Abstract
Explains that a common problem of cost control at design stage is the firms managers desire for the lowest cost compatible with supporting innovation and the designers preference for the optimal design, which may be unnecessarily sophisticated. Develops a mathematical model to represent this situation, pointing out that the manager is usually unaware of the design alternatives unless they are revealed by the designer, but can use budgetary limits and load costs onto certain cost drivers e.g. number of parts to influence the designers choice and align hisher interests with those of the firm. Suggests that the difference between actual and loaded costs is a function of the noncost benefits from design choice e.g. competitive edge and the degree of information asymmetry between manager and designer. Considers the implications for costing activities and the limitations of the model.