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 MANAGEMENT
ACCOUNTING
FOR DECISION MAKERS

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 At Pearson, we have a simple mission: to help people
make more of their lives through learning.

We combine innovative learning technology with trusted

content and educational expertise to provide engaging
and effective learning experiences that serve people
wherever and whenever they are learning.

From classroom to boardroom, our curriculum materials, digital

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Every day our work helps learning flourish, and

wherever learning flourishes, so do people.

To learn more, please visit us at www.pearson.com/uk

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 TENTH EDITION

MANAGEMENT
ACCOUNTING
Peter Atrill and
Eddie McLaney FOR DECISION MAKERS

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney
Dubai • Singapore • Hong Kong • Tokyo • Seoul • Taipei • New Delhi
Cape Town • São Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan

F01 Management Accounting for Decision Makers 49459.indd 3 23/09/2020 17:05

 PEARSON EDUCATION LIMITED
KAO TWO
KAO PARK
Harlow CM17 9NA
United Kingdom
Tel: +44 (0)1279 623623
Web: www.pearson.com/uk

First published 1995 by Prentice Hall Europe (print)

Second edition published 1999 by Prentice Hall Europe (print)
Third edition published 2002 by Pearson Education Limited (print)
Fourth edition published 2005 (print)
Fifth edition published 2007 (print)
Sixth edition published 2009 (print)
Seventh edition published 2012 (print and electronic)
Eighth edition published 2015 (print and electronic)
Ninth edition published 2018 (print and electronic)
Tenth edition published 2021 (print and electronic)
© Prentice Hall Europe 1995, 1999 (print)
© Pearson Education Limited 2002, 2005, 2007, 2009 (print)
© Pearson Education Limited 2012, 2015, 2018, 2021 (print and electronic)
The rights of Peter Atrill and Edward McLaney to be identified as authors of this work have been
asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a
retrieval system, distribution or transmission in any form or by any means, electronic, mechanical,
recording or otherwise, permission should be obtained from the publisher or, where applicable, a
licence permitting restricted copying in the United Kingdom should be obtained from the Copyright
Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN.
The ePublication is protected by copyright and must not be copied, reproduced, transferred,
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responsible may be liable in law accordingly.
All trademarks used herein are the property of their respective owners. The use of any trademark
in this text does not vest in the author or publisher any trademark ownership rights in such
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Pearson Education is not responsible for the content of third-party internet sites.

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ISBN: 978-1-292-34945-9 (print)

978-1-292-34946-6 (PDF)
978-1-292-34951-0 (ePub)
British Library Cataloguing-in-Publication Data
A catalogue record for the print edition is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Atrill, Peter, author. | McLaney, E. J., author.
Title: Management accounting for decision makers / Peter Atrill and Edward
McLaney.
Description: Tenth edition. | Harlow, England ; New York : Pearson, 2021. |
Includes bibliographical references and index. | Summary: “In this
edition, we have taken the opportunity to improve the book. We have
expanded on the changing role of management accountants to enable them
to retain their place at the centre of the decision-making and planning
process. In Chapter 1, we have included the recently developed statement
of Global Management Accounting Principles. These principles have been
identified (by the leading management accounting professional bodies in
the UK and US) as those to be followed when determining the information
that managers need. In Chapter 7, we have brought in a discussion of
current thinking and practice in the area of management control.
Throughout this new edition, we have included additional, and more
up-to-date, examples of management accounting in practice. We have also
added more in-chapter questions and diagrams”-- Provided by publisher.
Identifiers: LCCN 2020032735 | ISBN 9781292349459 (hardback)
Subjects: LCSH: Managerial accounting. | Decision making.
Classification: LCC HF5657.4 .A873 2021 | DDC 658.15/11--dc23
LC record available at https://lccn.loc.gov/2020032735
10 9 8 7 6 5 4 3 2 1
25 24 23 22 21
Front cover image Singora/Shutterstock
Print edition typeset in 9.25/13 pt Helvetica Neue LT W1G by SPi Global
Printed in Slovakia by Neografia
NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION

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 Brief contents

Preface xvii
How to use this book xix
Acknowledgements xxi

1 Introduction to management accounting 1

2 Relevant costs and benefits for decision making 42
3 Cost–volume–profit analysis 66
4 Full costing 107
5 Costing and cost management in a competitive environment 154
6 Budgeting 197
7 Accounting for control 243
8 Making capital investment decisions 286
9 Managing risk 333
10 Strategic management accounting: performance
evaluation and pricing in a competitive environment 360
11 Measuring divisional performance 413
12 Managing working capital 459

Appendix A Glossary of key terms 513

Appendix B Solutions to self-assessment questions 522
Appendix C Solutions to critical review questions 534
Appendix D Solutions to selected exercises 544
Appendix E Present value table 584

Index 587
Credits 601

BRIEF CONTENTS v

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F01 Management Accounting for Decision Makers 49459.indd 6 23/09/2020 17:05
 Contents

