Application of target costing and value stream in lean accounting

From two decades ago, some companies have adopted a production strategy that is called lean production. Researchers that adopted this strategy believed that traditional methods of costing products such as standard costing cannot appropriately evaluate its operational improvements. So, they were looking for a new costing system. Different researches led to the discovery of several systems for product costing. This study consists of two main parts. The first part of this research presents the issues related to lean accounting and techniques associated with activity based costing in the companies that have elected the lean manufacturing.The second part of the research mentioned how to use the value stream map in the lean accounting system and its included an example of value stream map, the way of mapping it and how to interpret the provided information. Finally, a sample of value stream income statement is provided, that is a tool of lean accounting.