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Cost / management accounting - The 21st century paradigms

Table of contents



TABLE OF CONTENTS 2
THE PARADIGMS OUTLINED BY FERRARA. 3
PARADIGM A: THE ERA OF THE INDUSTRIAL REVOLUTION. 3
PARADIGM B: THE ERA OF COST-VOLUME-PROFIT ANALYSIS AND DIRECT COSTING. 3
PARADIGM C: THE ERA OF ACTIVITY- BASED COSTING. 4
PARADIGM D: THE ERA OF MARKET DRIVEN STANDARD COSTS AS OPPOSED TO ENGINEERING-DRIVEN STANDARD COSTS. 5
THE CHANGE IN THE RELATIONSHIP BETWEEN COSTS AND SELLING PRICE HIGHLIGHTED THROUGHOUT THE 20TH CENTURY 6
COMMENTS ON FERRARA’S THOUGHTS ON THE 21ST CENTURY PARADIGM 8

















The paradigms outlined by Ferrara.
Paradigm A: The era of the Industrial Revolution.

The most important or the base of this paradigm was standard cost or the total cost per unit of output. When arriving the total cost per unit of output, almost all the costs including direct materials, direct labor, manufacturing overhead, and even marketing and administrative costs were accounted. As the f...

Posted by: Asare Mabel

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