ABSTRACT
The full cost paradigm that emerged during the 1965–1978 period was dominated by a concern with control. In moving away from firm-specific to macroeconomic capacity models, the justification for idle capacity reporting was lost. Idle capacity and the productive capability that it holds hostage affected the fortunes of individual firms, not nations. In relegating the firm and its managers to the back burner of academic and professional concern, management accounting abandoned its implicit covenant to provide decision-relevant information to managers charged with creating value for the firm’s stakeholders. By 1965, full cost-based models had won ascendancy in the minds and hearts of accountants throughout the western world. Having reached a comfortable decision on the one best way to account for product costs, management accountants turned their attention to fine-tuning variance reporting approaches. Academics remaining close to business, while in a minority, were quick to realize that the mood in management circles had changed radically.
