C-NRLF 
 
 
van 
 
 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 OF CALIFORNIA 
 
 HENRY RAND HATFIELD 
 MEMORIAL COLLECTION 
 
 PRESENTED BY 
 
 FRIENDS IN THE ACCOUNTING 
 PROFESSION 
 
MANUAL 
 
 AND FULL DESCRIPTION 
 
 of the 
 
 Simple Cost System 
 
 created and adopted by 
 
 The International Association of Manufacturing 
 Photo -Engravers 
 
 November, 1916, Edition 
 
 862-863 MONADNOCK BLOCK, CHICAGO 
 
Officers of the International Association of Manufacturing 
 Photo -Engravers, 1916 - 17 
 
 E. C. MILLER, President Osgood Co., 430 S. Market St., Chicago, 111. 
 
 F. W. GAGE, First Vice-President Gage Printing Co., Ltd., Battle Creek, Mich. 
 
 B. J. GRAY, Second Vice-President. .Gray-Adams Eng. Co., 1324 Wash. Ave., St. Louis, Mo. 
 
 J,. C. BBAGDON, Secretary-Treasurer John C. Bragdon, 711 Penn Ave., Pittsburg, Pa. 
 
 LOUIS FLADER, Commissioner 862-863 Monadnock Block, Chicago 
 
 Telephone - Harrison 656 
 Executive Committee 
 
 H. A. GATCHEL Gatchel & Manning, 6th and Chestnut Sts., Philadelphia, Pa. 
 
 E. W. HOUSER Barnes-Crosby Co., 226 W. Madison St., Chicago, 111. 
 
 ADOLPH SCHUETZ Sterling Engraving Co., 200 William St., New York, N. Y. 
 
 W. B. MACKENBURG Rapid Service Engraving Co., 202 Main St., Buffalo, N. Y. 
 
 P. T. BLOGG Alpha Engraving Co., Fayette and Howard Sts., Baltimore, Md. 
 
 Organizing Committee 
 
 HENRY PETRAN, Chairman Streissguth-Petran Eng. Co., 5 Wells St., Milwaukee, Wis. 
 
 A. E. WESSON Howard-Wesson Co., Worcester, Mass. 
 
 THEO. STENDEL Scientific Engraving Co., 400 W. 31st. St., New York, N. Y. 
 
 J. R. BEVAN Rembrandt Engraving Co., 6th & Cherry Sts., Philadelphia, Pa. 
 
 R. D. ARMIGER Baltimore-Maryland Eng. Co., 28 S. Charles St., Baltimore, Md. 
 
 F. A. DABNEY Metropolitan Engraving Co., 21 N. 12th St., Richmond, Va. 
 
 W. H. HOFFMAN Dixie Engraving Co., 128 Bay St., W., Savannah, Ga. 
 
 M. W. GANSTER Alabama Engraving Co., Cor. 1st Ave. & 22d St., Birmingham, Ala. 
 
 SHERMAN SMITH . .Pittsburg Photo-Engraving Co., 723 Liberty St., Pittsburg, Pa. 
 
 V. W. HURST Hurst Engraving Co., 116 St. Paul St., Rochester, N. Y. 
 
 H. K. PERRY Buffalo Engraving Co., Ellicott & S. Division St., Buffalo, N. Y. 
 
 J. D. CHAMBERS. . . .Art Engraving & Electrotype Co., 1104 Prospect Ave., Cleveland, Ohio 
 
 H. E. PARKINSON .' Terry Engraving Co., 51 E. State St., Columbus, Ohio 
 
 F. P. BUSH Bush-Krebs Co., 408 S. Main St., Louisville, Ky. 
 
 E. E. STAFFORD Stafford Engraving Co., Century Bldg., Indianapolis, Ind. 
 
 J. H. NEELAND ... Dean-Hicks Co., Ellsworth Ave. and Williams St., Grand Rapids, Mich. 
 
 GEO. H. HEBB Evans- Winter-Hebb Co., Woodward at Erskine, Detroit, Mich. 
 
 OSCAR KOHN Columbian Engraving Co., 115 W. Harrison St., Chicago, 111. 
 
 A. V. SCHALLER Art Engraving Co., 114 E. Third St., St. Paul, Minn. 
 
 F. A. FREEMAN Freeman Engraving Co., 107 5th St., Minneapolis, Minn. 
 
 GEO. DANZ Mound City Engraving Co., 100 N. Third St., St. Louis, Mo. 
 
 L. A. WILLIAMS Knoxville Engraving Co., Knoxville, Tenn. 
 
 H. G. GRELLE Grelle-Egerton , Engraving Co., 210 Camp St., New Orleans, La. 
 
 ROGER CUNNINGHAM, . Teachenor-Bartberger Eng. Co., 7th & Central Sts., Kansas City, Mo. 
 
 N. J. BAKER Baker Bros. Engraving Co., Omaha, Nebr. 
 
 J. J. WALDEN Southwestern Engraving Co., Fort Worth, Texas 
 
 J. A. DeBOUZEK. . . .DeBouzek Engraving Co., 27 S. West Temple St., Salt Lake City, Utah 
 
 WM. J. BRANDENBURG Bryan-Brandenburg Co., 232 E. Fourth St., Los Angeles, Cal. 
 
 ALBERT H. ANTZ Sierra Art & Eng. Co., Front & Commercial Sts., San Francisco, Cal. 
 
 F. E. ANDREWS Hicks-Chatten Eng. Co., 607 Blake-McFall Bldg., Portland, Ore. 
 
 A. BERNHARD Bernhard Engraving Go., 1915 First Ave., Seattle, Wash. 
 
 Publicity Committee 
 
 CHAS. STINSON Gatchel & Manning, 6th & Chestnut Sts., Philadelphia, Pa. 
 
