Cost accounting in eighteenth century Spain: the Royal Textile Factory of Ezcaray

Abstract

According to a growing body of literature, sophisticated costing techniques were used in the early stages of the Industrial Revolution (Fleischman & Parker, 1991; 1997), or before that period (Carmona et al., 1997). The investigation of cost accounting practices in medium Spanish factories that did not operate as monopolies should provide more insights into the development of cost accounting in the eighteenth century and into the use that was made of it. This paper reports on archival evidence of the use of cost accounting in the case of the Royal Textile Factory of Ezcaray between 1767 and 1785. It becomes apparent that a sophisticated knowledge of cost accounting existed in this company. Other findings reported are the important role of accountants in cost accounting, the likelihood of recurrent cost management, the lack of integration between cost and financial accounting and the use of cost accounting in a poorly managed company that, finally, went into bankruptcy.