The article is a comment on an article "Matrix Theory and Cost Allocation," by researchers T.H. Williams and C.H. Griffin, published in the July 1964 issue of the journal "The Accounting Review." According to the author, Williams and Griffin were the first to select this topic as an illustration of the application of matrix algebra to accounting problems. The model presented by Williams and Griffin is a matrix formulation of the popular simultaneous equations method of past years. It was pointed out that the aggregate cost of service departments after allocation in the Williams and Griffin model is more than the combined direct cost before allocation. The scope of this paper has two dimensions: first, to attempt to clarify the matrix algebra approaches that have already been posed and place them in perspective; second, to present a new matrix model of reciprocal service cost allocation and relate it to those previously presented. It would be assumed that each service department will have some of its cost allocated to some of the producing departments.

This article presents the authors' comments on the criticism of their article by professor Raymond S. Chen related to treasury stock method and conventional method in reciprocal stockholding, which was published in an earlier issue of the journal "The Accounting Review," as of April 1975. The authors say that the confusion begins with Chen's criticism against the alternative simultaneous equations methods. These alternative simultaneous equations methods were not the focus of the authors' article published in an earlier issue of the journal, but were a means that they utilized to introduce the liquidation approach to report reciprocal holdings. In the authors' opinion, Chen properly declared that the authors demonstrated that the traditional treasury stock method in reciprocal stockholding situations misstates the minority interest and is not consistent with a true treasury stock approach. But if this is true, it is difficult to understand why Chen again attempts to prove the validity of this point to the reader when he presents support for such an approach. Chen appears to challenge the modified treasury stock method.

Presents information on a study which analyzed the traditional treasury stock method in reciprocal stock holding situations. Explanation on the concept of reciprocal stock holding; Analysis of conventional treatment of mutual stock investments; Methods of allocation by simultaneous equations; Description of an equitable approach to allocation.

This article presents a study on the evaluation of resource acquisition decisions by the partitioning of holding activity in accounting in the U.S. It has been an endeavor in this paper to unfold a performance measurement system that overcomes some of the shortcomings of using holding activity as a performance measurement surrogate that have been cited by previous writers. The presentation has been in the context of a specific inventory optimization model. However, the ideas delineated in the interstitial structure can be adapted to other situations regardless of whether the firm uses optimization decision models or not.

A popular rule of thumb asserts that an extra tax deduction will generate a tax benefit equal to the tax rate times that deduction. This paper shows that when the extra tax deduction is a preference item, this rule of thumb can be economically harmful. The decision model presented in this paper examines the implications of taking extra tax deductions of preference items in the light of the minimum-maximum tax structure set forth in the 1976 Tax Act. The corporation tax situation with respect to the preference tax structure is also considered. The impact of the preference tax deduction is analyzed under a number of constraints and illustrated with a specific set of data. The generality of the conclusions reached is then tested by quantitative techniques.

Reviews the book "Cost Accounting," by Lester E. Heitger and Serge Matulich.