Abstract The article proposes a refinement of standard cost, to be called "controlled cost," using statistical techniques to evaluate operating efficiency and degree of control. The primary usefulness of a standard cost system is to facilitate cost control through identification of situations and investigation of performance when actual cost deviates significantly from standard cost. A level of cost that should be attained under efficient operation is specified and then compared with actual cost to measure operating efficiency and degree of control. Present practices of standard costing are based primarily on an assumption that the expected value of an efficient operation is stability and that any significant deviation of the mean of actual cost from the expected value indicates abnormality of operation requiring managerial attention. Earlier works of cost accountants have extended the concept of standard cost from a single value comparison to a range of control limits. A range of costs is established by statistical control techniques, and when actual costs fall outside the control limits, managerial investigation is required.

Abstract In this article the author comments on the work of Abraham J. Briloff. "Dirty Pooling." He states that in the paper two major points are made. First that a proforma restatement of the earnings histories of two or more companies contemplating a business combination to be recorded as a pooling of interests might be misleading to stockholders, and second, that academicians should actively engage in empirical research and seek wide circulation of their findings. The major objective of the paper was to present two illustrations and to use them as a basis for discrediting and disowning the pooling device in the interest of fair and relevant reporting of corporate economic data. But in the author's opinion this objective was not achieved. The central role played by the concept of the accounting entity in pooling-of-interests accounting is ignored. It is generally accepted that the concept of the accounting entity embraces an economic entity as well as a legal entity and that all of the parameters of the conventional accounting model apply to the given accounting entity.

Reviews the book "Accounting Systems: Design and Installation," 3rd ed., by J. Brooks Heckert and Harry D. Kerrigan.

Abstract The object of a structured accounting system is to focus on the decision-performance control problem by monitoring all parameters and variables in a firm's particular decision models and reflecting their deviations in a hindsight optimum decision. Since performance deviations may imply optimum decision deviations and vice versa, it would appear that people should recognize both sets of possible consequences in generating control information. Intra-period revision of an implemented decision is based upon a consideration of the firm's present state, which is the result of past decisions and actual performance, and its predictions for the future. Moreover, intra-period physical and economic limitations often constrain the adaptation possibilities, for example, major production mix alterations may be physically or economically infeasible in the middle of a period. And, because of the particular exigencies of this process, these decisions are usually made in a heuristic manner.

Peter A. Firmin, Seymour S. Goodman, Thomas E. Hendricks, James J. Linn, University Cost Structure and Behavior: An Empirical Study, Journal of Accounting Research, Vol. 6, Empirical Research in Accounting: Selected Studies 1968 (1968), pp. 122-155

Previous studies have recognized that occupational mobility varies with age, but studies have been impeded by imperfect measures of income to which career choosers respond. In this article, cohort changes for six age groups are viewed as resulting from responses to unobserved relative incomes in each of five decades. By an iterative procedure, leastsquares estimates can be obtained for ratios of age group response coefficients, and relative incomes are estimable down to a logarithmic transformation. Properties of the estimators are investigated. The analysis is applied to the U.S. and regions, and inferences are made about changes in the aggregate supply elasticity of farm operators and other conditions likely to prevail in the future.

Aggregate measures of output per man or output per man-hour, such as those regularly published in the Economic Report of the President, are frequently used as indicators of changes in aggregate productivity. These measures reflect both changes in output per man (or man-hour) in individual sectors of the economy and sectoral shifts in the composition of output. While this dual nature has been long recognized, it has not received sufficient attention.' The causative forces for productivity growth in a particular sector are entirely different from those accounting for shifts among sectors.2 Table 1 presents a measure of composition effects which allows for the separate analysis of sectoral productivity change and sectoral shifts. The measure which is used here has been discussed at length elsewhere.3 Briefly the procedure used derives from the following propositions: (1) Aggregate measures of output per man are derived by dividing aggregate output by an aggregate input measure, be it the total number of men or man-hours. (2) The output per man measure thus derived is an implicitly weighted average of output per man in all sectors of the economy, number of men being used as weights.4 As a result the aggregate input measure is equally weighted while the aggregate productivity measure is differentially weighted. (3) Because there is no justification for differentially weighting productivity that would not apply to the input measure, it is less arbitrary to isolate the weighting factor as a third component of output, which might be termed the effect of composition.5 Consistency is thus afforded in the treatment of aggregate input and productivity measures, and greater emphasis is placed on sectoral shifts as a source of growth in output.