 R. B. TEACHENOR Teachenor-Bartberger Eng. Co., 7th & Central Sts., Kansas City, Mo. 
 
 W. A. ALLEN The Manternach Co., 74 Union Place, Hartford, Conn. 
 
 J. W. RAWSTHORNE, JR Publicity Engraving Co., 525 Third Ave., Pittsburg, Pa, 
 
 A. W. MORLEY, JR Electro-Light Eng. and Elec. Co., 419 Pearl St., New York, N. Y. 
 
 Scale Committee 
 
 F. A. RINGLER 21 Barclay St., New York, N. Y. 
 
 GEO. H. BENEDICT, Globe Engraving and Electrotype Co., 711 S. Dearborn St., Chicago, 111. 
 
 C. J. DOYLE Detroit Photo-Engraving Co., 94 Fort St., W., Detroit, Mich. 
 
 F. W. GAGE Gage Printing Co., Ltd., Battle Creek, Mich. 
 
 J. C. BUCKBEE. . Bureau of Engraving, Minneapolis, Minn. 
 
77/E SIMPLE COST SYSTEM 
 
 And All There Is to be Known about It 
 
 Introductory 
 
 It may be taken for granted that you entered the photo-engraving 
 business with the idea of making money. If you have the right concep- 
 tion of business and if you know what profits are and mean, you have 
 probably met with a sad disappointment. What is to follow is intended 
 for men who take the photo-engraving business seriously, for those who 
 treat it as a business, not as a side-line or a means to an end. 
 
 A glance into the past discloses the fact that but very few men 
 ever succeeded in accumulating a competency out of the photo-en- 
 graving business. The men who were in it years ago, "when costs were 
 low and prices high, did not create fortunes out of this business. None 
 retired wealthy on money made in the photo-engraving business and 
 most of them are today either making a living and nothing more, or 
 are engaged in other and better-paying lines. We might as well face 
 the truth and look the situation squarely in the eye. 
 
 If these men, working under much more favorable conditions than 
 you are today, paying less for everything they bought and getting more 
 for everything they sold, could not accumulate even a modest sum to 
 keep them in their old days, how can you expect to fare better if you 
 persist in making the same mistakes they did? 
 
 The greatest mistake ever made by engravers is to as- 
 sume that it costs the same amount per square inch to make 
 plates, regardless of their size, and to sell them upon a flat, 
 square-inch basis. Wipe out that error and you will wipe 
 out your losses and increase your profits. 
 
 Because it has been published and circulated widely, you are 
 familiar with the Standard Scale of Prices approved by the Indian- 
 apolis Convention. This Scale takes into consideration the fact that 
 small plates cost more in proportion than large plates. That wipes out 
 mistake number one. Read the reading notes and you will see that 
 certain portions of the work are to be sold on the basis of time work. 
 Now remember that everything about this Standard Scale is based upon 
 the COST OF PRODUCTION, not in one shop or one city, but 
 
Manual and Full Description 
 
 in many shops in a number of cities, and that the facts were gathered 
 over a period of years. 
 
 In order to sell your products intelligently and at a profit, you must 
 fynow the cost of production. This, the Simple Cost System will give 
 you. We cannot combine to raise prices and eliminate competition. 
 As a matter of fact there is no necessity for such an act and certainly 
 no desire for it. We cannot compel men to do what we ask them to do. 
 On the other hand, we are not expected to conduct our businesses at a 
 loss nor do -we have to give away a part of our product. We have a 
 perfect and well-defined right to educate the photo-engravers in every 
 phase of the business, and no one will object to our endeavors to im- 
 prove the business and the men in it. 
 
 It will not do for some of us to know these things and to alone profit 
 by that knowledge. We cannot hope to enrich one part of our craft 
 and at the same time impoverish the remainder. We have discovered 
 the fundamental wrongs of this business and we have found the reme- 
 dies therefor. 
 
 The Simple Cost System will teach you more about your business 
 than you ever knew before and the Standard Scale will enable you to 
 make use of what you have learned. One is of no value without the 
 other. Unless you know your cost of production, you cannot properly 
 use the Standard Scale. LEARN THE ONE AND USE THE 
 OTHER. 
 
 Mistakes of the Past and What They Have Cost 
 
 Man is not inclined to view with favor the thing he gets for nothing. 
 To disabuse anyone of the idea that the result of the Cost Committee's 
 work is a free gift to photo-engravers, let it be known that we have paid 
 a fabulous price for it. 
 
 The International Association has been in existence nineteen years. 
 Let us say that the average annual dues of the Association for the first 
 eighteen years of its existence were $1 ,000 per year, a total of $18,- 
 000. In the last two years we have collected and spent, in behalf of all 
 photo-engravers, the sum of $60,000. The individual expenses of 
 every man attending the various conventions can be set at $1 00, a total 
 expense, for this item alone, of $140,000. We can safely say that our 
 organizational efforts during the past seventeen years have cost the sum 
 of $200,000, 
 
of the Simple Cost System 
 
 At the Boston Convention a Cost Committee was appointed to 
 gather statistics of cost and to formulate, if possible, a Basic Selling 
 Plan. This the Cost Committee has done. In addition thereto and 
 based upon the evidence obtained from those operating cost-finding 
 systems, the Cost Committee has formulated a Simple Cost System 
 and now, after nineteen years of effort, we have TWO CONCRETE 
 PLANS FOR IMPROVING THE BUSINESS ,4 Standard 
 Selling Schedule and a Simple Cost System. 
 
 As these two propositions are the result of nineteen years 
 of effort and represent a cash expenditure of over $200,- 
 000 out of the pockets of photo-engravers, it can hardly 
 be said that you are getting something for nothing. To 
 get an idea of the enormous cost at which our efforts 
 have been secured, let me call your attention to the fol- 
 lowing staggering figures. Estimating the annual sales in 
 the photo-engraving industry at only $10,000,000 per year 
 for the last fifteen years, a total of $150,000,000 is ob- 
 tained. The lack of a Standard Selling Schedule and ig- 
 norance of costs has cost the photo-engravers of this coun- 
 try a loss of at least ten per cent in revenues and one 
 hundred per cent in profits during all the time they have 
 been in business. Considering only the period of fifteen 
 years, the loss sustained by you, all of which could have 
 been saved, amounts to ten per cent of that immense sum, 
 or $15,000,000 a loss of $1,000,000 per year divided 
 among 500 firms. 
 
