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 Cost Keeping Short Cuts 
 
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 A Cost Department where it is recognized that a clerk's time is worth money 
 
Cost Keeping Short Cuts 
 
 Prepared from 
 
 Experiences in Many Lines 
 
 of Business 
 
 Illustrated 
 
 Detroit, Michigan, IT. S. A. 
 Burroughs Adding Machine Company 
 
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Hf 
 
 
 Copyright, 1911, by 
 BURROUGHS ADDING MACHINE COMPANY 
 
 of Detroit, Michigan, U. S. A. 
 
 All privilege of reproducing illustrations or 
 
 letterpress expressly reserved 
 
 by the publishers 
 
 First Edition July, 1910 
 Second Edition May, 1911 
 
 )-'*' 
 
 Arranged, Written and Illustrated by the Departments of Systeni 
 Service and Advertising 
 
To the Business Man 
 
 Who Wants to Know the True Value of Anything 
 
 He Does or Buys or Sells, this Little Book 
 
 is Respectfully Dedicated 
 
 254076 
 
Here again I would venture to utter a word of 
 caution to business men. Let them study their own 
 affairs frankly, and face the truth. If their methods 
 are extravagant, let them realize the facts and act 
 accordingly. One cannot successfully go against 
 natural tendencies, and it is folly to fail to recognize 
 them. It is not easy for so impressionable and 
 imaginative a people as we Americans are to come 
 down to plain, hard facts, yet we are doing it without 
 loss of self-esteem or prestige throughout the worlds 
 John D. RockefiJLler. 
 
BY WAY OF INTRODlJCriOMv. ;•:(:%;:/ 
 
 THE first edition of Cost Keeping Short Cuts was 
 issued not quite a year ago in response to what we 
 believed to be a well defined interest among busi- 
 ness men in cost finding. That our belief was well 
 founded in fact has been verified by the cordial reception , 
 given the book and the rapidity with which our supposedly 
 ample supply has been exhausted. Requests for copies 
 poured in from all quarters, making this second edition 
 necessary within nine months of the first. We have taken 
 advantage of the reprint to correct a few errors which 
 crept into the first edition, as well as to amplify the book 
 where experience has shown such amplification necessary 
 or valuable. 
 
 The merit of Cost Keeping Short Cuts has been 
 well attested by the number and warmth of the appre- 
 ciations coming to us through the mails. Perhaps the 
 greatest compliment paid the book, however, has been its 
 adoption by a number of schools and colleges, including 
 one of the leading universities as an authoritative text 
 book on costs, as well as by the successful application of 
 its principles by a large number of manufacturers. If 
 the second edition continues to receive the same degree of 
 favor and proves of the same value to its readers, we shall 
 be more than repaid for the expense of its production. 
 
 The whole matter started some time ago when we were 
 asked to make a special machine for a manufacturer who 
 thought it took too much time to handle his cost figures 
 by hand. We studied his conditions. We made him a 
 Burroughs machine which got so much greater efficiency 
 at such a reduction in cost, that we were led by his 
 enthusiasm to further investigate the whole subject of 
 cost finding. 
 
 We had not gone far before we found several very 
 surprising things: 
 
(a) I'hul American business men were just beginning 
 to be interested in costs. 
 
 (b) That they apparently were not much beyond the 
 inquiry stage. 
 
 (c) That the practical information on the subject of 
 cost finding was both meagre in quantity and questionable 
 in authority. 
 
 From among thousands of good friends, users of our 
 machines, without whose suggestions this book would 
 have been impossible, we, however, obtained much useful 
 experience data. An often repeated suggestion to "go 
 ahead and get other experiences and then let us also have 
 the benefits," caused us to arrange the material in form for 
 publication. 
 
 This book is the spoil of that little journey into Cost 
 Land. 
 
 Theory, in its objectional sense, has but little place 
 in what follows. The offerings are hot from the crucible 
 of everyday business practice. 
 
 One word, particularly to the technical reader. You 
 will find this book fundamental and elementary. It is 
 our aim to have it so. We hope you will find, however, 
 what we have tried earnestly to put here — a few helpful 
 suggestions. 
 
 If you find that it awakens inquiries and questionings 
 that you would like to have answered, will you not write 
 Us fully? 
 
 We may not be able to answer everything you ask. ^j 
 We are not cost experts. 
 
 It may be, however, that we can send you a form or 
 an experience that so nearly fits your problem that you 
 will feel repaid for your trouble in writing. Certainly we 
 shall be glad to be of such service to you. 
 
 Burroughs Adding Machine Company, 
 Detroit, Michigan. 
 May, 1911. 
 
CONTENTS 
 
 Chapter I— The Profits Made By Savings. 
 II — Putting in a Cost System. 
 Ill — Some Systems of Paying Wages. 
 IV— The Day Rate Wage Plan. 
 V— The Piece Work Wage Plan. 
 VI— The Differential Rate Wage Plan. 
 VII— The Premium Wage Plan. 
 VIII— The Bonus Wage Plan. 
 IX — Profit Sharing and Stock Distribution Plans. 
 X — Judging the Cost Keeping Requirements of a 
 
 Factory. 
 XI — Handling Material — Perpetual Inventory 
 Suggestions. 
 XII — Handling Labor Costs. 
 XIII — Indirect Expense or Burden. 
 XIV — Distribution of Burden. 
 XV — Some Forms Used in Cost Systems. 
 XVI — Final Disposition of Cost Figures. 
 XVII — Cutting the Cost of Keeping Costs. 
 XVIII — How the Burroughs Helps the Cost Keeper. 
 XIX — System Used in the Burroughs Factory. 
 XX — Information for the General Manager. 
 
Born, January 28th, 1858. Died, September 14th, 1898 
 The Inventor of the Burroughs Adding and Listing Machine 
 
CHAPTER I 
 The Profits Made by Savings 
 
 NOT long ago a keen-minded writer on business 
 subjects said, "During the next few years some of 
 the tidiest profits in American industry will be 
 saved out of operations. Heretofore, much of our profit 
 has been made. But saving profit is a different thing 
 altogether."* 
 
 That is the keynote of the remarkable interest in 
 manufacturing and cost of production systems, which 
 has appeared since 1905. 
 
 A nation of born salesmen and advertisers, we have 
 heretofore solved the problem of making more profits 
 by getting more sales. Competition has now forced us 
 to realize that an increase of advertising and selling expense 
 will not continue to increase the business in direct 
 proportion to the increase of expense. 
 
 The corner grocery-man who some morning finds a 
 competitor on the opposite corner, is forced to realize the 
 introduction of a new element. The new arrival advertises 
 and employs the best salesmen and prices his goods at less. 
 The old grocer finds his old trade gradually slipping away. 
 
 Such conditions must be met not only by advertising 
 and good salesmanship, but he must go a step further. 
 
 It means better systems of bookkeeping, closer inven- 
 tories, more careful checking of every item of income 
 and outgo, more accurate methods of knowing what each 
 clerk produces — in short the old grocer must decide to 
 know what it really costs him to sell a peck of potatoes, 
 in order to make the right price. 
 
 The same principle rules business in all lines. Cost, / 
 more than price, fixes profits. The public fixes the price ♦ 
 it will pay. The dealer may keep it high, but the public 
 fixes the limit, low or high, of what that price will produce. 
 
 ♦James H. Collins, 'The Easiest Profits," Saturday Evening Post, March 26, 1910. 
 
 11 
 
COST KEEPING SHORT CUTS 
 
 Profits The merchant may cut his cost as far as his ingenuity. 
 Savings ^^^ ^^^ manufacturing or mepchandising abiUty will take 
 him. He can only make the difference between what the 
 public will pay and what he saves on the costs. 
 
 So vital a thing as keeping the cost and the price as 
 widely separated as possible, would seem to call for the 
 best thoughts of the most expert business man. 
 
 But it hasn't. 
 
 In fact the whole subject of costs is a wilderness of 
 figures filled with more or less significant facts, which, 
 to the average American business man, cost too much 
 to catch. 
 Balance Many manufacturers depend on their balance sheets 
 Prices ^^ determine cost, and their competitors to fix price. 
 This is guesswork of the rankest, most treacherous and 
 deceiving sort. Even the street fakir selling collar buttons 
 knows what his costs are, and in that respect knows more 
 than some large enterprises who really know surprisingly 
 little about how much it costs .to put their output down 
 at the point of final delivery. 
 
 Many a retailer doing a business of »^50,000 a year will 
 tell you that **a cost system is only for manufacturers." 
 
 The wholesaler and jobber thinks of costs in a lump 
 sum as expenses in his balance sheet. 
 
 Another manufacturer calmly works out his business 
 plans on general assumptions of facts about what his 
 product costs him. 
 
 It has been well said that the average business execu- 
 tive fails to get more than a small fraction of the vital 
 facts and statistics that he should have to intelligently 
 control the activities of a business. 
 
 The desire to dodge the expense of the necessary 
 system that will bring such vital statistics to the executive 
 desk has created this condition. 
 
 Any efficient accounting system should be an orderly 
 and logical arrangement, by simple processes, of the facts 
 
COST KEEPING SHORT CUTS 
 
 and figures of a business, so that it may concentrate into, Profits 
 clear and concise statements a complete expression of the( gatings^ 
 activities and condition of that business. 
 
 Contrary to the somewhat prevalent idea, there is no 
 inherent complexity in system, just because it is a system. 
 It may, however, be suggested that the observance of 
 any logical routine in the handling of business is so 
 repugnant to the training and style of some business men 
 that they take refuge in the absurdity that "all system 
 is red tape" — with the often painful result that they fail 
 without knowing why, therefore being denied the im- 
 portant lesson their failure could have taught a man with 
 a more analytical mind. 
 
 That this attitude on the part of business men is too A Fatal 
 general and often fatal, is generally conceded by those 
 whose occupations such as bankers, lawyers, judges, 
 expert accountants, referees in bankruptcy, etc., bring 
 them into close contact with the facts and figures side of 
 business troubles or failures. 
 
 How many retailers and wholesalers and even manu- 
 facturers have to wait for their yearly or half yearly 
 inventory to find out if they have made or lost money? 
 How often has this found them in a position where it was 
 too late to do anything but call in their creditors. 
 
 No less an expert on costs than Mr. J. L. Nicholson 
 said in his interesting work on the subject of costs: 
 *'In the majority of enterprises to-day, the profits and 
 losses are only known at the end of the regular fiscal period, 
 when an inventory is taken and the books closed; and even 
 then the result is not necessarily correct, inasmuch as 
 the accuracy depends entirely upon the correctness of the 
 inventory, which there is no means of checking or verify- 
 ing in the ordinary systems. The result, whatever it 
 may be, appears in the books of accounts for the entire 
 period in one amount, and admits of no verification due 
 
 * "Nicholson on Factory Organization and Costs," pp. 8 and 9. 
 
 IS 
 
COST KEEPING SHORT CUTS 
 
 Profits to the principle involved. There are two important 
 Savings (questions that relate to this: First, are the results ap- 
 parently satisfactory; second, are they a disappointment, 
 and a surprise? Let us take up the first question by 
 asking one. Should a result in gross which is apparently 
 satisfactory be accepted without question? A careful 
 analysis of this will result in the answer. No. There is 
 absolutely nothing in the profits shown in this manner to 
 indicate whether the results should not have been con- 
 siderably more. There may be many articles made at a 
 loss, with the result that the articles upon which there is 
 a good margin of profit have been paying the losses 
 resulting from the sale of the other class of products. In 
 taking up the second question, the first query that arises 
 naturally would be: What am I going to do about it? 
 There is only one way to correct the fault, and that is to 
 locate it; and if the mass of detail that enters into the pro- 
 duction of any plant is buried, owing to a lack of records 
 dealing with the component parts of the product during 
 the period of six to twelve months before results are 
 obtained, this would indicate that some action is necessary 
 in providing a plan that will admit of locating or deter- 
 mining the cause." 
 
 Touching on a similar condition of the business mind 
 another writer recently said in a popular magazine : "The 
 business world is of three different opinions on this subject 
 of cost accounting, two of them wrong and the third right. 
 "One type of manufacturer operates with little cost 
 accounting other than his annual inventory, and main- 
 tains that a cost system entails too much trouble and 
 expense. From him one hears the familiar joke about 
 Smith's cost system: 'Smith had experts working three 
 months installing a cost system at his plant, and since 
 then he's been busier working the system than making 
 goods. Why, it costs him more to find out what his 
 product costs him than it does to make it! Ha, ha!' 
 
 14 
 
COST KEEPING SHORT CUTS 
 
 "The second type of manufacturer is Smith, who has System 
 actually become so absorbed in cost accounting that he g^^ 
 is trying to make its smallest refinements practical. In 
 many a mill Smith has been known to bring in experts to 
 find out exact costs on a small job, spending more for the 
 purpose than he made in profit. 
 
 "The third kind of business man is the one who strikes 
 a safe middle course, taking what the cost experts have 
 to give him and applying it in the light of his own practical 
 knowledge. A little cost accounting and a little common 
 sense make a combination hard to beat." 
 
 To steer a middle course between the extremes of the 
 impractical system visionary who strives to operate a 
 business on hard and invariable lines as a machine is 
 operated, and the stone blind "practical" man who never 
 does anything unless it is mouldy with precedent, is, 
 indeed, a hard but a necessary thing to do. 
 
 It is believed that the German was the first business 
 man to understand that cheapening the cost of production 
 opened the avenue to a greater and more profitable 
 business. 
 
 The old idea was to keep our methods a secret, on the 
 general assumption that the things hidden from a com- 
 petitor were the things that made us big and successful. 
 
 The idea of overcoming competition was to have so 
 much capital that we were able to lose a lot more money 
 than the competitor could afford to. If anybody got into 
 competition with us, the process was to freeze him out by 
 standing the loss longer than he could. 
 
 This was before the science of accounting was applied 
 to the matter of men's labor; before we realized that time 
 was money, that materials were money. Just as soon as 
 we grasped the idea that if we had more time we could 
 make more money, we started in to cut down the amount 
 of time we had to give to any one particular part of our 
 work by getting more out of the time. We could then sell 
 
 15 
 
COST KEEPING SHORT CUTS 
 
 Profits the product more cheaply because we had put less time 
 Sa\^ngs (money) into it. We commenced to use labor-saving 
 machinery because it was time-saving machinery, which 
 meant money-saving machinery. 
 
 This was theory that worked. 
 Theory! All theory is generally the product of experience and 
 
 it in turn produces experience, a sort of an endless chain. 
 
 It is an interesting speculation to figure out how cost 
 accounting came into use. No doubt some man had a 
 theory that, if he kept books with himself — not only with 
 his customers, but with the various parts of his business, 
 with all his workmen, with his materials, his machines 
 and his salesmen, that he would better know what he was 
 doing. 
 
 Some men are frank enough to admit that they don't 
 really know what they are doing. 
 
 On the one side, our man put down all that workman 
 did, and on the other, he put down all the man cost him. 
 At the end of the year, six months, or every month, he 
 could cast it up and see whether he was getting what he 
 was paying for and whether that workman was making a 
 profit for him. 
 
 He kept books with the raw material that he bought. 
 He found what raw material cost and where it went. 
 Then he found what it cost to manage the men and the 
 materials. Cost of management was important. 
 
 If every workman could be trusted to do his work well 
 without oversight, he wouldn't need to have an overseer 
 or foreman, but as every workman has to have a certain 
 amount of oversight, the employer said, "Here, I will 
 distribute that cost of oversight to each man according to 
 his importance on my payroll. If he makes $5.00 a day 
 and it requires $1.00 worth of oversight, I will debit that 
 dollar against his account." 
 
 "This also applies to the amount of material he uses. 
 I'll sell the material to the workman at cost." 
 
 16 
 
COST KEEPING SHORT CUTS 
 
 After he introduced this idea of keeping books with Keeping 
 himself and with his men, he found that while most of ^th^ 
 the men were paying him, a few were not. He began to Himself 
 drop the unprofitable men and put in better. His 
 standard was simple: If a $5.00 man over there was pro- 
 ducing good work at a profit, he made the $5.00 man over 
 here work up to the other fellow's standard. Before he 
 knew it he had the whole factory working up to a higher 
 pitch. That was one of the Cost Findings. 
 
 It was but a step to the idea that he should keep books 
 with his fines of production. He soon found that it took 
 a lot of money to sell certain lines. The margin was 
 small and he found other lines were more profitable. The 
 result was he cut down the production of the unprofitable 
 and increased the production of the profitable. Then he 
 saw no good reason why he shouldn't keep books with his 
 heads of departments and his salesmen. And so all along 
 the line he got in touch with the real meanings of the 
 activities of his business. 
 
 Some day he will apply the cost idea to his clerical . 
 and accounting department. 
 
 But he had found where the minutes went and it didn't 
 take him long to realize that as his Cost System gave him 
 facts and figures about the activities of his business, he 
 was fighting competition with his eyes open. He knew 
 what he could do. 
 
 All of this required system — a system which needed 
 the people who operated it to be in sympathy with the 
 things he wanted. 
 
 At the very beginning it is well to forget all about the Forget 
 idea that "our business is different." We find that there jj^^ 
 are time and material and indirect expense in every manu- 
 facturing business. It doesn't make any difference 
 whether we make candy cones for the school children of 
 New York, or locomotives for the Siberian railway. The 
 
 17 
 
COST KEEPING SHORT CUTS 
 
 Profits whole necessity lies in tracing the time, material and 
 Savings iJidirect expense which make up the cost of doing business. 
 
 Just as soon as we forget that "our business is dif- 
 ferent" we begin to find out how other people do their 
 work; how other people find what it costs them to do 
 business. That is where we are to-day — we are seeking 
 more light on the subject. 
 
 Tearing away all the fine spun theories of the profes- 
 sional, the fact is, having pushed price to the limit of the 
 public acceptance, greater profits now lie behind us, in 
 pushing costs down to the point where quality and 
 quantity of production begin to be affected. 
 
 That is the whole philosophy of cost keeping in a 
 sentence. Many men think the application of the prin- 
 ciple should be equally simple — but it isn't and it can't be. 
 
 All the complications come in when we come to trace 
 the course of a dollar's worth of material through two 
 hundred and fifty hands and one hundred and ten opera- 
 tions, to the completed article. 
 
 But this complexity in turn, actually works out in 
 expert hands, into some very simple system of records, 
 as will later be shown. 
 
 Cost accountants sometimes turn up most unusual 
 and surprising conditions in exceptionally reputable and 
 apparently well-regulated business households. 
 A Printer A printing house in a mid- western city had long been 
 °Q^^ known as a fine catalog house. It had been in business 
 since the time of the proprietor's grandfather. The 
 business had been profitable. The present proprietor's 
 father, son of the founder, had put in a poster printing 
 plant, run separately. The business was handled through 
 one bookkeeping department. Catalog plant and poster 
 plant were running night and day. One night the pro- 
 prietor found the poster plant folders working overtime 
 on a catalog order. 
 
 18 
 
COST KEEPING SHORT CUTS 
 
 "Do we charge the catalog department with that work Profits 
 and does the poster department get credit?'* he asked of Savings^ 
 the superintendent. 
 
 "Oh yes, they turn in tickets for it." 
 
 The young proprietor thought it over that night while 
 going home. 
 
 He spent the next day going over the tickets for last 
 month's business. He thought he saw some queer things. 
 He called in a cost expert. That expert finally got down 
 to the detail where he could tell what it cost to have the 
 "devil" pull a galley proof. He also found, among other 
 things, that the catalog plant had been paying poster 
 department losses for three years. Then the proprietor 
 who had been working along with the expert, commenced 
 to hire, fire and transfer. The old foreman and henchmen 
 of the house made some gloomy prophecies of the awful 
 things that were going to happen as a result of the change. 
 
 But the change worked, and anything is good when it 
 works. 
 
 Cost finding is not a series of formulas like that which 
 we get in chemistry. It is simply systematized processes 
 of finding out where every item of material and time and 
 expense go in the making of a product, or in the process 
 of buying and selling goods. When two chemists are 
 asked to give a formula of water, each will write H2O — 
 ask two hundred, the answer would be the same. Chem- 
 istry is a fixed science. 
 
 Ask two cost accountants what goes into costs and A Cost 
 you will get practically the same formula: 
 
 Cost of Material + Direct Labor = Prime Cost. 
 
 Prime Cost H- Direct Factory Expense = Factory Cost. 
 
 Factory Cost + General Expense = Cost to Make. 
 
 Cost to Make 4- Selling Expense = Cost to Make and 
 Sell. 
 
 Cost to Make and Sell + Profit = Price. 
 
 19 
 
t 
 
 COST KEE.PING SHORT CUTS 
 
 Profits That is the formula and it will remain the same, no 
 Saving^ matter how many cost accountants you ask. They may 
 phrase it differently, but the essentials will remain 
 the same. 
 
 Suppose, however, you were to ask a hundred chemists 
 to produce water according to the chemical formula. A 
 careful checking of the expenses incident to the manufac- 
 ture of a gallon by each of the hundred, would probably 
 give you a hundred. different costs. If you should compare 
 the costs you would get at the man who made the cheapest 
 gallon of water. 
 
 Take your cost formula and apply it to your product. 
 Keep a careful record by departments and men. 
 
 You will get a line on departmental and man efficiency 
 that will open your eyes. 
 
 Comparisons are necessary if you would get a just 
 estimate of the relative activity and efficiency of your 
 employes. 
 
 After all, the success or failure of any business is a 
 matter of the quality of the man-stuff of which the 
 business is made. 
 
 You can figure to the last decimal on the cost of your 
 materials, your overhead, your rent and heat and light, 
 know exactly what it is going to cost you to carry $1,000 
 in loans at the bank; but (and this is just as important) 
 what does it cost you to let John Jones handle your green 
 groceries; or, what does it cost you to let Bill Smith do 
 half as much work as Sam Perkins, who works next to him 
 in your machine shop? 
 
 Why does it cost you $200 a week for your accounting 
 department when your competitors, Fitzgerald. & Com- 
 pany, handle twenty-five per cent more business on $150.^ 
 
 Why.? 
 Why? When you come to that point you are getting in the 
 frame of mind where you will use a cost system as it 
 should be used — i. e., as a means to make profits. 
 
 20 
 
COST K E E PING SHORT CUTS 
 
 Referees in bankruptcy will tell you that half the Profits 
 failures that occur in periods of good business occur Savings 
 because the bankrupts didn't know what their outputs 
 cost them; they hadn't preserved the proper distance 
 between cost and price. 
 
 Too many prices are made on the basis: "Well, if he 
 can sell it for that, we can." Of course, that doesn't 
 follow at all. 
 
 One western mill recently found that the old day -wage 
 system was losing money for the firm, because the price 
 of the goods was fixed by the consumer and the workman 
 fixed the cost. 
 
 A piece-work wage system was introduced. A limit 
 was fixed on the cost of the goods with an eye to meet 
 the price fixed by the consumer. The system created a 
 comfortable margin between cost and price, and by the 
 system the tendency was for the margin to gradually 
 grow bigger as the management found places where to 
 economize in materials and time. 
 
 It is such simple things as these that work the revolu- 
 tions in profits. The American business man has long - 
 neglected his office, his internal organization, in favor 
 of his selling organization. Times are forcing a change. 
 
 We have, in the world's greatest and wealthiest nation, 
 more failures than in any other nation. The vast per- 
 centage fail for *'lack of capital," "for want of knowledge 
 of the business" — so Dun and Bradstreet tell us. The 
 commercial lawyers tell us that the principal "lack" is 
 a practical knowledge of what it costs to do business. 
 
 If there is any place where the old adage — "Be sure An Old 
 you are-right, then go ahead," means something, it is in 
 the matter of fixing prices. 
 
 Without accurate costs you cannot intelligently and 
 accurately fix price, is as plain as a pike-staff. 
 
 The principal difficulty, however, has lain in the 
 handling of the time and materials. The records required 
 
 21 
 
COST KEEPING SHORT CUTS 
 
 Profits so many hands and heads that the manufacturer preferred 
 Savings ^^ chance it, and dismissed the whole idea with the futile 
 pun: "It costs too much to know what it costs." 
 
 Like most generalities, however, this is dangerous. 
 Again, it is no longer true. Since the introduction of the 
 time clock for recording the gross hours of labor; the 
 elapsed time recorders by which each workman records in 
 plain figures on each card the time he has actually been at 
 work; and finally, the Burroughs Cost Machines by which 
 the time, the value of materials, and the costs may be 
 added and listed on wide sheets from the individual 
 records, and all other handling of figures done at a speed 
 of three to five times as fast as formerly done by the most 
 expert clerks, the expense of maintaining a cost system 
 has lost most of its terrors. 
 
 Business men are now turning to the subject with a 
 renewed interest further energized by the thought that 
 it is better to be safe than sorry. 
 
CHAPTER II 
 Putting in a Cost System 
 
 NEVER FORGET THE MAN," ought to be 
 written in large letters over the desk of the man 
 who is responsible for the systems used in any 
 kind of business. 
 
 Too many systems are made on the assumption that 
 the men working them are reasoning, thoughtful and 
 analytical. 
 
 Most men are none of these things. In fact, even most 
 of those men who are paid to think are not analytical; 
 their thinking is mainly remembering how a thing was 
 done before, and then doing it again. 
 
 Begin a system with yourself. 
 
 Decide that you are going to be honest with yourself. 
 
 The proper cost system registers the will of the -pro- 
 prietor. It goes as far as he will go. Some managers 
 don't want to know too much about their business. It 
 is surprising how much more common than may be sup- 
 posed, this failing is. The average man approaches a 
 cost system from the wrong angle. He doesn't want to 
 find that he has not been making as much money as he 
 should, because that reflects on his ability as a manager. 
 He should, on the other hand, try to find out where he is 
 not making as much as he should in order that he may 
 remedy the oversight. In the first place, then, determine 
 to find out what it has cost you to produce and sell your 
 product for one given period. That will open your eyes 
 to losses and perhaps unnamed profits. In the second 
 place, decide that you will put in a system to find out 
 what your future product will cost you. 
 
 Get at the costs; don't flinch or fumble, but go after 
 and get the whole truth about yourself and your business. 
 
 23 
 
COST KEEPING SHORT CUTS 
 
 Putting You may have some pet method of handhng tools in 
 
 Q^^^ the factory, charging the salesmen's expense, dividing 
 
 System territories, handling the accounting detail in the office. 
 
 You think it is efficient and profitable. It may not be. 
 
 Be prepared to see it thrown on the rubbish heap. 
 
 Make your superintendent and your men see the new 
 ideas in the same way. Employes are never glad to see 
 changes. They don't know what they mean, and being 
 ignorant of the purpose they generally imagine it means 
 the worst results to themselves. Superintendents, man- 
 agers who have been responsible for the systems you have 
 in use, would be more than human if they did not resent 
 the "new f angled ideas" that seem to be revolutionary 
 and mean an indictment of their own ability. 
 Consider the man. 
 A Story A man told a story which shows the value of this man- 
 knowledge so essential to the success of a cost keeping 
 system : 
 
 "The management of a large machine works came 
 down with the high-speed steel fever, a malady that needs 
 a little description. 
 
 "High-speed steels, made for cutting tools in metal 
 works, are so superior to ordinary carbon steels for certain 
 work that from forty to one hundred per cent increase in 
 production often follows immediately upon their intro- 
 duction in a machine shop. They make it possible to 
 run machines faster, cut more deeply and speed the work 
 all around. 
 
 "This particular management tried high-speed steel 
 and found that its costs could be reduced at least seventy 
 per cent. That meant almost a revolution in prices and 
 competitive conditions. An elaborate cost system was 
 worked out, the new steels applied everywhere, and 
 several contracts taken on terms that would have meant 
 bankruptcy under the old scheme of things. 
 
