ABSTRACT
This chapter presents an overview of the findings from an eight-year research project on capacity cost management. The subsequent Golden Era, spanning the period from 1920 to 1932, was marked by lengthy debates and discussions about capacity and the “proper” treatment of the costs it represents. One of the most interesting elements of historical analysis is the clear demarcation of practice apparent in retrospect, yet undetectable at the moment of change. While various programs were developed and implemented between 1933 and 1936, the National Industrial Recovery Act (NIRA) ended up having the greatest impact on costing practices and capacity cost management. Between 1953 and 1978, external reporting concerns defined the field of accounting. The negative impact of the direct cost/full cost controversy on accounting thought and practice is hard to overstate. The complacency of the Full Cost era was shattered in the 1980s by a series of increasingly aggressive critiques of management accounting practice.
