Abstract The article focuses on two points of view concerning the cost categories relevant to income measurement. The ultimate conclusion of the argument is that the fixed costs of production are costs without service potential since their incurrence in one period has no effect on whether they will be incurred in the future. Variable production costs on the other hand do have service potential since their incurrence today will overcome the need for their incurrence in the future. The essence of the argument seems to be contained in the idea that the only costs, which will be reduced in the future because they are incurred today, are variable costs since the fixed costs will remain the same with or without the production of goods, which are included in the inventory. In other words, the value of the inventory is determined only by the extra costs occasioned by producing the inventory. These costs are variable costs of production since the fixed costs of production would be the same with or without the production of the inventory. The idea of opportunity costs is certainly much broader in its possible impact on accounting theory than its position in the Sorter-Horngren thesis of "relevant costing."

Abstract When computing state and federal income taxes for small corporations, a problem arises concerning the actual amount on which the tax is to be calculated. On the forms distributed by the federal and state governments the net income for federal tax purposes and the net income for state tax purposes is computed. However, the taxes are not actually calculated on these amounts, since one may first deduct from the net federal income the tax paid to the state, and from the net state income, the amount of! tax paid to the federal government. On these reduced amounts, called the net taxable income, the actual tax is calculated. Here the problem arises. Before the federal tax may be computed, the state tax must be known; before the state tax may be computed, the federal tax must be known. This fact has caused accountants who are unfamiliar with algebra to become virtual jugglers with numbers until they finally arrive at a solution. In this article the problem has been readily solved with the use of an appropriate formula.

Abstract The decade and a half since World War II has witnessed considerable activity by industrial managements and the professions serving them in sharpening and polishing management tools that have been in industry's tool sheds for years. However, refurbishing the old tools has been inadequate. During this era industrial products have been radically changed, principles once held inviolate have given way to new ones and the introduction of new industrial processes, techniques, and research methods have radically altered long standing skill requirements. In this environment, if a profession is to survive it can do so only by orienting itself rapidly to the changing circumstances. The accounting profession during the past 20 years has taken many actions in recognition of a changing business environment. During the decade of the 1940's there was for example, considerable activity in describing and codifying accounting principles, standards, guides for professional conduct and the like. During the 1950's there was substantial emphasis on publicizing an image of the professional accountant as an "independent contractor" expert in attesting to and adding credibility to the financial statements of economic organizations.

Abstract The Jenkins Report, issued in June 1962, is the popular title of Report of the Company Law Committee, a 14-member body including, apparently, but two accountants, appointed late in 1959 by the President of Great Britain Board of Trade, the latter organization having, among its other regulatory powers, the responsibilities for licensing corporations and a number of functions. The Committee, headed by Lord Jenkins, a prominent British jurist, was asked "to review and report upon the provisions and working of the Companies Act of 1948" and upon certain other acts of Great Britain Parliament; and "to consider in the light of modem conditions and practices, including the practice of takeover bids, what should be the duties of directors and the rights of shareholders; and generally to recommend what changes in the law are desirable." At the outset one is impressed with the restricted approach to the problems confronting the Committee. Its chief concern is with ownership and controls; the public interest in the interrelations of directors and stockholders only by indirection received the Committee's attention. The Committee's report supplies a valuable source for the comparison of British corporate practice with that in the United States.

Abstract This article reports some of the findings of intensive research on management's use of accounting in decision-making. The core of the research is 44 case studies of decision making in small firms. In recent years, the issue of accounting in decision making has received considerable attention, but there is a dearth of large scale empirical evidence to suggest how managers actually use accounting data. Accordingly, the objectives of this research were, to describe how managers use accounting data in decision-making, to evaluate the consistency of accounting data with the logic of economic analysis, and to prescribe the role of accounting data in decision making. Because of space limitations, the descriptive element will be emphasized here. The case studies indicate that management uses accounting data as a means of recognizing the need for a decision and for comparing alternative courses of action. The remainder of this paper discusses those factors which influence the extent of management's use of accounting data in each of the two phases and concludes with suggestions for a general framework of thought concerning managerial accounting.

Abstract According to the author, the topic to which he addresses himself is a challenging one. It is of paramount importance to all concerned with a vital segment of our system of higher education and the continued advancement of the dominant social and economic institution, the business corporation. The author approaches the subject with humility. The author hopes that this paper will serve as a catalytic agent encouraging others to think deeply and perceptively on the role of business schools in a changing environment, and subsequently that faculty of business schools will forget their vested interest and act to make modem education for business the vital force required in the dynamic world economy. Within the business schools one need also to utilize the integrated systems approach that has characterized post-war management. Too often today there is no integration of different functional subject matter. Each discipline is frequently taught as though other business areas don't exist, or if they are recognized, they are assumed to be peripheral. The false barriers of subject matter specialization by traditional functional business areas must be breached; the areas must be integrated into a related systems approach.

Abstract The article presents the application of the Monte Carlo method to inventory problems involving uncertainty of demand and or lead-time. A general statement defining the Monte Carlo technique would be that it is a process whereby data are generated by the use of some random number generator, such as a random number table. In essence, the Monte Carlo method consists of simulating the real world to determine some probabilistic property of a population of events by the use of random sampling applied to the various components of the events. All inventory situations have certain general characteristics, each involving some aspects of cost, service and usage. One characteristic is that as an inventory increases, the cost of storing those goods will also increase but the cost resulting from an inability to fill orders will decrease. Hence, one aspect of the inventory problem is to find an inventory level, which minimizes the sum of the expected holding and shortage costs. The objective of the article is to consider a set of decisions, which will minimize total cost and provide an acceptable level of goods to satisfy the anticipated or expected demand rate.