J. Lee Nicholson

Jerome Lee (J. Lee) Nicholson (1863 - November 2, 1924) was an American accountant, industrial consultant, author and educator at the New York University and Columbia University, known as pioneer in cost accounting. He is considered in the United States to be the "father of cost accounting."

Nicholson most important contributions to cost accounting consisted of "emphasizing cost centres and the measuring of profits for individual departments based on machine hour rates." Also he helped establishing the National Association of Cost Accountants (NACA) in 1920, which resulted into the Institute of Management Accountants.

Born in Trenton, New Jersey, Nicholson grew up in Pittsburgh, Pennsylvania. After attending common school and business college, he started in industry. In his spare time he studied accountancy, and eventually in 1901 he obtained his Certified Public Accountant license for the State of New York.

Nicholson had started his career at the Keystone Bridge Company, where he worked his way up from office boy to assistant at the engineering department. In drawing up plans for the company foreman and superintendent, he started to develop his interest in cost accounting. At the age of 21, in 1884, he moved to the Pennsylvania Railroad Company where he had obtained an accounting position. Around 1900 Nicholson started his own accountancy and consultancy firm J. Lee Nicholson and Company, specialized in cost systems for manufacturing organizations.

During World War I he served at the US Ordnance Department as supervising cost accountant in 1917-18. He was promoted to the rank of Major, and kept using his rank in public life, signed his work with Major J. Lee Nicholson, and is remembered by that name. Previous to this position at the Ordnance Department, he was chief of the Division of Cost Accounting of the Department of Commerce. The filling of these positions gave him ample opportunity to become familiar with the war contract situation in its accounting aspects. In the summer of 1917 he was chairman of a conference of delegates from the War, Navy, and Commerce Departments, the Federal Trade Commission, and the Council of National Defense. This conference, in a pamphlet issued July 81, 1917, made certain recommendations regarding government contracts, and these recommendations are presented verbatim in Nicholson and Rohrbach's Cost Accounting (1919).

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