Preface xvii
How to use this book xix
Acknowledgements xxi

1 Introduction to management accounting 1

Introduction 1
Learning outcomes 1
What is the purpose of a business? 2
How are businesses organised? 3
How are businesses managed? 6
Establish mission, vision and objectives 7
Undertake a position analysis 9
Identify and assess the strategic options 10
Select strategic options and formulate plans 10
Perform, review and control 10
The changing business landscape 11
What is the financial objective of a business? 12
Balancing risk and return 14
What is management accounting? 16
How useful is management accounting information? 18
Providing a service 18
Weighing up the costs and benefits 20
Management accounting as an information system 22
It’s just a phase 23
What information do managers need? 25
Reporting non-financial information 27
Influencing managers’ behaviour 28
Reaping the benefits of information technology 29
From bean counter to team member 30
Reasons to be ethical 32
Management accounting and financial accounting 34
Summary 36
Key terms 39
References 39
Further reading 39
Critical review questions 39
Exercises 40

CONTENTS vii

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 2 Relevant costs and benefits for decision making 42
Introduction 42
Learning outcomes 42
Cost–benefit analysis 43
What is meant by ‘cost’? 44
Relevant costs: opportunity and outlay costs 46
Irrelevant costs: sunk costs and committed costs 49
Sunk cost fallacy 50
Determining the relevant cost of labour and materials 51
Labour 51
Materials 54
Non-measurable costs and benefits 56
Summary 58
Key terms 59
Further reading 59
Critical review questions 59
Exercises 60

3 Cost–volume–profit analysis 66
Introduction 66
Learning outcomes 66
Cost behaviour 67
Fixed cost 67
Variable cost 69
Semi-fixed (semi-variable) cost 70
Analysing semi-fixed (semi-variable) costs 70
Finding the break-even point 72
Contribution 78
Contribution margin ratio 79
Margin of safety 79
Achieving a target profit 81
Operating gearing and its effect on profit 82
Profit–volume charts 84
The economist’s view of the break-even chart 85
The problem of breaking even 87
Weaknesses of break-even analysis 87
Using contribution to make decisions: marginal analysis 90
Pricing/assessing opportunities to enter contracts 91
The most efficient use of scarce resources 93
Make-or-buy decisions 95
Closing or continuation decisions 97
Summary 100
Key terms 101
Further reading 101
Critical review questions 101
Exercises 102

viii CONTENTS

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 4 Full costing 107
Introduction 107
Learning outcomes 107
What is full costing? 108
Why do managers want to know the full cost? 108
Single-product businesses 110
Process-costing problems 111
Multi-product businesses 113
Direct and indirect cost 114
Job costing 115
Full costing and cost behaviour 116
The problem of indirect cost 118
Overheads as service renderers 118
Job costing: a worked example 118
Selecting a basis for charging overheads 123
Segmenting the overheads 126
Dealing with overheads on a cost centre basis 127
Batch costing 137
Non-manufacturing overheads 139
Full (absorption) costing and estimation errors 140
Full (absorption) costing and relevant costs 141
Full (absorption) costing versus variable costing 142
Which method is better? 144
Summary 146
Key terms 148
Reference 148
Further reading 148
Critical review questions 148
Exercises 149

5 Costing and cost management in a

competitive environment 154
Introduction 154
Learning outcomes 154
Cost determination in the changed business environment 155
Costing and pricing: the traditional way 155
Costing and pricing: the new environment 155
Cost management systems 157
The problem of overheads 157
Taking a closer look 157
Activity-based costing 158
Assigning overheads 159
ABC and the traditional approach compared 160
ABC and service industries 161
Benefits and costs of ABC 165
ABC in practice 167

CONTENTS ix

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 Managing costs over the product life cycle 169
Total life-cycle costing 170
Target costing 172
Kaizen costing 175
Other approaches to managing costs in the modern environment 178
Value chain analysis 178
Benchmarking 180
Total quality management 184
Managing quality costs 186
An alternative view 188
Summary 191
Key terms 192
Reference 192
Further reading 192
Critical review questions 193
Exercises 193

6 Budgeting 197
Introduction 197
Learning outcomes 197
How budgets link with strategic plans and objectives 198
Exercising control 199
Time horizon of plans and budgets 201
Budgets and forecasts 202
Periodic and continual budgets 202
Limiting factors 203
How budgets link to one another 203
How budgets help managers 206
The budget-setting process 208
Step 1: Establish who will take responsibility 208
Step 2: Communicate budget guidelines to relevant managers 208
Step 3: Identify the key, or limiting, factor 208
Step 4: Prepare the budget for the area of the limiting factor 209
Step 5: Prepare draft budgets for all other areas 209
Step 6: Review and coordinate budgets 209
Step 7: Prepare the master budgets 210
Step 8: Communicate the budgets to all interested parties 210
Step 9: Monitor performance relative to the budget 210
Using budgets in practice 211
Incremental and zero-base budgeting 213
Preparing budgets 216
The cash budget 216
Preparing other budgets 220
Activity-based budgeting 222
Non-financial measures in budgeting 225
Budgets and management behaviour 225
Problems with budgets 226
Beyond conventional budgeting 228
The future of budgeting 230

x CONTENTS

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 Summary 233
Key terms 234
References 234
Further reading 234
Critical review questions 235
Exercises 235