 24 
 
COST KEEPING SHORT CUTS 
 
 "And before those contracts were, completed the Putting 
 works did face bankruptcy. q^^^ 
 
 "For the new cost system wouldn't operate itself. System 
 Workmen had not been taught to temper the new steels, 
 a delicate process. No provision had been made for 
 grinding tools to exact angles in a special department. 
 There was an insufficient supply of tools for the new con- 
 ditions, leading to losses of time. Worst of all, employes 
 were suspicious of the whole innovation because it had 
 not been clearly explained to them and they feared it was 
 meant to put them at some disadvantage. The cost 
 system was only a theory at that point. It had never 
 been adjusted to the human equation, and it took more 
 than a year of patient work among the men in different 
 departments before such adjustment was brought about, 
 making the theory fact.'' 
 
 The man power, without which a system is simply a 
 theory on paper, had not been considered. 
 
 Managers frequently go at this phase of the question 
 in a way that leads to needless loss. At the bottom every 
 American workman is of the right stuff. That is not • 
 sentiment or patriotism; it is a plain statement of ex- 
 periences. 
 
 When you throw aside your general managership, and Breeds 
 get down on the floor and talk to these men as man to man, 
 you can generally get them into line with almost any 
 plan of betterment. It is the formal order like this that 
 makes it easy to form unions and call strikes: 
 
 "On and after this date every workman in this factory will 
 be put on a piece-work basis, as per schedule in the hands of 
 each foreman. 
 
 By order of the Company, 
 
 John James Smith, 
 
 General Manager," 
 
 Go back over the labor troubles in your district and 
 you will find a number dating from just such if-you-don't- 
 like-it-get-out orders. 
 
 25 
 
COST KEEPINGSHORT CUTS 
 
 Putting Such orders come from a man who fails to realize that 
 ^g^ every machine he has in his factory, every part of his 
 System product, every sale he makes, every dollar of his invest- 
 ment depends for its efficiency on a man. 
 
 Contented men give a better result than mere men. 
 
 Enthusiastic men give a better result than mere con- 
 tented men. 
 
 Men with pride in their work, with enthusiasm in their 
 blood, and loyalty in their hearts can whip the world. 
 
 That sounds like sentiment. So it is — but the stuff 
 that rules the world, certainly has a place in ruling a 
 business. 
 
 When you get down to the men, show them that you 
 trust them, tell them what you expect them to do, and 
 that the system of costs is simply to protect them and 
 you and your stockholders. You wish to place responsi- 
 bility where it belongs, and will pay for it in proportion 
 to its worth. Most of them will try to deserve responsi- 
 bility, and you'll find it pays to get rid of the others. 
 Manstuff Don't forget the manstuff on which your system 
 depends. This task is yours. Fix in your own mind 
 clearly what you want a system for, what you want it to 
 do, and why you want it. 
 
 The general advantages of any cost system are: 
 
 First — To reduce the costs. 
 
 Second — ^To increase production. 
 
 Third — ^To introduce machines to do work hitherto 
 done by hand. 
 
 Fourth — ^To equalize the output in each department. 
 
 Fifth — ^To serve as a guide to selling. 
 
 Sixth — ^To serve as a guide to pricing. 
 
 Seventh — ^To serve as a basis to judge the product and 
 efficiency and diligence of the workmen. 
 
COST KEEPING SHORT CUTS 
 
 Eighth — To place the employer in a position to get Putting 
 a safe basis, independent of the judgment of the foremen q^^ 
 of the different departments, on which to reward the System 
 dihgent and to get rid of the lazy. 
 
 Ninth — To act as a moral stimulus to every workman 
 and to insure fair distribution of reward to all. 
 
 Not one of these things can be handled with accuracy 
 and safety unless you have a cost system. 
 
 Starting a system is important, where to start, how 
 and when, for these take the time of men from a business 
 that must be kept going while it is being doctored. 
 
 The expert has found his opening here. 
 
 The expert always pays his way. The doctor, the 
 lawyer, the dentist are all unnecessary, but they are 
 economizers of life, liberty and happiness. They get more 
 for us than we could get for ourselves. 
 
 It is the same way with cost keeping. There are men 
 who have made a special study of cost keeping. The cost 
 keeper is generally an outsider who has made a study of 
 costs as applied to manufacturing, wholesaling or retailing. 
 There are experts who specialize on certain kinds of costs,- 
 such as foundry costs, costs in specialty manufacturing and 
 costs in department stores, and so on through a score 
 of lines. 
 
 The cost keeper should be more than a bookkeeper. The 
 while some bookkeepers have made excellent cost keepers. Keeper 
 He must have an ability for analyzing processes, a grasp of 
 manufacturing detail, and a knowledge of accounting, and 
 then the final test of his ability as a systematizer comes » 
 
 in an ability to mould these things into a simple, workable 
 system. 
 
 In its workability will be shown the value of knowing 
 human nature. Each record required of a workman 
 must appear to lead somewhere, say something, be com- 
 plete. To ask a man to set down some apparently need- 
 less figures for an unknown purpose, is to make him 
 
 27 
 
COST KEEPING SHORT C UTS 
 
 Putting indifferent and inaccurate, and that is to fail to get the 
 (^Qg^ facts in so many cases as to seriously interfere with the 
 System accuracy of the final results. 
 
 Business is enough of a gamble even after a cost system 
 has been installed without encouraging any one to guess 
 at any part of the data it obtains. 
 
 There are two ways to find costs: First, estimated 
 costs; second, absolute costs. 
 
 The process of estimating costs leads at best to self- 
 deception. It argues a decision to install a cost system 
 that shall give you a knowledge of what the items of your 
 product actually cost you to produce, and then side step- 
 ping to introduce guesswork into the result. 
 
 It is a compromise that inevitably hurts more than it 
 helps. It is not a system in any of its crude and imperfect 
 parts. It is just a process of recording human guesswork, 
 and has no more right to be called a system than a process 
 of keeping books by which you guess at the amount of the 
 items you enter to your debit, and speculate as to how 
 much your customers should pay you. 
 Absolute The system by whfch absolute costs are obtained is 
 an honest attempt to get at the real amount of labor, the 
 real amount of material put into any piece of work. The 
 ideal set before any costkeeper — dealing with absolute 
 costs — is: "Get the absolute facts and figures about the 
 various activities of the business." Approximations, 
 guesswork, estimates and speculations of any kind are 
 / barred, and in their place is an ever present single minded 
 
 desire to be absolutely accurate. 
 
 It must be realized that the value of the right system 
 lies in the difference between average and maximum 
 efficiency, between what is done by men who are left 
 largely to their own devices, or the uncertain moods and 
 ebbing and flowing energies of foremen, and men who 
 feel the constant spur of working up to a standard. 
 
COST KEEPING SHORT CUTS 
 
 The business man who thinks up to such n standard Putting 
 realizes that nothing happens in this world; that success (^^^^ 
 or failure does not come as a result of good or evil fortune. System 
 Back of them is a cause. Back of all success there is a 
 good and sufficient reason. The executive with a vision 
 realizes that he must get at -these causes and understand 
 them. As he hunts for them amid the activities of his 
 business, he is hospitable to the claims of all theories, of 
 new machines, of time saving devices in oflace or factory. 
 Nothing is poor in his eyes until it has been found wanting 
 after a trial. No theory is bad just because it is a theory. 
 He knows that theory is the egg, practice is the chicken. 
 But in this hunt for details that shall show him where and 
 whence to find the things that make or mar profits, the 
 manager finds that these very details are the things that 
 palsy the hand and the mind. He must deputize — hence 
 the costkeeper. 
 
 Details will not come of themselves to the executive: 
 the executive must go after the details, and he does this 
 by means of a system through which are recorded all the 
 time and materials used, and then a systematic distribu- 
 tion of these figures to certain divisions of processes or 
 expenses, which he knows to be the source of the greatest 
 possible loss to him. 
 
 He knows that profits will take care of themselves Profits 
 when he has taken care of the losses. That is the execu- 
 tive's part. 
 
 Many cost experts have found that a graphic charting 
 of the business helps to a proper analysis and aids in 
 placing the matter in a proper light before those who will 
 operate the system. 
 
 First,, chart all the various departments of the busi- 
 ness; under each department write exactly what the 
 department does. Arrange each of these departments 
 in the sequence of the work as it is done, or as the product 
 comes through. 
 
 S9 
 
COST KEEPING SHORT CUTS 
 
 Putting Arrange your system so the records will follow the 
 
 (-.Qg^. sequence of operations. 
 System , ^j^y factory or store not properly departmentized may 
 have a working chart arranged without in any way 
 interfering with the actual conduct of the work until the 
 system has been fixed. The simple principle of depart- 
 mentizing is, a department should handle the same class 
 of operations in a factory, or the same general lines of 
 goods in a store. Machine work should not be mixed up 
 with wood work in a factory, nor shoes with white goods 
 in a store. In the administration department the sales 
 making and the accounting branches should be divided, 
 the general executive departments should be individual- 
 ized. 
 
 For instance, take a machine shop : 
 
 This is divided into foundry, tool, paint, lathe, pattern, 
 polishing, planer work and assembling departments. 
 Each of these departments has its own expense covering 
 direct labor, direct material, general indirect expense. 
 The last is divided into departmental general indirect 
 expense and then into an account which carries a per- 
 centage of the entire indirect expense. 
 What a Any factory cost system should do several things; 
 System some of course, under certain circumstances, being much 
 should niore important than others. Among the important 
 ° things it should do are: 
 
 First — Ascertain the cost per unit on each line of 
 the factory product. 
 
 Second — Record the amount of time spent on each 
 operation, or each order. 
 
 Third — Show location in plant and the condition of 
 work on each unfinished unit. 
 
 Fourth — Show the amount of productive and non- 
 productive labor, and for what the non-productive labor 
 is used. 
 
COST KEEPING SHORT CUTS 
 
 Fifth — Show the amount of productive and non- Putting 
 productive labor and materials, and give stage of develop- q^^^ 
 ment by departments. System 
 
 Sixth — Show total output, average monthly output, 
 busy time and idle time on each unit of output, for day, 
 week or month. 
 
 Seventh — Show cost per hour of operating each class 
 of machines and by departments. 
 
 Eighth — Show relative overhead and direct labor cost 
 per hour, or per unit, in each department. 
 
 Ninth — Show whether each operation is increasing or 
 decreasing in cost, and, in its final analysis, whether you 
 are making goods at a profit or a loss. 
 
 Finally, it should be understood from the start that Finally 
 cost keeping is not a fad. Be convinced that it is a prime 
 necessity to financial success. Business — almost any kind 
 of a businesses but a guess without it. It requires study 
 and judgment and steady application of correct prin- 
 ciples. From the time material is bought until it is 
 fashioned by the workingman into the finished product, 
 the manufacturer is at an expense that never ceases. To . , 
 
 ascertain accurately the proportion of cost a job unit of 
 production should be charged with, is the function of 
 cost accounting. The actual work done — the visible 
 work — the grinding, cutting, punching, shaping, heating, 
 polishing, etc., are too commonly figured as the only cost 
 chargeable against the job. In fact, these items com- 
 prehend about fifty per cent only of the true cost. Why 
 this is so, and wherefrom these additional costs accumu- 
 late against each particular unit of the production, cost 
 accounting makes plain. 
 
 SI 
 
CHAPTER III 
 
 Some Systems of Paying Wages 
 
 IABOR is time and time is money in factory economy. 
 J Time is one of the most expensive things the 
 
 average manufacturer pays for, because it involves 
 a cost that, in most cases, is about equal to cost of 
 material and overhead expenses combined. 
 
 The proper cost system gives an absolute check on the 
 time reports of workman and foreman and shows just 
 how each man's time has been expended. 
 
 To know where and how we may most efficiently apply 
 the time of our employes for getting the best results is 
 the great question of the day. 
 
 No adequate answer to this question can be found 
 elsewhere than in a complete and thorough cost system. 
 
 A man is paid wages in order to produce certain 
 results. These results are more or less well defined just 
 in proportion as each man's work in a factory is defined. 
 It is not likely that any wage system, or any factory is 
 so well organized that there is an absolutely fixed arbi- 
 trary standard for a man's activities, either in the quality 
 of his work or the quantity he produces, yet wages are 
 the standard by which men are judged in the world of 
 labor, so that where high wages abound, good work is 
 expected, and where low wages abound, a corresponding 
 grade of work may be looked for. 
 
 On the other hand, the cost record of a factory is the 
 standard by which men are judged of their importance, 
 their ability and their productiveness in the economy of 
 that factory. The amount of their wages is dependent 
 upon that record. 
 
 It is therefore important that the man who works for 
 wages produce all that the manufacturer can reason- 
 ably expect of him, or that the manufacturer has been 
 
 32 
 
COST KEEPING SHORT CUTS 
 
 able to get from anybody else doing that same class of Some 
 work. Hence the necessity for a manufacturer to know ^J^ ^^^ 
 from actual records the worth of a man, not only for his Paying 
 own protection, but also that he may pay the man all ^^^^ 
 that the work is worth. 
 
 Abstractly speaking, every conscientious man who 
 thinks, should endeavor to produce the utmost for the 
 money he receives, on the general principle that "He 
 profits most who serves best," but unfortunately too few 
 people regard the matter in this light. Therefore, we must 
 take men as we find them, and in order to get the greatest 
 efficiency, we have adopted various systems that place a 
 premium on a man doing what he should do, and when 
 we devise a wage system that will make a man want to 
 produce the utmost for his paj^ we will have the wage 
 system that will immediately supplant all others. 
 
 There are numerous plans by which the wages paid to 
 a workman can be determined. They are: 
 
 1 — Day Rate Plan. 5 — Bonus Plan. 
 
 2— Piece Work Plan. 6— Profit Sharing Plan. 
 
 3 — Differential Plan. 7 — Stock Distribution Plan. 
 
 4 — Premium Plan. 
 
 The value of any wage system over another necessarily 
 depends upon the conditions of the plant in question, and 
 the plan must be adopted after a careful study of these 
 conditions and the nature of the product. 
 
 The different systems will be briefly explained in the 
 following chapters. 
 
 33 
 
CHAPTER IV 
 
 Day Rate Wage Plan 
 
 THE "day rate" or the "day's work" plan is one of 
 the most generally used — first, because it is the 
 simplest, and second, because it makes a less com- 
 plicated payroll. 
 
 It applies both to high class labor and to men engaged 
 in more or less routine work and those employed in non- 
 productive labor. 
 
 It consists in paying a workman a certain rate per day 
 or per hour; the amount of pay being determined by the 
 market rate for the class of work and afterwards by the 
 special skill of the workman. 
 
 There are objections to this plan, especially where no 
 adequate cost system is used, because there is no incentive 
 to make a workman do his best or to produce to his full 
 capacity. He gets so much a day whether he makes 100 
 parts or whether he makes 75. If he happens to be faster 
 than his fellow workmen and discovers that he is doing 
 more work than they he asks for a raise, and if he doesn't 
 get it, slows down to the same pace. 
 
 In other words, the day rate gives the men an oppor- 
 tunity to take it easy, their only incentive being a prod 
 from the foreman when he sees that they are "soldiering." 
 It is all in favor of the workman. 
 
 The only way in which a day rate plan can be equalized 
 between employer and employe is by a cost system. Of 
 course the total labor cost can be predetermined on 
 account of the fixed rate paid to the men, but the relation 
 between the rate and the amount of work each man is 
 turning out cannot be exactly known unless some kind 
 of record is kept. 
 
 There are some classes of labor where the amount of 
 work is not measurable by quantities, such as engineers, 
 
 $i 
 
COST KEEPING SHORT CUTS 
 
 firemen, inspectors, truckmen, watchmen, clerks, etc. Day 
 These necessarily must be paid so much per day, but the pj^^j 
 men who turn out the goods can be measured by the 
 amount of work they do. 
 
 Suppose that each man turns in a labor distribution 
 ticket every night, showing how much work he has done 
 during the day, or turns in a separate ticket when he has 
 finished a job. . The information thus gathered, if properly 
 used, will show the relative value of workmen. 
 
 This is especially true where a certain rate per hour is 
 paid and there is prospect for an increase of pay with an 
 increased amount of work. Under these conditions the 
 labor distribution tickets which are turned into the cost 
 department, and which show the time consumed on cer- 
 tain jobs by different workmen, contain data that indi- 
 cates those who deserve a "raise." Without an increase 
 of pay in view, the tickets would, in all probability, show 
 a dead level of production on the part of all the workmen 
 and be of no utility except to indicate that some man is 
 wasting an unusual amount of time. 
 
 The necessity for a well-ordered system whereby a 
 factory management can know the relative value of work- 
 men arises from the fact that factory employes, as a 
 general rule, are given to frittering away as much time as 
 possible. 
 
 Time is money to the manufacturer always; to the Time is 
 employe only when it is made to appear so. 
 
 The men are paid, say, for ten hours a day. If they 
 waste half an hour or an hour of it the employer pays 
 just the same amount as if the full ten hours had been 
 productive. This increases the cost of his goods. 
 
 The table on the following page shows how much 
 money a daily waste of five minutes amounts to in a year 
 and should be studied carefully by every employer who is 
 anxious to cut down the cost of production. 
 
 S5 
 
COS 
 
 T 
 
 KEEP 
 
 I N 
 
 G S H 
 
 R T 
 
 C U 
 
 T S 
 
 
 Rate 
 
 Loss 
 
 
 
 
 
 
 Day 
 
 per 
 
 by 1 By 10 
 
 Man Men 
 
 By 20 
 
 By 25 By .'J5 
 
 By 40 
 
 By 50 
 
 By 100 
 
 Men 
 
 Rate 
 
 Day 
 
 Men 
 
 Men Men 
 
 Men 
 
 . Men 
 
 Plan $1.00 $2.90 $29.00 $ 58.00 
 
 $ 72.50 $101.50 $116.00 $145.00 $290.00 
 
 
 1.25 
 
 3:62 36.20 
 
 72.40 
 
 90.50 126.70 
 
 144.80 
 
 181.00 
 
 362.00 
 
 
 1.50 
 
 4.35 43.50 
 
 87.00 
 
 108.75 152.25 
 
 174.00 
 
 217.50 
 
 435.00 
 
 
 2.00 
 
 5.80 58.00 
 
 116.00 
 
 145.00 203.00 
 
 232.00 
 
 290.00 
 
 580.00 
 
 
 2.50 
 
 ,7.25 72.50 ■ 
 
 145.00 
 
 181.25 253.75 
 
 290.00 
 
 362.50 
 
 725.00 
 
 
 3.00 
 
 8.69 86.90 
 
 173.80 
 
 217.25 304.15 
 
 347.60 
 
 434.50 
 
 869.00 
 
 Labor distribution tickets are made out by the fore- 
 man or his clerk, and on them are recorded the time of 
 beginning and finishing a job. 
 
 They provide a means of keeping "tab" on the men 
 and finding the exact labor cost. 
 
 This is especially true of a factory that is turning out a 
 uniform commodity. 
 
 The very fact that each workman has a ticket and 
 knows that the work he is doing will be timed by it in the 
 cost department, makes him put forth more effort. 
 
 If he wastes time and escapes the surveillance of his 
 foreman to-day, his ticket will indicate the extra time to 
 complete a job and show the discrepancy between to-day's 
 work and the work on the same job to-morrow or next 
 day. Besides, there are other workmen engaged in the 
 same work with whose expertness he can be compared. 
 The The adding machine plays a most important part in 
 ,^^^i^g the addition of time and amounts on the labor distribu- 
 tion tickets, not only for getting labor cost of jobs and 
 checking the payroll, which will vary with absentees, 
 latesj^new men, etc., but for compiling data from which 
 information can be obtained regarding any man's record. 
 
 A daily or weekly charge to accounts or to depart- 
 ments, and the earnings of workmen, cost of jobs, etc., can 
 be quickly determined with an adding machine. 
 
 In fact the machine makes possible the compilation of 
 valuable statistics, within a reasonable length of time, 
 such as would be practically impossible without it. 
 
 And a still greater advantage of exact statistical infor- 
 mation is that it makes the day rate wage plan more 
 equitable to the employer. It shows him whether or not 
 his men are doing their work faithfully. 
 
 36 
 
CHAPTER V 
 
 Piece Work Wage Plan 
 
 "b' 
 
 THE piece work wage plan is based on the principle of 
 paying the employe for the exact amount of work 
 he is capable of doing. He gets so much per piece 
 or so much per hundred pieces, and therefore has a 
 chance theoretically, and to a considerable extent in 
 practice, to earn according to his efforts and abilities. 
 
 The tendency of workmen to lag when paid by the day 
 or hour is so universally manifest in all kinds of business 
 that the manufacturer must realize that he is paying too 
 much for his labor when he uses this plan. 
 
 In order to remedy this defect in the day rate plan, 
 the piece rate was instituted. No sooner did it go into 
 effect, however, than the rate of production in some fac- 
 tories jumped by leaps and bounds and men who were 
 formerly employed at $2.50 and $3.00 per day began to 
 earn wages of $4.00 and $5.00. 
 
 This fact immediately showed the manufacturer that 
 he had been imposed upon by his workmen while oper- 
 ating under the day rate plan. In order to adjust prop- 
 erly the wages to the class of work being done he made a 
 cut in the rate per piece. 
 
 The inevitable cut shows the workmen that if they 
 produce too much they will only set for themselves a high 
 speed standard and still be unable to earn more than a 
 certain maximum amount. So human nature again 
 creeps in and the men begin to work just fast enough to 
 get the highest wage without going beyond the limit that 
 will mean a cut. 
 
 In this way the full advantage of a piece work rate is 
 considerably modified. 
 
 This system also makes it necessary to inspect care- 
 fully all parts because of the increased rapidity with which 
 
COST KEEPING SHORT C UTS 
 
 Piece they are made and the corresponding liabihty to faulty 
 Plan workmanship. Each workman is held responsible for 
 the parts rejected and in this way compelled to exercise 
 care in their manufacture. 
 
 It requires tact and expert judgment to change from a 
 day rate to a piece rate plan, and care must be taken that 
 no intimation of the new plan gets abroad. For days, 
 the rate of production of the men engaged in the different 
 classes of work must be quietly observed in order to 
 arrive at a fair price per piece. 
 
 It has been the experience of many manufacturers 
 that when a price was thus arrived at, it was found to be 
 far too high, as proven by the enormous increase of pro- 
 duction following immediately after the piece rate went 
 into effect. Because of this, considerable friction arises 
 between the men and the manager before the piece rate is 
 finally adjusted to the point where equity is guaranteed 
 to both. 
 
 Another failing of the piece rate plan is this : If each 
 man is allowed to earn according to his utmost power of 
 production, there will always be found some, who by vir- 
 tue of unusual skill, will earn a very large amount. This 
 makes the manufacturer feel that he is paying too much 
 for his labor and at the same time arouses the antagonism 
 of other workmen who can't earn an equally large amount. 
 System An adequate cost system is necessary to the most 
 ecessary g£pg(.|-iyg handling of piece rate workers' time and earn- 
 ings. Labor distribution tickets are used the same as 
 with the day rate plan, the time required for making a 
 certain number of parts being recorded. This informa- 
 tion gives the cost keeper an opportunity to find out 
 whether every workman is doing his best. Some men, 
 who could earn $3.00 per day by applying themselves, are 
 content to earn $1.75 or $2.00 and ease down on their 
 work accordingly. This is a detriment to the general 
 efficiency of the factory and must be discouraged. 
 
C OST KEEPING SHORT CUTS 
 
 The cost keeper finds that the adding machine is Piece 
 indispensable for getting the total time and earnings of pi^n 
 piece workers on different jobs without an undue expen- 
 diture of clerical time and labor. 
 
 After getting the total labor cost of a job or operation, 
 the machine is used for making extensions to determine 
 the burden or indirect expense on that job or operation 
 and in this respect saves time and money. In addition 
 to the time saved there is an assurance of accuracy in the , 
 listed proof of the work. 
 
 Many other additions and multiplications are neces- 
 sary to get the total department cost, the total cost by 
 accounts and to extend the price of certain parts requi- 
 sitioned from the finished stock room. 
 
 And the Burroughs has the capacity both to add and 
 list and to multiply, printing every item so that proof can 
 be easily obtained. Then the totals can be recapitulated 
 by accounts and the bookkeeper furnished with neatly 
 and accurately tabulated sheets from which to make his 
 postings to the Cost Ledgers. 
 
CHAPTER VI 
 
 Differential Rate Wage Plan 
 
 THE third plan is known as the differential rate plan 
 and has met with the approval of a great many 
 manufacturers because of the equitable adjustment 
 of wages to production. 
 
 This plan consists of paying the workman an increased 
 rate per piece according to the increased number of pieces 
 that he produces above a certain standard, and likewise 
 of decreasing the rate per piece in case the number he 
 produces falls below the standard, which has previously 
 been fixed by ascertaining the average earning capacity 
 of all the workmen. 
 
 The easiest way to explain this plan is by an illustra- 
 tion. 
 
 Suppose the manufacturer has found out by experi- 
 ence that eight of a certain kind of parts can be made by 
 the average workman in a day of ten hours and that for 
 each part 27 cents can be paid. 
 
 The manufacturer tells the workmen who are engaged 
 on this class of work that if they will make ten parts a 
 day and do the work perfectly, they will receive 29 cents 
 a piece for them, and if, by their industry and ability they 
 can make eleven parts a day, they will receive 30 cents 
 a piece for the work. Likewise he tells them that in case 
 they fail to make as many as eight parts, the price per 
 part will be lowered so that if only seven parts are turned 
 out, they will get 25 cents a piece for them. It will be 
 seen from this that each workman is given an opportunity 
 to earn extra money. 
 
 Looking at it from the manufacturer's standpoint the 
 man who can turn out the most work even at the increased 
 rate per part is more economical to him and reduces the 
 final cost of each part more than the man who turns out 
 
COST KEEPING SHORT CUTS 
 
 only a few pieces and gets the smaller rate per part. Differen- 
 This is true because the burden or overhead cost for p^^^ 
 manufacturing a few more parts a day is not as great in 
 proportion to the number of parts manufactured as when 
 fewer parts are made each day and the work is spread out 
 over several days. Thus the amount of burden to be 
 added to the eleven parts that a skilled workman turns 
 out in one day is not as great as the amount to be 
 added to the same number of parts when made by a less 
 rapid workman who turns out only seven parts in one 
 day and leaves four parts to be manufactured the second 
 day. This reduction of burden per piece very materially 
 reduces the final cost. 
 
 The following table shows how^ the man who makes 
 the fewest parts per day actually costs the company more 
 money than does the man who make more parts and gets 
 more for each part: 
 
 No. of Price per Labor Cost of Overhead Total Cost per 
 
 Articles Article • Cost Material Cost Cost Article 
 
 7 $0.25 $1.75 $0.70 $1.50 $3.95 56^ 
 
 8 .27 2.16 .80 1.50 4.46 55f 
 
 10 .29 2.90 1.00 1.60 5.50 55 
 
 11 .30 3.30 1.10 1.64 6.04 54ff 
 
 One of the best features of this plan is that the poor Poor Pay 
 workman gets poor pay and the good workman gets good ^^^ °°^ 
 pay, thus differentiating the grades of employes much 
 more effectively than when the straight piece work plan 
 is used. The poor workman cannot reasonably * 'kick*' 
 on his lower pay when he is shown that his inefficiency is 
 actually making the manufactured article cost more per 
 piece than in the case of the man who is getting higher 
 pay and doing more work. 
 
