ABSTRACT
This chapter investigates economic underpinning of Industrial Revolution cost accounting—its development as an aid to technological decision making. During the Industrial Revolution, there were several significant inducement mechanisms giving rise to technological change in British industry. Those factors advanced in the literature include population growth, rising and redistributed incomes, changing tastes, and overseas markets, and resource scarcities and scientific research. Important as such macro-level influences might have been in terms of aggregate technological change, what concerned the individual industrialist, who actually made the investment decision, was the effect which the adoption, adaption, or even rejection of a particular technology would have on his profitability. The chapter illustrates a more micro-level how Industrial Revolution enterprises employed cost accounting methodology to deal with technology issues. It examines the processes involved in procuring new technology, experiments undertaken to decide between technological alternatives, the accounting used to evaluate existing technology, and special decision making related to technology.
