Rosemary R. Fullerton
Utah State University
Cheryl S. McWatters
University of Alberta
Abstract: Despite arguments that traditional product costing and variance analysis operate contrary to the strategic goals of advanced manufacturing practices such as just in time (JIT), total quality management (TQM), and Six Sigma, little empirical evidence exists that cost accounting practices (CAP) are changing in the era of continuous improvement and waste reduction. This research supplies some of the first evidence of what CAP are employed to support the information needs of a world-class manufacturing environment. Using survey data obtained from 121 U.S. manufacturing executives, the study examines the relationship between the use of JIT, TQM, and Six Sigma with various forms of traditional and non-traditional CAP. Analysis of variance tests indicate that most traditional CAP continue to be used in all manufacturing environments, but a significant portion of world-class manufacturers supplement their internal management accounting system with advanced management accounting techniques.
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