 It is the opinion of cost experts that for a factory or 
 plant where indirect expenses are very large in compari- 
 son to the cost of labor, the differential rate plan is almost 
 sure to pay, but where this indirect cost is comparatively 
 small, the advantage is more doubtful. 
 
 41 
 
COST KEEPING SHORT CUTS 
 
 Differen- When the differential rate plan is in operation it is 
 pj^jj necessary to maintain a very rigid inspection department 
 so that faulty workmanship due to the increased speed on 
 the part of some workmen may not slip through. 
 
 A few advantages of the differential plan may be 
 summed up as follows: 
 
 First — The wages are raised and the cost is lowered, 
 thus bringing about a better feeling between employer 
 and employe. 
 
 Second — The work is of a uniform quality, owing to 
 the system of inspection. 
 
 Third — It obtains a maximum production per unit of 
 time because of the fact that the workman is laboring for 
 higher wages and at the same time is prevented from turn- 
 ing out inferior work by the inspection of the parts that 
 he makes. 
 
 Fourth — It discourages and automatically relieves the 
 factory of incompetent workmen since they can't blame 
 anyone but themselves for their small wages. 
 
 Labor distribution tickets again enter into the proper 
 recording of work done by this system. In order to have 
 the required data at hand for figuring earnings, it is 
 absolutely necessary to use tickets on which are given 
 the time put on a job, the number of pieces made, etc. 
 The strong point in favor of an adding machine to handle 
 work of this kind is that it can be used for making the 
 numerous extensions of rates per piece and the number of 
 pieces turned out by each workman. 
 Multipli- Thus, in the example in Figure 1, there are three 
 l^achine different extensions to make in order to arrive at the 
 earnings of the men who turn out 132, 144 and 165 pieces 
 respectively. 
 
 While these problems are simple, there are many 
 where the number of pieces run into the thousands at a 
 rate of so many cents or a rate of so many cents and mills 
 per hundred. 
 
 42 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 This complicates the extensions and makes the adding Differen- 
 
 machine especially useful. 
 
 To those who are unfamiliar with the Adding Machine 
 it might seem like a contradiction to cite instances where 
 it is used for multiplying, but as a matter of experience, it 
 is capable of performing multiplication about three times 
 as fast as it can be done mentally. It can be used with 
 equal facility in handling either whole numbers or whole 
 numbers combined with fractions. 
 
 I The value of a listing machine in this case is obvious, 
 since it records the operation and thus gives proof of the 
 work. 
 
 tial Rate 
 Plan 
 
 .Zls — 
 
 er/cs — 
 
 .r/cs — 
 
 1 3 2 ^.2 4 
 
 1 4 4 ^.2 6 
 
 1 6 5 ■^S 5 
 
 ■5J- 
 
 1.3 2 
 
 1.4 4 
 
 •i'C- 
 
 1.6 5 
 
 1.3 2 
 
 1.4 4 
 
 1.6 5 
 
 1.3 2 
 
 1.4 4 
 
 1.6 5 
 
 1.3 2 
 
 1.4 4 
 
 1.6 5 
 
 13.2 
 
 1.4 4 
 
 1.6 5 
 
 13.2 
 
 1.4 4 
 
 16.5 
 
 #3 1.6 8-;:- 
 
 14.4 
 
 16.5 
 
 14.4 
 
 16.5 
 
 
 / 3 7.4 4^'^- 
 
 ^5 7.7 5«- 
 
 Pig. 1 
 
 Facsimile reproduction of three multiplications made with a Burroughs 
 Adding Machine. 
 
 48 
 
CHAPTER VII 
 
 Premium Wage Plan 
 
 "&' 
 
 THE next wage plan, which is conceded to be one of 
 the most successful in actual operation, is known 
 as the Premium Plan. 
 
 This is somewhat similar to the differential plan, the 
 difference being that instead of increasing the rate per 
 piece, the increment of earning is based upon time saved. 
 That is, a certain premium is given for the time saved in 
 completing a job for \yhich an average time has been pre- 
 determined. 
 
 In addition, a minimum wage is incorporated in this 
 plan, which assures the workman of a certain amount of 
 pay in case he fails to s,ave time on account of accidents, 
 etc. This has placed the whole system in a more favorable 
 light with the employes, thus reducing the general 
 opposition to its installation. 
 
 It can best be illustrated by example : Suppose a man 
 is working ten hours a day at the rate of 26 cents an hour. 
 At this rate, he will earn $2.60 a day. 
 
 The manufacturer tells him that if he will cut down 
 the time on a job from ten hours to nine hours he will pay 
 him 26 cents an hour for those nine hours, which is $2.34, 
 and will divide with him the wage that he would have been 
 paid for work done in the remaining hour. If this division 
 is on a half-and-half basis, the workman will get $2.34, 
 plus 13 cents, or $2.47. Then he has another hour to 
 work during which time he can earn more. If he saves 
 two hours, he will receive 26 cents an hour for the eight 
 hours, which will amount to $2.08, and get one-half of the 
 two remaining hours' wages, which, on the half-and-half 
 basis, amounts to 26 cents. In this case he has two hours 
 more during that day in which to earn an additional wage; 
 
COS T 
 
 KEEPING 
 
 S H O R T 
 
 CUTS 
 
 and even if he earns no additional premium during these Premium 
 two hours, he will at least get the regular rate of 26 cents pj^^^ 
 per hour, or 52 cents in all. 
 
 So for the day of 10 hours work under these conditions, 
 he will earn $2.08 pay for eight hours, plus 26 cents bonus 
 for saving two hours, plus 52 cents additional wage earned 
 in the two hours, or $2.86 in all. 
 
 Thus the workman's superior skill and speed have 
 -earned him more money while the employer has obtained 
 a greater number of parts at a lower final cost per part. 
 
 This plan has also the advantage of inspiring the men 
 with an ambition to exert themselves to their full capacity 
 and at the same time it automatically remunerates them 
 according to their ability. 
 
 In the piece work plan the employe gets the benefit, 
 the employer saving only in the burden or indirect expense. 
 Under the Premium Plan, the profit is divided more evenly 
 and both the employer and employe enjoy its benefits. 
 The table, *Figure 2, gives an idea of the relative efficiency 
 as to saving in labor cost between the different systems in 
 vogue at the present day. 
 
 Systems 
 
 11 
 
 Rate of Pay 
 
 is 
 
 h 
 
 3« 
 
 ]a 
 
 Overhead 
 Cost 
 
 Total 
 Cost 
 
 Cost per 
 Article 
 
 TeductioT 
 in Cost per 
 100 Articles 
 
 Day Rate 
 
 Piecework... 
 
 Differential... 
 
 Premium 
 
 Bonus 
 
 .8 
 8 
 
 10 
 8 
 
 10 
 8 
 
 10 
 
 8 
 10 
 
 .30 per hour .'. . . 
 .32 per piece. . . . 
 .32 per piece .... 
 .32 per piece .... 
 .34 per piece .... 
 .28 per hour .... 
 .14 additional for 
 
 each hour 
 
 saved. 
 .28 per hour .... 
 .32 per hour .... 
 
 $3.00 
 2.56 
 3.20 
 2.56 
 3.40 
 2.80 
 3.15 
 
 2.80 
 3.20 
 
 .'eV 
 
 ' .84 
 
 .35" 
 .40' 
 
 $1.00 
 1.00 
 1.25 
 1.00 
 1.25 
 1.00 
 1.25 
 
 1.00 
 1.25 
 
 $1.50 
 1.50 
 1.60 
 1.50 
 1.60 
 1.50 
 1.60 
 
 1.50 
 1.60 
 
 $5.50 
 5.06 
 6.05 
 5.06 
 6.25 
 5.30 
 6.00 
 
 5.30 
 6.05 
 
 .6875 
 .6325 
 .6050 
 .6325 
 .6250 
 .6625 
 .6000 
 
 .6625 
 .6050 
 
 $2;75" 
 ".75 
 6;25 
 
 '5.75 
 
 Fig. 2 
 
 Comparative Costs of Similar Articles as resulting from the different 
 
 Wage Plans, showing effect upon Labor Cost, Material 
 
 Cost, Overhead Cost and Total Cost. 
 
 ♦"Nicholson on Factory Organization and Costs," 
 
 45 
 
COST KEEPING SHORT CUTS 
 
 Premium It will be seen that the premium plan has a great deal 
 pff^ in its favor as regards the reduction in the cost price per 
 article. This system also necessitates an exact set of 
 records in order that no workman will be deprived of his 
 just earnings and also that no "soldier" will share in the 
 premiums which he has not earned. 
 
 The labor distribution tickets necessary for this 
 information can be handled with the greatest possible 
 accuracy and speed on an adding machine. Likewise the 
 many extensions that must be made where workmen are 
 reducing the amount of time on a job and thereby earning 
 wages based on this reduction, can be figured more quickly 
 and accurately with an adding machine than by hand and 
 mind. 
 
CHAPTER VIII 
 
 Bonus Wage Plan 
 
 THE bonus plan is based on the principle of increasing 
 the pay in a certain ratio as the time for completing 
 a job is decreased, the rate depending on the per 
 cent of time saved. 
 
 By referring to the table on page 45, it will be seen 
 that where eight articles are made in ten hours, on the 
 Bonus Plan, the rate per hour is 28 cents, and where ten 
 articles are made the rate per hour is 32 cents. 
 
 This plan is practically the same as the Premium Plan 
 and in fact some cost accountants make no distinction 
 between them. 
 
 The same circumspection must be used in introducing 
 this plan to the factory as with the Premium or Piece 
 Work Plans, care being taken to fix as accurately as pos- 
 sible the rate of increase in wages resulting from time 
 saved on a job. 
 
 One fact in connection with the installation of the 
 Premium or Bonus Systems should be borne in mind. 
 Where there is only a little machine work, the rate should 
 be made fairly low, since the rate per cent of increase will 
 be large. But if the work involves machine work it will 
 require a greater application of skill and effort to effect 
 a large increase, and therefore a Premium rate with a 
 fairly high premium can be used. 
 
 In other words the increase where machine work is 
 prevalent has been found to be comparatively small in 
 contrast to manual work. 
 
 Other points of excellence in the Premium and Bonus 
 Plans may be summed up thus: In using these plans 
 the employe's reward is immediate as compared with the 
 results of other plans, such as profit sharing. The fact 
 
 47 
 
COST KEEPING SHORT CUTS 
 
 Bonus that quick rewards are obtained appeals to the average 
 workman. 
 
 The workman does not have to pay a penalty for not 
 "speeding up," except the loss of his "bonus" or being 
 discharged when he has proven unfit for the work. The 
 minimum wage makes it easier to install the Premium and 
 Bonus Systems because it does away with the intense 
 antagonism that is generally shown when a new plan is 
 proposed. 
 
 It is an excellent incentive for the men to exert them- 
 selves to their full capacity when they realize that they 
 will be rewarded according to the amount of work they 
 turn out. 
 
 The management does not suffer as much loss in case 
 of an over-estimation in the rate of Premium or Bonus, 
 and it provides a more equitable division of profits 
 between employer and employe. 
 
 48 
 
CHAPTER IX 
 Profit Sharing and Stock Distribution Plans 
 
 THERE are two other plans that are calculated to 
 bring increased production and better relations 
 between employer and employe. These are the 
 profit sharing and stock distribution plans. There is not 
 as much definite information about them as in the case 
 of other plans because they have only been tested out in 
 comparatively few cases. However, it will be well to 
 understand the principles upon which they are based. 
 
 The Profit Sharing Plan embodies the feature of the 
 workmen sharing in the profits of the factory but it has 
 the defect of not discriminating between the good and 
 poor workmen, both sharing the profits alike. 
 
 Then again, the increased profits of a plant may result 
 from the selling force or from some source entirely outside 
 the activities of the workmen, in which case they have no 
 just claim to a share in the profits. And, if through some 
 mismanagement, there are losses instead of profits, they 
 object to standing their share of the losses. 
 
 Another disadvantage of the plan is that the rewards 
 are too far in the future to be much of an incentive to the 
 average man to put forth his best efforts. Ordinarily, 
 the profits are figured but once a year and this means 
 that each workman must wait a year before he can know 
 how much his share amounts to. 
 
 A number of authorities hold that there is only one 
 practical method of handling the profit sharing plan and 
 that is to set a price on every article manufactured. The 
 factory is charged only with such expenditures as relate 
 to its production and a predetermined burden for super- 
 vision. The factory is then credited for all articles at this 
 scheduled price whether they are sold or not. 
 
 49 
 
COST KEEPING SHORT CUTS 
 
 Profit When the inventory is taken, the factory account in 
 
 ^^"^^ the ledger will show the factory profit and the difference 
 between the actual cost and schedule price. Whatever 
 saving there may be is distributed among the foremen of 
 the different departments and in some instances among the 
 employes, according to the rate of pay for each man. 
 
 Penalties are enforced for faulty workmanship, poor 
 attendance, and so forth, according to existing conditions. 
 The stock distribution plan will probably be more 
 successful in small shops where the proprietor and work- 
 men are brought into closer touch with one another. 
 The same defects exist in this plan when applied to the 
 larger shops, as in the case of the profit sharing plan. 
 
 In reviewing the different wage systems, it must be 
 borne in mind that the success of any one of them depends 
 as much upon the manager's tact and sympathy and 
 understanding of the workmen's attitude as upon the plan. 
 The Any plan in itself is a cold-blooded proposition, and in 
 
 fs^CoW order to warm it up, it must be imbued with a good deal 
 of human interest. In going about the installation of any 
 wage system, the manager must study carefully the class 
 of men whom he has employed and look at the whole 
 situation as much as possible from their standpoint. By 
 doing so he will provide himself with a guide that will 
 lead to the plan best suited to his particular case and the 
 one calculated to produce harmonious relations between 
 himself and his employes. 
 
 The systems we have just outlined have been in actual 
 operation. Some of them have proven more efficient than 
 others but the object of all of them is to increase produc- 
 tion and bring about an equitable adjustment between 
 the amount of pay given out and the amount of labor 
 received. 
 
CHAPTER X 
 
 Judging the Costkeeping Requirements of a 
 Factory 
 
 GREAT care should be taken in the introduction of a 
 Cost System in a factory. In one case a firm 
 manufacturing a specialty, and employing about 
 1200 men in the factory, introduced a system that 
 ultimately required nearly 250 printed forms. When 
 these were rearranged and a proper system was installed, 
 all but 23 of the forms were discarded. The saving, of 
 course, was tremendous. 
 
 This condition of over systematizing generally comes 
 as a result of '^letting the system work out itself," instead 
 of having some specialist come in and work out a complete 
 plan of costkeeping, coherent, logical, thorough, with 
 definite objects in view. 
 
 Where a form is introduced to get a certain set of facts 
 or figures — then another form to get something else — then 
 another and so on, as is done in so many places, the cost 
 system is a menace, breeding confusion and loss of time 
 when it should nourish order and efficiency. 
 
 Remember, however, that mere forms do not make a 
 system; nor do an adding machine, a typewriter, or a few 
 clerks make a system. They are simply the physical 
 expression of a system. 
 
 No form in this book should be put in operation by a 
 manufacturer or business house, until it has been care- 
 fully considered, both in its relation to the specific thing 
 that the form is to record, and in its relation to every 
 other form in the system. It is well to keep in view 
 one thing. Put on the form just as much data as you 
 can. Don't, however, use any one ,form for entirely 
 different classes of data. 
 
COST KEEPING SHORT CUTS 
 
 Judging A cost system to be complete must embrace every item 
 ^ments ^^ expense connected with a commodity from the time 
 the raw material is received in the factory, until the 
 finished product is sent to the shipping room. 
 
 In order to provide a set of records that will give this 
 information, cost has been divided into three parts: 
 
 1. Cost of Material. 
 
 ^. Cost of Labor. 
 
 3. Indirect Expense or Burden. 
 
 Cost of material and cost of labor are very closely 
 related, these two combined giving the prime cost or flat 
 cost of any article. 
 
 The indirect expense, while a most vital factor, is in a 
 way separate and distinct. However, it is necessary to 
 know this indirect expense and to distribute it over all 
 the manufactured articles in order that a selling price may 
 be fixed that will insure a profit. 
 
 It is a well-known fact that all the raw material 
 
 coming into the factory does not go into the manufacture 
 
 of the goods. Some of it is used, for instance, to make 
 
 tools with which the articles are made. 
 
 Division This leads up to the division of material cost into two 
 of Costs 1 
 
 classes : 
 
 First — Direct material cost. 
 
 Second — Indirect material cost. 
 
 The direct material cost is the cost of all material that 
 goes into the product. 
 
 The indirect material cost is that which embraces the 
 cost of factory supplies, tools and so forth, and cannot 
 be charged as a component of the product. It is, however, 
 included in the burden or an indirect expense. 
 
 Labor cost is also divided into two classes : 
 
 First — Direct Labor. 
 
 Second — Indirect labor. 
 
 The direct labor cost is that which constitutes the 
 pay of the men who actually work on the product. 
 
 5? 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 Indirect labor cost embraces all labor about the fac- 
 tory that does not actually produce goods. All foremen, 
 repairmen, handlers of material, errand boys and the like, 
 come under this classification, which is also included in 
 burden. 
 
 Factory burden is composed of indirect cost of labor, 
 indirect cost of material and indirect expense. Indirect 
 expense includes such items as light, heat, power, 
 maintenance, insurance, taxes, depreciation and similar 
 expenses which are necessary to the manufacture of the 
 goods. 
 
 t,^ Burden should be figured with the greatest possible 
 accuracy and properly distributed over each of the articles 
 manufactured, according to the amount of direct labor or 
 of time and material expended in its production. 
 
 Judging 
 Require- 
 ments 
 
 
 
 
 
 
 
 
 
 
 30% 
 PROEIT 
 
 100% 1 
 
 SELLING S 
 
 PRICE • 
 
 
 
 SELLING EXP 
 
 70% 
 
 rOTAL COST 
 
 
 
 20% 
 INDIRECEEXR 
 
 EMTORYCOST 
 
 
 20% 
 LABOR 
 
 3S% 
 PRIME COST 
 
 MATER/flL 
 
 
 
 
 
 
 Fig. 3 
 Diagram Illustrating the Building of Costs. 
 
 The diagram in Figure 3, illustrates the building up The Cost 
 of the cost of an article to the price at which it can be sold ^^^ram 
 with a profit. It will be noted that material and labor, 
 represented by 15 and 20 per cent of cost respectively, 
 make up the prime or flat cost, which is 35 per cent. Then 
 this prime or flat cost plus the indirect expense of 20 per 
 
COST KEEPING SHORT CUTS 
 
 Judging cent gives the final factory cost, which is 55 per cent. The 
 ^ments ^^^^ factory cost plus the selling and administrative 
 expense of 15 per cent gives the total cost of 70 per cent, 
 and the total cost of 70 per cent plus the profit of 30 per 
 cent gives the selling price of 100 per cent. A careful 
 study of this diagram will explain clearly the various 
 elements that go to make up the selling price of a 
 commodity. 
 
 Remember, that the cost of goods when placed in the 
 shipping room, does not include the expense necessary to 
 market the product. Manufacturing costs and selhng 
 costs are two separate and distinct propositions and 
 must not be confused with one another. By fixing this 
 fact firmly in mind at the outset much trouble will be 
 avoided. 
 
 M 
 
CHAPTER XI 
 
 Handling Material; Perpetual Inventory 
 Suggestions 
 
 THE cost of material is comparatively easy to obtain. 
 The price paid for it depends on the market. To 
 this is added all charges in connection with hand- 
 ling it. Therefore when the amount required to make a 
 certain number of articles is definitely known, it can be 
 charged up at the same rate at which it was purchased. 
 
 We have already pointed out that raw material is 
 divided into direct and indirect. The direct, in some 
 cases, is divided into accessory material and finished 
 material. Thus, a plant manufacturing a commodity 
 made up of a large number of stamped parts would con- 
 sider cold rolled steel or metal sheets as part of its raw 
 material, while the plant that manufactures cold rolled 
 steel would consider pig iron as raw material, and the 
 furnace in turn that manufactures pig iron would consider 
 iron ore as raw material. Therefore, the raw material 
 in any plant is the material as it is received before any 
 change has been made in it. 
 
 Even finished parts, if received, are classed with the 
 raw material which goes into the make-up of a commodity. 
 Thus a furniture manufacturer would class with his raw 
 material such items as handles, knobs, casters, etc. 
 
 Accessory material is that which does not go into the 
 product itself but is used in its manufacture. In this 
 class fall such items as tool steel out of which certain tools 
 are made, repair material, etc. 
 
 The market may fluctuate, it is true, but still the mean 
 or average price of material is easy to determine. 
 
 Some factories contract for a year's supply of raw 
 material at a fixed rate and in this way the market 
 
 56 
 
COST KEEPING SHORT CUTS 
 
 Handling fluctuations have no effect upon the cost, except at 
 Material i • . i 
 
 long intervals. 
 
 The operations necessary in handling raw material 
 are its purchase, storage and subsequent distribution 
 through the factory. 
 
 The cost authorities seem united in favor of the 
 perpetual inventory as a system for handling material. 
 Some of the most successful say: Perpetual inventories 
 are undoubtedly the best, because by them we are able 
 to keep an exact record of stock on hand; we know the 
 minute we arrive at a point where it is advisable to place 
 orders for new stock so that no part of the supply may 
 become exhausted before a new supply is in hand. 
 
 Perpetual inventories require perpetual attention. 
 The difficulties in handling them have been largely due 
 to lack of attention upon the part of employes. There 
 are some very simple rules that should be noted. 
 Constant First — No material should be permitted to leave the 
 raw stock room without a requisition, signed on behalf 
 of the department where it is to be used. 
 
 Second — All requisitions must be checked up each 
 night before closing, and for that purpose an hour should 
 be established in the afternoon, after which all requisitions 
 of the day should be filled the first thing in the morning. 
 
 Third — Low water marks should be established by 
 which the Supply Clerk can be protected, and the Pur- 
 chasing Agent can be warned of the possible exhaustion 
 of the supply. 
 
 Fourth — A large low water mark should be placed on 
 each kind of raw material so that the Purchasing Agent 
 may have sufficient time to get new estimates before 
 ordering a new stock of material. 
 
 Fifth — Perpetual inventory records should be treated 
 as cash is treated. Cash is verified often, or should be, 
 so inventory should have regular periods for verification. 
 
 56 
 
 Attention 
 
COST KEEPING SHORT CUTS 
 
 The perpetual inventory of raw stock or raw and semi- Handling 
 finished stock constitutes only a part of a complete factory 
 stock inventory, because there is always a great deal of 
 stock in process of construction. 
 
 Since every hour of labor expended on raw or semi- 
 finished stock enhances its value, it is obvious that all 
 stock in process of manufacture will be worth considerably 
 more than the raw or semi-finished stock. Furthermore, 
 the stock in process will not be indicated on the perpetual 
 inventory record since it is charged off the card when 
 requisitioned by the factory foreman. 
 
 Therefore, it is necessary to rely on the cost records to 
 get an accurate value of stock in process. This is easily 
 accomplished by noting the various departments through 
 which the stock or material has passed up to the time of 
 the inventory and then figuring the labor cost and burden 
 expended and adding to this the value of the material as 
 indicated on the requisitions, carbon copies of which are 
 always sent to the cost department. 
 
 Thus by co-ordinating the perpetual stock records Raw and 
 with the cost department records the value of raw and gtock 
 semi-finished stock and of stock in process can be obtained 
 with a great degree of accuracy. 
 
 The individual stock card for each class of material 
 applies equally well to raw stock and semi-finished stock. 
 Thus, in a factory that makes parts from raw material 
 and then assembles machines from those parts into com- 
 plete machines or other product, two sets of perpetual 
 inventory cards are kept, one for raw material and one for 
 the finished parts or semi-finished material. Both sets of 
 records are kept in the way described above. See Figures 
 67 and 68 for Finished Stock Records. 
 
 In the proper recording of all material, one of the best 
 forms of record is a perpetual stock card. This consists 
 of a suitable card for each class of raw material and on it 
 
COST KEEPING SHORT CUTS 
 
 
 
 
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COST KEEPING SHORT CUTS 
 
 is recorded the amount of material and the date when it Handling 
 is received. The distribution of the material is made on ^*^^*^ 
 receipt of requisition blanks, which give the amounts 
 taken from the stock room and show the job to which 
 the material is to be charged. These 
 amounts are deducted from the bal- 
 ances on their respective stock record 
 cards. This gives the factory a per- 
 petual inventory of all the different 
 kinds of raw material remaining in the 
 stock room. 
 
 The use of an adding machine not 
 only expedites the work, but assures 
 its accuracy. In Figure 4 is shown the 
 stock record card used in a factory for 
 recording each kind of stock. It is 
 checked up with the adding machine 
 as follows : 
 
 When a suflScient number of requi- 
 sitions have been given to fill the col- 
 umn of "amounts issued," the stock- - 
 keeper takes the adding machine and 
 adds up the different amounts that 
 have been received together with the 
 original balance. In the illustration 
 on this page the total of amounts re- 
 ceived and the original balance as 
 secured with the adding machine is 
 35,3733^ pounds, the whole numbers ' 
 and fractions being added at the same 
 time. Then he adds the amounts 
 issued, securing a total of 15,7393^ 
 pounds, and deducts this total from 
 the total amounts received. If the 
 remainder corresponds to his last bal- 
 ance (19,633%), he knows that the 
 
 '1^ 
 
 1 3 5.8 7% 
 
 1 9 .7 4 • 
 
 1 1 5 .8 4 
 
 6 5.0 9 
 
 1 7.1 9 
 
 3 5 3.7 3% ;• 
 
 2 4.0 
 
 1.3 
 
 2.6 3 
 
 .2 0" 
 
 1 3.4 
 
 1 3.0 1 
 
 .1 
 
 .3 
 
 1 0.2 b% 
 
 1 8.5 
 
 1 4.6 7 
 
 1 2 .2 3 • 
 
 .4 
 
 1 1.3 
 
 .1 
 
 4.2 6 
 
 2.8 
 
 2 7.7 4 
 
 .1 
 
 .1 
 
 1 5 7.3 9% - 
 
 S0 
 
COST KEEPING SHORT CUTS 
 
 Handling column of balances has been properly extended and can, 
 a eria ^j^gj-gf^i-e, carry the last balance forward to the back of 
 the card, knowing that his work is exactly right. 
 
 On each requisition is recorded the kind of stock used, 
 the price, the date it was withdrawn, the part into which 
 it was made and any other information necessary to 
 show exactly where and for what the raw material was 
 used. By indicating on each requisition the job number 
 or symbol, it is an easy matter to find the material cost 
 of a job by adding up the requisitions bearing any 
 particular job number. This is done very quickly and 
 accurately with an adding machine. 
 
CHAPTER XII 
 Handling Labor Costs 
 
 THE cost of labor constitutes a large part of the total 
 cost of any commodity. It also embraces the 
 greatest amount of detail work because it is neces- 
 sary, not only to ascertain the labor cost of every article, 
 but to record various kinds of data relative to the 
 efficiency of workmen, which is obtained from their labor 
 distribution tickets. 
 
 No matter how many different jobs or parts of jobs 
 any one man may work on, he is paid for the work and 
 his work contributes toward the building of a certain 
 product. For this reason, it is necessary to keep an 
 accurate record of all the time he devotes to the job and 
 the amount he earns, the nature of this record of course 
 depending upon the wage plan used at the factory. 
 
 One of the greatest leaks in connection with labor cost 
 is due to the workman's loss of time, either on account of 
 getting started on new jobs slowly or on account of 
 "soldiering." Therefore, in finding the cost of labor with 
 a view to cutting it down as much as possible it is essential 
 that such loss of time should show up on the records. 
 
