Abstract Reviews the book "Accounting, Costing and Cost Estimation," by Haydn Jones.

Abstract ABSTRACT: While accounting historians agree that cost accounting is a consequence of the industrial revolution, they have not thoroughly explained the economic consequence of the industrial revolution which prompted manufacturing firms to develop actual cost accounting techniques in the nineteenth century. This paper presents an explanation for the rise of nineteenth-century cost accounting which supplements the traditional view that increased use of fixed capital and the resultant need to account for costs of long-lived assets prompted industrial accountants to graft cost accounts onto the double-entry system. The study concludes that not only changes in the temporal structure of their costs, but also changes in the way they organized economic activity, explain the conditions which prompted manufacturers to develop cost accounting procedures for gathering financial information needed by managers.

Abstract This article discusses the role of accounting history in the study of modern business enterprise. It is well known, of course, that typical manufacturing firms of the mid-nineteenth century specialized mainly in one activity: that of transforming raw materials into finished products. These manufacturing firms necessarily relied for non-manufacturing services upon outside companies that specialized, as did they, primarily in one operation. For example, the manufacturer depended upon wholesale suppliers and commission merchants to provide raw materials and to sell finished goods to the final customer. One new method for controlling and coordinating company procedure was an innovation commonly called "the unitary form of organization." The unitary form of organization also involved the design of complex accounting systems to carry out assessment, operations, and planning throughout the firm. Du Pont Powder Co. exemplifies the early use of accounting data for management control in vertically integrated industrial firms.