Strategic Business Management

Part 2

MANAGERIAL ACCOUNTING

‘It is a common criticism of cost accountants that they spend too much time in working out elaborate distributions of expenses which are unimportant in themselves and which do not permit of an accurate distribution. Undoubtedly some of that criticism is deserved, but it should also be remembered that once the basis for distribution has been worked out, it can generally continue in use for some time.’— H. G. Crockett, ‘Some Problems in the Actual Installation of Cost Systems,’National Association of Cost Accountants (NACA) Bulletin, vol. 1, no. 8 (February 1921)

‘Today the cost department of the average business is looked on as a right arm of first Importance in management. Without the cost department today 90 percent of our business would be out of existence...the cost department of the future is going to have more effect on the business and on the general management of business than any other single department...and, gentlemen, in my opinion the major portion of the work of the cost department of the future is going to be applying recognized principles of cost analysis to sales expenses, for there is the greatest evil in present-day industry—the high cost, extravagant, outrageous cost, of distribution.’—James H. Rand, President Remington Rand Company, 1921