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Cost allocation in Britain: towards an institutional analysis

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  • M. N. Ahmed
  • R. W. Scapens

Abstract

This historical investigation attempts to gain insight into some of the socioeconomic factors surrounding the development and functioning of cost allocation practices in Britain. These factors are conceived in this study as isolated neither from the nature and structure of human behaviour, nor from the dynamic changing world in which individuals, firms and other constituent elements of society exist, act and interact. The institutional approach taken in this paper is contrasted with the transaction cost economics and labour process approaches. The historical analysis focuses on the emergence of uniform costing systems, government contracting in wartime, and the effects of collective trade agreements, and it reveals some of the wider economic, organizational, legal and political contexts in which cost allocations evolved and developed over the years. In addition, it demonstrates the complex and changing framework of norms, working rules and institutional arrangements within which cost allocation systems came to function in industrial and social organizations. The study concludes that although cost allocation systems have over the years remained simple, procedural and repetitive, their wider meanings and significance have served a variety of interests and needs in different times and in different socio-economic environments.

Suggested Citation

  • M. N. Ahmed & R. W. Scapens, 2000. "Cost allocation in Britain: towards an institutional analysis," European Accounting Review, Taylor & Francis Journals, vol. 9(2), pages 159-204.
    • Handle: RePEc:taf:euract:v:9:y:2000:i:2:p:159-204
    DOI: 10.1080/09638180050129864
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    Cited by:

    1. David Dugdale & T. Colwyn Jones, 2003. "Battles in the costing war: UK debates, 1950-75," Accounting History Review, Taylor & Francis Journals, vol. 13(3), pages 305-338.
    2. C. Homburg & Julia Nasev & Philipp Plank, 2018. "The impact of cost allocation errors on price and product-mix decisions," Review of Quantitative Finance and Accounting, Springer, vol. 51(2), pages 497-527, August.
    3. Graziano Coller, 2018. "L?eterno divario tra teoria e prassi del pricing nel Management Accounting," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2018(2), pages 11-33.
    4. Lucas, Michael & Rafferty, James, 2008. "Cost analysis for pricing: Exploring the gap between theory and practice," The British Accounting Review, Elsevier, vol. 40(2), pages 148-160.
    5. Christian Nitzl & Dennis Hilgers & Bernhard Hirsch & David Lindermüller, 2020. "The Influence of the Organizational Structure, Environment, and Resource Provision on the Use of Accrual Accounting in Municipalities," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(2), pages 271-298, April.
    6. Sven Modell, 2002. "Institutional perspectives on cost allocations: integration and extension," European Accounting Review, Taylor & Francis Journals, vol. 11(4), pages 653-679.
    7. Graziano Coller & Paolo Collini, 2015. "The optimality of full-cost pricing: a simulation analysis of the price-adjustment dynamics," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(2), pages 157-191, August.

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