I am now a mega TV star! Well, I spent part of yesterday at Channel 4 Studios in central London being interviewed by the Einstein Network. The topic of my intereview was the work I did in the former Soviet Union on product cost systems development. If I say so myself it went well and I think I acquited myself well enough. I've appeared on the telly before but never in a formal setting such as this and it was an interesting experience, of course. It will be interesting to see how they turn the interview into the finished article: the interview plus a study pack. The interview was taped as if it were live; start, carry on and finish with no interrruptions and then finish. The interviewer was very good as she received her script just before I went in and although she was using a teleprompt for her questions, she put some life and soul into her performance! DW

Are you following the Disney and Dell Top Job split stories? Up until this week both companies had one person doing both Chairman and CEO jobs: Michael Eisner was forcibly ousted from one half of his portfolio earlier this week and now Dell’s founder Michael Dell has [voluntarily] announced that wef 16 July he will hand over the CEO job to someone else. Remember corporate governance? Combining the two jobs is seriously frowned on here in the UK so for students it may be worthwhile reviewing this issue as it’s still fresh: what better background than Mickey Mouse, too? DW

Last week I pointed out that the UK government has announced that it is to let market forces determine the future of executive pay packages but that the EU is considering further investigation into whether it feels that legislation in this area is needed. From the USA now comes this, hauntingly familiar, headline: Will the Government Legislate Executive Pay? Apparently, William McDonough, the chairman of the Public Company Accounting Oversight Board warned that the US government could intervene to control executive compensation if company managers do not. Meanwhile in Wednesday’s Daily Telegraph there was the story about the CEO of Bradford and Bingley who is about to move to take charge of Visa International, the credit card company. The DT quoted B&B chairman Rod Kent as saying “This answers the doubting Thomases in the fat cat debate who do not believe there is an international executive pay market. McDonough told a meeting of the Economic Club of Chicago it would be good riddance if a chief executive quit because his or her pay was being cut. I would turn to the directors and point out that there are lots of fine people in America, many of them in this room, who would be happy to be CEOs at more rational levels of income, said McDonough, according to the report. More food for thought! DW

I'm deeply grateful to Ian Baker for this cartoon and hope that everyone enjoys it. DW

Saurabh wrote to me from India last week with a plea for help on calculating machine hour rates. I replied to the efect that she should go to a factory and ask them all about it since she is doing a Master's degree and should be able to cope with that. She replied: Thanks for sending reply. Firstly i was confused about calculating Machine Hour Rate (MHR) as therotical and practical are different.I have collected information about MHR in local indian books. But when i visited one small scale industry I came to the conclusion that it was different to what was written in books. 1] MHR = FIXED COST + VAR COST. Var.cost includes costs like power, heating etc.S ome authors prefer to add wages but some don't consider it. What is the correct way? 2] while calculating fixed costs, how to calculate building cost? In the Books generally final amount is given. Here's my response: 1 Remember that books often seem to be different to real life because books speak very generally about cost accounting whereas a business is very specific. Another problem is that some practising accountants aren't very sure about their theory and they can make mistakes! Look carefully at what you find and check that it really makes sense. Ask the accountant at the factory to explain why they do what they do. When I do real factory work, this is what I do! Some companies have no proper accountant so they do what they can even if it doesn't always make sense. They NEED an accountant but think they can't afford one. To answer the question of what are fixed and what are variable costs you need to consider the situation you are studying. Again, this is a problem with text books. Many authors simply copy what other authors have written and blindly write the same things without thinking about them. Take a look at my site for examples of fixed and variable costs. If you are not sure about the behaviour of costs in a real business, plot their total costs on a graph with output or sales on the horizontal axis and total costs on the vertical axis and it should give you an idea of fixed costs. If you're not sure about this, collect your data, send it to me and I'll show you what to do. Direct wages were always considered to be variable costs and probably they are on a unit by unit basis. However, many companies then realised that even when output if low, they have the same labour costs as when their output is higher ... their direct labour is partly fixed and they don't even realise it. Ask your company's management what really happens to their labour costs. 2 For this question are you asking what comprises building costs? Building costs are made up of such items as rent, property taxes, repairs and maintenance ... anything that you can directly associate with the building in just the same way as you can associate labour costs with labour and material costs with material. I hope these answer your questions. Let me know of any other problems you think I can help you with. Best wishes DW

Don't you just hate it when: you go to a web site for the second time, having set your user name and password on the first visit, only to be asked to input them again ... and again on the third visit ... and again on the nth visit? you go to a supermarket or other self service shop to find that a woman (never a man, note, unless he has tattoos, earrings and is wearing a baseball cap) is blocking the very shelf that you NEED with her body, her trolley (parked longitudinally and not latitudinally) and children if appropriate? That woman will then amble through the things she wants at turtle neck speed until she is comfortable. Don't you just feel like dashing to the local self protection shop to buy one of those 20,000 volt zappers, dashing back to the supermarket and zapping these oh so slow shoppers? The first of these just happened to me at Blogger.com for the umpteenth time and the second of them happened yesterday at Waitrose: not once, not twice but three times in one visit. Mrs W has a cold or flu and is incapacitated hence my reluctant retail experience. End of first rant for a while! DW