Honor project - Management accounting can be seen...

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Management accounting can be seen everywhere in today’s business world. From a production manager who is doing the variance analysis to a Chief Executive Officer of a company discuss their budget with their executives, from setting up a new production line to giving up an old segment, people can see that management accounting is used along the development of a company. By interviewing Professor Brian W. Jacobs, who has been working as a manufacturing manager in the primary metals and automotive assembly industries for over 20 years, we gain a better understanding of how the management accounting is applied in the manufacturing industry. His rich experience in management has provided us a solid understanding of following aspects: lean production, bottleneck, total quality management (TQM), make or buy decision and variance analysis. Lean Production As the biggest waste is incurred by inventory, lowering inventory is an efficient approach to attack waste. Lean production, which aims to perform this role, was adopted by his company; apparently, reducing waste of production is its most tangible benefit which we were familiar with. Also, it is an effective way of showing respect for people, which has never occurred to us before. Based on his experience, as lean production is able to reduce waste of production substantially, it would raise the satisfaction of labors; eventually, the productivity of them will be increased enormously due to the high morale. Thus, lean production not only cuts down unnecessary expense but also increases the labor efficiency.
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Bottleneck Bottleneck usually refers the part in a company’s production line that prevents the company from achieving the expected production. In other words, it refers to the weakest part in the production line. We both perceived the bottleneck as a negative element of a
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This note was uploaded on 10/21/2011 for the course ACC 202 taught by Professor Sue during the Spring '10 term at Michigan State University.

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Honor project - Management accounting can be seen...

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