Reality of Recession Essay Example | Topics and Well Written Essays - 250 words

Reality of Recession - Essay Example The author of this essay states that this kind of production practice affects a company’s accounting practices greatly. Moreover, there are actually two kinds of which, first is managerial accounting and second would be cost accounting. To differentiate both, the former is concerned with incorporating all levels and parties involved with every direction their company chooses to go, that is giving much priority in providing information to managers who direct and control its’ operation as a whole to have total control on actual results to plans and benchmarks. But on the other hand, the latter is merely for cost determination and budget creation of a certain product or service. Going back to the philosophy of lean production, companies that practice this would lean more on managerial kind of accounting, where business processes are all integrated from processes to cost allocation to be able to manage the quality of product and satisfaction they can give to customers (Reco gnizing the Difference between Cost Accounting and Management Accounting, n.d.). Toyota is one of the companies that experienced the triumph of lean production. Their philosophy of thinking globally but acting locally is put to action as they integrate the design of the car and their manufacturing process to gain efficiencies and be able to lower the cost of their cars while satisfying global needs (The Triumph of Lean Production, n.d.). This indeed is the key to the future of companies in the midst of recession.