 All the necessary information for compiling this data is 
 given on labor distribution tickets. On these are recorded 
 the job number, the date, the workman's number, and the 
 time required to complete a job together with the earnings. 
 
 In handling these an adding machine is almost indis- 
 pensable. 
 
 Obtaining the total cost of each job is only one of the 
 operations necessary in connection with labor tickets. 
 They must be handled several times and a great deal of 
 adding and listing is necessarily done! For instance, the 
 total cost of a job must be obtained. Then the total cost 
 of manufacturing by departments, the total amount to b^ 
 
 61 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 -4^//. e^ 
 
 ^/f £o 
 
 ^3/.2o 
 
 ■^/6.2/ 
 
 ■4!i^Zo.oo 
 
 ^e/s-o 
 
 ^36.27 
 
 LfiBOR 
 
 co>s7: 
 
 T'/'/rre 
 
 /frnounf: 
 
 8^4 
 
 ■5f 
 
 2.3 5 
 
 8 'A 
 
 2.0 1 
 
 12 
 
 3.7 9 
 
 6 
 
 1.5 
 
 16 '/a 
 
 4.7 7 
 
 1 6% 
 
 4.9 3 
 
 1 
 
 3.0 
 
 7 8 'A 
 
 2 2.3:5^* 
 
 Fig. 5 . 
 
 Diagram showing the increase in value of raw material as it passes through 
 
 diflFerent departments and an example of adding machine work, 
 
 where time and amounts are listed and the two 
 
 totals obtained at one operation. 
 
 «« 
 
COST KEEPING SHORT CUTS 
 
 charged to the numerous manufacturing accounts and Handling 
 checking up the pay roll, etc., and various other recapitu- Costs^ 
 lations are necessary. 
 
 It is in this connection that the adding machine comes 
 in, not only as a time and labor saver but for proving the 
 accuracy of the work. Items that are listed can easily be 
 checked and verified. 
 
 The accompanying diagram, Figure 5, gives a general 
 idea of the detail work necessary to figure the cost of labor. 
 
 The order for a job originates in the superintendent's 
 office. One of his clerks makes out a requisition for the 
 necessary material and sends it to the Raw Stock room. 
 This notifies the Raw Stock keeper that a job has been 
 started and that certain material will be used. It also 
 gives him authority for honoring the foreman's requisition 
 for the material. 
 
 A production order describing the job is sent to the Starting 
 foreman of the department where the first operation is to * ^ ^ 
 be done. A cost card, also describing the job and showing 
 the cost of the material, is sent to the Cost Department. 
 
 The foreman in Department 1 then draws all the ma- - 
 terial or part of it, as the case may be, and begins the job. 
 
 The material in this case is worth $11.85. Depart- 
 ment 1 does $2.35 worth of work on it, thereby increasing 
 its value to $14.20 exclusive of Burden, which is ignored 
 in this instance. The partly finished job is then sent to 
 Department 2 and a time ticket for operation No. 1 
 showing $2.35 is sent to the Cost Department. 
 
 Department 2 does $2.01 worth of work on the job 
 and thereby increases the value of the material to $16.21. 
 A time ticket showing the labor cost of $2.01 is sent to the 
 Cost Department. 
 
 The material passes on in this way to all the depart- 
 ments, which send their time tickets to the Cost Depart- 
 ment, Department No. 7 finishes the job, which is now 
 worth $34.20, and turns it into the Finished Stock room. 
 
COST KEEPING SHORT CUTS 
 
 Handling The Cost Department then sorts the tickets per- 
 Costs taining to the job from the many others that have been 
 sent in arid adds the hours and amounts on the Burroughs 
 Cost Machine. This gives the labor cost for the job and 
 the time required for its completion, the hours and 
 amounts are added and listed at the same time with this 
 machine. The two totals are printed by pressing the 
 total button and pulling the handle. 
 The It is obvious that the Cost Department will handle 
 
 urroug s ^^j^^ ^^ accumulation of tickets in order to get the total 
 labor cost of all jobs, and it is for this reason that the 
 adding machine is so exceedingly useful. 
 
 The foregoing gives a general idea of what is necessary 
 for figuring cost of labor. The other recapitulations of 
 labor tickets by departments for figuring Burden by 
 accounts, for figuring labor distribution and so forth 
 necessitate an equally large amount of adding. A more 
 complete outline of the work is ^iven later in the descrip- 
 tion of the cost system used by the Burroughs Adding 
 Machine Company. 
 
 n 
 
CHAPTER XIII 
 Indirect Expense or Burden 
 
 THE question of computing and distributing the Indi- 
 rect Cost or Burden, which constitutes from twenty- 
 five to two hundred and fifty per cent of the total 
 cost of a finished product, according to the nature of the 
 product and the conditions under which it is manufactured, 
 is one of the most puzzhng questions involved in costs. 
 
 At the outset it must be distinctly understood that 
 there is a difference between Factory Burden and Selling 
 Expense. The former has to do with the productive 
 cost of the goods, the latter is separate and apart and is 
 confined to putting the goods on the market. 
 
 Factory cost, which includes Burden, is the value of 
 the product when it is turned into the warehouse or 
 shipping room. The selling expense cannot be included 
 in this value because it would inflate it by just that much 
 and give an erroneous asset on the balance sheet when 
 inventory is taken. 
 
 If the general manager of a manufacturing concern 
 looks after the selling and his assistant looks after the 
 manufacturing, the salary of the former goes into selling 
 expense and the salary of the latter goes into burden as 
 part of the factory cost. While he does not handle the 
 product personally, his expense to the factory is necessary 
 in supervising its manufacture and must be included as 
 part of the cost. 
 
 In short, the whole object of burden distribution is 
 to allocate the charges which constitute it in such way 
 that every department in the factory will bear its pro- 
 portionate share. When this has been done, the cost 
 keeper can tell to a very close figure the cost of every 
 article, whether it has been handled by all departments 
 or by only one or two of them. 
 
 65 
 
COST KEEPING SHORT CUTS 
 
 Indirect Burden includes every expense necessary to the 
 ^^^^11 manufacture of an article outside of the direct labor cost 
 Burden and cost of material. The numerous elements that make 
 up Burden are given in the following: 
 
 1 — Indirect Labor. 
 
 2 — Repairs and Maintenance. 
 
 3 — Heating, Lighting, Rent, etc. 
 
 4 — Taxes. 
 
 5 — Insurance. 
 
 6 — Depreciation. 
 
 Indirect Labor includes the labor of all the men and 
 boys about the factory who do not work directly on the 
 product. The superintendent's salary comes under this 
 classification, likewise that of his assistants and foremen. 
 
 Since it is usually necessary to have a building in 
 which to make goods, the cost of supplying it with heat, 
 light, power, etc., must go into Burden. If the building 
 is rented, the rent is included in Burden. In like manner 
 taxes, insurance and maintenance are included in Burden. 
 Spread- In spreading Burden it is the best practice to divide 
 Bifrden ^^^h element on a monthly basis so that any changes in- 
 factory conditions tending to raise or lower it can be more 
 quickly and easily adjusted. 
 
 For example, if the heating of a factory costs $1200 
 a year, this element of Burden will be divided into twelve 
 parts and spread over the factory departments on the 
 basis of $100 per month. In subdividing the $100 for 
 each department the total cubical contents of the factory 
 is taken and each department receives a part of the 
 Burden which is proportionate to its contents. Thus, if 
 a factory has a total of 150,000 cubic feet and Department 
 "A" has 30,000 cubic feet, this department will receive 
 30,000-150,000 of the $100, which is $20. 
 
 Rent, taxes and insurance are distributed in the same 
 general way. 
 
 Indirect labor, depreciation and repairs and main- 
 tenance, however, must be proportioned according to the 
 
COST KEEPING SHORT CUTS 
 
 jimount of each that is incurred by a department, because Indirect 
 it is a rare exception when every department of a factory ^^^^^'^^^ 
 will require a part of Burden that is proportionate to Burden 
 its size. 
 
 After the Burden has been spread over the departments 
 on the monthly basis it is distributed to the product 
 according to one or more of the methods which are de- 
 scribed on the following pages. 
 
 These elements of Burden are comparatively easy to 
 ascertain and can be spread over the various manu- 
 facturing departments with sufficient accuracy for all 
 practical purposes. 
 
 But depreciation, which is also an element of Burden, 
 is different, and requires more study, care and experience 
 in its calculation than all the other elements put together. 
 
 Depreciation applies both to buildings and equipment, Depre- 
 the amount to be charged off depending on several con- ^^^^^^^. 
 ditions. For instance, a frame building is comparatively 
 short lived, while a building made of concrete and steel 
 endures for many years. Therefore, a higher rate of 
 depreciation must be charged off for a frame building 
 than for a concrete steel building. On the other hand, 
 the difference in these rates will not be so great as the 
 difference in the structure would indicate. The frame 
 building may be made of good timber and contain light, 
 smooth-running machinery, while the concrete-steel build- 
 ing may contain heavy, vibrating machinery. 
 
 From this it will be seen that the nature of the building 
 itself is not all that must be considered in fixing a rate of 
 depreciation. Ordinarily the rates for factory buildings 
 are from 2 per cent to 6 per cent, depending upon local 
 conditions, the kind of structure and the nature of the 
 work going on within the walls. 
 
 In the case of machinery, the percentage covers a 
 broader range running from ^}/2 per cent to 1^3^ per cent. 
 
 67 
 
COST KEEPI N G SHORT CUTS 
 
 Indirect This also depends upon the amount and kind of work the 
 ^^^°Q^ machine is called upon to do and requires close observa- 
 Burden tion and experience to determine. 
 
 It has been observed that some machines depreciate 
 rapidly the first year or two, and after that at a much 
 slower rate, while others depreciate very slowly for the 
 first few years and then seem to go to pieces at once. 
 
 Again, some machines can be operated in a more or 
 less dilapidated condition while others must always be 
 in the best running order. 
 
 There are other considerations in fixing depreciation 
 
 aside from actual wear and tear. Maintenance or 
 
 upkeep has a direct bearing upon depreciation in that an 
 
 effectual maintenance from year to year, especially on 
 
 certain kinds of machinery, affects in large measure the 
 
 loss due to depreciation 
 
 Reserve Thus, if a machine worth $1,000 depreciates at the 
 Account ^^^^ ^j -^p p^j. ^^^^ p^j. yg^j. j^ ^jjj 1^^ ^^j.^j^ ^gQQ ^^ ^Yie 
 
 end of the first year, and $100 will be set aside as a reserve 
 to take care of the depreciation. If, however, $50 is 
 spent in repairs to the machine which restores it to a 
 condition practically as good as new, it is the general 
 practice, except in very conservative concerns, to take 
 this $50 from the $100 depreciation, reserve fund instead 
 of charging this item of repairs to General Expense. 
 
 Then the stability of the machinery as regards up-to- 
 dateness must be considered, because in some manufac- 
 turing businesses methods are improving so constantly and 
 new style machinery is required so frequently that a much 
 higher rate of depreciation must be used. There are 
 cases where a machine, practically as good as new, must 
 be scrapped on account of a more improved machine 
 coming on the market. Obviously the rate of deprecia- 
 tion in such cases is exceptionally high. 
 
 The problem of depreciation is further complicated by 
 the fact that a business itself may not be permanent, yet 
 
COST KEEPING SHORT CUTS 
 
 it may" require some highly specialized machinery, in Indirect 
 which event a decreasing demand will mean a decreasing ^j.^^*^"^^ 
 value of the plant. Burden 
 
 Summing up a few of the many points necessary to 
 consider in fixing a rate of depreciation, we mention : 
 
 First — The nature of goods manufactured, whether 
 staple, specialty or novelty. 
 
 Second — The kind of machinery used, heavy or light, 
 fast or slow moving. 
 
 Third — The kind of buildings used and the nature of 
 the work within them. 
 
 Fourth — The location of the plant regarding increase 
 or decrease in value of property. 
 
 Fifth — The nature of maintenance or upkeep. 
 
 Sixth — The exposure of equipment to the elements. 
 
 Seventh — The permanence in style of machinery and 
 equipment. 
 
 At first sight it would seem an almost hopeless under- Available 
 taking to fix a rate of depreciation with anything like fnce^"" 
 accuracy; but fortunately there are a great many concerns 
 similar in the nature of their product, whose experience 
 can be studied and compared. Then, the Fire Insurance 
 Companies, who base their risks on depreciated values, 
 have evolved from their large experience certain principles 
 governing depreciation which can be relied on as giving 
 very good results. 
 
 In ;'egard to the prorating of depreciation over the 
 various manufacturing departments in a factory it may 
 be well to mention that the best practice consists in 
 dividing the annual depreciation into twelve parts, so 
 that a certain amount can be included in the factory 
 burden each month. Thus, if a $60,000 plant has a 
 depreciation of 10 per cent per year, instead of charging 
 off $6000 at the end of the year, divide this amount by 
 
C O S T K E E PING S II O K T CUTS 
 
 Indirect 12 and charge off $500 monthly as part of Factory 
 xpense g^J.^gJJ gy treating depreciation in this way the true 
 Burden production cost is secured every month. 
 
 So much, in a general way, for the different elements 
 that go to make up Burden. We will now briefly describe 
 the different methods of distributing it over the product. 
 These methods are very important in determining the 
 best way to get at the cost of a product. 
 
 70 
 
CHAPTER XIV 
 Distribution of Burden 
 
 BURDEN may be distributed in many different ways 
 and the right way can be decided upon only after 
 a study has been made of the conditions in the 
 factory where the cost system is to be installed. 
 
 The following methods of distributing burden are 
 most commonly used: 
 
 1 — Direct Labor Cost Method. 
 
 2 — Direct Labor Hours Method; 
 
 'J — Direct Labor and Material Method. 
 
 4 — New Machine Rate Method. 
 
 5 — Fixed Machine Rate Method. 
 
 C— New Pay Rate Method. 
 
 A knowledge of the general principles on which these 
 methods are based will give a better insight to the method 
 best adapted to your business. 
 
 It is important to use the most economical and effect- 
 ive system, but there are one or two easy methods that 
 work out to fallacious results and are therefore bad. 
 
 Spreading a fixed blanket burden over all departments 
 is essentially wrong in principle, because the article, for 
 instance, going through two departments should not bear 
 the same indirect expense as that which goes through six. 
 It will generally be found that figuring an indirect expense 
 on a percentage principle leads to false conclusions, and 
 it is important not to have false conclusions in any system 
 which attempts to be accurate. 
 
 For instance, it was found to be a poor system that 
 distributed, as part of a blanket burden, the salary of a 
 General Manager who devoted his time to the selling end 
 of the business. The result was an inflation of the value 
 of finished stock because the indirect labor, which was 
 
 71 
 
COST KEEPING SHORT CUTS 
 
 Distribu- part of selling expense, had been included in the Cost of 
 Burdeii Production, and distributed without reference to the 
 department in which it was employed. 
 
 In figuring burden the growth and alteration in the 
 factory or the changes of processes should always be taken 
 into consideration. For this reason it is advisable to 
 prorate overhead charges monthly, so that the burden 
 rates can be checked monthly, or at least every three 
 months. Under average running conditions the rate will 
 undoubtedly fluctuate, but the fluctuation can usually be 
 attributed to some specific cause. In cases of improved 
 methods of manufacture, the monthly or quarterly burden 
 test will show the rate so much altered that a change will 
 be necessary in order to distribute the correct amount of 
 burden. 
 Direct The Direct Labor Cost Method of figuring burden 
 Cost ^^ ^^^ ^^ ^^^ most generally used on account of its 
 Method simplicity. It is based on the principle that the product 
 increases in value as labor is added to it and consequently 
 the greater the amount of labor applied to its manu- 
 facture, the greater will be the expense of supervision and 
 management. 
 
 The method of obtaining the ratio of indirect expense 
 to labor cost is very simple, the process involving the divi- 
 sion of the total amount of indirect expense by the total 
 amount paid for labor during the same period of time. 
 In other words, if the total indirect expense for one month 
 is, say $7,000, and the total expense of labor for the same 
 period is $9,200, the per cent of burden to be dis- 
 tributed over the different articles will be 7,000^9,200 
 or 76 per cent. 
 
 This extra charge is added to the articles made during 
 the same period. In this way each article is charged with 
 a certain part of the indirect expense of the entire plant, 
 the amount varying according to the cost of labor put 
 upon it. Thus if an article has $1.25 worth of labor put 
 
COST KEEPING SHORT CUTS 
 
 into its manufacture and the material cost is 75 cents, Distribu- 
 according to the above ratio, 76 per cent of $1.25, which is purfjen 
 95 cents, is added as burden, making the total cost $1.25 
 (labor), plus 75 cents (material), plus 95 cents (burden). 
 The same principle is used in distributing the total burden 
 of $7,000 over the various articles manufactured. 
 
 The different departments of a factory may vary con- 
 siderably in their process and equipment and if the nature 
 of the article is such that it passes through many different 
 operations, it is almost certain that the indirect expense 
 in some of the departments will be greater than in others. 
 Again, certain articles may be completely finished in one 
 department while others pass through several depart- 
 ments, and the indirect expense of the one department 
 may be far greater than the average indirect expense of 
 the other departments. In this case a general average of 
 all the departments, including the one, will be lower than 
 the expense of the one department and hence the true cost 
 of the article manufactured in that department will not be 
 obtained. 
 
 Where departmental conditions are different and an The 
 average rate is used, it is evident that the extra indirect R^te^^^ 
 cost of manufacture in certain departments will be loaded 
 on other departments where the expenses are not so 
 heavy. While an average rate will give the cost of all 
 the articles combined, under these conditions it cannot 
 give accurately the cost of each individual article. This 
 information is necessary in fixing selling price. 
 
 Another phase in connection with this method is that 
 the rate of paying all the workmen is not always pro- 
 portional to the indirect expense, because a man working 
 for $1.75 a day will oftentimes incur more indirect expense 
 than the man who earns from $3.00 to $3.50 a day. An 
 example of where this may occur is found where a cheap 
 workman is operating an expensive machine and an 
 
 73 
 
COST KEEPING SHORT CUTS 
 
 Distribu- expensive workman is operating a cheap . machine. In 
 Burden ^^^^ former case, the overhead charge will be too small and 
 in the latter it will be too great. 
 
 Again, if a manufacturer is fighting competition with 
 certain articles, such a method of adding burden will 
 not give the exact cost of those articles and hence it will 
 be impossible to fix accurately their selling price with a 
 view to making sure profits on their actual cost. 
 
 Apparently such a method is erroneous, but the trouble 
 lies in the fact that an average cannot be estimated on a 
 number of different kinds of articles. If a system that 
 is based on wages is to be operated successfully, the wages 
 must represent the true conditions of production and 
 must be in proportion to the actual cost. This condition 
 is found only where labor is practically uniform as regards 
 production, wages and amount of time consumed on each 
 operation. 
 Applying To apply this system successfully, the percentage of 
 System burden must be calculated by departments. In this way a 
 close approximation to the true cost of the article can be 
 obtained. Under this method the total indirect cost of 
 $7,000 for the whole plant is divided up into smaller 
 amounts chargeable to each department and prorated to 
 articles manufactured according to the amount of burden 
 the department incurs in performing its respective oper- 
 ations upon them. 
 
 The diagram. Figure 6 makes clear the principle of 
 apportioning burden departmentally. 
 
 In this case it has been calculated that for each dollar's 
 worth of productive labor in Departments 1, 2, 3, 4 and 5, 
 a burden of 75 per cent, 67 per cent, 85 per cent, 91 per 
 cent and 83 per cent, respectively, shall be added to the 
 direct labor cost of the product in order to obtain the 
 total factory cost. 
 
 Thus a batch of raw material conies to Department 1 
 and is valued at $12.75. In Department 1, $3.20 worth 
 
COST 
 
 K E E P I N G 
 
 SHORT 
 
 CUTS 
 
 of labor is done upon it. This increases the vakie to Distribu- 
 $15.95. Then 75 per cent of the labor cost, $3.20, which is tmdL 
 $2.40, is added to the $15.95, giving a total cost of $18.35. 
 The partly finished material is passed on to Depart- 
 ment 2 where $2.10 worth of work is done on it. This 
 amount together with 67 per cent of $2.10, which is $1.41, 
 is added to the $18.35, increasing the value of the partly 
 finished product to $21.86. 
 
 /^M 6rOCK 
 
 Wsmmm 
 
 Va/ue 
 
 ^/^^^ Lf\BOR COST METHOD ^-^-e 
 
 
 ¥3Q.03 
 
 i/a/we 
 
 ^/8.3S, 
 
 
 ^&mam 
 
 _ emom 
 
 Va/ue^2Aa6 jl' 'BiS^' \ i/o/ue ^2S.^7 I ^t% 
 
 ^0.2S 
 
 Fig. 6 
 
 Graphic Illustration of the Labor Cost Method of Figuring Burden. 
 
 In this way,- the material passes on through Depart- 
 ments 3, 4 and 5 to completion and is turned into the 
 Finished Stock Room, worth $38.03. 
 
 The Labor Distribution Tickets made out by each 
 department that performs an operation on this material, 
 are sent to the Cost Department and give the labor cost 
 for each of the operating departments. 
 
 75 
 
COST KEEPING SHORT CUTS 
 
 Distribu- When the job has been finished the amount of burden 
 Burden ^^ ^^ charged to the product is calculated from data on 
 these tickets. 
 
 Then by adding to the amounts of labor and burden, 
 
 the value of the material used, the total cost of the job 
 
 is obtained. 
 
 Inven- There is another very important point in this connec- 
 
 Work in ^^^^ which should not be overlooked. It pertains to the 
 
 Process inventory of work in process. 
 
 Suppose, for example, a batch of partially finished goods 
 has just come to Department 4 at the time the inventory 
 is being taken, and it is desired to find its true value. 
 
 On the supposition that individual time tickets have 
 been used, all such tickets relating to this particular batch 
 of semi-finished stock, will have been sent to the Cost 
 Department and filed behind the cost card for this job. 
 When the inventory clerk finds this semi-finished stock in 
 Department 4 he takes note of the job or order number 
 and reports to the Cost Department that job so and so 
 is in Department 4 ready to go through the operation 
 performed by that department. 
 
 The cost clerk then turns to the cost card for that 
 
 job, sorts the time tickets by departments, which in this 
 
 case will be for Departments "1," "2" and '%" gets the 
 
 total labor cost for each of these three departments, 
 
 figures the burden for each and combining these two 
 
 totals with the value of the material, obtains the true 
 
 cost of the semi-finished stock as it lies in Department 4. 
 
 The same method is used for getting the value of all 
 
 work in process and can be done quickly and accurately 
 
 when the cost records are kept in proper shape. The 
 
 usefulness of the adding machine for getting the labor 
 
 totals is obvious. 
 
 Direct The Direct Labor Hours Method is similar to the 
 
 Hours direct labor cost method, both of them being methods 
 
 Method by which the burden is distributed on the basis of a 
 
 76 
 
COST KEEPING SHORT CUTS 
 
 general average rate. The difference between them is Distribu- 
 that different bases are used for determining the burden. Burden 
 This method is based on workmen's time instead of labor 
 cost, the hour being taken as the unit of time. In other 
 words, the indirect expenses of a plant are distributed 
 according to the hours worked by the employes instead 
 of the wages they receive. A rate per hour is obtained 
 by dividing the total indirect expense for a certain period 
 by the total number of hours for the same period and in 
 this way determining the amount per hour to be added 
 to the cost of production in order to get the total cost. 
 
 Thus, if the indirect expenses are $7,000 and the total 
 number of productive hours are 50,000, the amount of 
 burden per hour would be 7,000- :-50,000 or 14 cents per 
 hour. 
 
 Applying this method to the example given under the 
 Labor Cost Method with the assumption that the labor 
 cost of $1.25 represents 5 hours work, the cost will be 
 $1.25 plus 75 cents for material, plus 5X14 = 70 cents 
 burden or $2.70, as against a total cost of $2.95 in the case 
 of the labor cost method. 
 
 The difference in the total cost of these two methods is 
 very easily explained since by the first method the amount 
 of burden varies according to the amount of money each 
 man earns but by this method it is distributed equally 
 among hif!,h. priced and low priced men, the basis being 
 the number of hours each man works. 
 
 In the former case the articles produced by .a high 
 priced employe are charged a greater amount of indirect 
 expense than those produced by a low priced employe. 
 Since, by the direct labor hour plan, the indirect expense 
 is divided equally between high and low priced employes 
 on the assumption that they work the same number of 
 hours per day, the two sets of costs do not exactly 
 agree. 
 
 77 
 
COST KEEPING SHORT CUTS 
 
 Distribu- This method of distributing burden also lends itself 
 Burden readily to accurate valuation of work in process at inven- 
 tory time. It is very similar to the method just described 
 under Labor Hours Method. 
 Inven- Under these conditions, however, it is necessary after 
 Work in distributing by departments the time tickets pertaining 
 Process iq q, job, to get the total hours of work put in by each 
 department. Then the rate per hour of burden for each 
 department is multiplied by the total number of hours, 
 thus securing the burden for each department. Then 
 these items of burden are recapitulated and combined 
 with the value of labor and material used on the job up 
 to the stage where the inventory clerk finds it, and the 
 inventory value is obtained. 
 
 The most effective application of the labor hours 
 method is found by dividing the factory into departments 
 determined by similarity of machinery or processes and 
 calculating the hour rate according to the number of 
 hours put in by the men in each department. 
 
 When the general average method is employed the 
 apparant cost of the product may be so far wrong that 
 the manufacturer may discourage sales of articles that 
 are making money and encourage sales of others which 
 are sold at an actual loss. These conditions are due, 
 of course, to the fact that too much burden is charged to 
 certain articles and too little to others. Taken alto- 
 gether, the direct labor hours method is somewhat more 
 accurate' than the direct labor cost method if the work 
 is departmentalized, unless the labor cost happens to be 
 proportional to the true cost of production. 
 
 Both methods are more or less imperfect as regards 
 accurate results, when applied to a factory as a whole, 
 because they are not based on elements which represent 
 actual conditions, except in the case where the product 
 
 78 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 and process are very simple and uniform. The depart- Distribu- 
 mental method of distributing burden on these plans is Burden 
 the only one where accurate results can be expected. 
 
 Rm STOCK 
 
 Value 
 
 mis H ED STOCK 
 
 ^'""'^ LmOR HOURS MFTHnn ^^/u 
 
 S/zh rs-fS) 2c f^ 
 Labor- 
 
 1^*, 
 
 \/a/ue 
 
 //; 
 
 3arz:/er; / /9 DEPMmEm 
 
 cosr 
 
 ^/2.a9 
 
 '7ihs (S) Zo^ 6hrs@22% 
 
 La6or- ///^,S Labor 
 ■93 Burckn 
 
 BURQ£N 
 
 /2/.J6 
 
 i^/.32 La6or\ ^/2S 
 
 96 BunJen\ ./J" 
 
 j^/3.6S 
 
 [ BURDEN I . ^ > I BUROm 
 
 Fig. 7 
 Graphic Illustration of Labor Hours Method of FiguringiBurden. 
 
 The diagram in Figure 7 shows how burden is appor- 
 tioned to each operating department at so much per pro- 
 ductive hour. 
 
 From the diagram it will be seen that Departments 1, An 
 2, 3, 4 and 5 carry a burden rate of 14, 12, 16, 15 and 18 J""^^""^' 
 cents per hour respectively. 
 