 Raise your selling prices ten per cent and you double 
 your profits. 
 
 Is it worth while? 
 
Manual and Full Description 
 
 The Simple Cost System What It Is 
 
 Cost is the exact sum of all expenditures incurred in connection with 
 an item, including expenses of manufacturing, marketing or other 
 handling up to the point at which cost is determined. Denham. 
 
 The Simple Cost System is a method by which you can ascertain 
 correctly the cost of any article you manufacture in your photo-en- 
 graving department. Broadly speaking, only two elements enter into 
 the production of photo-engraved plates materials and labor. The 
 Simple Cost System tells you the cost of materials and it tells you the 
 exact hour cost of labor. If you have your workmen record the amount 
 of time they consume in making a plate and if you know its size, you 
 can readily and without mental effort on your part figure up the value 
 of the material and the value of the labor and by adding the two you 
 arrive at COST. 
 
 No business can be safe nor can any manufacturer be considered a 
 business man unless the cost of production is known. The Simple Cost 
 System, based upon the fundamental truth that everything you buy 
 and sell is expressed in MATERIALS and LABOR, finds the true 
 cost of each. This is a simple act when dealing with material, because 
 those items practically separate themselves from all other expenses, 
 consequently the cost of materials can be easily obtained. The TRUE 
 COST OF LABOR is not so easily determined. The wages paid 
 out to labor are self-evident, but inasmuch as LABOR must pay for 
 itself and carry all other expenses, it becomes necessary to establish 
 the exact ratio of the labor expense to all other expenses and then add 
 a sum to the wages paid the workmen large enough to cover all other 
 expenses and include NON-PRODUCTIVE TIME. 
 
 That is exactly what the Simple Cost System is and does. 
 
 How It Is Created 
 
 If cost is the exact sum of all expenditures incurred in the making 
 and handling of an item, then we must go to the expense account 
 (Cash Book) to get our figures. This we have done. 
 
 Materials have been separated from all other expenses of the busi- 
 ness and we found that materials cost two cents per square inch for zinc 
 etchings and three cents per square inch for copper halftones (1913). 
 
of the Simple Cost System , 7 
 
 The cost of materials per square inch in this case means THE 
 SOLD INCH. For every SOLD inch of materials, one-third of an 
 inch is waste. In other words, 33 1 /3 per cent of all materials is waste; 
 only 66 2/3 per cent of your materials is sold in the shape of photo- 
 engraved plates. To prove the cost of materials, take their total cost 
 for one year, separate the items into two classes zinc materials and 
 halftone materials. Keep track of the number of square inches of zinc 
 etchings and halftones you sell for one year. Divide the total cost of 
 the zinc materials for the year by the number of square inches of zinc 
 etchings sold during that period and the answer will be your cost of 
 materials for zinc etchings on the SOLD INCH BASIS. Do the 
 same with your halftone figures and you will get the cost of materials 
 for halftones on the SOLD INCH BASIS. If you allow yourself 
 a fair margin on the materials to cover cost of handling and interest 
 you will find our figures of two and three cents per SOLD INCH as 
 the correct prices for the materials entering into zinc etchings and half- 
 tones respectively. 
 
 Having disposed of materials, we take all other expenses connected 
 with the photo-engraving department and divide them into four classi- 
 fications, as follows : 
 
 Shop Pay-Roll (DIRECT LABOR) .Wages paid to men 
 actually employed in the production of photo-engraved plates. 
 
 Superintendence (INDIRECT LABOR). Wages paid to su- 
 perintendent, foremen, floor boys, etc. 
 
 Shop Expense. Rent for shop, power, light, heat, water, janitor 
 service, repairs, etc., etc. 
 
 Office Expense. All so-called Overhead expenses, such as exec- 
 utive salaries, salesmen's salaries, advertising, delivery, office rent and 
 light, interest on investment, depreciation, etc. 
 
 The following illustration shows exactly how the items of expense 
 were taken from the Cash Book and separated. 
 
 In creating the Simple Cost System the expenses of one plant for the 
 period of two years were first considered. Then to verify the figures, 
 we took the expenses of five different firms for the period of six months, 
 separated the expenses into the various classifications and compared 
 them with our first figures. You can see the result. They are prac- 
 tically identical. 
 
Manual and Full Description 
 
 Division of Expenses ( Material Not Included) 
 
 5 Plants 1 Plant 
 
 6 Months 2 Years Average 
 
 Shop Pay-Roll $50,580 $51,810 51% 
 
 Superintendence 5,620 6,080 6% 
 
 Shop Expense 13,200 T2.890 13% 
 
 Office Expense 30,520 28,520 30% 
 
 $99,920 $99,300 100% 
 
 At your leisure, go to your own Cash Book, separate your ex- 
 penses in exactly the same manner as shown here and see how your 
 figures compare with ours. Put each classification on a percentage 
 basis and then see what percentage of your total expense each class 
 represents. That will tell the story. You may not divide and classify 
 your expenses exactly as we have done, but you certainly cannot go 
 wrong on the Shop Pay-Roll. IF YOUR SHOP PAY-ROLL 
 REPRESENTS ABOUT FIFTY PER CENT OF YOUR 
 TOTAL EXPENSES, exclusive of materials, THEN OUR 
 HOUR RATE AND THE LABOR COST CALCULATOR 
 FIT YOUR CONDITIONS EXACTLY. 
 
