Costs, Revenues and Pricing

Abstract

This chapter and Chapter 8 deal with costing within a firm. While Chapter 8 deals with the subject more from the point of view of traditional accountants, Chapter 7 tackles the subject more from the point of view of economists. Although accountants have always dealt with cash flow statements, showing money entering and leaving a firm over a period of time, in the past they were primarily concerned with auditing and producing sets of accounts such as profit and loss accounts and balance sheets. These accounts were essentially backward-looking, since they dealt with past events. Economists, on the other hand, are concerned with decision-making that concerns production in the future.