 The raw material valued at $10.00 comes into Depart- 
 ment 1 where 8}^ hours of labor are expended on it. The 
 labor cost at 20 cents an hour is $1.70 and the burden at 
 14 cents an hour is $1.19. Therefore, when the material 
 leaves Department 1, it is worth $10.00 (raw material), 
 plus $1,70 (labor cost), plus $1.19 (burden), or $12.89, 
 
 tion 
 
COST KEEPING SHORT CUTS 
 
 Distribu- • The partly finished product now worth $12.89 is sent 
 
 Burden ^^ Department 2 where 7% hours of work are done upon 
 
 it. This increases its value $1.55 (labor cost 20 cents per 
 
 hour), plus 93 cents (burden), which is added to $12.89 
 
 giving the partly finished product a new value, $15.37. 
 
 In this way the product passes on through depart- 
 ments 3, 4 and 5, each one of which increases its value by 
 so much labor cost and so much for burden, until it is 
 turned into the Finished Stock Room worth $21.36. 
 Direct The Dircct Labor and Material Method of figuring 
 ^and burden is similar to the labor cost method, with the 
 Material exception that it takes the total cost of labor and material 
 ^ ** as the basis instead of the total labor cost only. 
 
 The application of such method is practical only in 
 those cases where the material constitutes the greater 
 part of the direct cost of the product. 
 
 Necessarily it is an averaging method and if the labor 
 cost predominates it is almost certain to give inaccurate 
 results. 
 
 New The New Machine Rate Method is one that provides 
 ^^^g for charging labor and departmental expenses direct to a 
 Method process or machine so as to show the total cost per hour, 
 or per whatever unit of measure selected, of operating 
 the machine or process. The expenses thus charged 
 include both those directly and indirectly related to the 
 process or machine in question. 
 
 Having found the total expense of operating a machine 
 or process and having reduced this rate to so much per 
 hour, the article is charged according to the time that the 
 machine is employed upon it. 
 
 To operate this plan with the greatest success, all 
 machinery must be grouped according to similarity of 
 operation performed by it and then each job done by a 
 machine is charged so much per hour according to the 
 
 80 . . ' 
 
COST KEEPING SHORT CUTS 
 
 nature of the operation performed. The rate for any Distribu- 
 stated operation is determined by close observation and Burden 
 exact prorating of the total departmental expense. 
 
 Each group of machines should be considered a de- 
 partment so that the total indirect expense can be more 
 accurately distributed over the product. If the depart- 
 ment includes radically different processes, it should be 
 subdivided and the department indirect expense prorated 
 over each division. 
 
 The more nearly alike the machine work or process is 
 in each department, the more easily and accurately the 
 expense can be allocated and the machine rate of burden 
 or process rate of burden determined. 
 
 After this has been done, the total time of the workmen, 
 the supplies and repairs are charged to the operations or 
 processes. In addition to these items, charges are made 
 for insurance, depreciation, rent and all other items in 
 any way connected with the manufacture of the product. 
 Ordinarily, these are indirect expenses, but with this 
 plan they are treated as direct. Each machine or process 
 is operated as nearly as possible like a complete little 
 factory, being charged with the cost of labor to operate 
 it, the cost of its repairs, superintendence, the rent of 
 its floor space, the amount of power it takes, etc. 
 
 After finding the total direct cost of operating machines 
 or processes, it is necessary to find the total number of 
 hours that they are operated during a certain period of 
 time, say a month. In this way, the cost per unit of 
 measure, whether it be hour, pound or ton, can be calcu- 
 lated by dividing the total direct expense by the total 
 number of units. 
 
 When the direct expenses have been figured, the General 
 general indirect expenses or those which are not directly Expense 
 related to any machine or process, are spread over the 
 different departments on some scientific basis. These 
 are added to department indirect expenses. This gives 
 
 81 
 
COST KEEPING SHORT CUTS 
 
 Distribu- the total department indirect expense, which is divided 
 Burden 3-mong the machines or processes of that department 
 according to the total number of hours or other units of 
 measure. 
 
 The total indirect expense of a department for a cer- 
 tain period is then divided by the total units of measure for 
 the same period and the rate thus obtained is applied to 
 the product of the machines or processes. Thus all in- 
 direct expense for the department, as well as pro-rata of 
 general expense, is included in the machine or process rate. 
 By this plan machines or processes absorb nearly all 
 expenses ordinarily considered as indirect and gather 
 them together so that they can be charged directly to the 
 product at so much per hour or any other unit of measure. 
 When When these costs have been collected and reduced 
 lected ^^ ^^ much per hour or pound for each machine or process, 
 it is comparatively easy to charge the product at this rate 
 according to the number of productive hours or the number 
 of pounds manufactured. 
 
 If "time" is the basis upon which the calculations are 
 made instead of ''quantity" the total indirect expense 
 for a month is divided by the total number of hours that 
 the machines or processes have been operated during the 
 month and in this way the rate per hour is determined. 
 This rate is then multiplied by the total hours each 
 machine or process has been in operation, to get the total 
 monthly charge for each. 
 
 Thus direct and indirect expenses are charged to a 
 machine or process and reduced to a certain rate per 
 unit of measure. 
 An For instance, if material for an article costs 75 cents 
 xamp e ^^j requires five hours to pass through a certain process 
 at $1.60 per hour, including direct and indirect expense, 
 the total cost will be 75 cents plus $8.00 or $8.75. This 
 example illustrates the fact that all expenditures (except 
 for material) incurred by a machine or process can be 
 
 82 * 
 
COST KEEPING SHORT CUTS 
 
 charged directly to the product. Thus the total cost of an Distribu- 
 article is easily figured when the price of the material, and jJurden 
 time required by each machine or process through which 
 it passes are known. 
 
 This plan is one of the most desirable because it gives 
 a rate by which the greatest amount of expense of manu- 
 facture can be charged directly to the product in one item. 
 
 Where conditions are such that it can be used, the 
 results will be as close to the actual cost as it is possible 
 to get them. 
 
 The inventory value is obtained by multiplying the 
 number of hours the article has been in process in each 
 department by the respective rates per hour for each 
 department. The totals are then recapitulated and to 
 this grand total is added the cost of the material, giving 
 the inventory value. 
 
 The Fixed Machine Rate Method is similar in some Fixed 
 respects to the new machine rate method. The indirect j^^^^^ ^°^ 
 expenses, however, are distributed differently by pro- Method 
 rating them over the entire production on a percentage, 
 or some other basis, instead of including them in the . 
 operating cost of the machine. 
 
 The rate of direct expense charge is calculated depart- 
 mentally either from previous experience or from an 
 analysis of current expenses and is distributed among 
 the different machines operating in each department. 
 
 Charges are made to the cost of articles manufactured 
 on the basis of this rate, the total of which is credited to 
 the department expense account. 
 
 The general indirect expenses are not combined with 
 the department indirect expenses as in the case of the new 
 machine rate plan, but are distributed on the basis of a 
 supplementary rate, which is applied to the entire product 
 of the factory. Anj^ method can be used for this dis- 
 tribution such as labor hours, labor cost, etc. 
 
COST KEEPING SHORT CUTS 
 
 Distribu- The actual charges to be made against each machine 
 Burdwi ^^^ determined and then any difference between the 
 estimated rate and the actual charges is added to or de- 
 ducted from the general indirect expense and distributed 
 by the supplementary rate. Thus, discrepancies between 
 actual rate and estimated rate are adjusted. 
 
 This plan differs from the new machine rate in that it 
 is based on an estimate and assumes a 100 per cent 
 efficiency in running the plant. When the product is 
 charged only with actual running time of machines, which 
 is more likely to be 60 or 75 per cent of full time, the 
 credit to departmental indirect expense increases rapidly, 
 and makes the cost of production appear much larger 
 than it actually is. 
 
 In order to equalize this effect, the difference between 
 the indirect expense and the actual charges is deducted 
 from the general indirect expenses before they are dis- 
 tributed by the supplementary rate. In case the actual 
 charges exceed the estimated charges the difference is 
 Faults added. One of the faults with this plan is that the 
 Plan general indirect expenses will decrease according to the 
 amount of machinery lying idle, and it is possible in this 
 way for a major part of the machinery, if idle, to reduce 
 the general indirect expense to nothing. 
 
 This is fallacious on its face, since the remaining active 
 machinery must incur some general indirect expense. 
 The possibility of eradicating general indirect expense is 
 due to the inexact distribution and makes it practically 
 valueless to the manufacturer. 
 
 This plan takes no account of idle machinery, dull 
 times or machines which run only part of the time, and 
 is therefore practicable only in very special cases where all 
 machines are busy nearly all the time, and turn out a 
 more or less uniform product. 
 
 The differences are accentuated because the rate is 
 based on the assumption that the plant will run full time 
 
 84 
 
COST KEEPING SHORT CUTS 
 
 instead of taking an average rate which indicates more Distribu- 
 nearly the true conditions in a factory. Burden 
 
 The New Pay Rate Plan obtains the indirect expenses 
 for each department separately, the general operating 
 expense being first allocated to each department on the 
 basis of direct labor costs before the percentage of 
 departmental indirect expense is determined. 
 
 The departmental indirect expenses are not charged as 
 percentages to the articles turned out by these depart- 
 ments but are added as separate rates to the wages of 
 employes working in the departments, the amount to be 
 added being based on the time the employe works on 
 any one job. 
 
 This plan being applied departmentally does away 
 with one of the chief disadvantages of an average rate 
 plan, but it is applicable only where uniform wages obtain. 
 
 It is simple in that the calculations involve only the It is 
 multiplication of the time an article is in process by the ^™^ ^ 
 rate per unit of time, rather than a pro rata of indirect 
 expense added to the products turned out by each depart- 
 ment. Thus the plan has the advantage of saving con- 
 siderable time, especially in a large plant. 
 
 It likewise has disadvantages, even if it gives true cost, 
 because it permits of no analysis of costs. All the figures 
 are obtained in totals, thus depriving the cost department 
 of a means to examine the cost of separate items and to 
 suggest improvement in operations that will reduce cost. 
 . Detailed information is exceedingly valuable to the 
 manufacturer in order to point out leaks and weak spots. 
 This plan fails to give it and for this reason frustrates one 
 of the prime objects of an adequate cost system. 
 
 If the management doesn't particularly want an 
 analysis of costs, this plan can be used advantageously 
 providing conditions at the plant in question render it 
 adaptable. 
 
 85 
 
CHAPTER XV 
 
 Some Forms Used in Cost Systems 
 
 THE following pages are devoted to the description 
 of typical forms used in connection with cost 
 systems now in daily use in different parts of the 
 country. 
 
 Since the variety of these forms is legion, we only 
 attempt to give one or two of each kind, and these are 
 given only for the purpose of presenting to the layman a 
 general idea of their purpose and make up. 
 
 It is impossible to outline a cut and dried system 
 which can be committed to print and safely used by any- 
 one who desires to install a cost system. All that such a 
 book as this can hope to do, is to outline important 
 principles and give a few practical interpretations. 
 
 The conditions in different plants are so varied that 
 the successful installation of a cost system requires special 
 study by an expert, who has a comprehensive knowledge 
 of costs and whose experience enables him to draw up 
 forms suitable to the case in hand. 
 
 This remark may lead some men to doubt the business 
 expediency of a system that requires considerable initial 
 expense to set into operation, and much patience there- 
 after until it gets under way; but in reality, as testified 
 by the experience of others, it is a matter of necessity, 
 not expediency. 
 
 Therefore, in studying the forms, don't conclude be- 
 cause there happens to be an item left off that you think 
 you need, or a couple of items added that you do not 
 need, that there is no cost form in that particular depart- 
 ment that can meet your requirements. 
 
 When you decide to set a system going in your plant, 
 call in an expert cost man and with his assistance learn 
 
 86 
 
COST KEEPING SHORT CUTS 
 
 in general what forms and data are necessary to operate Some 
 it effectively and you can then draw up forms that will ^^^^ 
 suit your needs exactly. 
 
 A manufacturer who attempts to design his own forms 
 unaided, will, nine cases out of ten, overlook some account- 
 ing detail that later will develop into one of great impor- 
 tance. This will necessitate a change in form or method 
 of collecting the data, the cost of which will be as much 
 perhaps as the service of an expert would have been in the 
 beginning. 
 
 Every time a certain kind of information is gathered 
 together it can, in all probability, be utilized in some other 
 way to advantage, aside from the purpose for which it 
 was originally collected. Every department of a cost 
 system is inter-related with some other department. A 
 cost accountant appreciates this fact and therefore can 
 draw up forms for one branch of the accounting that will 
 be sufficient to embrace any information collected in this 
 branch and useful in a related branch. Hence the neces- 
 sity for an experienced man. 
 
 A Purchase Requisition (Figure 8) is a memorandum Purchase 
 on which is recorded the kind and quantity of a certain tio^"*^^' 
 stock that is to be ordered, the date ordered, the order 
 number, and similar information which varies in detail 
 according to the plant where it is used. 
 
 Its purpose is to facilitate the transaction between the 
 purchasing agent and the factory or stock room in regard 
 to the purchase of material, supplies, etc. 
 
 If a certain department needs a new supply of material, 
 which has been exhausted in the stock room, a purchase 
 requisition is filled out either by the department foreman 
 or stock room clerk and sent to the purchasing agent, who 
 orders the stock and files it. The requisitions can be 
 made in duplicate or triplicate, as occasion demands. 
 
 When a plant employs a regular stock clerk he can 
 make out all requisitions for replenishment of stock 
 
 87 
 
COST KEEPING SHORT CUTS 
 
 PURCHASE ftEQU/S/TJON 
 
 To. 
 
 Fifr^Aasirr^ Acferrf 
 
 Date 
 
 Qu/jr/r/rr 
 
 /f/zT/CL£:S 
 
 D/ir^ ^/f/yr£D 
 
 Fig. 8 
 Purchase Requisition 
 
 m/ecmsE oROEff, 
 
 Hddresa ffeowsihon /^o 
 Place Oi/r Or</e/-M>, /t'eftz/sif/orf A/o o/rc/ CafA^. art a// fnt/i>/ces 
 
 SfZ/PO/^o-BfrO/FE 
 
 DESCmRT/Ol^ 
 
 ^^/j//r/Tr 
 
 r/?/cf: 
 
 
 
 
 
 Fig. 9 
 Purchase Order 
 
COST KEEPING SHORT CUTS 
 
 because he keeps a record of each kind and knows when Some 
 the low mark of any particular stock has been reached. 
 
 In special cases where it is necessary to have other 
 parties make out the requisitions, such as specification 
 clerks or superintendents, a copy should be sent to the 
 stock clerk in order that he may look after its receipt, 
 inspection and disposal and make the proper entries on 
 his records. 
 
 A Purchase Order (Figure 9) contains all the neces- Purchase 
 sary details of a bill of goods purchased by a factory, 
 such as name and address of purchaser, order number, 
 quantity and description of goods, shipment date, price 
 and any other information of this nature that is deemed 
 advisable. 
 
 As many copies can be made as desired, according to 
 the requirements of the business. There should always 
 be at least two copies, one for the purchaser to retain and 
 one to be sent to the dealer from whom the goods are 
 purchased. 
 
 If it is desired to keep a record of **stock ordered" 
 according to kind, a copy of the order should be sent to ' 
 the stock clerk that he may post to his stock record. All 
 records of incoming material, however, should be kept 
 separately from the records of "stock ordered.'* 
 
 The bookkeeper can also use a copy to advantage in 
 checking up invoices, thus making his postings more 
 promptly and relieving the purchasing agent of the detail 
 of checking the invoices. 
 
 A Stock Received Report (Figure 10) embraces all Stock 
 information necessary to the proper recording of incoming Rgpoj-t 
 stock. It contains such items as number, date received, 
 purchase order number, quantity and description, price, 
 by whom received, by whom shipped, etc. 
 
 This record is usually kept in a book, but since both 
 the bookkeeper and purchasing agent should have copies, 
 
COST 
 
 K E E P I N G S H R T 
 
 C V T S 
 
 Loose 
 Sheets 
 
 Some the disadvantages of this system are obvious.. It is awk- 
 
 ^^^^ ward to pass a book around and also to locate the different 
 
 items of incoming stock that have been recorded in it. 
 
 The advantage of loose sheets lies in the fact that 
 every department concerned with the receipt of stock can 
 be supplied with a copy. 
 
 If the record is used only for advising the bookkeeper 
 and purchasing agent, a form should be adopted that is as 
 simple as possible. If it is to be used in connection with 
 the stock record it must necessarily contain information 
 that will enable both the purchasing agent and the stock- 
 keeper to make up their records properly. 
 
 SrOC/f /fJECE/l/ED /fEPOffT 
 
 Qummr 
 
 /}/?nCL£S 
 
 rf^oM 
 
 O/FUf/^Z/O 
 
 Fig. 10 
 Stock Received Report. 
 
 Such items as weight, value, classification, bin number, 
 etc., are generally necessary to the stockkeeper in order 
 to facilitate posting to his stock records. 
 
C S T K E K P I N G S II O R T ("UTS 
 
 If a copy also goes to the bookkeeper, the account, Some 
 department, column, folio, etc., are indicated. 
 
 If transportation charges are heavy, provision should 
 be made on the report whereby they can be added to the 
 purchase price of the goods, thus giving the exact cost of 
 the stock as delivered. 
 
 One of the chief advantages of a receiving report is 
 that it makes the receiving clerk check up carefully and 
 inspect the stock received. 
 
 This guards the management against faulty stock and 
 paying for invoices in full where only a part of the order 
 has been received. 
 
 In this way leaks are stopped, which in many cases 
 have been very serious. 
 
 A Raw Stock Record (Figure 11) gives all the neces- 
 sary information regarding the quantity of raw stock on 
 hand. There is one card for each kind of stock. The 
 typical stock record card contains such information as 
 classification or kind, amount received, date received, 
 price per pound or piece, amount delivered, balance, high 
 and low water mark, and so forth. 
 
 The card serves as a perpetual inventory of every kind 
 of stock, the amounts received being added to the old 
 balance and the amounts delivered being deducted each 
 time from the - amount on hand, and a new balance 
 extended. 
 
 All items posted to such records, both receipts and 
 deliveries, should be taken from forms made out by 
 responsible parties and checked, otherwise they will not 
 reflect the true status of the stock on hand. Another 
 reason why extreme care should be taken with these 
 records is that, in case of discrepancies between the records 
 and actual stock on hand, they cannot be accurately 
 corrected. Therefore, separate forms should be used for 
 each receipt of stock and for each requisition that comes 
 from the factory. Never post from verbal information. 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 u 
 
 J 
 
 h 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 i 
 
 03 
 
 ~1 
 
 5 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 > 
 
 1 ^ 
 
 ! 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 i 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .5 
 
 i 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 !o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 \ ^1 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ' 
 
 1 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 L 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 92 
 
COS T KEEPING SHORT CUTS 
 
 The cards should be checked periodically by the Cards 
 results obtained from an actual inventory and in case of pgj.j_ 
 errors, either by over-run or shrinkage, the cards should odically 
 be made to agree with the actual amount of stock on hand 
 after the cause for the discrepancy has-been determined. 
 
 Unless checks are made and the reason for discrep- 
 ancies is ascertained, the records cannot be relied upon. 
 
 As much care should be taken to keep the stock 
 records in balance with the stock on hand as is taken by 
 the cashier in keeping his cash book in balance with the 
 cash on hand. 
 
 A Bill of Material (Figure 12) is an advice to the Bill of 
 stockkeeper that the items shown thereon will be required 
 for a certain job. It is sent to the stockkeeper as soon 
 as the job is begun in the factory and he issues the 
 material as needed, the foreman signing for each issue. 
 The foreman also makes out a requisition for each issue 
 of stock, in order that the proper entry can be made on 
 the stock record card. 
 
 A Material Requisition (Figure 13) is used by the Material 
 different departments of a plant for ordering raw material ^i^^' 
 from the stock room and contains information which 
 enables the stockkeeper to issue the^ required amount 
 and to post it to the proper record card. Ordinarily 
 the items are department number, date, job number, 
 article, quantity, price, by whom received and by whom 
 signed. 
 
 The foreman of a department or his clerk usually 
 makes out the material requisition which is sent to the 
 stock room and then to the cost department. In this 
 way the cost of the material can be charged to the job 
 and the proper entry can also be made on the stock 
 record card. 
 
 Other forms of material requisitions are ruled to 
 accommodate a number of different items that go into a 
 
 93 
 
COST KEEPING SHORT CUTS 
 
 /?£QU/f?£0 BV 
 
 BILL -/Wr£">?//?Z.. 
 
 DATE 
 OEPY^O 
 
 o/roE/fM? 
 
 a/iss/r/c/ir/oy 
 
 /j/?r/CLE 
 
 Ci/^AT/rr" 
 
 /f/?/-/f 
 
 /fAfom^r 
 
 ffECE/VEo ay 
 
 
 
 
 
 
 
 
 Fig. 12 
 Bill of Material 
 
 M/iTEmL /TEQU/SmON. 
 
 Orc^erAb Depf /Yo 
 
 ^ymJbo/ Oafe /Icc'f A/o 
 
 Qm/YT/n /7£sc/F/rr/o/r 
 
 v/jLOf: 
 
 
 
 
 
 
 Oe/i\/ercc/ to 
 
 De/iVsreal hy 
 
 foreman 
 
 Fig. 13 
 Material Requisition 
 
 94 
 
COST KEEPING SHORT CUTS 
 
 single job. These are used when it is not desirable to Some 
 issue a separate ticket for each kind of material, the ^^^^ 
 whole lot being ordered at one time. 
 
 There are a multitude of forms from which to select. 
 The one in the illustration, Figure 13, is used where only 
 one kind of material is ordered on a single requisition. 
 
 A Production Order (Figure 14) is a memorandum Produc- 
 issued by the factory manager when a job is to be started, Order 
 and gives specifications relating to it. It contains such 
 items of information as order number, date wanted, date 
 completed, description of product to be manufactured, 
 kind of material, amount, value, etc. This serves the 
 factory superintendent as a written statement of what 
 he is to manufacture and eliminates verbal orders. 
 
 There are numerous forms of production orders which 
 are generally divided into two classes The first class is 
 used when it is desired only to regulate the manufacture 
 and record it, and the second class where it is necessary, 
 in addition to the above, to send information regarding 
 the job to the cost department. 
 
 In the first class, only the data relating to the manu- 
 facture of the goods is necessary, but in the latter such 
 items as workmen's time, cost of operations, quantity of 
 material and cost should be recorded. 
 
 When an order necessitates operations that must be 
 performed by different departments simultaneously, sub- 
 production orders are issued outlining the work to be 
 d^e by the respective departments. 
 
 A copy of the order should be sent to the stockkeeper 
 so that he can properly superintend the disbursement of 
 raw material. The order assures him of the correctness 
 of the material requisitions that are sent in by the 
 different departments working on the job. 
 
 The Time Ticket (Figure 15) is a memorandum that Time 
 shows how much time a workman has spent on a job, 
 and it is used as a means of ascertaining labor cost of jobs, 
 
 95 
 
COST KEEPING SHORT CUTS 
 
 Ospr 
 
 DATE 
 
 PnODUCT/ON ORDER, 
 
 //o 
 
 0£SCRJPT/ON' 
 
 qMNT/rr FffJCE: /RM0U7vT 
 
 Daji/t/r£n td 
 
 /juTHOff/zoj ay 
 
 Fig. 14. Production Order 
 
 T/ME TICKET 
 
 DEfflRTMENT 
 
 WOKKMflNS //jRM£ 
 
 Z7/77Z- Wbff/OffJA^ Mo. 
 
 O/fOEff No, 
 
 Symbol 
 
 BoxAb. 
 
 M). T^ECES. 
 
 /iccou//r/Yo. 
 
 Op£Rfir/o/\/ 
 
 Time: 
 
 FfflTE: 
 
 /jMOl/fyT 
 
 Hourly' Mu^otreo Oocl/tps Qmt^ 
 
 Remarks 
 
 T/M£ ^r/7/rreo 
 
 T/ME F//V/SHED 
 
 Eh n eMnt/^ O. K, 
 
 Fig. 15. Time Ticket 
 
COST KEEPING SHORT CUTS 
 
 preparing comparative records by workmen, furnishing Some 
 data for adjusting piece rates, distributing labor cost by ^^^^ 
 account^, departments or workmen, checking pay rolls 
 and so forth. 
 
 pf The information given on a typical time ticket, is, 
 workman's number and name, date, time job is begun, 
 time job is finished, pieces finished, operations and all 
 other information required by the conditions under which 
 the goods are manufactured. 
 
 In a well regulated factory, the foreman gives a time 
 ticket to every productive workman when he begins a 
 job and records thereon the time started. This is done 
 either by hand or by a time stamp. When a job or opera- 
 tion is finished, the foreman records the time finished and 
 starts the man on another job, issuing a new ticket with 
 the starting time for the second job or operation. Or the 
 time of starting the second job or operation may be noted 
 on the old ticket, according to the kind of ticket used. 
 The time ticket may be issued for the operation, the job, 
 the day or for a series of jobs that cover several days. 
 On this account a great variety of time tickets is extant, 
 but the object of them all is practically the same, viz., to 
 indicate how much time each man is employed on a job or 
 operation and to give the manager a line on his efficiency. 
 
 Since time tickets embrace information that is related 
 directly to cost, the kind of ticket will depend, in large 
 measure, upon the kind of cost system in operation. 
 
 In some factories they use time tickets as shown in A Card 
 the illustration. A separate ticket is used for each opera- 
 tion. These are adequate for the day rate and piece rate 
 systems of paying men and give the cost department 
 information whereby the cost of each operation can be 
 posted on comparative records, together with information 
 that indicates the efficiency of the men. This feature is 
 brought out clearly in the description of the Cost System 
 given in Chapter XIX. 
 
 97 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 ^ 
 
 
 
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COST K E E P I \ G SHORT CUTS 
 
 A Pay Roll (Figure 16) is a record showing the total Some 
 amount of time worked by each employe and the amount ^^™^ 
 of money he has earned. 
 
 Pay Rolls are divided into two general classifications, 
 one of which contains all the workmen's time and 
 earnings on separate sheets, and the other includes this 
 data on one sheet. 
 
 The forms used in the first class give such information 
 as name, date, order, operation, article, number of articles 
 made, time, rate and amount. One individual pay roll 
 serves for a number of jobs. 
 
 The forms used in the second class contain columns for 
 employes' names, time, rate, amount and so forth. The 
 total time of each man for the pay period is recorded in 
 the time column and the amounts are extended. Some- 
 times a separate column is used for the daily time of each 
 man, there being as many columns as there are days in 
 the pay period. A total of these daily amounts at the 
 end of the period is carried into the total time column. 
 
 A Production Report (Figure 17) gives a departmental Frodiu- 
 record of the various articles made during a certain period ||"" „.t 
 of time, usually a week. 
 
 The typical report is ruled in colunuis, in which are 
 recorded the order number, kind of article, operation, 
 number made, number rejected, etc. If the report is 
 used in connection with figuring costs it contains columns 
 for time, rate of pay, material cost and labor cost. Some 
 forms have columns giving the daily record of production 
 for a week while others give only the totals for a week. 
 
 In brief, this report is used for the purpose of laying 
 before the management, weekly, the amount and cost of 
 production for every department. It can also be used in 
 the finished stock room for posting to the finished stock 
 records. 
 
 It is as necessary to keep a record of the finished prod- 
 uct or parts as it is to keep a record of raw stock. 
 
COST 
 
 KEEPING 
 
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COST KEEPING S;H O Jt^ ; ;C^ P - T S 
 
 The Finished Stock Record (Figure 18) gives the Finished 
 article or part, the date, the classification, high and low R^orj 
 water mark, the amount on hand, the amount disposed 
 of, and the balance. 
 