 Don't lose track of the fact that the Shop Pay-Roll (Direct Labor 
 expense) is almost exactly one-half, or fifty per cent of the total ex- 
 pense, EXCLUSIVE OF MATERIALS. It follows naturally 
 that if DIRECT LABOR AMOUNTS TO ONE-HALF OF 
 YOUR TOTAL EXPENSES, TO GET THE LABOR COST 
 PER HOUR YOU HAVE TO MULTIPLY BY TWO THE 
 WAGES PAID THE WORKMAN. In other words, if you pay 
 your workman fifty cents per hour and if that amount represents jusj 
 one-half of what it costs you for everything outside of labor, then if 
 labor is to be made the unit of reckoning, you must double it to short? 
 its true cost to you. 
 
 The foregoing is a very simple problem in arithmetic and one any 
 ten-year-old boy can solve. But there is another item to be taken 
 into consideration. Someone has to pay for NON-PRODUCTIVE 
 TIME. 
 
 Non-productive time is time paid for by you, but which cannot be 
 sold directly to the customer in the shape of finished plates. It repre- 
 sents time lost for various reasons. Your workmen may be idle part 
 of the day because business is slack. Your power may be shut down. 
 Your equipment may be out of order. Your water supply may fail you 
 partly or at times altogether. Your men may be idle for most any 
 
 ' 
 
of the Simple Cost System 
 
 CASH 
 
 OL D D 11 
 
 CR. 
 
 <R5Sf 63 
 
 Direct Indirect 
 Materials Labor Labor 
 
 $498 17 $58 46 
 
 Shop 
 Expense 
 
 Office 
 Expense 
 
 Sold 
 Items 
 
 bhop ray-Koll 
 
 21.12 
 
 
 $21.12 
 
 
 
 Camera Repairs. ......... 
 Oil 
 
 84.00 
 1 80 
 
 $1 80* '. 
 
 84.00 
 
 
 
 
 
 
 3 60 
 
 3 60 
 
 
 
 
 
 2 50 
 
 
 
 
 $2.50 
 
 Office Pay-Roll 
 Advertising 
 
 150.00 
 60.00 
 2 50 
 
 
 2.50 
 
 $150.00 
 60.00 
 
 
 
 1 .50 
 
 
 
 1.50 
 
 
 
 2.00 
 
 
 
 5.00 
 
 2.00 
 
 
 5.00 
 
 
 
 
 
 c-i v _ r 
 
 28 50 
 
 28.50 
 
 
 
 
 
 15 85 
 
 15 85 
 
 
 
 
 
 36 45 
 
 36.45 
 
 
 
 
 Copper 
 -7- _ 
 
 28 50 
 
 28 . 50 
 
 
 
 
 
 2.19 
 
 
 2.19 
 
 
 
 SKnn PAV Rnll 
 
 556 63 
 
 498.17 58.46 
 
 
 
 
 Glass 
 
 16.00 
 
 
 16.00 
 
 
 
 Rent, Light and Power 
 
 357.56 
 4 50 
 
 
 357.56 
 4.50 
 
 
 
 
 
 Office Rent and Light 
 Petty Cash, Office 
 
 Ppttv C'ash Sb.nn 
 
 80.40 
 12.25 
 8 40 
 
 
 
 8 40 
 
 80.40 
 . 12.25 
 
 
 
 Freioht 
 
 1 50 
 
 1 . 50 
 
 
 
 
 
 30 00 
 
 
 
 30 00 
 
 
 Local Club Dues 
 
 5.00 
 
 
 
 5.00 
 
 
 
 24 80 
 
 24.80 
 
 
 
 
 Office Pay-Roll 
 Plumber 
 
 150.00 
 12.20 
 
 
 12 20 
 
 150.00 
 
 
 
 Ink 
 
 3 50 
 
 3.50 
 
 
 
 
 Paint 
 
 1.50 
 
 
 1.50 
 
 
 
 
 
 
 
 
 
 Illustrating How You May Separate Your Expenses 
 
 The left-hand column represents a page from your Cash Book. The columns to the right show 
 the different classifications and how to transfer your individual expenditures from the Cash Book to a 
 sheet ruled so you can place each item of expense under its proper heading. 
 
 Figure up your expenses for a year, then see what percentage of the whole is represented by each 
 classification* 
 
 Add up your " Material " expenses and your " Sold Items " and subtract both from your Total 
 Expense. Materials have been otherwise provided for, and Sold Items should not be charged 
 against any of the four classifications we are using to arrive at cost. 
 
 Our figures show that Direct Labor is 5 1 per cent of the Total Expense (Materials Excluded). 
 Indirect Labor is 6 
 Shop Expense is 1 3 
 Office Exp'nse is 30 
 
 100 per cent 
 WHAT DO YOUR FIGURES SHOW? 
 
1 Manual and Full Description 
 
 reason at all, but the fact remains that you pay for their full time, 
 although it is not all used in the production of plates. Your photogra- 
 pher has to polish screens and lenses. He has to mix chemicals and 
 boil silver baths. Your etchers have to stop work in order to attend 
 to their equipment. The router and blocker has to repair belts, clean 
 motors, sharpen cutting tools ; in fact, every one of your workmen puts 
 in a part of his time at some of these things AND YOU PAY HIM 
 FOR HIS TIME. 
 
 IF YOU SOLD ALL YOUR PRODUCTS ON THE 
 BASIS OF THE ACTUAL TIME CONSUMED IN THEIR 
 MAKING, YOU WOULD LOSE MONEY, UNLESS YOU 
 MADE YOUR HOUR RATE HIGH ENOUGH TO 
 COVER NON-PRODUCTIVE TIME. 
 
