The Accounting Historians Journal Vol. 14, No. 1 Spring 1987
Richard Vangermeersch UNIVERSITY OF RHODE ISLAND
THE DIAGRAM OF THE COST SYSTEM OF HANS RENOLD LTD. — A BLUEPRINT FOR ACCOUNTING FOR ROBOTS
Abstract: Knowledge of accounting history can be a great aid in solving accounting problems of today and tomorrow. One example of this is the use of a cost diagram of Church and Renold and the writings of Church to solve the problem of accounting for robots.
The purposes of this research note are the presentation of a diagram of an accounting system for a highly capital intensive firm and the illustration of the relationship that system has for the accounting for robots. This diagram was found in October, 1984 in the substantial archives of Renold Chains Limited in Wythenshawe (near Manchester) England, while I was conduct-ing a sabbatical research project on Alexander Hamilton Church. This research project is a follow-up on work I have been doing on the redesigning of cost accounting for companies using robots.1
Church was an electrical engineer who became quite active in cost accounting at the turn of the 20th Century. He went from a two-year assignment with B. & S. Massey in Manchester to an assignment with Hans Renold from 1900 to 1905 [Urwick and Wolf, 1984, p. 116]. Church later resettled in the United States and wrote and practiced extensively in management, accounting, and industrial engineering until his death in 1936 [pp. 115-7]. Hans Renold, like Church, was chosen by Urwick as one of the first 70 pioneers of management [pp. 58-60]. Renold was also an engineer who was, as a disciple of F.W. Taylor, in the forefront of the scientific management movement in Great Britain. Renold and Church's system was considered to be the foundation of modern scientific costing in Great Britain [pp. 58-9].
Only the first half of the diagram is shown in Figure 1, as the second half dealt with accounting for administrative and dis-
1The specifics of the Schwarzbach and Vangermeersch machine labor approach has been published in the two articles referenced at the end of this research note. Rather than showing and discussing this system again, I have concentrated on the historical backdrop of this system.