This article focuses on the problem of fixed charges in cost accounting. Fixed costs may be defined as those costs which remain practically unchanged in total amount when physical volume of output is varied. Such costs are not controllable by management, for their total amount is independent of circumstances which can be altered by executive decision. Most of these costs are fixed only within a certain range of output and become variable when greater ranges occur. To control costs, management needs information concerning controllable costs: which costs are controllable, what these costs should have been and what they actually were, as well as why the variances occurred. To determine the adequacy of selling prices, management needs to know total costs and product variable costs. Total costs will provide information as to the over-all adequacy of selling pikes. Variable product costs will provide information as to the adequacy of selling prices of individual products and, provide a guide for minimum selling prices. Thus management is concerned with both fixed and variable costs.

A recent article appeared in the "Wall Street Journal," captioned, "Businessmen, Professors Disagree on Subjects Best for Commerce Career, But No One Favors 'Vocational' College." The occasion for this article was the publication of a study made by the Society for the Advancement of Management concerning the courses businessmen and college professors considered essential for a well rounded education for business. It was not surprising that businessmen and professors were unable to agree in all cases, as educators themselves find numerous areas of disagreement concerning curricula content. The results of this study are interesting because of the emphasis given to the study of accounting as a preparation for business. Of more significance, however, was the recognition given to the so-called cultural courses of study. The demands placed upon accountants are such that a thorough technical training plus a broad general background are essential for success in this area of work. This is particularly true in the field of public accounting.

Reviews the book "Consolidated Statements," by George Hillis Newlove.

The article presents information about last-in-first-out (LIFO) as a method of determining depreciation. The present problem of depreciation that is facing the accounting profession provides a vivid illustration of difficulties that arise only because of the variance between economic and accounting concepts. The problem is a result of the rapidly changing price level, but the inability of the accounting profession to supply an adequate procedure to cope with the situation stems, in the main, from its insistence upon using the historical cost concept in spite of the fact that cost determined by this method bears little or no relation to economic cost. An instance of the inadequacy of the present concept of accounting in this matter can be found in the recent action of the United States Steel Corp. in shifting to the LIFO method for handling long term inventories. In discussing short-term inventories, the United States Steel Corp. made the following statement in its 46th Annual Report, "an accepted procedure for determining the cost of short-term inventories is the LIFO." Commenting further on this procedure, the report states that this method is a generally accepted accounting practice.

Many problems arising as the result of wartime conditions will continue to perplex for years after the war. Uncertainties which will be resolved only by future developments have in the past presented difficulties in accounting practice and have been a basis for criticism by some who hold the erroneous conception that accounting statements are by their nature intended to be exact and accurate representations of fact. Industries expect after the war a more or less protracted period of retooling, plant reconversion and rehabilitation and redevelopment of markets. In conclusion, a brief word should be said as to the general bearing these thoughts may have on accounting education. The educator is always confronted with the question of where the emphasis in curriculum and instruction should be placed as between teaching accounting techniques and development of understanding of principles, policies and underlying social sciences. Obviously, the man trained to recognize the significance of new situations and to meet them on the basis of an experienced judgment and a command of basic principles has been a more useful member of the profession in wartime than the narrowly-trained technician. This is likely to be true also in years to come.

Economic transactions find expression in ordinary business activity through the use of money price and it is the aid that accountant has given a businessman in recording economic and financial transactions in the form of price that has made accounting useful. But during periods of monetary inflation, when most prices suddenly spurt upward, prices assume new importance and present new problems. Price is no longer primarily a result of market conditions but it is also influenced by governmental financial policy. It is during these times of stress and strain that some people begin to wonder whether or not cost-price can safely be used to record at all times the value facts about things given and received by a business enterprise. Perhaps a businessman's dilemma can be made clear by following through a chain of events that takes place in a violent inflationary boom. Whereas in normal times an accountants attention is focused on the efficient utilization and exchange of goods, rights and services placed at his disposal.

The article says that it is good educational psychology to explain difficult topics by simple diagrams. Diagrams in economics books have long explained the forces of supply and demand. Diagrams have frequently showed the circulation of money. There is, in fact, no value in keeping a thing difficult that might he made simple and easily understood by a diagram. The article further says that annuities constitute the axis of the entire field of actuarial science. Innumerable business problems are entirely or in part annuities and they are found in accounting and insurance, and even in corporation finance and public finance. The article presents a diagram to reveal their exact nature and which can be remembered much longer than any well-worded page. The graphic method of showing annuities can be used for many types of annuities and kinds of problems. The horizontal scale gives the time in periods from left to right. The vertical scale is used only to show the sequence of rents of the annuity, the first at the top and the last at the bottom. The interest is shown as an addition to the rents in order to give the final amount or as an addition to the initial present worth in order to give the rents.

The article focuses on interpreting the two principal annuity formulas. It is assumed that the student already understands the formulas for compound interest and compound discount and recognizes them in the said formulas. For calculating annuity, most of the students employ the formula for the sum of a geometric progression. However, the two principal annuity formulas can be explained without reference to a geometric progression and in terms that a student can understand and remember. Without referring to a geometric progression, the author attempts to show why the first formula is compound interest on one divided by the interest rate per period and why the second formula is compound discount on one divided by the interest rate per period. The author believes that the explanations presented in the article are preferable to the usual textbook discussion because the student can see why the annuity formulas are as they are; namely, compound interest on one divided by the interest rate per period and compound discount on one divided by the interest rate per period.

Reviews the book "Foreign Exchange Accounting," by Christian Djorup.

Reviews the book "Corporate Trust: Administration and Management," 2nd ed., by Robert I. Landau and Joseph C. Kennedy.