Developing Expertise: Two Episodes in Early Nineteenth Century U.S. Management Accounting History
نویسنده
چکیده
Prior to 1850, accounting information was used routinely by owner/ managers in two large, integrated manufacturing environments in the United States the Lowell cotton textiles mills and the Springfield Armory. In the textiles mills, accounting costs were assigned to products and product lines to facilitate make-or-bw, product pricing, and factory site selection decisions. At Springfield, product cost data were used primarily to establish target prices against which private contractors were required to compete in order to obtain government contracts. In both locations, labor processes were monitored and efficiencies obtained pzimarily through piece-rate pay schemes that generated earning levels commensurate with skill differentials and market expectations. Accounting controls in the form of actual-to-standard hbor cost comparisons were not employed. Archival investigations of these two environments were undertaken to evaluate the state of accounting expertise at the time and were stimulated, in part, by assertions from several noted accounting historians in a series of recent papers. These scholars have argued that accounting was strictly mercantile and was not used for managerial purposes during the period because it lacked a needed disciplinary component, hereby retarding management's innate desire to control abor processes. Notwithstanding the uniqueness and noveltE. of this interpretation, our investigation suggests hat accounting information served management in problem-solving scenarios that business historians have long characterized as managerial. Just as importantly, we believe that the use of certain accounting procedures and the absence of others (i.e., norm-based standard costing and variance analysis) befitted the social mores and decisionmaking needs of the day. The paper describes the nature of management accounting in these two environments. We initially examine the Massachusetts textiles mills and identify instances where accounting information was used by owner/managers to
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