A number of times we have mentioned the importance of learning the historical development of Cost Accounting. If you haven’t had a chance, read over our page: http://costmgmt.org/resources/history-of-cost-accounting/, many of the concepts, like proper overhead allocation, are not new, they were conceived by the early pioneers in costing. Early pioneers like Alexander Hamilton Church. Most of Church’s works are now available to read for free on Google Play.

Since we have been talking about standard cost recently, here is some interesting history from Updating Standard Cost Systems by Carole and Leo Cheatham: ‘The idea of standard costs is difficult to trace to any one individual. However, four names stand out in the evolution of standard cost systems-Alexander Hamilton Church, John Whitmore, Harrington Emerson, and G. Chester Harrison.

Alexander Hamilton Church did not describe a standard cost system as such, but his ideas planted the seeds for what was to follow . . .Church perceived that the really difficult area in manufacturing cost is overhead. He proposed that a machine hour rate be used to apply overhead and that the rate be applied to production centers rather than to the factory as a whole, and he recognized the effect of idle capacity.’

John Whitmore, a disciple of Church’s, is credited with giving the first specific description of a standard cost system in a lecture at New York University in 1908.’
Updating Standard Cost Systems was published in 1993 and is probably the most recent publication on standard cost in some time. It has some really good ideas on making a standard cost system more relevant to the 21st Century. If you are into standard cost, you should try to find a copy.

 

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