Just in time production system's effects on manufacturing costs-cost accounting: Teknik Masura Ambalaj Sanayi ve Ticaret A.Ş. case

Today, owing to rapidly development and changing in telecommunication and technology, local economies often transcend geographical boundaries and competition in many industries became worldwide in scope. Therefore, production is no longer being made locally and all of the world markets became a global market.Such a development in business life affected consumer to become more conscious. Consumers started preferring products of firms which supply low cost, high quality products and the best selling and post selling services. Intensified competition compelled the firms to supply low cost, high quality and the best selling and post selling services. Consequently, Just In Time (JIT) Production System which supplies high quality and low cost products to consumers whenever they demand came out. JIT System requires reducing -nearly to zero- inventory holding (carrying) costs, especially for raw materials and work in process inventory.Since JIT Production System necessitates minimum inventory and Total Quality Control it has caused important changes in physical production conditions, structure of manufacturing costs and measuring costs. In JIT Production System, manufacturing overhead increases while direct labor cost decreases substantially. So, comparing to traditional manufacturing system direct labor cost vs. manufacturing overhead lost its importance in JIT Production system and this made firms to form different cost accounting system so as to produce useful accounting information.Key Words: Just In Time, JIT Production System, Just In Time Cost Accounting,Zero Inventories