The question here is: Are costs aligned with cash flowing away from your company, and if not, why not? Costs should, by their very nature, be aligned to cash leaving, but they are not in all cases. Costing and cost accounting are based on false ideas, false relationships, and on the inappropriate use of math. These issues will be discussed in detail throughout the rest of the book. The purpose of this chapter is only to demonstrate that costs, themselves, do not align with cash.
Pick an arbitrary time period. It begins on the first day of the analysis period—a month, a year—and ends on the last day of that period. During that time, you spend money buying things, consuming things, and doing work. Let’s think about ...
Get Lies, Damned Lies, and Cost Accounting now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