7 Accounting for control 243

Introduction 243
Learning outcomes 243
Budgeting for control 244
Types of control 245
Variances from budget 247
Flexing the budget 247
Sales volume variance 248
Sales price variance 251
Materials variances 252
Labour variances 253
Fixed overhead variance 254
Reconciling the budgeted profit with the actual profit 255
Reasons for adverse variances 259
Variance analysis in service industries 261
Non-operating-profit variances 261
Investigating variances 261
Variance analysis in practice 264
Compensating variances 264
Standard quantities and costs 265
Setting standards 266
Who sets the standards? 266
How is information gathered? 266
What kind of standards should be used? 267
The learning-curve effect 267
Other uses for standard costing 268
Some problems 269
The new business environment 271
Making budgetary control effective 272
Behavioural issues 273
Failing to meet the budget 274
Budgets and management autonomy 275
Types of management control 275
Direct control 275
Indirect control 276
Summary 278
Key terms 280
Reference 280
Further reading 280
Critical review questions 281
Exercises 281

CONTENTS xi

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 8 Making capital investment decisions 286
Introduction 286
Learning outcomes 286
The nature of investment decisions 287
Investment appraisal methods 288
Accounting rate of return (ARR) 290
ARR and ROCE 291
Problems with ARR 292
Payback period (PP) 294
Problems with PP 296
Net present value (NPV) 298
Why does time matter? 299
Interest lost 299
Risk 299
Inflation 300
What should managers do? 300
Dealing with the time value of money 301
Calculating the net present value 303
Using present value tables 304
The discount rate and the cost of capital 305
Why NPV is better 306
NPV and economic value 306
Internal rate of return (IRR) 307
Problems with IRR 310
Some practical points 311
Investment appraisal in practice 314
Investment appraisal and strategic planning 317
Managing investment projects 318
Stage 1: Determine investment funds available 318
Stage 2: Identify profitable project opportunities 319
Stage 3: Evaluate the proposed project 319
Stage 4: Approve the project 319
Stage 5: Monitor and control the project 320
Summary 323
Key terms 324
References 325
Further reading 325
Critical review questions 325
Exercises 326

9 Managing risk 333

Introduction 333
Learning outcomes 333
Dealing with risk 334

xii CONTENTS

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 Assessing the level of risk 334
Sensitivity analysis 334
Strengths and weaknesses of sensitivity analysis 341
Scenario analysis 343
Expected values 343
Reacting to the level of risk 351
Summary 352
Key terms 353
Further reading 354
Critical review questions 354
Exercises 354

10 Strategic management accounting: performance

evaluation and pricing in a competitive environment 360
Introduction 360
Learning outcomes 360
What is strategic management accounting? 361
Facing outwards 362
Competitor analysis 362
Customer profitability analysis 366
Competitive advantage through cost leadership 370
Non-financial measures of performance 372
The balanced scorecard 373
Scorecard problems 380
Measuring shareholder value 380
The quest for shareholder value 381
How can shareholder value be created? 381
The need for new measures 382
Economic value added (EVA®) 383
Shareholder value-based management in practice 388
Just another fad? 389
Pricing 389
Economic theory 389
Some practical considerations 397
Full cost (cost-plus) pricing 398
Pricing on the basis of marginal cost 400
Target pricing 402
Pricing strategies 402
Summary 406
Key terms 407
References 407
Further reading 407
Critical review questions 408
Exercises 408

CONTENTS xiii

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 11 Measuring divisional performance 413
Introduction 413
Learning outcomes 413
Divisionalisation 414
Why do businesses divisionalise? 414
Devolving decisions 414
Divisional structures 416
Is divisionalisation a good idea? 416
Measuring divisional profit 421
Contribution 421
Controllable profit 422
Divisional profit before common expenses 422
Divisional profit for the period 423
Divisional performance measures 424
Return on investment (ROI) 424
Residual income (RI) 428
Looking to the longer term 429
Comparing performance 431
EVA® revisited 432
Transfer pricing 433
The objectives of transfer pricing 434
Transfer pricing and tax mitigation 436
Transfer pricing policies 438
Market prices 438
Variable cost 439
Full cost 439
Negotiated prices 440
Divisions with mixed sales 441
Differential transfer prices 443
Transfer pricing and service industries 445
Non-financial measures of performance 445
What is measured? 446
Choosing non-financial measures 449
Who should report? 449
Summary 451
Key terms 453
Further reading 453
Critical review questions 454
Exercises 454

