I am thrilled to take this opportunity as the President of SPCEA to share the incredible success of our Annual Conference, a landmark event that brought together cost engineers from all corners of the globe. Our theme, "Cost and CO2 Estimating Accuracy," delved into the...
“Those of you familiar with my writings already know my opinion of the accounting concept of depreciation (“the dumbest concept in the history of management accounting”). I’ve been ranting against its use in decision-making since an article of mine on the subject appeared in Management...
“Sunk costs are irrelevant” is a principle stated in almost every book on decision science ever written. Despite this well-accepted principle of decision science, accountants continue to include their company’s biggest sunk cost as a major factor in determining its product, service and process costs....
In earlier blogs, I explained my views about depreciation; both its irrelevance in business decision-making and the way it is treated as a fixed annual cost. An organization does, however, need to provide for the preservation of its existing capital based as it sells products...
It's important to distinguish between measurements made from the financial accounting perspective and those made from the managerial accounting perspective. Periodicity is important in financial accounting. Expenses are measurements of the resources consumed during a specific period of time using measurable and auditable historical information...
During my four decades as a consultant, it has never ceased to amaze me how little attention manufacturing firms pay to the amount of time they use the equipment they’ve invested in to generate a return on that investment. The equipment uptime needed to drive...
Product costs, also known as cost of goods sold (COGS), are direct material, direct labor, and manufacturing overhead. COGS are typically the highest category of a manufacturing company’s cost, and they have a huge impact on the company’s competitiveness. COGS are inherently added to products as...
Why have we created a cost engineering certification? Well, most industries have established and well-communicated standards for what it means to be an expert in the field. The ability to quickly communicate knowledge and skillsets is necessary for anyone in a professional environment to prove that...