Value stream income statements, which are part of a lean accounting system, have all the following characteristics except:
A) They report segment profits in the form of value streams.
B) They attempt to separate out the short-term effects of reductions in inventory.
C) They separate traceable from non-traceable costs on the income statement.
D) They calculate average costs for units in each value stream.
E) They eliminate the need to deal with indirect costs.

Question

Quizplus · Accepted Answer

Value stream income statements do not eliminate the need to deal with indirect costs, but attempt to allocate them to the appropriate value stream. Therefore, the correct answer is E, as all the other options are correct characteristics of value stream income statements.

Value Stream Income Statements, Which Are Part of a Lean