12 Managing working capital 459

Introduction 459
Learning outcomes 459
What is working capital? 460
Managing working capital 461
The scale of working capital 461

xiv CONTENTS

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 Managing inventories 464
Budgeting future demand 466
Financial ratios 466
Recording and reordering systems 466
Levels of control 469
Inventories management models 471
XYZ inventories management 477
Managing trade receivables 478
Which customers should receive credit and how much should they be
offered? 479
Length of credit period 480
An alternative approach to evaluating the credit decision 483
Cash discounts 484
Debt factoring and invoice discounting 485
Credit insurance 485
Collection policies 485
Reducing the risk of non-payment 489
Managing cash 490
Why hold cash? 490
How much cash should be held? 490
Controlling the cash balance 491
Cash budgets and managing cash 492
Operating cash cycle 493
Cash transmission 497
Bank overdrafts 498
Managing trade payables 498
Taking advantage of cash discounts 499
Controlling trade payables 500
Managing working capital 500
Summary 503
Key terms 505
Further reading 506
Critical review questions 506
Exercises 507

Appendix A Glossary of key terms 513

Appendix B Solutions to self-assessment questions 522
Appendix C Solutions to critical review questions 534
Appendix D Solutions to selected exercises 544
Appendix E Present value table 584
Index 587
Credits 601

Lecturer Resources ON THE

WEBSITE
For password-protected online resources tailored to
support the use of this textbook in teaching, please visit
go.pearson.com/uk/he/resources

CONTENTS xv

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F01 Management Accounting for Decision Makers 49459.indd 16 23/09/2020 17:05
 Preface

Welcome to the tenth edition of Management Accounting for Decision Makers. This book is
directed primarily at those following an introductory course in management accounting. Many
readers will be studying at a university or college, perhaps majoring in accounting or in another
area, such as business studies, IT, tourism or engineering. Other readers, however, may be
studying independently, perhaps with no qualification in mind.
The book is written in an ‘open learning’ style, which has been adopted because we believe
that readers will find it more ‘user-friendly’ than the traditional approach. Whether they are
using the book as part of a taught course, or for personal study, we feel that the open learning
approach makes it easier for readers to learn.
In writing this book, we have been mindful of the fact that most readers will not have studied
management accounting before. We have tried to make the topic accessible to readers in a
number of ways. This includes avoiding unnecessary jargon. Where technical terminology is
unavoidable, we have given clear explanations. At the end of the book (in Appendix A) there
is a glossary of technical terms, which readers can use to refresh their memory if they come
across a term whose meaning is in doubt. In the book, we also introduce topics gradually,
explaining everything as we go. We have included frequent questions and tasks of various
types to try to help readers to understand the subject fully, in much the same way as a good
lecturer would do in lectures and tutorials. These questions and tasks have been framed in a
way that is designed to encourage readers to help improve their critical thinking. Many of the
questions and tasks require readers to think beyond the material in the text and/or to link the
current topic with material covered earlier in the book. More detail on the nature and use of
these questions and tasks is given in the ‘How to use this book’ section immediately following
this preface.

A note to students from the authors

Management accounting is concerned with providing information to those who need to make
financial/economic decisions about their organisation. Such decisions could involve such
things as:

■ assessing how much inventories (stock) a retail outlet should hold for optimal profitability;
■ deciding whether to abandon a particular product by a manufacturing business on the basis
of its profitability:
■ appraising the economic desirability of investing in new equipment that would enable a
business to provide a new service to its customers; and
■ a government weighing the costs and benefits of building a high-speed rail link from London
to Birmingham and the North.

It should be clear that these types of decision have a real impact on businesses, those who
work for them and for their customers. Getting these decisions wrong could have profound
effects, perhaps leading to a business collapsing, throwing its employees out of work and

PREFACE xvii

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 depriving customers of a product or service that they wish to buy. In the case of the rail link,
the impact is felt by the taxpayer who will fund the project, people who live on or near the
proposed route and, eventually, those who will travel on the line.
To relate the subject matter of the book to real life, each chapter includes a number of
‘Real world’ examples. These are generally short case studies that examine how a particular
business has approached a particular management accounting issue. In some cases, they are
presentations of research evidence as how organisations, in general, deal with such issues.
Evidence from students who have used past editions indicates that these can help to bring
the subject to life.
When you have completed your studies and are working in an organisation, you will need
to have the ability to solve problems. It is also crucial for you to be able to communicate your
solutions to colleagues and to customers. To do this you will need to develop a capacity to
think critically. ‘Critical thinking’ can be defined as the analysis of facts to form a judgement.
In analysing the facts, it is important that factual evidence is used in a logical way. It is also
important that a sceptical and questioning approach to the evidence is applied. When recruit-
ing, organisations are increasingly looking for evidence that potential employees can think
critically when seeking to solve problems.
In writing this book, we have been aware of the need to encourage critical thinking. The
‘Activities’ (typically short questions) that are interspersed throughout the book are designed,
among other things, to try to develop the appropriate critical thinking skills. This is also true
of the ‘Critical review questions’ at the end of each chapter. Similarly with many of the end-
of-chapter ‘Exercises’.
We hope that students will find the book readable and helpful.