 The Simple Cost System is based upon the experience and records 
 of a number of shops throughout the country. A careful comparison 
 of these records has disclosed the fact that conditions are very much 
 alike in all photo-engraving establishments in the long run. Varia- 
 tions may and will occur, but they happen only when the records 
 cover a short period of time. When they are kept for a year or more, 
 they are astonishing in their similarity. For instance: We figure the 
 non-productive time as being eight hours per week on the part of every 
 workman. When you are extremely busy, you will perhaps have 
 less than eight hours of non-productive time per week. When busi- 
 ness is dull, you are sure to have more than eight hours of non-produc- 
 tive time per week. EIGHT HOURS NON-PRODUCTIVE 
 TIME OUT OF FORTY-EIGHT HOURS PER WEEK IS 
 A FAIR AVERAGE CONDITION and we have accepted it as 
 such. It goes without saying that you cannot change your prices with 
 the fluctuations of your sales, nor can you change your prices after 
 you have given your estimate on a job. Accept what we give you until 
 you have had ample opportunity to learn the exact conditions in your 
 own plant. It will take you at least a year to determine them for your- 
 self. 
 
 As before stated, we have come to the conclusion that the average 
 amount of non-productive time amounts to eight hours per week on the 
 part of every workman. 
 
 Your total expenses, exclusive of materials, are divided into four 
 classifications: Shop Pay-Roil (Direct Labor), Superintendence (In- 
 direct Labor) , Shop Expense and Office Expense. Out of these four 
 
of the Simple Cost System 
 
 sources of expense, there is only one that actually produces the goods 
 you sell, namely, DIRECT LABOR. 
 
 Therefore, YOU MUST SELL DIRECT LABOR AT A 
 PRICE THAT WILL PAY FOR ITSELF, COVER EVERY 
 OTHER ITEM OF EXPENSE (materials excluded) AND 
 PRODUCE A PROFIT. 
 
 EXPENS 
 
 EXECUTIVE ANoOFFICE SALARIES, 
 ADVERTISING, TAXES, INSURANCE 
 DEPRECIATION, ETC. 
 
 SHOP EXPENSE 
 
 RENT, POWER, LIGHT, ETC 
 
 INDIRECT LABOR 
 
 SUPERINTENDENCE. ETC 
 
 DIRECT LABOR EXPENSE 
 
 m 
 
 The Dollar of Expense. 
 The shaded portion Direct Labor must carry All Other Expenses and Produce the Profits. 
 
 If you will glance at the illustration, "The Dollar of Expense,'* 
 you will get the idea very quickly. Fifty-one cents out of every dollar 
 of expense go to your workmen. To double the workman's wages 
 would give you the hour cost EXCLUSIVE OF THE NON- 
 PRODUCTIVE TIME. If you do not take the non-productive 
 time into consideration, you cheat yourself. You buy forty-eight hours 
 per week, you sell FORTY HOURS PER WEEK. TAKE 
 THE WAGES OF ANY ONE OF YOUR WORKMEN 
 PAID HIM FOR FORTY-EIGHT HOURS' WORK, DI- 
 
12 
 
 Manual and Full Description 
 
 VIDE THAT SUM BY FORTY, MULTIPLY THE RE- 
 SULT BY TWO AND YOU HAVE 'HIS HOUR COST. 
 
 vTo illustrate: You pay a workman twenty-four dollars per week 
 for forty-eight hours' work. His rate, then, is fifty cents per hour. But 
 you sell only forty hours of his time per week ; therefore his rate on the 
 sold hour basis is sixty cents per hour. Since the workmen's wages are 
 just one-half of your total expense, now that we have taken the non- 
 productive time into consideration, we simply DOUBLE THE 
 SOLD HOUR COST AND WE GET THE TRUE HOUR 
 COST. That is why the I. A. M. P. E. Cost Calculator is based on 
 DOUBLE THE WAGES PAID FOR FORTY SOLD 
 HOURS PER WEEK. 
 
 I. A. M. P. E. Labor Cost Calculator. 
 
 This Calculator saves figuring. It gives you the hour cost of any workman in your employ on the basis of Double the 
 Wages Paid for Forty Sold Hours per Week. 
 
 
of the Simple Cost System . 1 3 
 
 To find the cost of a plate, you get a record of each workman's 
 time consumed in its making. You locate each workman's weekly 
 pay on the left side of the Cost Calculator and you follow the line to 
 the right until you come to the amount of time consumed irj minutes or 
 hours. The figures appearing at that point give you the cost of his 
 time. In that manner you get the cost of every man's time appearing 
 on the cost ticket. Add up all items of labor cost and add to that sum 
 the cost of materials at two cents an inch for zinc etchings or three cents 
 an inch for halftones. The result is the complete cost of that particular 
 piece of work. 
 
 The foregoing description of the Simple Cost System covers the 
 subject fully. Read it over carefully and you will know all there is 
 to be known about it. It has been our aim not only to present you with 
 the Simple Cost System, but to explain every detail of it so, that you 
 can verify it step by step. Its use in the beginning will produce mysti- 
 fying results and at times you will doubt your own figures. Stick to 
 it and you will soon see why things are thus and so. No doubt you 
 have your own ideas on the subject, and perhaps you have long sus- 
 pected some of the things the Simple Cost System will show you. 
 The difference is, if you use the Simple Cost System YOU WILL 
 KNOW you won't have to guess or surmise. There are none so 
 badly fooled as those who fool themselves, and engravers have fooled 
 themselves long enough. 
 
 Perhaps you do not believe all we have told you about this Cost 
 System. Very likely you are of the opinion that such conditions as 
 we assert to be facts do not exist in your shop. Very well. We have 
 told you exactly how we arrive at our conclusions and you can check 
 us up and check the Simple Cost System up in any way you like. We'll 
 change our figures as soon as you prove conclusively that they are 
 wrong. That's fair, is it not? 
 
 How to Install the Simple Cost System 
 
 Before you send a cost ticket into the shop, explain to your work- 
 men that in order to conduct your business properly and with due re- 
 gards to all concerned, it is necessary for you to know the cost of pro- 
 duction of every article manufactured. Have them understand that 
 you want a correct record of the time consumed in the manufacture of 
 the work, so that you can arrive at a fair selling price, one that will 
 permit you to pay the workmen good wages and net a fair profit for 
 
14 
 
 Manual and Full Description 
 
 yourself. When your workmen understand your motives they will co- 
 operate with you and take as much interest in cost finding as you do, 
 because it means just as much to them as it means to you. Do not for- 
 get that both you and your workmen will be surprised at the facts pro- 
 duced by the cost tickets. Take them as they come to you and use 
 them properly. The same facts always existed, only you did not know 
 it and your workmen did not even suspect it. 
 
