First Gauging, then Measuring Period Profit - Gauging is Coming Across with the Truth Partly Outside Science
20 Pages Posted: 23 Apr 2003 Last revised: 10 Jun 2016
Date Written: January 14, 2003
Who dares to say what the normal percentages of scrap and/or unfit products are to be allowed for in order to calculate the unit-cost of a certain product? How many normal seconds or minutes to produce an element? Normal quantities and normal prices per unit? One needs a lot of data, most of it has to be brought in from the outside world. Science cannot answer most of these questions. The answers are just input-data in the unit-cost calculation. The calculation itself is the heart of the matter. That calculation, the scheme, is science. With open places to enter brought in data, values and standards. In this respect there is no difference between unit-cost calculation and profit calculation. In either case several sets of data are necessary to make a start. The crucial question is where to put them in? Maybe some questions have a more or less objective answer, some data is objective data and therefore an object of science. But the main scientific thing is the scheme, the calculus, the procedures, exactly what and how to calculate? The best formula is one that contains everything and that formula must be user-friendly to work with. With less, there will be no satisfactory solution.
Keywords: Measuring Data, Values and Standards representing 'the state of the art', HC-systems, Sandilands Committee, RC-systems, Whittington's Old Fred who's a street trader
JEL Classification: M41
Suggested Citation: Suggested Citation