A note to lecturers and tutors from the authors

In this edition, we have taken the opportunity to improve the book. We have expanded on the
changing role of management accountants to enable them to retain their place at the centre
of the decision-making and planning process. In Chapter 1, we have included the recently
developed statement of Global Management Accounting Principles. These principles have
been identified (by the leading management accounting professional bodies in the UK and US)
as those to be followed when determining the information that managers need. In Chapter 7,
we have brought in a discussion of current thinking and practice in the area of management
control. Throughout this new edition, we have included additional, and more up-to-date, exam-
ples of management accounting in practice. We have also added more in-chapter questions
and diagrams.
This text is supported by its own MyLab Accounting which is an environment that gives
unlimited opportunities for practice using a range of questions, and which provides timely
feedback. Updates to MyLab Accounting for the 10th edition include the enhancement of
over 45 previously static questions so that these are now algorithmic, which means that each
student is able to work on a numerical problem that is individual to him or her. In addition to
the Case Studies, useful self-study suggestions in the Study Plan, and vast range of exercises
(over 940) to select from, better feedback has been incorporated in MyLab Accounting for
this edition, providing a greater quality of response to help students learn from their incorrect
answers and make progress in their learning.
For access to MyLab Accounting, students need both a course ID and an access card (see
the advert on the inside back cover of the book).
Peter Atrill
Eddie McLaney

xviii PREFACE

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Another random document with
no related content on Scribd:
stones as they came out; setting aside those which could not be
erected for some time; and the piles of such stones grew larger at
Quincy and on the ground about the monument, while the monument
itself rose at a snail’s pace. A more spectacular progress was
needed for a project that was started on a shoestring, and depended
on more and still more public contributions. The building fund
dwindled to such a low sum that in February, 1829, work had to be
suspended for lack of funds to pay the wages of quarrymen,
stonecutters, derrickmen, blacksmiths, and teamsters, and the cost
of the good hay for the hard-working horses and oxen of the project.
But 14 courses had been laid—to a height of 37 feet, 4 inches. The
sailors were disappointed, and a poetess said:

But where’s the pile they said would rise,

Throwing its shadows o’er the wave,—
Lifting its forehead to the skies—
A Beacon far o’er land and sea,
Signal and Seal of Liberty.

A lottery to secure more building funds was next proposed. It

was not unusual to allow lotteries in this period—churches,
turnpikes, bridges, and even Harvard College—had received such
grants. Public sentiment in Massachusetts, however, was beginning
to consider lotteries a vicious practice and the director of the Bunker
Hill Monument Association voted against one.
At this time, Amos Lawrence was a member of the building
committee—a wealthy philanthropist of Boston, whose religion
seemed to be fixed on two ideals, one of which was his charities.
Unlike that of a few good ministers of the time, who had preached
against giving funds for the monument because they felt their various
charities should come first, Lawrence deemed the completion of the
Bunker Hill Monument of first importance. This project became his
other obsession. He enlisted the aid of the Massachusetts Charitable
Mechanics Association in the campaign for funds. Started in 1795 by
Paul Revere, and others, to promote a better understanding between
master mechanics and their apprentices, this society had become
influential; its membership embraced mechanics, manufacturers, and
such honorary members as Ex-President Adams, Daniel Webster,
and Edward Everett. Amos Lawrence had picked upon a well-
managed organization for assistance; its executives were shrewd
financiers and they knew how to get things done. The president of
the Massachusetts Charitable Mechanics Association became in
perpetuity the first vice-president of the Bunker Hill Monument
Association (today he is still so listed). Thereafter, the Mechanics
Association took an active part in the promotion and construction of
the monument. It made a careful estimate of the cost to complete the
monument and, much to Solomon Willard’s disgust, raised his
allowance for contingencies. Both associations decided to be
satisfied when the monument had reached the height of 159 feet, 6
inches—about two-thirds of the height previously determined upon.
Work was resumed on 17 June 1834, and continued until funds
again gave out, when the monument was 32 courses high, 85 feet;
now imposing enough for quite the good mariners of busy Boston
harbor to take notice of. It was the year 1835, and the country was
headed for a severe financial depression—a bad sign for those who
sought contributions for any but the most practical of objectives. In
this emergency, the women of New England again became active in
the raising of funds.
In the summer of 1840, a common greeting of the women of
Massachusetts was: “What are you doing for the Fair?” Those who
knit stockings, crocheted in worsted of various colors, who were
skilled in embroidered work, or who were merely good at plain
sewing strove industriously to get ready for the Fair that was to earn
money for the Bunker Hill Monument. Ten years earlier, the women
of New England had made a noble effort to secure funds for the
monument, but as the contributions from females and children had
been limited to a maximum of $1.00 each, the total was small. Now,
although the maximum sum ever raised at a Boston fair was $3,000,
they felt that a sizable sum could be realized in a fair in Quincy Hall,
near Faneuil Hall. Despite the criticism that “women were stepping
out of their sphere,” Sarah J. Hale, the leading spirit in this
 10
remarkable effort, persisted. Quincy Hall was 382 feet long by 47
feet wide, and it was crowded with the 43 tables of things to sell,
when the seven-day fair started in September, 1840. A Whig
Convention, in this year of a presidential election, undoubtedly
helped to increase the attendance at this very successful fair. The
price of admission on the first day was double that of the remaining
days, which was $0.25.

