From the discussion above, it can be seen that the pressure to meet investors’ financial expectation and the greater capital intensity as indicated by the greater proportion of fixed manufacturing overhead to total manufacturing costs may have made net income differential to become greater than what it has been in the past while JIT system tends to minimize net income differential under the two methods. This study aims to examine the impact of product costing choices on profitability in the current operating environment by (1) examining whether manufacturing companies have been increasingly capital intensive; (2) examining whether JIT philosophy has had an impact on how the sample companies manage their inventories; (3) examining whether net income differential as a percentage of sales has increased over time; and (4) examining relative impact of capital intensity and the degree to which companies embraced JIT philosophy on profitability differentials over the period studied.