 FORM "A" 
 
 NO- /7. 
 
 Mrs. 
 
 Min. 
 
 $ 
 
 1 
 
 Photographer 
 
 
 Lr 
 
 
 M 
 
 Stripper 
 
 
 f 
 
 
 ,/t 
 
 Printer 
 
 
 f 
 
 
 ,10 
 
 Etcher 
 
 
 tf 
 
 
 ,32 
 
 Finisher 
 
 
 if 
 
 
 J 
 
 Router 
 
 
 _ 
 
 
 'II 
 
 Blocker 
 
 
 J* 
 
 
 10 
 
 Proofer 
 
 
 /f 
 
 
 M 
 
 //""Sq. in. Copper @ 3<f 
 
 
 ,*f 
 
 Sq. in. Zinc 2{ 
 
 
 
 TOTAL 
 
 L 
 
 Vf 
 
 REMEMBER THIS POINT: THE SIMPLE COST 
 SYSTEM IS NOT A FAULT-FINDING SYSTEM. IT IS 
 INTENDED TO SHOW YOU EXACTLY WHAT YOUR 
 COSTS ARE. 
 
 Referring to the blank forms furnished with the Simple Cost 
 System and illustrated herewith, and the I. A. M. P. E. Labor 
 Cost Calculator, let us assume that you operate a very small 
 photo-engraving plant, employing, say, four or five men. Perhaps 
 you do not use shop tickets or order tickets of any kind and you simply 
 mark sizes and other instructions on the back of copies or on a slip of 
 paper. In that case fasten one of the little cost tickets marked "Form 
 A" on the back of the copy or on the envelope in which the copy is 
 
of the Simple Cost System 
 
 15 
 
 sent to the shop. If there are more than one copy in the order, keep 
 the cost record for the entire order on one ticket or send in a ticket for 
 each plate, just as you see fit. 
 
 Now have each one of your workmen record in its proper place on 
 the cost ticket the exact amount of time consumed by him in handling 
 each job. When the work is completed, the copy, plate, proof and 
 cost ticket will all reach the office at the same time. 
 
 The Labor Cost Calculator will give you the hour cost of each 
 workman. Add up the labor costs thus obtained, then add to that 
 
 FORM "B." 
 
 From_ 
 
 Jo_ 
 
 .191 _ 
 
 Halftone* 
 
 Zinc Etchings 
 
 Q? 
 -- L& 
 
 
 
 fo 
 
 .32. 
 
 O 
 
 17) 
 
 7$ 
 
 /a 
 
 vr 
 
 17 
 
 TO 
 
 Zf 
 
 Ltr 
 
 if 
 
 {,00 
 
 17 
 
 op 
 
 2. 
 
 72 
 
 IL 
 
 
 70 
 
 /o 
 
 sum two cents per square inch for zinc etchings or three cents per square 
 inch for halftones for the size of the plate, and you have the TOTAL 
 COST OF THE JOB. 
 
 If you are a bit ambitious and want to know just what you are doing 
 from day to day, then use the blank marked "Form B." Let your 
 bill clerk or bookkeeper have several of these blanks before him and 
 as soon as a job is completed, let him put down the results of that job 
 on this blank. Use one blank for zinc etchings, another for halftones 
 and another for color work, etc. In this way you can separate the 
 different classes of work, and you will have an ever-ready and up-to- 
 the-minute schedule of your output, showing the full particulars of 
 each order, together with the item of profit or loss. You can keep 
 these records by the day, the week or the month. Once you begin to 
 keep them, you will be closer to the pulse of your business than you 
 
16 
 
 Manual and Full Description 
 
 ever were before. Just imagine being able to tell in a minute's time 
 exactly how many of each kind of plates you made during a day, week 
 or month and how much you gained or lost by the operation and ex- 
 actly where and when such gain or loss was incurred. 
 
 FORM "C." 
 
 COST RECORD 
 
 Mrs. 
 
 Min. 
 
 $ 
 
 1 
 
 65 Line 
 
 Like Copy 
 
 White Letter 
 
 Inserts 
 
 Photographs 
 
 
 
 
 
 85 Line 
 
 Oval 
 
 Embossing 
 
 Color Plates 
 
 Retouching 
 
 
 
 
 
 100 Line 
 
 Outline l/~ 
 
 Metal Base 
 
 X Proofs 
 
 Sketch 
 
 
 
 
 
 120 Line 
 
 Vignette ^ - 
 
 Mortise 
 
 Submit for 0. K. 
 
 Drawing 
 
 
 
 
 
 133 Line 
 
 No Line 
 
 Anchor 
 
 
 
 
 
 
 
 150 Line //" 
 
 Square 
 
 Trim Flush 
 
 Regular on Wood fS* 
 
 Photographer 
 
 
 3f 
 
 
 ft 
 
 
 
 
 
 Stripper 
 
 
 j~ 
 
 
 /0 
 
 DRAWING 
 
 / HALFTONE 
 
 ETCHING 
 
 ENGRAVING 
 
 Printer 
 
 
 j~ 
 
 
 /Q 
 
 Size 4i3/*/)((f 
 
 SUbieCt /f^^x^/^d^ ff/%te^<^<<-< 
 
 Etcher 
 
 / 
 
 fr~ 
 
 L 
 
 ?? 
 
 
 
 
 Finisher 
 
 i 
 
 
 
 flP 
 
 Salesman, Instructions ^J/j/^^ J/77^n a Csrtstjfct s J^" /)^ ^7~ 
 
 Router 
 
 
 /r 
 
 
 30 
 
 T^r? A^iziS^yL 
 
 Blocker 
 
 
 j- 
 
 
 /0 
 
 f ' L. 
 