10
She was editor of Godey’s Lady’s Book for
30 years, and is credited with promoting the
establishment of the last Thursday in November
as Thanksgiving Day.

The success of the Quincy Fair was phenomenal. The net sum
of $30,035.53 was realized and turned over to the directors of the
Bunker Hill Monument Association toward the completion of the
Bunker Hill Monument. This amount was nearly one quarter its total
cost. The Yankee ladies did not know that two contributions of
$10,000 each, with several smaller donations, were available by
now. The gift of $10,000 by Judah Touro was peculiarly heartening,
as an example of the expression of the gratitude of the son of an
immigrant to the country of his adoption. The father of Touro had
been rabbi of a synagogue in Holland. The younger Touro was born
in Newport, R. I., in 1776; he had sailed to New Orleans with an
assortment of New England commodities and had made money in
their sale. A soldier in the Battle of New Orleans, in the War of 1812,
he had been given up for dead in the battle. He had become a
millionaire and, learning of the proposed gift of $10,000 by Amos
Lawrence, toward the completion of the monument, Touro had
matched it. Thus, in the year 1840, the success of the Bunker Hill
Monument was assured. It could now be built to the full height
planned by Baldwin and Willard—about 220 feet.
 The Riggers
Contractor James Sullivan Savage would have no trouble finding
good men for the ticklish job of raising and setting the heavy stones
of the higher courses of the monument; able sailors, who would take
a shore job for a change. Maritime Boston was full of these good
riggers, who were used to dizzy heights, and to whom the half
hitches, square knots, guys, slings, and tag lines would be easy. Up
to this time the monument had been built by day labor, not by
contract. Now, Savage had taken a contract to finish the monument
for $43,800, from the elevation of 85 feet to the top. He was well
trained in masonry, for he had worked on the job since the start
under Willard, whose rigid ideas would not let him take a contract
himself for profit on such a patriotic project, but who agreed to
superintend the work of Savage to the finish. Savage had the traits
of a good contractor—energy, resourcefulness, honesty—and the
sense that knew how each detail must be executed toward the end
of producing a job to be proud of.
Savage replaced the one-horse capstan of the hoist by a six-
horsepower steam engine, an innovation that speeded up progress.
The steam engine as a prime mover in land and water transportation
had become well established, and its use to drive textile machinery
had proved successful. Steam power in the construction industry,
however, was a novelty. Shouts and wigwag signals from the setting
gang at the top to the engineer on the ground were replaced by a
bell-wire signaling system. This must have been a pull bell, for many
11
years would pass before electric bells came into common use.

11
Joseph Henry had developed the
electromagnet at about the time of the laying of
the lower courses of the monument, and, a few
months after its dedication, Morse would operate
the first telegraph line between Washington and
Baltimore, but the transmission of electric
 currents by insulated wires even for a few score
feet was still too new to receive serious attention
on a construction job.