 The object of this record is to Morm the finished 
 stock keeper at all times as to the quantity of each kind 
 of stock on hand. By extending the balance after each 
 issue of finished parts or shipment of finished product, he 
 can tell immediately whether or not it has reached the 
 low water mark. If the supply is low he can notify the 
 factory manager, who in turn starts an order for a new 
 supply. This information is especially valuable where 
 staple parts are kept in stock and are drawn on contin- 
 uously for erection into a finished product. 
 
 The information regarding receipts of finished stock 
 can be taken from the production reports and the dis- 
 bursements can be obtained either from requisitions or 
 from sales sheets or shipping orders. 
 
 From time to time, as the stock of parts runs low, a 
 physical inventory should be taken and the records 
 adjusted to agree with the stock on hand. 
 
 A Cost Record (Figure 19) shows the cost of each Cost 
 part or article manufactured and includes the direct labor 
 cost, the indirect labor cost, the cost of material, the 
 name of the article or part, the operation, the quantity 
 finished, etc. 
 
 This information is arranged in column form, the 
 items of cost being recorded opposite each operation. A 
 footing of the material and of the direct and indirect 
 labor cost columns, on the completion of the last opera- 
 tion, gives the total of each of these costs for the com- 
 pleted part or article. A recapitulation of these totals 
 gives the total cost. 
 
 Some cost records are ruled to show comparative costs 
 and defective work, also the selling price and gross profits. 
 
 101 
 
C .43 i^^$.?r. : ;*K.'¥ M -P I :N G SHORT C V T S 
 
 FMSHEO 3WCK ff5C0frO. ^o 
 
 Nax/mi/m 
 Article • - AUnirm/m 
 
 
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 flMour/r w/rHOf?flWfi/ 
 
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 Fig. 18 
 
 o/?D£:/?/^o COST RECORD, /^cct a/o 
 
 D/\TE STARTEO. DATE FINISHED 
 
 OEISCRIPTIOr/ 
 
 
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 Fig. 19 
 102 
 
C S 1^ K K E P I X (i S II () U T C U T S 
 
 OFLfiATION 
 
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 noff£ces 
 
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 Fig. 20 
 
 Cost Record of Operations. Reverse side of Cost Record Card 
 shown in Figure 19. 
 
COST 
 
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COST KEEPING SHORT CUTS 
 
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COST K E E P I N G S II O II T 
 
 CUTS 
 
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COST K !•: !•: V I \ (; s ii o w r cuts 
 
 The reverse side of the same Cost Record Card is so Some 
 ruled that the cost by x)perations can be recorded. This ®™^ 
 affords good data for comparative purposes, especially as 
 between day and piece workers employed on the same 
 kind of work. (See Figure 20.) Another form of Cost 
 Record is shown in Figure 21. 
 
 There is perhaps a greater diversity of forms for this 
 record than for any other, a distinct form being necessary 
 for practically every individual plant. 
 
 The form of this record, as well as that of other records 
 already enumerated, depends entirely upon the cost 
 system that is used. It is because of this inter-relation 
 between the make up of the form and the cost system that 
 the services of a cost expert are so necessary. 
 
 To the mind that has never made a study of costs this 
 statement is hard to understand, but it is nevertheless 
 true. A satisfactory cost system cannot be installed 
 unless it has behind it a man thoroughly acquainted with 
 the subject and all of its ramifications. 
 
 A web rotary printing press is a complicated piece of 
 machinery to the lay mind, but note how smoothly it 
 runs and the beautiful work it turns out. 
 
 Likewise a complete cost system appears a hopeless 
 mass of detail to the uninitiated, yet when set in motion by 
 the man who knows, it becomes a great satisfaction and 
 safeguard to the management of a plant. 
 
 At the end of the month a statement should be prepared Factory 
 that shows the Expenditures of the Factory by accounts, ^^^l^ 
 
 The illustrations in Figures 22 and 23 are typical 
 statements of this kind. 
 
 They give an analysis of expenses relative to factory 
 operation, including amounts expended for direct and 
 indirect labor and material. Forms may be used on 
 which the expenditures for the factory can be summarized 
 either as a whole or by departments. 
 
 107 
 
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COST KEEPING SHORT CUTS 
 
 The cost price of the goods sold during the month. Some 
 the inventory at the beginning and end of the month, ^^^^ 
 the amount of finished goods on hand, amount in process 
 and so forth, can also be recorded. 
 
 The statement may be made comparative by ruling 
 columns for the expenditures during the corresponding 
 months of the previous year. 
 
 An ordinary ledger may be used for keeping these 
 accounts, but a regular factory ledger as described later, 
 is better adapted to the purpose. 
 
 The tabulation of items to this statement is nothing 
 more than copy work. By placing the statement in the 
 adding machine carriage, the items can be added and listed 
 very quickly. The advantage of using a machine for this 
 kind of work lies in the fact that it does it more rapidly than 
 it can be done by hand and the totals are always correct. 
 
 A Cost Record of Sales (Figure 24) shows an abstract Cost 
 of sales made during the month and a classification of of^g^Ies 
 the different articles sold. It may be ruled to include 
 cost of labor, material and burden. 
 
 Some of the records are ruled so that individual sales 
 can be posted and others are ruled for daily totals. 
 
 The .adding machine is very useful for tabulating 
 the items on this kind of sheet. 
 
 An Inventory Record is a record that shows the total 
 amount of stock on hand and its value. 
 
 The illustration in Figure 25 is a typical inventory 
 sheet that gives the quantity, price and value of every 
 kind of raw stock, semi-finished material and finished 
 product on hand at the close of the year. 
 
 In preparing inventories, care should be taken to 
 include goods in process. 
 
 - Where the inventory is used in connection with a 
 stock and cost system it should be divided into raw 
 material, goods in process and goods finished. 
 
 109 
 
COST 
 
 K p: p: p I N G 
 
 SHORT 
 
 C U T g 
 
 Some 
 P'orms 
 
 The amount and cost of raw material should be 
 entered on stock cards or sheets according to kind. The 
 posting is made in the balance column, which, if the stock 
 cards have been properly kept, will agree with the balance 
 obtained by deducting the last amount of raw material 
 issued. 
 
 CNTERED BY UX^-^^A^ 
 
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 f Fig. 25 
 
 Inventory of Raw Stock 
 
 The goods in process, their cost and last operation 
 performed upon them, should be entered on a cost sheet 
 by order numbers. 
 
 The quantity and cost of goods finished should be 
 entered on the finished stock record. 
 
 no 
 
CHAPTER XVI 
 
 Final Disposition of Cost Figures 
 
 UP to this point we have taken into consideration 
 the various elements that constitute cost of pro- 
 duction, together with numerous modifications 
 that arise under varying conditions. 
 
 First we explained how wages are paid, then how 
 inventories are taken, how raw stock is handled, how 
 burden is distributed and the kinds of forms used in keep- 
 ing the cost records. 
 
 This naturally leads to the inquiry, "What is done 
 with the cost figures after they have been collected.'^" 
 
 They must be posted either as debits or credits to 
 certain accounts. Therefore, it is necessary to design a 
 System of Distribution that will provide accounts to 
 which all productive and non-productive labor, material, 
 general and other expenses can be charged. It should be 
 arranged so that charges can be made against each depart- 
 ment and also against any shop or production order, so 
 as to give an accurate analysis of cost. 
 
 All material requisitions and labor tickets pertaining 
 to a production order should bear the order number, and 
 on the labor tickets the department number should also 
 be recorded. If the order is for plant repairs or better- 
 ment, both requisitions and labor tickets should bear the 
 number of the department for which the repairs are made 
 or the improvement done. By thus identifying the labor 
 ticket or requisition for material with a job and depart- 
 ment, it becomes comparatively easy to distribute the 
 cost to the department account and to the job. 
 
 As has been pointed out before; it is absolutely 
 necessary to draw a distinct line between the selling and 
 manufacturing end of a business. The cost to make 
 
 ui 
 
COST KEEPING SHORT CUTS 
 
 Final goods is one thing, the cost to sell is quite another, and if 
 tT(fn of *^^^ ^^^^ ^^ borne in mind from the outset a great amount 
 
 Cost of confusion will be avoided, 
 igures rpj^^ following "Card of Accounts" is typical of a large 
 manufacturing business and is so arranged that all 
 accounts, including selling, manufacturing and general 
 expense items, are segregated into their proper groups. A 
 "card" for a large business has been selected because it 
 shows what is necessary for accurate accounting in big 
 concerns and at the same time includes all of the fewer 
 accounts which are necessary to smaller concerns. For 
 instance, out of the forty-one general accounts shown, a 
 small concern could select possibly fifteen or twenty 
 which would answer all its requirements. 
 
 All of the general accounts, shown on this card, that 
 present any difficulty in understanding are described 
 briefly, so that a little study of them should give the 
 reader a very clear idea of what each one is intended 
 to include and how it is used. 
 
 CARD OF ACCOUNTS 
 
 CAPITAL ASSETS 
 
 1-^Patent Account 
 
 2— Good Will Account. 
 
 3 — Real Estate and Building Account. 
 
 4 — Special Tools Account. 
 
 5 — Plant Machinery and Equipment Account. 
 
 This includes all machinery, shafting, pulleys, belts, standard 
 bench tools, boilers, piping, ventilators, motors, etc. 
 6 — Patterns and Drawings Account. 
 
 This includes all patterns, drawings and blueprints necessary to 
 the manufacture of the product. 
 7 — Inventions Account. 
 
 This includes cost of experimental work and development of 
 new features. 
 8 — Factory Furniture and Fixtures Account. 
 
 This includes all furniture, fixtures and apparatus necessary to 
 the factory. 
 9 — Office Furniture and Fixtures Account. 
 
 This includes all articles of this nature pertaining to the general 
 office equipment. 
 
 112 
 
COST K E E P I N G S H O R T CUTS 
 
 FACTORY INVENTORIES Final 
 
 Disposi- 
 10 — Raw Material and Supplies Account. tion of 
 
 This includes raw stock, millwright and small tool stores, pack- ^P^^ 
 ing cases, etc., which may be treated as separate accounts where ^ 
 the nature of the business demands it. 
 11 — Finished Parts Account. 
 
 This includes all finished stock and accessories which can be 
 treated as separate accounts when necessary. 
 12 — Miscellaneous Inventory Account. 
 
 This includes scrap, inventory adjustments, dismantled 
 machines, etc., which may also be treated as separate accounts. 
 13 — Work in Process Account. 
 
 This includes all parts and sections of a product that are in 
 process of construction, together with all labor and material 
 expended on them. 
 14 — Experimental Work in Process. 
 
 This account includes all labor and material expended on experi- 
 mental work. 
 
 FACTORY OPERATING ACCOUNTS 
 
 15 — Operating Expense Accounts. (Distributed over all Burden.) 
 These accounts consist of such items as building and machinery 
 expense, electric light, power and heat, a separate account being - 
 kept for each. 
 16 — Factory Production Expense Accounts. (Distributed over all 
 Production Department Burden Accounts.) 
 These accounts cover such items as inspectors' school, nickel 
 plating, finished stock, stock order and standard departments. 
 17 — General Factory Expense Accounts. (Distributed over all 
 Burden Accounts.) 
 - These accounts cover factory managers and foremen, purchas- 
 ing department, janitors, receiving and raw stock departments, 
 time and cost departments, tool supply department, printing and 
 stationery, replacement of tools and machinery, drayage and mis- 
 cellaneous freight and express. 
 
 Under each of the Factory Operating Accounts are 
 the following sub-accounts: Salaries, labor supplies, 
 repairs, light, heat, gas, furniture and fixtures, insurance, 
 taxes, etc. 
 
 113 
 
COST KEEPING SHORT CUTS 
 
 Final FACTORY BURDEN ACCOUNTS. 
 
 Disposi- 
 tion of 18 — Repair and Construction Burden Accounts. 
 
 Cost These accounts cover such items as millwright and carpenter 
 
 Figures departments, tool designing, inventions, tool and pattern making, 
 
 experimental work, etc. 
 19 — Manufacturing Department Expense Accounts. 
 
 These accounts cover all of the various manufacturing depart- 
 ments, testing, inspecting, cleaning, assembling, polishing, japan- 
 ning or painting and shipping departments. 
 
 Under each of the Manufacturing Department Ex- 
 pense Accounts are sub-accounts for salaries, non-pro- 
 ductive labor, supplies, repairs, light, power, gas, heat, 
 overtime allowance, etc. 
 
 20 — Pay Roll Accrued Account. 
 21 — General Ledger Account. 
 
 INVENTORIES OF FINISHED PRODUCT. 
 
 22 — Finished Product at Factory Account. 
 23 — Finished Product with Agents' Account. 
 24 — Models Account. 
 
 25 — Advertising and Stationery Stores Account. 
 26 — Accessories to Product Account. 
 
 CURRENT ASSETS AND LIABILITIES. 
 
 27 — Accounts Receivable Accounts. 
 
 These accounts cover agents' accounts, miscellaneous personal 
 accounts, reserve for doubtful accounts, accrued interest, etc. 
 28 — Bills Receivable Accounts. 
 
 These accounts cover bills receivable and reserve for doubtful 
 notes. 
 29 — Cash Accounts. 
 
 These accounts cover cash in bank, petty cash, postage fund, 
 paymaster's fund, etc. 
 30 — Capital Stock Accounts. 
 
 These accounts cover capital and treasury stock. 
 31 — Accounts Payable Accounts. 
 
 These accounts cover such items as audited and unaudited 
 vouchers, accrued taxes, bills payable, prospective commissions, 
 cash on unfilled orders, reserves for depreciation, etc. 
 32 — Surplus Accounts. 
 
 These accounts cover profit and loss, surplus and dividends. 
 
COST KEEPING SHORT CUTS 
 
 SALES AND COST OF SALES. Final 
 
 Diaposi- 
 33 — Sales Accounts. tion of 
 
 These accounts cover sales of the product and accessories. Cost 
 together with cancellations and exchanges. Figures 
 
 34 — Cost of Sales Accounts. 
 
 These accounts cover all costs for selling the product and its 
 accessories. 
 35 — Other Income Accounts. 
 
 These accounts cover the income from such sources as rents, 
 interest, discounts and miscellaneous inconje. 
 
 SELLING AND DISTRIBUTING EXPENSES. 
 
 36 — Commission Account. 
 
 37 — Repairs Account. 
 
 38 — Allowance Account, 
 
 39 — Freight and Express Account. 
 
 40 — Other Accounts. 
 
 These accounts cover all expenses incurred for general sales 
 department, agencies, advertising, etc. 
 
 There are sub-accounts for each of these accounts, such 
 as salaries, supplies, postage, traveling expenses, tele- 
 phone, telegraph, taxes, insurance, rents, conventions, etc. 
 
 GENERAL AND ADMINISTRATIVE EXPENSES. 
 
 41 — Administrative and General OflSce Accounts. 
 
 These accounts cover expenses for the president, general mana- 
 ger and assistant, together with expenses for the various admin- 
 istrative departments. 
 
 There are sub-accounts for each of these, covering 
 officers' salaries, office salaries, supplies, postage, heat, 
 light, power, taxes, insurance, depreciation, repairs, trav- 
 eling expenses, donations, janitors, etc. 
 
 Where sub-accounts are used it is customary to number 
 them from "1" upwards and to designate them by 
 writing the general account number followed by a dash 
 and the sub-account number. Thus, referring to the 
 "Card of Accounts" at the division headed "Factory 
 Burden Accounts," the salaries paid in the manufacturing 
 
 115 
 
COST 
 
 KEEPING 
 
 SHORT CUTS 
 
 
 
 
 
 
 
 
 
 
 
 
 DAPimL 
 
 . 
 
 SELLING 
 
 AND 
 
 GENL. EKP. 
 
 
 INCOmE 
 
 AND 
 
 REVENUE 
 
 1 
 
 CAPITPiL 
 L/AB/L/T/ES 
 
 
 
 
 \ 
 
 \ 
 
 
 1 
 
 
 
 
 
 /ACCOUNTS 
 REC'BLE 
 
 \\ \ ■ / / 
 
 1, 
 
 ACCOUNTS. 
 PAY'BLE 
 
 
 
 
 \\\ / / 
 
 / 
 
 
 
 
 BILLS 
 REC'BLE 
 
 
 / 
 / 
 
 BILLS 
 PAY'BLE 
 
 
 
 
 \\\ \ / // 
 
 / 
 
 
 
 
 0/^SH 
 
 \\\\ /// 
 
 / 
 
 SURPLUS 
 
 
 
 
 \ 
 
 'm/ 
 
 / 
 
 
 
 
 1 
 
 CMTROUNG ACCOUNTS 
 
 ^ERAL LEDGL 
 
 1 
 2 
 
 
 CONTROUNG ACCOUNT 
 
 
 
 DR. 
 
 i 
 
 CR 
 
 CRDR 
 DR. C/t 
 
 CR 
 
 \ 
 
 DR 
 
 
 
 
 mnrnRY 
 
 Ca^TmiNG ACCOUNT 
 
 LEL 
 
 ^GER 
 
 
 
 
 
 
 ^^ 
 
 ^^^^ 
 
 
 
 
 Raw •STOCK 
 SUPPLIES 
 
 ^"/7 
 
 \^ 
 
 SHIPPING 
 EXPENSE 
 
 
 
 
 / / 
 
 
 
 . 
 
 FINISHED PftRJS 
 STOCK 
 
 y / 
 
 PRODUCTION 
 
 DEPARTMENT 
 
 BURDEN 
 
 
 
 
 
 
 
 \ 
 
 
 
 
 WORK 
 PROGRESS 
 
 
 GENERAL 
 EXPENSE 
 
 \ 
 
 F^PAIR'>^'CONSTR. 
 
 DEPARTMENT 
 
 BURDEN 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Fig. 26 
 Diagram of Factory Accounts. 
 116 
 
COST KEEPING SHORT CUTS 
 
 department would be designated by account No.'* 19-1," Final 
 
 the "19" referring to manufacturing department and the tiorfof ' 
 
 "1" referring to "salaries," which is the first of the sub- Cost 
 
 , Figures 
 
 accounts. 
 
 Since the factory department of a manufacturing 
 business is a very important part of the establishment, 
 it is customary to segregate all items pertaining strictly +^ 
 the factory into a factory ledger. This ledger is divided 
 into groups of accounts adapted to the line of business 
 for which it is used. 
 
 For the purpose of illustration, the following outline 
 of a typical factory ledger is shown. By careful study it 
 will be seen that several of the accounts in this factory 
 ledger correspond to the factory accounts mentioned in 
 the general "Card of Accounts." All other accounts for 
 the selling and administrative end of the business are kept 
 in the general ledger or ledgers. 
 
 FACTORY LEDGER ACCOUNTS 
 
 Group l^Controlling Account. General Ledger. 
 Group 2 — Raw Stock and Supplies Account. 
 
 a. Raw Stock Stores. c. Packing Cases. 
 
 h. Millwright Stores. d. Small Tool Stores. 
 
 Group 3 — Finished Parts and Stock Account 
 Group 4 — Work in Process Account 
 Group 5 — :General Expense Account 
 
 a. Building Expense. e. Heating. 
 
 h. Machinery Expense. /. General Tool Expense. 
 
 c. Electric Light and Power, g. General Factory 
 
 d. Gas, Fuel and Lighting. Expense. 
 
 Group 6 — Repairs and Construction Department Burden Account 
 
 a. Machine Shop. d. Pattern Shop. 
 
 h. Tool Making Shop. e. Electric Shop. 
 
 c. Carpenter Shop. 
 Group 7 — Production Department Burden Account 
 
 a. MiUing Machines. e. Assembling. 
 
 h. Screw Machines. /. Erecting. 
 
 c. Punch Presses. g. Inspecting. 
 
 d. Drill Presses. 
 Group 8 — Shipping Expenses. 
 
COST K E E V I N G S H () 11 T C V T S 
 
 Final The factory ledger bears the same relation to the 
 tfon of general ledger as the various subsidiary ledgers or accounts 
 
 Cost bear to the general ledger. 
 igur«'^^ A general scheme of this relation is illustrated by the 
 diagram in Figure 26, in which the factory ledger and 
 subsidiary accounts are represented as separate books. 
 It is not necessary, however, to have separate books, 
 except in large manufacturing concerns where it is more 
 convenient to do so. In a small concern the various 
 subsidiary accounts, including the factory ledger accounts, 
 may be subdivisions of the general ledger, although it is 
 generally desirable to have a separate ledger for factory 
 accounts. 
 
 Beginning with the Factory Ledger in the diagram it 
 will be seen that the typical accounts comprising this 
 ledger are. Raw Stock and Supplies, Finished Parts and 
 Stock, Work in Process, General Expense, Repair and 
 Construction Department Burden, Production Depart- 
 ment Burden and Shipping Expense. 
 
 All of these accounts converge into a Factory Ledger 
 Controlling Account to which their total debits or credits 
 are posted and which forms the door of exit, so to speak, 
 from the Factory Ledger. The corresponding door of 
 entry to the General Ledger is a similar Controlling 
 Account, with the exception that the debits and credits 
 are the reverse of the debits and credits in the Factory 
 Ledger Controlling Account. 
 
 The various subsidiary ledgers for the general accounts 
 also have corresponding controlling accounts in the gen- 
 eral ledger similar to the one illustrated for the Factory 
 Ledger. In this way the total debits and credits for all 
 subsidiary accounts are gathered into the general ledger. 
 But since this book treats principally of factory costs, our 
 attention will be devoted to the Factory Ledger. 
 
 The first account covers raw stock and supplies used 
 in connection with the factory output and all other 
 
 118 
 
COS T K K K P I N G SHORT CUTS 
 
 material in the nature of factory supplies. This account Final 
 is debited for all stock and supplies received into the tion^of^' 
 factory and credited for all that is used. The credits are Cost 
 obtained from the material and supply requisitions. igures 
 
 The account for finished parts and stock covers finished 
 manufactured parts and all stock which is purchased in 
 finished condition, but which is only a part that goes into 
 the finished product. It is usually known as semi-finished 
 stock. This account is debited with all receipts and 
 credited with all disbursements made on requisitions for 
 finished parts or stock. 
 
 The Work in Process account covers all unfinished 
 parts or products in the factory, being debited with all 
 labor, burden and material used, and credited with finished 
 parts or products. This account is the most active of 
 the factory accounts since practically all the material 
 and labor expended is controlled by this account. 
 
 The General Expense Account covers such items as 
 are shown in Group 5 of the Factory Ledger "Card of 
 Accounts," and is debited with all general expense items 
 and credited with the total amount that is distributed . 
 between the Productive Department Burden Account, 
 Repair and Construction Department Burden Account 
 and Shipping Expense Account. 
 
 The Repair and Construction Department Burden 
 Account covers such items as are shown in Group 6, and 
 is debited with indirect labor, supplies, repairs, general 
 expense, etc., and credited with the total amount dis- 
 tributed to Department Burden Accounts on the basis of 
 productive hours. (This basis is used, of course, in only 
 those factories using the labor hours' method of Burden 
 distribution.) 
 
 The Production Department Burden Account covers 
 items as shown in Group 7, and is debited with indirect 
 labor, supplies, repairs and general expense and credited 
 with the total amount distributed to work in process. 
 
 119 
 
COST KEEPING SHORT CUTS 
 
 Final The Shipping Expense Account covers all items inci- 
 tion of dental to shipping, and is debited with all such expenses, 
 Cost exclusive of freight and express, and credited with the 
 igures j-Q^-g^j amount that is distributed to the cost of the prod- 
 uct shipped. 
 
 While the above explanation of a factory accounting 
 system is more or less in skeleton form, it gives a good 
 general idea of the system of distributing the numerous 
 debit and credit items and show§ how the results are 
 finally disposed of. 
 
 In one of the following chapters, in which the routine 
 and statistical phase of a cost system is treated, are 
 described the methods for handling the cost data with 
 a view to finding out the exact cost of each unit of the 
 product. 
 
 120 
 
CHAPTER XVII 
 
 Cutting the Cost of Keeping Costs 
 
 "O^EE that roomful 'of clerks," said the manufacturer 
 ^^ with a sweep of his hand, as we looked over the cost 
 ^"^^ department of his factory, "that costs us $15,000 
 a year." 
 
 There's the rub — the cost of running a cost depart- 
 ment is a constant irritation to the man who has yet to 
 realize that it costs to be safe. Yet this premium which 
 must be paid to be safe — to know that you are getting the 
 product at the right cost — is nothing but the insurance 
 premium in another guise. 
 
 Pay it the business man must — either in salaries to 
 cost keepers or through decreased profits on sales. But 
 too frequently he does not handle his cost keeping work 
 with that concrete sense of values which he shows in 
 handling the making and selling of his product. 
 
 Whether producing figures or frying pans, the prin- 
 ciples are the same. 
 
 A cost expert of national reputation for his successful 
 handling of many knotty cost-of-production problems, 
 said to a committee of the stockholders of a company 
 in trouble: 
 
 "One of the objections raised against cost systems 
 is that after incurring considerable expense incident to 
 the inauguration of such a system, some manufacturers 
 have discontinued the use of the system after a com- 
 paratively short period. There can be but two explana- 
 tions given in such a case. The first one is, that the 
 management did not comprehend the system and its 
 underlying principles. The second reason is, that the 
 system was defective in design, and the underlying prin- 
 ciples were either not basic, or else wrongly applied. 
 Defects of this character in a system usually ifivolve such 
 
 121 
 
COST K E R P I N G S II R T CUTS 
 
 Cutting an amount of clerical labor as to make the system, to a 
 Costs gJ'^^t extent, impracticable. They are traceable to two 
 principal causes, one of which is that the one designing 
 the system attempts to figure out a plan of cost finding 
 from a bookkeeping standpoint, without any reference 
 to, or knowledge of, factory conditions governing the 
 manufacture of the product. The other cause is due to 
 the fact that those in the immediate charge of the enter- 
 prise are unfamiliar with accounting and the preparation 
 of statistics, and are unable for this reason to see at the 
 outset the impractical features contained in the system. 
 In other intances a half-hearted effort is made to in- 
 augurate a system, and the slightest resistance eliminates 
 the desire of the manufacturer to continue his plans along 
 these lines, merely because a few difficulties are encoun- 
 tered during the first few days or weeks.*' 
 
 There is no doubt but that the cost of conducting a 
 cost system is important. 
 Common But let US apply the same common sense we use in 
 solving the problem of gaining efficiency in a factory, to 
 the lowering of the cost of handling the statistics and 
 facts in an office. 
 
 Let us use machines for the work that machines can 
 do more quickly and accurately than men. 
 
 A great economist has said that "a man should not 
 be kept at any work a machine can do better." 
 
 Acting on that dictum has made the commercial 
 world over again in an hundred years. 
 
 We have come to accept it everywhere but in our 
 offices. There we still keep production down to a hand- 
 work basis. We take men out of the factory by adding 
 automatic machinery, and we add new men to the office 
 force to take care of the increased work and output. 
 
 We see signs of a change. 
 
 It has been slow. 
 
 122 
 
C () S T K K E P I X G S II () R T (' V T S 
 
 When business men realize what the Burroughs means Cutting 
 to all the figure-handling work of a business, the machines Qq^^^ 
 will become as common as typewriters. 
 
 It is just plain everyday common sense that it should 
 be so. 
 
 In any cost department where figures have to be 
 handled, this labor-saving machine should be introduced. 
 The cost department must employ a number of clerks for 
 the purpose of handling the figures, statements and 
 statistics. These statistics are made up from figures 
 gleaned from many sources. These figures must be 
 recapped by special headings and then statistical sum- 
 maries made from these recaps. 
 