 Proofer 
 
 
 zp 
 
 
 Z 
 
 
 30 Sq. In. Copper @ 3$ 
 
 
 JD 
 
 
 Sq,ln. Zinc@2t 
 
 
 
 Other Work 
 
 ELECTROS CreditA^X 
 
 
 7 
 
 7? 
 
 Req. No, ^2/^ ji> 
 
 Invoice No. /JYSLC, 
 
 Express or Carfare 
 
 
 ./$ 
 
 Order rr 
 No. ' 
 
 >/*\U 
 
 Wante'd ^/// f" A. M. Delivered 
 P.M. 
 
 Other Charges 
 
 
 
 Name A 
 
 t*.# &2U 
 
 ^^^. ShipVia ^^ 
 
 
 
 
 Price ^ 
 
 2 
 
 6V 
 
 Address * ^ 
 
 7 /h <, 
 
 Ci^u^ur^ *fa. &.<&'< 
 
 Profit or Loss fo^Ld 
 
 
 37 
 
 ' f 
 
 Now let us assume that you conduct a larger shop and that you 
 have a complete office equipment and plenty of office help. In that case 
 you will want a Shop or Order ticket as well as a Cost Record. For 
 you we advise the use of blank marked "Form C." In fact, every shop, 
 no matter how large or small, should have an Order ticket to carry the 
 instructions to the workmen. We offer you such a blank and in this 
 case we have added a Cost Record to the Order ticket. This ticket 
 is handled in the following manner. It is printed in duplicate form, 
 white and pink sheets alternating. Your salesman or order clerk fills 
 in the blank spaces necessary to carry the instructions. By placing a 
 sheet of carbon paper between the two sheets he gets an exact duplicate 
 copy of the sheet he writes. One sheet is sent into the shop, the other 
 is kept on file in the office. On the left-hand side of the ticket will be 
 found the cost record. The workmen record their time as they go 
 
of the Simple Cost System 1 7 
 
 along and when the ticket finally reaches the office and is figured up, 
 you have on one sheet of paper a full description of the job, every de- 
 tail pertaining to it and a record of its cost of production. A flat proof 
 of the job may then be attached to the ticket and it can be filed together 
 with its duplicate as a permanent record. 
 
 To capitulate: 
 
 Blank marked "Form A" is the simplest form of cost ticket known. 
 It is intended to record the cost of production only and answers no 
 other purpose. 
 
 Blank marked "Form B" is used to tabulate the results of your 
 cost records and can be used in conjunction with any kind of cost or 
 order ticket. It takes no time to keep these records and if you do, you 
 will know at any and all times just what you are doing and at what cost. 
 
 Blank marked "Form C" is a complete Order and Cost ticket. It 
 will fit practically every engraving establishment and answer the pur- 
 pose better than perhaps the form you are using for merely your Order 
 Ticket. 
 
 The general adoption of these forms will result -in UNIFORM- 
 ITY, something greatly to be desired. Workmen will quickly be- 
 come familiar with the blanks and many mistakes due to misunderstand- 
 ing will be eliminated. It will be a great step toward STAND- 
 ARDIZATION, perhaps the greatest the photo-engravers have ever 
 undertaken. 
 
 You now have in your possession everything necessary to install and 
 use the Simple Cost System. Additional blanks can be secured from 
 the Commissioner at COST to the I. A. M. P. E. Electros of any 
 of the forms can be secured likewise. 
 
 In placing the Simple Cost System before you ready for use, FREE 
 OF CHARGE, the Officers of the International Association of 
 Manufacturing Photo-Engravers feel that they are rendering you a 
 signal service. They are actuated by the highest motives and a sin- 
 cere desire to aid you as a brother photo-engraver. There is nothing 
 altruistic about this. It is just plain common sense and in keeping 
 with the spirit of the times. The use of the Simple Cost System and 
 the Standard Scale will enable you to do your share in the uplift of 
 the photo-engraving business. The use of the Simple Cost System and 
 the Standard Scale will enable you to reduce your losses and increase 
 your profits, will take care of you and yours and make you proud of 
 the fact that you are in the photo-engraving business. 
 
18 Manual and Full Description 
 
 Agreement between the International Association of Manufac- 
 turing Photo-Engravers and the International Photo- 
 * Engravers' Union of North America 
 
 WITNESSETH: First. It is agreed by the International Photo-Engravers' 
 Union of North America, that members of the International Photo-Engravers' 
 Union will co-operate with the International Association of Manufacturing Photo- 
 Engravers of North America in the installation and operation of the "Simple 
 Cost System" adopted by the International Association of Manufacturing Photo- 
 Engravers at its convention held in Indianapolis, Ind., June 23, 24 and 25, 
 1913, in all photo-engraving establishments wherein members of the I. P. E. U. 
 are employed and working under an agreement with the local union. 
 
 Second. It is agreed by the International Association of Manufacturing 
 Photo- Engravers that the object of installing and operating the said "Simple 
 Cost System" is for the sole purpose of determining the true cost of production 
 and its relation to existing prices in order to realize a fair margin of profit upon 
 the sale of photo-engravings and that the said "Simple Cost System" is not in- 
 tended and that it shall not be used in its entirety or any part thereof by any 
 employer for the purpose of checking up or speeding up the workmen, or used in 
 any way detrimental to the workmen or their working conditions. 
 
 Third. It is agreed by both parties to this agreement that in the event of any 
 difference or differences arising in the installation, abuse or abuses arising or 
 occurring under or during the operation of the said "Simple Cost System," such 
 difference or differences, abuse or abuses shall be immediately adjusted in the 
 following manner: 
 
 A. Whenever any member of either party to this agreement and coming 
 under its provisions, shall feel themselves aggrieved in the operation of the said 
 "Simple Cost System," the local parties in interest must meet in conference as 
 soon as possible and not later than ten (10) days after complaint is made, at 
 which conference (or continuation thereof) every effort to agree and adjust the 
 grievance shall be made. 
 