As its lighter stones would be easier to handle, the granite inner

cone (newel) around which the stairs wind was erected a few
courses ahead of the walls of the monument. It thus served as a
support for the derrick which raised the heavier wall stones. Through
apertures in the hollow walls of the newel, a heavy beam (wood?)
was passed, upon which the derrick was set.
It is interesting to compare our modern hoisting derrick with the
apparatus used to raise the stones for the monument. The derrick of
today consists of a guyed, vertical mast, an adjustable boom hinged
to the base of the mast, with boom falls, and hoist falls, each with
their cables and pulleys, or blocks. At the base of the mast, a bull
ring serves to turn the mast by power. The whole combination is
called the derrick. When we get accustomed to the old English or
American custom of calling the mast the post or derrick, and the
boom either the gaff or derrick, a little study enables us to
comprehend how the monument was built.
The lower courses were raised by the “Holmes Hoisting
Apparatus,” designed by a practical seaman of Boston. This device
could command a circle 100 feet in diameter. Except that it had no
bull ring to turn the mast, it appears much like the derrick of today.
With steam power available for the upper courses, Savage seems to
have modified the boom of Holmes to serve as a nearly horizontal
“lever,” on which a “wheel carriage” drew the stone inward, to its
desired position for placement. In other words, apparently, the boom
became today’s monorail. A somewhat obscure, English description
of the means used to hoist masonry 100 years ago, tells of two
devices. One was a “movable derrick crane,” with a vertical post,
supported by two timber backstays, and a movable hinged “jib or
derrick,” which could be today’s boom. This assembly, of course,
corresponded to today’s stiff-leg derrick, in which the back guys are
replaced by timber members. The other English device for raising
stones was practically exactly like today’s traveling crane, and that
was the name it went by in England, 100 years ago.
Our construction forebears of over a century ago had to use
ropes and chains for all purposes; there were no wire ropes. About
the time Savage set his first stone, John A. Roebling was making the
first American wire rope cable, in a largely outdoor plant located on a
level meadow on his farm in Saxonburg, Pa. Wire rope had real
advantages in construction work, because of its superior strength
and its much less stretch under load. A crude sketch, dated 1837,
shows that the derrick for the monument was guyed by chains, which
attached to the top of the mast and passed over timber brackets at
the staging level, and thence vertically down to weights at the
ground. In his long length, the stretching and shrinking of a rope
under rain, load, and temperature changes would be difficult to
control.
Every four courses of the wall stones (about 11 feet) the derrick
was raised, perhaps by unshipping the boom and using it as a lesser
mast to raise the mast proper. Square timber sticks were then
beginning to be used for staging, instead of the round trunks of small
trees and saplings previously used. A sketch of the monument
shows a squared timber stage for pointing the joints. Such a stage
could be much more easily erected, and was more reliable than the
round sticks, tied at the joints by cords.
On paper, Willard had performed the painstaking task of
dimensioning every stone, each with its top (the build) a little
narrower than its bottom (the bed), so that the true taper of the
obelisk would be maintained. To set the stone to line was the chore
of the erecting force. On the top of the stone already in place lime
mortar was spread, enriched with hydraulic cement, and with a
sprinkling of iron filings. (A popular, modern, commercial
waterproofing compound utilizes the fact that, upon oxidizing, iron
particles mixed with the cement mortar expand, thus reducing the
voids and producing a denser mass when the mortar sets.)
Temporary wooden wedges would be placed at the corners of
the stone already in place, to support the heavy new stone until the
mortar had hardened. When the ponderous stone had been speedily
raised from the ground to a level a few inches above the mortar, the
engine would be stopped; the derrick adjusted to right or left, and in
or out, until the stone was very closely in line. Next, riggers would
push on the bridle chain which attached to the two lewises in the
stone’s top surface, guiding it to its true position in its gentle descent
as the engine lowered it the few inches needed to bed it. A tiny
fraction of an inch “out-of-line” would be serious, for such errors if
repeated, or if not compensating, would visibly throw the monument
out of line. On a light stage high above the ground, bracing
themselves against gusts of wind, the riggers would be intent on the
necessity for such accuracy, but not forgetting their own safety, for
no careless workman could work for Savage. They would remember
that, while laying the last stone of the 12th course, at the southwest
corner, one man had been pushed off (the only death on the project).

Profitable Project
Happily, the good riggers raised their monument, course by
course, to the top. They were under a boss who knew his trade, and
he was making money—the sign of content on any construction
project. (Savage made some more money after the monument was
finished, when he retained the steam engine that had been used for
hoisting stone, for the purpose of raising a passenger car to the top.
For the car ride he collected $0.20, as against the $0.125 for visitors
who climbed the stairs.)
The practical riggers would not be disturbed at the proposal,
advanced when the monument neared its top, that the apex be
modified to form a platform to accommodate visitors. Aesthetic
Bostonians were much disturbed at this proposal. Happily, the
Bunker Hill Monument Association voted down this architectural
atrocity.
 High Capstone
On Saturday, 23 July 1842, several hundred of our early rising
Bostonian ancestors rose earlier than usual to arrive at the
monument at 6:00 a.m. On the ground at the base, they studied the
capstone; a small stone pyramid, three feet, six inches high, stoutly
lashed to the derrick hook, and with an American flag at the top.
Standing on the capstone, firmly grasping the hoisting rope, Colonel
Charles R. Carnes waited for the signal to hoist. When the clock
struck six, a signal gun was fired, and the capstone, bearing the
good colonel, started up. In 16 minutes it had reached the top; at
6:30 a.m. it had been bedded, and a national salute announced to all
Boston that the Bunker Hill Monument was completed.
By railroad, great multitudes came to Boston for the dedication of
the Bunker Hill Monument, nearly a year later, on 17 June 1843.
Unlike the time of 18 years earlier, when the cornerstone had been
laid, stagecoaches were not the main conveyance for visitors to
Boston. Indeed they were decidedly on the way out, and would soon
be but symbols of an era of traveling discomfort, as the railroad
completely took over. President Tyler and his cabinet attended;
Daniel Webster matched with sonorous eloquence his famous
speech at the laying of the cornerstone, and there were still 13 very
aged surviving veterans of the battle able to attend.