 There are two chances of error in every handling of 
 figures : 
 
 First — In putting down the figure. 
 
 Second — In making additions, multiplications, sub- 
 tractions and divisions. 
 
 You can't afford to take chances. Where the fraction Taking 
 of a cent — in such a business as a foundry, for instance — 
 may be the difference between profit and loss, work must • 
 be right. The manager who has his costs checked and 
 counter-checked for possible error, is really making the very 
 figures by which he gets his costs, cost him from twenty- 
 five to sixty per cent more than they should. It doesn't 
 matter how simple and eflficient the cost system, without 
 a Burroughs, it is more expensive than it should be. 
 
 If the work in any cost department were figured out 
 on a piece-work basis, it would be easy to find out just 
 how much it costs to handle every item. 
 
 You pay the clerks on a basis of time — by the week or 
 month. It is obvious that a rapid, accurate man can 
 handle a greater amount of work to a satisfactory con- 
 clusion than a slow, inaccurate man. It is right here that 
 the Burroughs Adding and Listing Machine demonstrates 
 its utility in any cost department. 
 
 123 
 
COST KEEPING SHORT CUTS 
 
 Cutting The regular Burroughs can accurately handle 160 
 (^Q^g^g items a minute. There is probably not a clerk in your 
 employ who can set down figures and accurately add 
 them up at the rate of 40 a minute. Therefore the 
 machine can work four times as fast as your most expert 
 clerk. Remember, the Burroughs prints the figures and 
 has a total just as soon as the figures appear on the 
 sheet. 
 
 But the average operator in an office cannot handle 
 the machine as fast as it will operate. Let us say, for 
 instance, that the clerk can handle a machine at the rate 
 of 80 items a minute, which means that the machine and 
 the operator are twice as fast as the fastest clerk without 
 the machine. The gain in time, therefore, in handUng 
 1,000 items — and leaving out of consideration the vital 
 matter of accuracy — is one that can very quickly be 
 reduced to a dollars and cents basis. If you would 
 check the items your clerks handle in every operation for 
 even a single day, you would realize just how much this 
 machine means. 
 
 We We know cost departments with these machines where 
 the daily increase of work has been handled through a 
 period of six months to a year without increase in the 
 force. In other places, where the work was more station- 
 ary in volume, the work has been handled more quickly 
 and accurately in a third to a half less time. 
 
 In short, the Burroughs means a gain in money -saving 
 efficiency in every line of work that the cost department 
 handles, just as an automatic machine means a saving in 
 time and a gain in efficiency in the factory. You cannot 
 afford to pay men to handle figures that a machine can 
 handle better, because it can handle them more quickly, 
 and with less man aid; better, because it is absolutely 
 accurate, while men are but relatively so; better, because it 
 furnishes you with neatly printed sheets; better, because 
 
 124 
 
 K 
 
 now 
 
COST KEEPING SHORT CUTS 
 
 it is cheaper; better, because it frees your best men from Cutting 
 drudgery, and lets them do the thinking, planning, doing q^^^^ 
 of things that mean bigger results to the business. 
 
 Bear these facts in mind when considering the cost 
 problem in your business. It is the solution of how to 
 get the cost facts with the smallest expenditure of time 
 and work. 
 
 125 
 
CHAPTER XVIII 
 
 The Burroughs Machine and How it 
 Helps the Cost Keeper 
 
 BEFORE entering upon a description of the actual 
 operation of a cost system it is well to describe 
 briefly the machine which plays such an important 
 part in the economical handling of the hundreds of items 
 that must be accounted for. 
 
 The Burroughs Adding and Listing Machine is a me- 
 chanical device which adds, lists and tabulates numbers 
 and amounts more quickly and accurately than the work 
 can be done by hand and mind. 
 
 It is something like a typewriter, only a little heavier, 
 more compact and box shape, as shown by the illustration, 
 and it is operated by a handle at the side or by a touch 
 bar connected with an electric motor. See Figure 27. 
 
 The keys on top are arranged in columns on a sloping 
 keyboard. The mechanism is so constructed that the 
 depression of a key, which stays down until released, 
 does nothing more than set the machine. It is necessary 
 to pull the handle or touch the bar before the item thus 
 " set up " can be listed and added. The advantage of this 
 is that it permits the operator to correct a wrong item 
 when necessary before it is added and listed. 
 
 When an item is set up incorrectly, the correction 
 button marked "C" restores the keys to normal position, 
 otherwise the handle pull restores them automatically 
 after the item has been added and listed. 
 
 The button marked "C" (Figure 27) is a general cor- 
 rection button and is used when the whole item is to be 
 corrected. The row of buttons at the top are individual 
 column correction buttons and are used for correcting 
 an error in one or more figui'es of an item. 
 
 120 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 KEYBOARD BUTTON 
 
 VARIABLE SPLIT 
 
 DEVICE 
 
 Fig. 27 
 
 Keyboard View of the Burroughs Duplex Cost Machine 
 Electrically Operated. 
 
 Time 
 
 Amount 
 
 
 Dep ' t 18^/ 
 
 8% 
 
 2.3 5 
 
 s% 
 
 2.0 1 
 
 1 2 
 
 3.7 9 
 
 6 
 
 1.5 
 
 1 6% 
 
 4.7 7 
 
 16% 
 
 4.9 3 
 
 1 
 
 3.0 
 
 7 S% 
 
 2 2 .3 5 - 
 
 Fig. 28 
 
 Example of Cost Machine work showing how Time and 
 
 Earnings are added and listed simultaneously. 
 
 127 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 Fig. 29 
 
 Three-quarter View of the Burroughs Cost Machine 
 Electrically Operated. 
 
 ADJUSTABLE 
 STOPS 
 
 LEVER TO PASTE 
 CARRIAGE BA(; 
 
 CASE SCREW 
 STOP ROD HOLDER 
 
 Fig. 30 
 
 Rear VieW of the Burroughs Machine Showing the Carriage 
 and its Principal Features. 
 
 1«8 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 The button marked "E" is an eliminating button. The 
 When it is depressed in connection with an item, the item jviLchin^ * 
 can be listed but not added and the symbol {'11') printed 
 at the side of it will indicate this fact. This button is 
 used when department or account numbers are set in at 
 the top of a list of items. Figure 31 illustrates this feature. 
 
 Dep' t 
 
 16-//- 
 
 
 
 >:^ 
 
 1 2 .4 2 S 
 
 
 2.2 4 
 
 2.2 4 
 
 
 2.5 4 
 
 2.7 5 
 
 
 2.4 5 
 
 3.1 2 
 
 
 3.2 2 
 
 2.6 5 
 
 
 1.9 7 
 
 2.1 
 
 
 1 2 .4 2 S 
 
 2 5 .2 8 -''- 
 
 Fig. 31 
 
 The button marked *'S. T." is used for taking sub- 
 totals. When it is depressed and the handle is pulled, 
 the amount which had been accumulated in the machine 
 is printed, but not cleared from the machine. This is 
 shown in Figure 31, the sub-total being printed at the 
 bottom of the first column and carried forward to the top 
 of the second column. 
 
 The button marked "Total" is used for getting totals. 
 When it is depressed and the handle is pulled, the total 
 in the machine is transferred to the paper and the machine 
 is cleared. 
 
 A star (*) is printed opposite all totals and an (s) 
 opposite all sub-totals in order to distinguish them from 
 other items and from each other. The total button 
 should always be depressed and the handle pulled before 
 an addition is begun. Thus any amount that may be in 
 
 129 
 
COST KEEPING SHORT CITS 
 
 
 . 
 
 SUMMARY OF PIECE WORK DAILY TOTALS 
 
 ■ 
 
 
 
 
 
 
 FOR WEEK ENDING 12-11. 1909 | 
 
 DEPT 
 
 FRIDAY 
 
 SATURDAY 
 
 MONDAY 
 
 TUESDAY 
 
 WEDNESDAY 
 
 THURSDAY 
 
 TOTAL 
 
 
 , 
 
 « 
 
 « 
 
 * 
 
 » 
 
 * 
 
 . * 
 
 1 
 
 6 6J2 4 
 
 6 5.3 
 
 5330 
 
 61^3 
 
 7 1.3 
 
 6336 
 
 3 8 1 .1 5 * 
 
 s 
 
 27.56 
 
 2 2»0 
 
 2 4.6 
 
 2936 
 
 30X30 
 
 3130 
 
 1 6 5.4 2* 
 
 3 
 
 6 3.4 5 
 
 75O0 
 
 6 2.4 
 
 B4.C0 
 
 8 33 
 
 8 23 6 
 
 4 7 0.91* 
 
 4 
 
 1 4 2.45 
 
 13 2.4 5 
 
 15530 
 
 1 4 4 .0 6 
 
 1 5335 
 
 15 2>*5 
 
 8 8 0.4 6* 
 
 5 
 
 1 5 4.6 7 
 
 1 6 3.6 5 
 
 1 3936 
 
 1 5 0.3 
 
 J 6 4.6 
 
 1 5 5.7 8 
 
 92736* 
 
 6 
 
 6 3.5 6 
 
 5 53 7 
 
 5 3.0 
 
 6 1.3 5 
 
 71X30 
 
 6 23 6 
 
 367X34* 
 
 7 
 
 5000 
 
 4BA5 
 
 49XD0 
 
 5 9.7 9 
 
 5 1.45 
 
 5137 
 
 3 10.2 6* 
 
 e 
 
 36.56 
 
 3 0.0 
 
 33XD0 
 
 35X30 
 
 4 1>40 
 
 40.47 
 
 216X3* 
 
 9 
 
 4 0.0 
 
 4836 
 
 41.46 
 
 4 1.05 
 
 52X30 
 
 39X30 
 
 26 2X37* 
 
 .10 
 
 2 5.6 
 
 4 1.3 
 
 2938 
 
 2736 
 
 31>J0 
 
 31X38 
 
 1 8632* 
 
 .11 
 
 4 3.5 
 
 5 0.0 
 
 4 1.9 9 
 
 4 430 
 
 4 4.60 
 
 40X39 
 
 2 6 4.6 8* 
 
 .12 
 
 15.45 
 
 2 2.4 
 
 17.45 
 
 16A5 
 
 17.3 5 
 
 20X)0 
 
 109J.0* 
 
 .1 3 
 
 2350 
 
 1837 
 
 3 1.46 
 
 3 23 
 
 3 2.4 
 
 30X30 
 
 1 68.43* 
 
 .1 4 
 
 36.50 
 
 32X36 
 
 2837 
 
 3 7.45 
 
 40O0 
 
 4 1.08 
 
 2 15.6 6* 
 
 .15 
 
 4 2.4 
 
 4 0.0 
 
 4 1.00 
 
 4 0X30 
 
 45X30 
 
 4 2.6 
 
 2 5 1.0 0* 
 
 ^6 
 
 2 5.0 
 
 2 3.0 5 
 
 8 7.46 
 
 28.46 
 
 2 6.4 5 
 
 3 7.0 6 
 
 16 7.4 8* 
 
 J. 7 
 
 1 3336 
 
 13036 
 
 1 4 2.4 5 
 
 1 2 5 .4 5 
 
 1 2837 
 
 15437 
 
 8 15.16* 
 
 .18 
 
 4 2.4 5 
 
 4 1.3 4 
 
 3838 
 
 51X33 
 
 4137 
 
 4.0X3 8 
 
 255X35* 
 
 .1 9 
 
 7 3.4 5 
 
 7 33 
 
 6 3.8 9 
 
 7 23 
 
 7 2.3 4 
 
 7 5.6 6 
 
 431.14* 
 
 .2 
 
 2455 
 
 82X50 
 
 2 6.4 6 
 
 2 6.3 5 
 
 2 4.7 6 
 
 31^0 
 
 1 5 53 2* 
 
 .2 1 
 
 5 3.6 7 
 
 4 33 6 
 
 5 23 7 
 
 5 2.3 
 
 5 23 3 
 
 48£8 
 
 3 3.31* 
 
 .2 2 
 
 7 4.34 
 
 7 2.3 
 
 7 1.3 
 
 7 0.0 
 
 7 5.00 
 
 7 7.7 7 
 
 4 4 0.71* 
 
 .2 3 
 
 4 6.0 
 
 4 2.4 5 
 
 3 9.6 8 
 
 5 0.0 
 
 5-1X3 
 
 5 23 3 
 
 281X6* 
 
 .2 4 
 
 6 5.0 
 
 6 2.4 5 
 
 6 1.00 
 
 5 23 7 
 
 6 5.6 7 
 
 6535 
 
 3 7 0.24* 
 
 .2 5 
 
 1 5 2.3 
 
 1 4 5.6 
 
 1 4 5.0 
 
 1 6 2.4 
 
 1 6 33 6 
 
 1 05X30 
 
 873.86* 
 
 .2 6 
 
 12 3.5 
 
 11130 
 
 15 0.0 5 
 
 1^030 
 
 1 4 2.6 8 
 
 15 330 
 
 8 1.7 3* 
 
 .2 7 
 
 52A5 
 
 4836 
 
 3 2.0 
 
 4936 
 
 4837 
 
 5 8.8 8 
 
 2 9 1X3 2* 
 
 .2 8 
 
 4 7.6 6 
 
 5 2.4 5 
 
 3130 
 
 4 2.4 5 
 
 51X30 
 
 6130 
 
 2 8 63 6* 
 
 .2 9 
 
 15>J5 
 
 2 2X)0 
 
 1 230 
 
 1 2.4 4 
 
 2 23 
 
 80X30 
 
 1 4.8 9* 
 
 JO 
 
 3 23 6 
 
 3 5.0 
 
 2 2.6 6 
 
 3'1X3 5 
 
 4 130 
 
 27X37 
 
 18 9.6 4* 
 
 .31 
 
 5 3.4 5 
 
 4 8.45 
 
 4 2.0 
 
 4 1.40 
 
 5736 
 
 3 7.6 7 
 
 28033* 
 
 .3 3 
 
 3 63 6 
 
 2136 
 
 41J5 
 
 4 0.0 
 
 4 13 5 
 
 4 2.6 6 
 
 223X8* 
 
 
 1,90439* 
 
 1,841^4* 
 
 180238* 
 
 1,893X36* 
 
 2,0 3 3.7 6* 
 
 1,973^8* 
 
 11.4 4 8.6 5* 
 
 Fig. 32 
 
 The machine carriage permits of tabulations similar to the above. This 
 
 is a miniature reproduction of actual work. Note 
 
 its neatness and uniformity. 
 
 130 
 
COST KEEPING SHORT CUTS 
 
 Fig. 33 
 No. 9 Burroughs 
 
 Fig. 34 
 
 No. 11 Burroughs 
 
 ISl 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 ELIMINATING KEY 
 
 ISUB TOTAL KEV 
 
 TOTAL KEY 
 
 Fig. 35 
 
 , Keyboard View of the Burroughs Duplex 
 Adding and Listing Machine. 
 
 f/flMES 
 
 7^0/V. 
 
 TU£S 
 
 W£0. 
 
 WUffS 
 
 FRI 
 
 s»r 
 
 TOTALS. 
 
 ^9H.S-H.J^ 
 
 300 
 
 2.9 5 
 
 30 
 
 2.7 5 
 
 3.0 
 
 2.8 
 
 17.5 0T 
 
 'J:ATAou^ 
 
 3.2 5 
 
 3.0 
 
 3.2 5 
 
 2.8 5 
 
 3.2 5 
 
 2.8 
 
 1 8 .4 OT 
 
 1? OTcCts^n^ 
 
 2.9 5 
 
 3.10 
 
 310 
 
 3.0 
 
 3.10 
 
 3.0 
 
 18.2 5T 
 
 f3'iir(r<^^ 
 
 2.7 5 
 
 3.2 
 
 3.0 
 
 3.10 
 
 3.15 
 
 3.0 
 
 18.2 0T 
 
 ^^:H'aXci 
 
 3.0 
 
 3.2 5 
 
 300 
 
 2.9 5 
 
 2.9 5 
 
 3.10 
 
 18.2 5T 
 
 trn.TT^^mo 
 
 3.0 
 
 3.0 
 
 3.2 
 
 3.0 
 
 2.8 
 
 2.8 5 
 
 1 7.8 5T 
 
 /\ d^.'^AArU 
 
 3.2 5 
 
 3.0 
 
 3.10 
 
 3.0 
 
 3.0 
 Crand 
 
 3.0 
 Tofat. 
 
 18.3 5T 
 1 2 6.8 09 
 
 Fig. 36 
 
 Sample of Duplex work showing how the machine is used for preparing 
 a weekly pay roll. 
 
 1S2 
 
COST KEEPING SHORT CUTS 
 
 the machine will be thrown out and not be added in with The 
 the items that are to be totaled. If there is no amount Machine * 
 in the machine the star alone will be printed. The star is 
 ySi signal to the operator that the machine is "cleared for 
 action" and also a safeguard for the accuracy of his totals. 
 
 The illustration in Figure 30 shows the machine car- 
 riage, which closely resembles a typewriter carriage. The 
 arrows indicate its principal features and the tabulated 
 sheet in Figure 32, as well as many other sheets of similar 
 nature that are reproduced in this book, show the kind of 
 work that it can do. 
 
 The illustrations in Figures 33 and 34 show two styles 
 of Burroughs Machines, namely, the nine-column (No. 9) 
 and the eleven-column (No. 11). These machines are 
 illustrated for the purpose of pointing out two of the 
 styles of Burroughs that are used in Cost Departments. 
 
 Another style is the No. 9 Duplex, shown in Figure 
 35, together with a sample of its work. (Figure 36.) 
 
 To all appearances it is the same as the regular machine The 
 (the illustration closely resembles a No. 9), but it is con- "^ ^^ 
 structed with two sets of adding wheels so that the • 
 totals of any number of groups of items can be obtained 
 and also the grand total of all the groups at one operation. 
 
 In other words, a total pay roll for each department of 
 a plant can be secured and by shifting a lever and pulling 
 the handle again a grand total for all departments can be 
 printed. Or, the total weekly or monthly earnings of 
 each workman and grand total for all workmen can be 
 obtained at one operation. 
 
 The fac-simile illustration in Figure 36 shows a sample 
 of Duplex work. 
 
 It is impossible to outline every operation in a cost 
 system where an adding machine can be used to advan- 
 tage, but we can give suggestions and illustrations where 
 it has been applied in our own and other cost departments 
 that will show the versatility of a Burroughs. 
 
 188 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 The While we build a number of different styles, it doesn't 
 Machme signify that each style is cut out for its own little batch 
 of work and no more. The difference in styles consists 
 principally in the difference in sizes ranging from 6 column 
 machines to 17 column machines, and embracing special 
 features that are intended to handle special work. 
 
 The machine we ordinarily advocate for a cost depart- 
 ment is the Burroughs Duplex Cost Machine of 15 columns 
 with electric drive, 1^3^ inch carriage and arranged to add 
 amounts of earnings and time (either in hours and }/i 
 fractions or in hours and minutes), at one operation. 
 
 The fraction keys constitute the special feature of the 
 cost machine, but this in nowise interferes with its 
 adding and listing ordinary amounts, or its capability for 
 tabulating final results on statement sheets, or whatever 
 report forms are necessary. 
 
 Take for instance the machine shown in Figure 27, 
 which is the Duplex cost machine. 
 
 
 
 
 18-//- 
 
 3 7)/ 
 
 1 2.6 5 
 
 4 4)/ 
 
 1 4.4 5 
 
 5 4 
 
 1 8.6 5 
 
 3 5% 
 
 1 1.4 4 
 
 5 4 
 
 1 8.0 
 
 5 7 
 
 2 1.3 5 
 
 4 4)/ 
 
 1 5.6 
 
 3 2 7 
 
 1 1 2 .1 4 - 
 
 Fig. 37 
 
 When it is desired to add workmen's time and amount 
 of earnings, from the labor tickets, by workmen, accounts, 
 departments or other classifications, the operator first 
 
 134 
 
COST KEEPING 
 
 SHORT 
 
 CUTS 
 
 .1 Burroughs 
 ^"^ Machine 
 
 prints the reference number, using the ehminating key The 
 to prevent it from adding. He sets the time in 
 left hand section and the amount in the right hand 
 section. Then by touching the electric contact bar both 
 items are printed on the paper and added. The second 
 pair of items is taken off in the same way, and so on until 
 all items for the classification have been added and listed. 
 Then by depressing the total button and touching the con- 
 tact bar, the two totals are printed 
 as shown in the illustration. Note 
 the department number, the listed 
 items and the totals in Figure 37. 
 
 Now, suppose he wants to add 
 some requisitions for material to 
 find the cost of material for a certain 
 job. He uses the right hand section 
 of the machine and runs off the 
 amounts as shown in Figure 38. 
 
 Again, suppose there are some 
 extensions to be made. For in- 
 stance, 3425 pieces at $2.14 per 
 hundred and 1495 pieces at $4.12 
 per hundred. These extensions in- 
 *^'^^ volve multiplication which can be 
 
 done very quickly on the machine, getting an absolute 
 proof of the work. The right hand section is used for 
 these operations and the calculations come from the 
 machine as shown in Figure 40. By pointing off the result 
 the proper number of places, the amount in dollars and 
 cents is obtained. The decimal points in this case are 
 represented by the vertical lines which are put in by hand. 
 One of the greatest advantages of a listing machine for 
 such work as this lies in the fact that every step of the 
 calculation is printed on the paper. When the operation 
 has been completed the work can be quickly proved, first 
 by inspecting the amounts listed (these representing the 
 
 Job 6 3 3-/^ 
 
 3.3 5 
 
 4.5 5 
 
 1 2.0 5 
 
 2.3 6 
 
 4.0 
 
 2.5 5 
 
 3.2 5 
 
 1.4 5 
 
 3 3 .5 6 ^ 
 
 135 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 No. 
 
 M. 
 
 13.3 6 
 
 Hours 
 
 3 4 $/Sl.2 5 
 
 DIME 
 Savings Bank 
 
 Bank Hours, 9 to 3. 
 Saturdais, 9 to 12 and 6 to 8 p. m. 
 
 Capital, - - - - . $500,000 
 
 Surplus and Undivided Profits, - 275,000 
 
 Stockholders' Additional Liability, - 500,000. 
 
 Guarantee Fund for Depositors, $1,275,000 
 
 Griswold Street, cor. Fort Street 
 l^9i 'Woodwarii Avenue 
 n74 Jefferson Avenue 
 407 Gratiot Avenue 
 
 DETROIT, -- MICH. 
 
 Fig. 39 
 
 Pay envelope showing a workman's Number, Time and Earnings 
 recorded with the Burroughs Adding Machine. 
 
 186 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 3 4.2 5 
 
 1 4.9 5 
 
 3 4.2 5 
 
 • 1 4 .9 5 
 
 3 4.2 5 
 
 1 4 9 .5 
 
 3 4.2 5 
 
 1, 4 9 5 .0 
 
 3 4 2 .5 
 
 1, 4 9 5 .0 
 
 3, 4 2 5 .0 
 
 1, 4 9 5 .0 
 
 3, 4 2 5 .0 
 
 • 1, 4 9 5 .0 
 
 7,3 
 
 2 9 .5 - 
 
 6,1 5 9.4 0-^ 
 
 The 
 
 Burroughs 
 Machine 
 
 Fig. 40 
 
 multiplicands), and then counting the number of times the 
 amounts have been repeated, thus checking the multipliers. 
 
 A very little practice soon makes a machine operator 
 quite expert in multiplying, and when once he has mas- 
 tered the operation he will never give it up. 
 
 If it is desired to enter the amounts of pay on the 
 envelopes, the machine can do it quickly. See Figure 39. 
 
 The operator places the envelope in the carriage and 
 turns it up to a certain point, which his eye soon becomes 
 accustomed to, thus enabling him to do it very rapidly. 
 Then he sets the workman's number in the left hand sec- 
 tion (ignoring the fraction column altogether) depresses 
 the eliminating button and pulls the handle. Then he 
 sets the time in the left hand section and the amount in 
 the right hand section. A touch of the bar lists both 
 items and adds only the amount. 
 
 The envelope is turned out and another inserted, the The 
 number, time and amount being set down on it in the same 
 manner. When all the amounts have been set down, the 
 total that shows on the adding wheels. should agree with 
 the pay roll total. If it does, the pay roll clerk knows 
 that the correct amounts have been printed on the 
 envelopes and that there is no necessity for checking 
 
 Envelope 
 
 137 
 
COST KEEPING SHORT CUTS 
 
 Fig. 41 
 
 Pay Roll prepared with a Burroughs Adding Machine, showing master 
 
 sheet containing the names. The time and earnings 
 
 are added and listed simultaneoulsy. 
 
 138 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 them back to be sure about it. If the total by depart- The 
 ments is desired, each total can be noted as soon as the Ma^chin^ ^ 
 last envelope for each department has gone through the 
 machine. In cases like this, the Duplex Machine enables 
 the operator to secure the total for each department and 
 a grand total for all departments without recapitulating 
 the department totals. 
 
 We made a test of this method with a number of 
 envelopes, and found that the amounts could be written 
 by machine and the total checked much more quickly 
 than it was possible by hand. The illustration, Figure 39, 
 shows an envelope prepared by the Cost Machine. 
 
 Then the pay roll clerk may want to prepare a pay 
 roll sheet recording workmen's hours and amounts. 
 
 He inserts the pay roll sheet in the 12}^-inch carriage, 
 which will accommodate sheets up to that width and runs 
 off the time and amounts, adding the amounts only. All 
 that is necessary is to set the number in the left hand sec- 
 tion and the amount in the right hand section and touch 
 the bar. The machine does the rest as shown in the illus- 
 tration. See Figure 
 41. 
 
 Hours and amounts 
 of both day and piece 
 workers can be added 
 and listed at the same 
 time with the Duplex 
 Machine, securing 
 totals for each and a 
 grand total of both. 
 The illustration, 
 Figure 42, shows how 
 this work is done. 
 The items opposite the 
 symbol (?) are for 
 Fig. 42 piece workers and are 
 
 
 ■k 
 
 
 * 
 
 5 4 % 
 
 1 2.3 6 
 
 4 5/2 
 
 1 5.0 
 
 39 
 
 1 3.0 1 
 
 4 Q-^l^ 
 
 1 7.5 5 • 
 
 54 
 
 1 8.0 
 
 4 i 'A 
 
 1 9 .4 5 1 
 
 1 7 /2 
 
 1 1 .4 i 
 
 1 3 8 '/a 
 
 6 1 .4 s 
 
 1 5 3 % 
 
 4 5.3 6 T 
 
 2 9 2/4 
 
 1 Q 6.7 6 * 
 
COST KEEPING SHORT CUTS 
 
 The added in the lower counter, while the other items are for 
 Machfne ^^^ workers and are added in the upper counter. The 
 first total opposite the " s »» jg for piece workers, the next 
 total opposite " t *' is for day workers and the last total 
 opposite " * '* is the combined total of day and piece 
 workers. 
 
 When the cost keeper wishes to prepare his summary 
 or report sheets he places them in the machine and 
 runs off column after column of figures, just the same as 
 he would do on a typewriter, with the added advantage 
 that he can print a total of each column as soon as the 
 last item has been listed. See Figure 32. 
 A These are a few of the many things that one Burroughs 
 Only ^^^^ Machine will do, and we call your attention to them 
 in order to impress upon you the fact that it is an all 
 round assistant in the Cost Department and not a 
 machine whose special features limit its capacity for work 
 or one that is to be used for " adding " only. 
 
