Transitioning from standard-based cost accounting procedures to quality-based cost accounting procedures

This study will make use of a hypothetical company to demonstrate the financial advantages of converting from standard or traditional based cost accounting to quality-based cost accounting. This study will show specific accounting methods of both systems and highlight the differences and the specific uses of this divergent data. In addition, six-sigma manufacturing tolerances will be shown to be financially more equitable than three-sigma manufacturing tolerances. Furthermore, quality as a way of life and ethical value will be shown to have a dynamic and positive effect on the organization.