Foucault’s Experiment
Seven years later (1850), two Harvard professors checked with
elaborate apparatus, paid for by members of the Bunker Hill
Monument Association and the Massachusetts Charitable
Association, the famous experiment of Foucault which used a long
pendulum to prove the daily rotation of the earth. Suspended in the
newel by an annealed wire, 210 feet long, the oscillations of a
pointer, attached to a 31-pound British cannon ball relic of the battle,
were observed; and its plane of swing was seen to revolve during
the day from right to left of the observer. A sudden shower on a
previously bright day complicated the experiment, until Professor
Eben N. Horsford discovered the reason. Cooled by the rain the
monument’s exposed face contracted; its apex moved
correspondingly and carried the point of suspension of the pendulum
with it. As observed years later on the Washington Monument,
Horsford deduced that the side of an obelisk, exposed to the hot sun,
expanded, and that its apex followed the sun in the sun’s travel from
east to west. Such motion is tiny, and the ingenuity of the apparatus
to observe it was notable. The path of the orbit of the bob, registering
both the earth’s rotation and the effect of varying heat on the
monument’s sides, was described as an irregular ellipse with major
axis of one-half an inch.

Today
Two hundred thousand persons visit Bunker Hill every year. Of
these visitors 20,000 pay their $0.10, and presumably climb the 294
12
granite steps to the top. Very few Bostonians are among these
13
visitors. They are of various types: honeymooners and casual
tourists, whose list of the sights to be seen in historic Boston
includes the monument, and historically minded youngsters, one of
whom was recently caught in a heated argument with his father as to
where the order was to “wait ’til you can see the whites of their
eyes.” Surely, the stout young man who recently lugged 25 pounds
to the top—his young daughter—was not typical.

12
Estimate of custodian from a review of his
register, 1951.
13
“Those pangs of conscience he feels every
June 17 are as close as the average Bostonian
 ever comes to climbing Bunker Hill
Monument.”—Boston Globe, 18 June 1951.

The evidence that the monument is probably the most popular of

the historic shrines of old Boston would be as pleasing to the charter
members of the Bunker Hill Monument Association as to the present
members of this venerable society, which lists among present and
past members, 30 generals, 12 admirals, 12 Presidents of the United
States, a score of Massachusetts governors, 20 mayors of Boston,
and 6 presidents of Harvard University. It is a healthful society to
belong to, the 1949 Proceedings say, in the mention of 46 half-
century members of whom 16 were then living.
Many years ago, the Association voted to hold patriotic exercises
every year at the monument, and this resolution has been faithfully
fulfilled. The annual ceremonies today are very different from those
of the earlier years; they have followed the varying pattern in which
American citizens have celebrated their national anniversaries during
the more than a century since the monument was dedicated in 1843.
They were solemn occasions during the earlier years. In what better
spot could the Yankees of the trying days of the Civil War compare
their convictions with those who fought for similar principles than at
the monument, as they listened to the stirring eloquence of their War
Governor, John A. Andrew. In later years the holiday spirit took over,
with a fireman’s muster to please the older folk, while the youngsters
of Greater Boston made Bunker Hill Day on 17 June a parallel in
firecracker noise and casualties to fingers and eyesight, to the
Fourth of July, of which it was a preview. Today, Bunker Hill Day is a
huge neighborhood festival, with block parties and a skillfully routed
parade which seems to pass every house on the hill. They who enjoy
things most are the children of working people, not of the wealthy
families that once lived in the sightly dwellings of Bunker Hill. Each
boy or girl can give a visitor the story of the battle in detail, and recite
the precise dimensions of the monument. (They collect from tourists
for this information, for it is one way by which Charlestown
youngsters get their spending money.) These children would rarely
answer to the old names: Prescott, Warren, Putnam, or similar
Yankee names. They are mostly of second or third generation
European families: proud Americans, fortunate to live near the site of
one of America’s most famous historical shrines. Their festival is a
heartening occasion to witness, for it is American democracy at its
best.
Through it all the monument rises above its unadorned settings;
except that the crown of the hill has been removed, it could still be
the New England hilltop farm on which the battle was fought. The
obelisk rises in the simplicity of its straight lines and clean angles,
with no curves, and with the somber gray of its harsh-textured
masonry unrelieved by any greenery of foundation shrubbery. The
rugged monument is symbolic of the stern spirit of those who fought
in the battle, and of the determination of those who solved the
problem of building this massive memorial to them, in the pioneer
days of American architecture and engineering.
 Transcriber’s Notes
Punctuation, hyphenation, and spelling were made
consistent when a predominant preference was found in the
original book; otherwise they were not changed.
Simple typographical errors were corrected; unbalanced
quotation marks were remedied when the change was
obvious, and otherwise left unbalanced.
Illustrations in this eBook have been positioned between
paragraphs and outside quotations.
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