Own-costs

Own-costs. The German term for what a thing costs the producer before any margin, and it appears in ordinary commercial speech as well as in accounting.

Zu Selbstkosten abgeben — to hand something over at own-cost — is a specific and meaningful statement in German business. It names an exact point on a scale everyone is assumed to know exists.

Sighted over the thumb

Sighted over the thumb. The German for a rough estimate, from the surveyor’s trick of gauging distance by holding up a thumb. It is always flagged, and flagging it is the point — the speaker is marking the number as not properly derived before anyone else can.

The milkmaid’s arithmetic

Milkmaid’s arithmetic. The German term for a calculation that looks right and has left something out — from the fable of the milkmaid who counts the profits from her pail before dropping it.

It is a serious accusation in a German commercial discussion. The charge is not that the conclusion is wrong but that the working was.

Cost accounting as a discipline

Kostenrechnung. German business education treats cost accounting as a discipline in its own right, with its own vocabulary and its own exams, distinct from financial accounting. Selbstkosten, own-costs. Deckungsbeitrag, contribution margin. Zuschlagskalkulation, overhead absorption. The tradition assumes a price is built upward from documented inputs, and teaches the building.

The calculation

Die Kalkulation. The German word for working out what something must cost — materials, labour, overhead, margin — and the noun is used as though it produces a result rather than an estimate. Das ist so kalkuliert ends a conversation about price. The figure was derived, and the derivation is available.

Fixed book prices

Die Buchpreisbindung. German law fixes the retail price of books. Every shop sells the same title at the same price, and the publisher sets it. The price is treated as a property of the book rather than of the transaction.

The architects’ fee scale

Die HOAI. Until 2019, German law set both minimum and maximum fees for architects and engineers. Charging below the minimum was not permitted. The justification, stated by the professional chambers, was that binding rates protect planners and clients from ruinous price competition that would endanger quality and safety.

The European Court of Justice struck the binding rates down on 4 July 2019, holding that they obstructed price competition contrary to the Services Directive. Germany had to be told by a foreign court that price is something to compete on.

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