When deciding upon the price to charge for one of their products, the managers of the Soho Foundry in Birmingham placed great reliance upon the data stored in their accounting system. By the last decade of the 18th century, the nature of the steam engine business was changing rapidly and reputation alone was insufficient to attract customers. Also, as more industrialists decided upon steam as a source of power and competition to supply their needs increased, more attention had to be paid to price structures. The increasing standardization of products meant that a price list could be determined. The partners showed some reluctance to come to terms with the pricing issue, insisting that the quality of their product was of more importance than its price. This paper addresses the processes undertaken at the Soho Foundry to establish price lists for engines and parts. It shows that prices were based on the cost of previous machines, this cost being calculated using predetermined rates as shown in the engine books. The paper concludes with the observation that continual reliance on historical data was one of the factors contributing to the firm's loss of its competitive edge.
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1 December 1999
Research Article|
December 01 1999
MANAGEMENT ACCOUNTING PRACTICE AND PRICE CALCULATION AT BOULTON AND WATT'S SOHO FOUNDRY: A LATE 18TH CENTURY EXAMPLE
Robert Williams
Robert Williams
UNIVERSITY OF WOLLONGONG
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Received:
August 01 1996
Revision Received:
March 01 1999
Accepted:
April 01 1999
Online ISSN: 2327-4468
Print ISSN: 0148-4184
© 1999 American Accounting Association
1999
Accounting Historians Journal (1999) 26 (2): 65–66.
Citation
Robert Williams; MANAGEMENT ACCOUNTING PRACTICE AND PRICE CALCULATION AT BOULTON AND WATT'S SOHO FOUNDRY: A LATE 18TH CENTURY EXAMPLE. Accounting Historians Journal 1 December 1999; 26 (2): 65–66. https://doi.org/10.2308/0148-4184.26.2.65
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