 B. If five (5) days after the conference meeting provided in section "A," 
 no agreement or adjustment has been reached, either party in interest may refer 
 the grievance or complaint to the President of the International Association of 
 Manufacturing Photo-Engravers and the President of the International Photo- 
 Engravers' Union for immediate adjustment by submitting a complete statement 
 to both of the aforementioned executive officers; such statement to embrace a 
 complete statement of the grievance or complaint, and relate what effort has been 
 made locally to adjust the grievance and cause of failure to do so. A copy of 
 this statement must be furnished to all parties in dispute by the party referring the 
 complaint or grievance to the said executive officers for adjustment, and the party 
 or parties against whom the complaint or grievance is filed, shall immediately file 
 its or their answer to all parties in interest. 
 
 C. Immediately upon receipt by the said Executive Officers of such state- 
 ment, they shall consider and adjust the complaint or grievance as soon as possible, 
 
of the Simple Cost System 1 9 
 
 but not later than ten (10) days after the original complaint has been filed with 
 them. Upon their failure to agree or adjust the complaint or grievance, the entire 
 matter shall be immediately referred to a joint conference committee; which com- 
 mittee shall consist of three members selected by and from the Executive Officers 
 or Executive Committee of the International Association of Manufacturing Photo- 
 Engravers, and three members selected by and from the Executive Council of the 
 International Photo-Engravers' Union, who shall meet as soon as possible there- 
 after, but not later than ten (10) days after failure of said Executive Officers to 
 agree, and proceed in adjusting the complaint or grievance. 
 
 D. The time of submission and consideration as fixed in sections A, B and C 
 shall be binding in all cases unless the time has been expressly extended by the 
 President of the International Association of Manufacturing Photo-Engravers and 
 the President of the International Photo-Engravers' Union. Such extension of 
 time shall apply only to the particular case for which it is extended. 
 
 E. All decisions shall become effective at once unless otherwise provided and 
 shall be binding upon all, subject to appeal to the joint conference committee 
 within thirty (30) days from date of decision; but the decisions of the joint con- 
 ference committee shall be final and binding upon all parties in interest. 
 
 F. All expenses incurred by either party attendant upon the adjustment of 
 any case shall be borne by each respective party. 
 
 G. The rules of procedure as herein or hereinafter agreed to may be 
 amended at any meeting of the joint conference committee. 
 
 Fourth. Both parties to this agreement specifically authorize the President of 
 the International Association of Manufacturing Photo- Engravers and the Pres- 
 ident of the International Photo-Engravers' Union to give public disapproval 
 and disavowal to any failure upon the part of any party in interest to comply with 
 the terms of this agreement, and as herein provided. 
 
 IN WITNESS THEREOF, the undersigned, as duly authorized representa- 
 tives of the two parties to this agreement, have hereunto affixed their signatures 
 in approval thereof this first day of October, 1913. 
 
 INTERNATIONAL ASSOCIATION OF MANUFACTURING 
 
 PHOTO^ENGRAVERS 
 
 By 
 
 E. W. HOUSER, President. 
 Louis FLADER, Commissioner. 
 
 INTERNATIONAL PHOTO-ENGRAVERS' UNION OF N. A. 
 
 By 
 
 MATTHEW WOLL, President. 
 Louis A. ScHWARZ, Sec')?- Treas. 
 
Gage Printing Co., Ltd., Battle Creek, Mich. 
 

 
 en 
 
 WGOCOCOCOfcOtOtObOfcOlObOfcOfcOtOI-*l-*t-k|-*l-* 
 
 M M M M M O O O O O 
 
 MMOOOOgOQD^IOa 
 
 O 
 
 ca en w F* co w co co co co co o o to c o o M M M 
 
 CO^OQD(yCOOQD<ienfrCOEOOgDQD3enCOOQDenCO 
 
 
 oa cn en en 
 
 
 
 g 
 
 
 
 ooo<i<i wwwwcw 
 
 S?ilO ^ CO M O ^ QT CO O 
 
 C^COOOlOWTOOTMOOOOTCOOOOOTCOOCAOOTOW 
 
 
 03MMOOCPOOOOQOOO^ 
 W *1 M CK O tf^ OOOi W OO 
 
 M M 
 
 cooo 
 oooioco OTQOOCOO w 
 
 oQooaca w^co 
 iooo oio^coo OTQOOCO OTQO 
 
 
 JO M M M M M M MMMMMMMM 
 
 co w * 
 
 goowwcowMMor 
 OTQ O O O O OCflO OTOWOWOWOOOOOO 
 
 ^ co co co co co ro to t ic to tc ic o o o M M M M M 
 
 CJT Or CR rf^ 
 
 ^ fe M c 
 
 ^^ CO CO CO CO CO W CO JO JO JO MM 
 
 ro b b <i b t co M b ^i rfs* M bo en 
 
 o <i <i a 
 
 jo M p p p oo oo <i <i <i pa pa pa pa en en en en ^ ^ co co jo 
 
 to o 
 
 Wage 
 
 NN 
 
 UU 
 
 o 
 
 B 
 
 2 
 
 T 
 
 W 
 r 
 
 
 M 
 
 
 ^^^ 
 
 k >fl 
 
 ^^ M 
 
 J 
 
 
 5 
 
 
 
 
 Wage 
 
UNIVERSITY OF CALIFORNIA LIBRARY 
 BERKELEY 
 
 Return to desk from which borrowed. 
 This book is DUE on the last date stamped below. 
 
 l?JunS4VtY 
 61954 LU 
 
 \ 
 
 2 5 1969 8 
 REC'DLDl DEC 9 '69 -12PM 
 
 LD 21-100m-9,'481B399sl6)476 
 
 
93795 
 
 M513327