The Accounting Historians Journal Vol. 9, No. 2 Fall 1982
M. C. Wells
UNIVERSITY OF SYDNEY
TAYLOR'S CONTRIBUTION TO COST ACCOUNTING: A COMMENT
Abstract: Frederick Winslow Taylor developed a system of cost accounting while at the Midvale Steel Company (1878 to 1890). In their article on his contribution to the development of cost accounting, Chen and Pan suggest that Taylor has not received the credit he deserves. They also assert a close association between cost accounting and scientific management. Finally, Chen and Pan compare Tay-lor's work with a book published in 1885 by Metcalfe.
In this comment, Taylor's contribution is more critically evaluated. As he did nothing to promote cost systems, it is concluded that he has received the credit due to him. Metcalfe's book is also evaluated, and placed in the perspective of other publications of the period.
Chen and Pan's article on Frederick Winslow Taylor's contribu-tions to the development of cost accounting1 is another in a long line of papers asserting a connection between scientific management and cost accounting. That connection is undeniable. But Chen and Pan's claims about Taylor's role is overstated. More importantly, perhaps, their claim that "an introduction to his [Taylor's] work in cost accounting . . . provides better understanding of his system of scientific management in general"2 suggests a fundamental mis-understanding of the nature of both cost accounting and scientific management. Taylor's (and others') systems of cost accounting in-volved the classification and grouping of expense items so that "all such items as interest, depreciation, taxes, insurance, sales and traveling [sic] expenses, as well as all of the more direct expenses of the business may be charged directly and equitably onto the sources from which we derive our income."3
Scientific management, on the other hand, required detailed plan-ning of the physical production, and a clear identification of the work to be undertaken by each worker. The only obvious connec-tion between these requirements and cost accounting is that the job sheets or cards can be used for both purposes. The significance of this connection for the development of cost accounting will be explored in greater detail below.