Obtain a copy of the following article: Andrew Bargerstock and Ye Shi, “Leaning Away from Standard Costing,” Strategic Finance, June 2016, pp. 39–45 (available at: http://sfmagazine.com/post-entry/june-2016-leaning-away-from-standard-costing/). This article critically evaluates the application of standard cost systems (for short-term financial control) in “lean” organizations. The authors offer arguments that for such organizations, better short-term operational control can be achieved through the use of value-stream reporting—a topic covered at greater length in Chapter 17 of the text.

Required

After reading the above-referenced article, respond to the following questions:

1. Characterize the use of standard costing and variance analysis for short-term financial control.

2. What are the arguments against using standard costing and variance analysis (SCVA) for “lean” organizations? That is, what do the authors of the article offer as the key “flaws” of SCVA?

3. What alternatives are proposed by the authors for achieving short-term operational control for “lean” organizations?

4. Discuss what the authors believe to be primary reasons more organizations have not discarded traditional approaches to short-term financial control.