 Where a cost department is large and can use several 
 machines more economically than one, we usually advo- 
 cate that some of them be cost machines and some 
 regulars. Under these conditions one, two, three or more 
 clerks are often delegated to the task of getting total time 
 and earnings of workmen, and need the cost machine for 
 this special class of work, while others are employed in 
 straight adding and listing of material requisitions, or in 
 making extensions, which can be done on regular machines. 
 
 However, when only one machine is to be used in a 
 department and time and earnings are to be added and 
 listed, pay rolls prepared, extensions made, etc., the Duplex 
 Cost Machine should be installed by all means, because 
 it is far better adapted to all the different classes of work 
 that will be required of it. 
 
 140 
 
CHAPTER XIX 
 
 Cost System in the Burroughs Factory 
 
 THE Cost System in the Burroughs Factory will be 
 made clearer by first giving a general idea of the 
 route raw material takes, and describing the two 
 distinct processes necessary to complete an adding ma- 
 chine. 
 
 The first process consists of converting the raw 
 material into finished parts which are ordered in lots 
 ranging from several hundred to several thousand, 
 according to the quantity we have found advisable to 
 keep on hand. 
 
 These parts, after having been inspected, are turned 
 into the Finished Stock Room. 
 
 The next process is the assembling of the parts into 
 the complete machine. Our cost records take into con- 
 sideration both of these processes, the two being handled 
 along very similar lines. 
 
 The diagram in Figure 43 gives a good idea of the 
 route that raw stock takes through our factory, from the 
 time it is received in the Raw Stock Room until the 
 completed machine is received in the Shipping Room. 
 
 All orders for new machines or parts originate in the 
 Superintendent's oflSice. 
 
 When the finished stock keeper discovers that a certain 
 part has reached the low water mark, the Superintendent's 
 oflBce is notified and the Production Order for new parts 
 is issued, the order being sent to the foreman of the 
 department that is to perform the first operation upon it. 
 A cost record card is sent to the cost keeper notifying him 
 that the job has been started. 
 
 A requisition is also forwarded from the Superinten- 
 dent's oflSce to the raw stockkeeper, notifying him that a 
 certain amount of stock will be withdrawn by the foreman 
 
 141 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 A 
 
 Cost 
 
 System 
 
 for that job. When the foreman receives the material, 
 one or more of his men perform the first operation upon 
 it, and he sends in their time tickets to the Cost Depart- 
 ment and passes the partly finished product on to the 
 next department, after it has been O. K'd. 
 
 Each department that performs an operation on it 
 sends its time tickets to the Cost Department. As soon 
 as the last operating department has finished the job, the 
 parts are sent to the Finished Stock Room and the Cost 
 Department is notified that the job has been finished. 
 
 The Cost Department can then recapitulate the 
 labor cost of the job, the material cost and figure the 
 burden, getting the total cost of the job. 
 
 Rm STOCK 
 
 
 /? y^M r r aJ f<'G<juisJt/'on\for 
 
 DEP'T. ' Proc/ucUon Order 
 
 1 6/k/ Fbn Card 
 
 fi-oduc^ 
 
 i"ig. 43 
 
 Diagram showing route of material from raw stock room to 
 shipping room. 
 
 142 
 
COST KEEPING SHORT CUTS 
 
 When it is desired to erect a number of machines of A 
 a certain style, the Superintendent's Office issues an order gystem 
 to the Erecting Department and sends a requisition to the 
 Finished Stock Department caUing for a certain number 
 of finished parts, which are sent by the Finished Stock 
 Department to the Erecting Department. A copy of 
 the factory order is sent to the Cost Department, notify- 
 ing it that certain machines are to be erected. 
 
 The time tickets of the Erecting Department are sent 
 to the Cost Department, where the total labor cost 
 and burden for assembling the parts into machines, are 
 calculated. 
 
 Then the finished machines are sent to the Shipping A 
 Department, where they are ready for the customer. ^^^ ^^^^ 
 
 The above outline gives a good bird's-eye view of our 
 factory operation and makes the following description 
 of the system more easily understood. 
 
 What we accomplish with our cost system can be 
 summed up under eight general heads. We find out: 
 
 1 — The labor cost of each job. 
 
 2 — The labor cost of assembling the parts into machines. 
 
 3 — The labor cost of each workman. 
 
 4 — The labor cost of each operation. 
 
 5 — The cost of material for each job. 
 
 6 — The total amount of labor cost, burden and material to be 
 
 charged to the various manufacturing accounts. 
 7 — The total cost of the complete machine. 
 8 — The relative efficiency of day and piece workers on the same job. 
 
 Our system has been planned so that it not only gives 
 the cost of machines, but furnishes a means of keeping 
 every workman under close observation and recording 
 his work in such way that his value can be obtained upon 
 very short notice. 
 
 By studying the diagram in Figure 43, it will be seen 
 that a great number of time tickets pour into the cost 
 department every day. This is due to the fact that a 
 
 143 ^ 
 
^COST KEEPING SHORT CUTS 
 
 BOX NO. . SYMBOL LOT NO. 
 
 2672 600 A— 9 5 
 
 «.«.o..,„. Shaft supportln(5: 611 'a 
 
 
 
 1 
 
 QUANTITY 
 
 4020 
 
 DESCRIPTION OF MATERIAL Off PARTS USED. 
 
 507 Gtm Rod 
 
 DO 
 NOT 
 WRITE 
 IN 
 THIS 
 SPACe- 
 
 HUklBCR PARTS WANTeO 
 
 5000 
 
 NUMBER PER BOX 
 
 200 
 
 ORDER ISSUED BY 
 
 J.C.H. 
 
 DATE DUE 
 
 4-15-.' 10 
 
 NUMBER OF BOXES 
 
 25 
 
 
 """' 
 
 opertATiONS 
 
 Piece 
 marm 
 
 o»rc 
 
 OUAMIITV PAKTS 
 
 otLivmneo 
 
 
 number 
 
 f man s 
 K 
 
 SENT AHEAO [ 
 
 AN<r 
 
 OATC 
 
 Bo. So. 
 
 4 
 
 32 
 
 
 
 
 
 
 
 
 
 
 15 
 
 15 
 
 
 
 
 
 
 
 
 
 
 4 
 
 36 
 
 
 
 
 
 
 
 
 
 
 15 
 
 15 
 
 
 
 
 
 
 
 
 
 
 
 106 
 
 
 
 
 
 
 
 
 
 
 3 
 
 381 
 
 
 
 
 
 
 
 
 
 
 2 
 
 35 roueh 
 
 
 
 
 
 
 
 
 
 
 2 
 
 35 size 
 
 
 
 
 
 
 
 
 
 
 
 and oil 
 
 
 
 
 
 
 
 
 
 
 15 
 
 100 
 
 
 
 
 
 
 
 
 
 
 3 
 
 380 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 , 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 •..•.». i33<i7i Burroughs Adding Machine Co. Factory Form 372 1 
 
 Pig. 44 
 A Box Card accompanies the material through the various factory operations 
 
 144 
 
COST KEEPING SHORT CUTS 
 
 separate ticket is made out for each operation. The A 
 adding machine makes it possible to recapitulate these gystem 
 with a minimum expenditure of time and labor. 
 
 It would be useless to attempt a minute description of How it 
 a cost system in the few pages at our disposal, so in ^^^^ ^^ 
 outlining the Burroughs System, only its principal 
 features will be discussed. 
 
 ^In our business the product in process of manufac- 
 ture can be handled most conveniently in metal boxes. 
 Each batch of raw material or work in process is carried 
 from department to department in galvanized iron boxes. 
 Each box is numbered in plain white figures. 
 
 When a job is started, a box card (Figure 44) i& made 
 out in duplicate in the Superintendent's office, the original 
 going with the box of material to the Department that 
 is to first work upon it, and thence on through the different 
 operations in other departments until it is finished. It 
 is then turned over to the cost keeper as a notification 
 that the job has been completed. The duplicate copy 
 remains in the Superintendent's office as a tracer. 
 
 On each box card is recorded the box number, number 
 of boxes required for the batch of material, symbol or 
 part number, quantity of material used, number of parts 
 wanted, number of parts to the box, date due, etc. In the 
 left hand column of the card are recorded the various 
 operations through which the part is to pass and the 
 numbers of the departments that will perform these opera- 
 tions. Figure 44 is a reduced facsimile of a box card made 
 out for a certain shaft in the machine. 
 
 As soon as the foreman receives the box card and the 
 material, he goes ahead with the operation, completes 
 it and fills in the blank spaces opposite his department 
 number, indicating the number of parts he makes, 
 number spoiled, date the job is passed on, etc. 
 
 Then he sends a notification ticket in duplicate to 
 the Superintendent's office. The number of parts that 
 
 146 
 
COST KEEPING SHORT CUTS 
 
 •-bVx' 176"^ '•"-••' ORDER FOR STOCK 
 2672 ^'''^^o A..9 
 
 LOT NO. 
 
 5 
 
 DATE OF ORDER g«p7»'*10 
 
 ^aAMP OF PARxShaft supporting 611 '8 
 
 STOREKEEPER ;- . 
 
 PLEASE DELIVER T04^^^E 
 THE FOLLOWING MATERIAL. 
 
 
 .DEPARTMENT 
 
 QUANTITY 
 
 OESCRI(»TION OF MATERIAL OR PARTS USED 
 
 
 4020 
 
 507 Gun Rod 
 
 
 NUMBER PARTS WANTED 
 
 5000 
 
 NUMBER PER BOX 
 
 200 
 
 STOCK ORDER 
 
 J.C.H. 
 
 PER 
 
 DEPARTMENT 
 
 DATE DUE 
 
 4-15- '10 
 
 NUMBER OF BOXES 
 
 25 
 
 DELIVERED BY. 
 
 Fig. 45 
 Stock Order Card, made at same time with box card 
 
 £672 
 
 COST RECORD 
 ^^^«^ A-.9 
 
 LOT NO. 
 
 5 
 
 DATE OF ORDER- 
 
 2»7-'10 
 
 NAME OF PAR 
 
 STARTED IN 
 
 T Shaft supporting 61 1 ' s 
 
 4 
 
 .DEPARTMENT 
 
 DESCRIPTION OF (MATERIAL OR PARTS UStD 
 
 4020 
 
 507 Oon Rod 
 
 4BER PARTS WANTED 
 
 5000 
 
 NUMBER PER BOX 
 
 200 
 
 JMBER PARTS TRANS r D 
 
 J.C.H, 
 
 NO PARTS FINISHED 
 
 DATE DUE 
 
 4-15- * 10 
 
 MUMBER OF BOXES 
 
 JUMBER PARTS DESTROYED 
 
 DAT« REC O FIN. STOC^ 
 
 25 
 
 Fig. 46 
 Cost Record Card, made in skeleton at same time with box card 
 
 146 
 
COST KEEPING SHORT CUTS 
 
 have been made, the number rejected, the workman's A 
 number, etc., are taken from this ticket and entered on gygtem 
 the Superintendent's tracer, which is the dupUcate of the 
 box card. 
 
 The Superintendent's clerk then refers the dupUcate 
 ticket to the foreman of the next department, informing 
 him that he is the next man to handle the material. 
 
 When the foreman of this department is ready to 
 handle the material, he sends the truckman,with the ticket, 
 to the first department which delivers the material to 
 him. 
 
 As soon as Department 2 completes its operation, 
 another notification ticket is made out and the material 
 is passed on to the next department. 
 
 By this system the Superintendent's office is notified 
 of the completion of each operation, and knows at all 
 times where each partly finished job is located in the 
 factory and how near it is to completion. 
 
 In addition to the box card and tracer there is a third 
 copy, made out at the same time. It contains only the 
 information that is on the upper half of the card and serves" 
 as an order to the Raw Stockkeeper. This stock order 
 is shown in Figure 45 and gives the stockkeeper authority 
 to issue stock as it is requisitioned by the foreman of the 
 department that is to perform the first operation upon it. 
 
 It is, of course, necessary for the foreman to send in a 
 separate, requisition for each lot of material that he uses. 
 
 For instance, the stock order may call for 150 pounds of 
 a certain kind of stock and the foreman may send in requisi- 
 tions for only 25 pounds at a time, according to the amount 
 that he finds convenient to handle at one operation. 
 
 On the reverse side of this card are columns for date, 
 description, quantity, price and amount. In these 
 columns are recorded the amounts of raw stock issued 
 on each requisition of the foreman. 
 
 147 
 
COST KEEPING SHORT CUTS 
 
 A When the last amount has been withdrawn, the total 
 System ^^ ^^^ items on the reverse side should equal the amount 
 on the face of the stock order. 
 
 If it happens that the Superintendent's clerk over- 
 estimates the amount of stock necessary to make the 
 parts, a credit ticket is made out and the over amount is 
 deducted from the amount indicated on the face of the 
 order. This over amount is then credited back to the 
 stock record card. If the original quantity is insufficient, 
 smother requisition is made and the extra amount is added 
 to the original amount indicated on the stock order and 
 debited on the stock record card. 
 
 There is also a fourth copy which contains the same 
 information as the stock order and serves as a Cost 
 Record Card, Figure 46. This card is sent to the Cost 
 Department, where it is filed in a cabinet; it notifies the 
 cost keeper that a new job has been started in the factory. 
 All the time tickets referring to this job are filed behind 
 the cost record card, as are also the requisitions for the 
 material that goes into the job. Upon the completion of 
 the job, the time tickets and requisitions are sorted by 
 departments and recapitulated with the adding machine, 
 thus securing the labor and material costs. The burden 
 for each department is then figured and posted in its 
 column on the back of the card. Then by combining the 
 labor, material and burden totals the cost to manufacture 
 that particular part is secured. 
 
 Figure 46 shows a cost record card and Figure 47 
 shows the reverse side where the total labor, burden and 
 material costs are recorded. 
 
 The four forms, namely. Box Card, Tracer, Stock 
 Order and Cost Card are used both for the manufacture of 
 parts and also for the assembling of parts into what we 
 call dash symbols, which are machine sections composed 
 of two or more parts joined together. 
 
 148 
 
C O ST KEEPING SHORT CUTS 
 
 When a certain style of Burroughs Adding Machine A 
 is to be erected, a factory order is made out in triplicate, System 
 giving specifications for that particular style of machine. 
 One of the copies goes to the Cost Department, where it 
 is placed on file, and notifies the cost keeper that a certain 
 style of machine is to be erected. 
 
 Then as the time tickets, Figure 48, of the men at the 
 erecting benches come in they are filed behind the factory 
 order, together with the requisitions for parts and sections 
 that go into the machine. 
 
 As soon as the machines are completed the cost keeper 
 is notified. Upon receiving the notification he adds up 
 the labor tickets and the material requisitions and figures 
 the burden. Then on the back of his copy of the factory 
 order he records the labor cost, material cost and burden 
 in total and by the various departments that have 
 worked on the erection of the machines. 
 
 Figures 49 and 50 show the face and reverse of our 
 factory order. 
 
 The data is then transferred to a permanent card 
 record on which is recorded the cost per machine for that 
 particular style and is used for comparative purposes 
 when other machines of the same style are erected. 
 This is a very valuable record, not only because it gives 
 the cost to manufacture the machine (which is the first 
 object of the cost system), but because the cost to make 
 machines of the same style can be compared from time to 
 time, giving a check and enabling an average cost to be 
 struck, from which no very great variation should occur. 
 
 The greatest factor in making it possible to secure 
 proper data is the use of the individual time ticket for 
 every job. While these pour into the Cost Department in 
 large numbers they are quickly disposed of by using the 
 adding machine, which recapitulates them by departments, 
 by jobs, etc., in the shortest possible time. 
 
 149 
 
COST KEEPING SHORT CUTS 
 
 
 
 
 LABOR & 
 
 BURDEN COST 
 
 SYMBOL a LOT NO 
 
 
 
 DATE 
 
 OEJ'T 
 
 HOURS 
 
 LABCiR 
 
 BURDEN 
 
 SUMMARY 1 
 
 
 
 
 
 
 
 DETAILS 
 
 ITEM 
 
 TOTAL 
 
 
 
 
 
 
 
 
 LABOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 BURDEN 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LESS ITEMS TRANSFO 
 F O. 
 
 
 
 
 
 
 
 
 
 
 
 F. O. 
 
 
 
 
 
 
 
 
 
 
 
 
 F. O 
 
 
 
 
 
 
 
 
 
 
 
 
 F. O. 
 
 
 
 
 
 
 
 
 
 
 
 
 F, O. . 
 
 
 
 
 
 
 
 
 
 
 
 
 MATERIAL 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 UNIT COST 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 Fig. 47 
 Reverse side of Cost Record Card, showing spaces for detailed items of cost 
 
 TIME TICKET 
 
 
 Department No rJf... 
 
 WORKMAN'S Name ^^ 
 
 
 
 Date 
 
 WORKMAN'S No. 
 
 ^^. ()tL^^<Le^ 
 
 vl///// 
 
 /S7r 
 
 Order No. 
 
 Symbol 
 
 Box No. ' 
 
 No. Pieces 
 
 Account No. 
 
 ^ 
 
 CZ/^ 
 
 7^^/ 
 
 7S^o 
 
 ^/ 
 
 Operation 
 
 Time 
 
 Rate 
 
 Amount 
 
 MOURLY 
 
 HUHO.„ 
 
 '^ / 
 
 <r- 
 
 Remarks 
 
 Time STARTED 
 
 
 Time Finished 
 
 c>:3o 
 
 FOREMAN'S 0. K. 
 
 / ;o.. 
 
 .^^o» .,„.. 
 
 %a^ 
 
 BURROUOHS AOOIMO. MACHMI CO. FACTORV rORH HO. ■» 
 
 Fig. 48 
 Each workman turns in a time ticket on completion of each job or operation 
 
 150 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 a 
 
 
 1 1 1 : 1 . j 1 i ; i 1 1 i 
 
 
 U 
 
 
 
 
 ■. 
 
 
 
 
 ■. 
 
 
 
 
 X 
 
 
 : j i ; j : 1 j : . i i : 
 
 
 
 « 
 
 
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 8 
 
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 M 1 M 
 
 
 
 z 
 
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 ■ ■ i i 
 
 
 
 kl 
 
 
 
 
 
 
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 z 
 
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 6 
 
 
 
 
 
 
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 c« 
 
 
 
 
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 I'll 
 
 
 JZ U 
 
 M s s 
 
 
 O Q ' 
 
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 Ma 
 
 ORI 
 
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 i 1 i tot 
 
 
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 M M 5 
 
 
 tA 
 
 
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 ' 
 
 4= P 
 
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 bjD i 
 
 
 
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 ^ (t 
 
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 C X H 
 
 
 
 
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 ouosau 1S03 
 
 6 
 
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 161 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 
 O 
 
 s 
 
 D 
 -I 
 < 
 
 E 
 ill 
 
 < 
 
 < 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 z 
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 S 
 
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 5 
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 I 
 
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 1 
 
 < 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 z 
 111 
 
 z 
 
 X 
 
 :5 
 
 1 
 
 IS 
 
 < 
 
 Q 
 
 
 
 
 
 
 
 
 
 
 
 V) 
 
 !;; 
 8 
 
 z 
 
 hi 
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 m 
 « 
 
 s 
 
 3 
 
 Z 
 u 
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 n: 
 
 2 
 
 
 
 
 
 
 
 
 
 
 * 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 cc 
 
 s 
 2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (T 
 
 3 
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 a 
 
 
 
 I 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 m 
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 3 
 
 
 I 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 c 
 
 2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 bJ 
 
 1- 
 
 O 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 u,0 
 
 o 
 +-> 
 
 
 PQ 
 
 « 
 
 152 
 
COST KEEPING SHORT CUTS 
 
 In our factory a separate time ticket is made out for A 
 each operation, one man turning in from one to a dozen System 
 tickets a day, according to the nature of his work. 
 
 The foreman's clerk makes out a ticket for each work- 
 man when he begins a job and checks the time on the 
 tickets at the completion of the job. The various jobs, 
 operations, departments, etc., are identified by numbers 
 on the time ticket. 
 
 We use two different kinds of time tickets, one for 
 day workers and one for piece workers. The day workers* 
 ticket is shown in Figure 48. The piece workers* 
 ticket is similar, but is yellow instead of white and is 
 made out in duplicate, the original having a carbonized 
 back to save using carbon paper. These tickets are 
 arranged in pads, every other one being carbonized, with 
 a duplicate between each so that no extra time is re- 
 quired in filling them out. The reason for using duplicate 
 tickets for piece workers is that it facihtates the checking 
 of the pay roll. The single ticket serves for day workers 
 as will be shown in the description of checking the pay 
 roll which follows : 
 
 Every morning the time tickets for the previous day 
 are sent to the time keeper, who sorts them by depart- 
 ments and then by workmen. The first thing done is 
 the checking of the extensions on the piece workers* 
 tickets. The day workers' tickets are checked by another 
 process which is described in detail later on. 
 
 After the piece work ticket extensions have been 
 checked, both they and the day work tickets are added 
 and listed at separate operations on the Duplex Machine, 
 which secures the day*s total of hours worked and amount 
 earned by each workman and at the same time automat- 
 ically recapitulates these totals, giving the total hours 
 and amounts for all the day workers and all the piece 
 workers in the department. 
 
 153 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 A Since there are 9^ working hours in a day, the total 
 System ^^"^^ ^^ esich workman, as shown on the adding machine 
 slip, should be 9^ hours. In case it is not 9^ hours the 
 time keeper knows that either the ticket was made out 
 wrong or that the workman did not put in the whole day. 
 Any undertime is immediately checked by comparing it 
 with the workman's clock card, on which is registered his 
 time of entry into the factory. 
 
 OAll.Y PROOF RF.PORT TIfpt No // n^rr / - 2.S~- '/O 
 
 ACCOUNT 
 NUMBEK 
 
 HOURS 
 
 AMOUNT 
 
 
 HOLRS 
 
 
 ^ 
 
 29 
 
 'U 
 
 4 
 
 7.0 
 
 PRiCEDINC DAYS ALLOTMENT 
 
 fQ32. 
 
 '/4 
 
 3o3 
 
 »? 
 
 lo 
 
 32 
 
 'U 
 
 9 
 
 34 
 
 *DD KEW RMPLOYXS 
 
 9 
 
 % 
 
 / 
 
 9S 
 
 la 
 
 12 
 
 '/a. 
 
 S 
 
 23 
 
 CHANCES OF RATEf 
 
 
 
 
 
 IS 
 
 425. 
 
 'U 
 
 f2S 
 
 Ol 
 
 TXJTAL 
 
 lO^Z 
 
 
 3oS 
 
 o^ 
 
 /6 
 
 Joo 
 
 '/z 
 
 9Z 
 
 OS 
 
 DEDUCT: EMPLOYES QUIT 
 
 f9 
 
 h 
 
 4 
 
 oo 
 
 17 
 
 /97 
 
 '4 
 
 S3 
 
 92 
 
 
 
 
 
 
 ^3 
 
 29 
 
 /v 
 
 // 
 
 7o 
 
 PRESENT ALLOTMENT 
 
 lOZZ 
 
 'h 
 
 3o/ 
 
 Oi^ 
 
 
 
 
 
 
 ADD OVERTIME AND ALLOWA^^ES 
 
 10 
 
 '/z 
 
 2 
 
 36 
 
 
 
 
 
 
 PIECE WORK 
 
 
 
 
 
 
 
 
 
 
 TOTAL 
 
 /03:^ 
 
 
 3o3 
 
 4o 
 
 
 
 
 
 
 DtDKI LATEs'i ABSEHTFES 
 
 6 
 
 'k 
 
 / 
 
 9S 
 
 
 
 
 
 
 
 
 
 
 
 TOTAUS 
 
 /OZ6 
 
 Vz. 
 
 3o/ 
 
 ^S 
 
 PAY ROLL 
 
 /026 
 
 /2 
 
 3o/ 
 
 V^ 
 
 it7Si>t.l.'HjlH.aill'.i>^ : 1 
 
 Fig. 51 
 Daily Proof Report. 
 
 This, however, does not show why the workman did 
 not work all day and for this purpose we use a "Daily 
 Proof Report" and a Time Keeper's Daily Report, as 
 shown in Figures 51 and 52. 
 
 It is obvious that if all the day workers in a depart- 
 ment, whose daily earnings for full time are known to 
 the cent, are present, that the total amount of time they 
 will put in and the amount of money they will earn can be 
 known. These items of time and earnings, based on the 
 assumption that all the men work the full day, are shown 
 in Figure 51, opposite "Preceding Day's Allotment." 
 
 154 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 TIME-KEEPER'S DAILY- REPORT. ^ 
 
 Department No /.? Date L..Z. ^..Z.. .f? 
 
 LIST AND CLASSIFY UNDER PROPER HEADING ABSENT, LATE, PASS 
 OUT QUIT, STARTED, OVERTIME & ALLOWANCE. AND CHANGES OF RATE. 
 
 NO. 
 
 NAME 
 
 HR'S 
 
 AM'T 
 
 NO. 
 
 NAME 
 
 HR'S 
 
 AMT 
 
 
 ^T^iljLA^i 
 
 ^ 
 
 ^ 
 
 ^ 
 
 f 
 
 XZiZ^^X 
 
 
 
 
 /a 
 
 (^}a^KJL<^ 
 
 f^ 
 
 ^/ 
 
 ^ 
 
 / 
 
 
 
 
 
 
 r^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 co-^^^<^ 
 
 % 
 
 <^ 
 
 </ 
 
 <^ 
 
 
 
 
 
 
 (f(, 
 
 i9^r<^ 
 
 fl 
 
 z 
 
 <:><? 
 
 
 
 
 
 
 iH 
 
 ^..uuJttjJ 
 
 n 
 
 2 
 
 <7^> 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (OyfJ.^^ 
 
 fe 
 
 /p 
 
 ^ 
 
 ^/^ 
 
 -^dLu/ttur 
 
 ^ 
 
 
 
 /i^i 
 
 
 of 
 
 / 
 
 ao 
 
 
 
 
 
 
 m 
 
 ^/h&^eju4^ 
 
 e) 
 
 
 9o 
 
 
 
 
 
 
 lio 
 
 UTLeer 
 
 Z 
 
 
 fk 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .^^^ 
 
 ^^ 
 
 /r 
 
 
 
 
 
 
 
 ILI 
 
 LAJle^L^y^ 
 
 (>'A 
 
 / 
 
 t£ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TIME-KEEPER 
 
 FOREMAN 
 
 208835 Burrougha Adding Machine Co. Factory Form No. 377. 1 
 
 Fig. 52 
 Time Keeper's Daily Report 
 
 155 
 
COST KEEPING SHORT C UTS 
 
 A Now in case any of the day workers are late, or absent, 
 System ^^ ^"^^> ^^ ^^^ employes come in, these facts are noted on 
 the time keepers Daily Report for each department. 
 These reports are made out by the time keeper from the 
 clock cards and from "discharge" and "new employes" 
 slips, which are sent in each day by the foremen. They 
 are then O. K'd by the foremen of the various depart- 
 ments. See Figure 52. This report refers both to day 
 workers and piece workers and gives the reasons for any 
 undertime that may appear on the adding machine slip 
 previously described. Only the lates, absentees, quits, 
 etc., for day workers are transferred to the Daily Proof 
 Report. On the report in Figure 52 is shown a new 
 employe at $1.95 per day, who is added to the allotment. 
 Next come two employes who have quit, which takes 
 away 193^2 hours and $4.00 in earnings. The next item 
 shows 10 hours and $2.36 to be added for overtime and the 
 last item shows 6}^ hours and $1.95 to be deducted for 
 lates. Compare the items in Figures 51 and 52. After 
 making these additions and deductions, the remaining 
 10263^ hours and $301.45 is allotted for the current day 
 and should agree with the grand total for day workers on 
 the adding machine strip. 
 
 If the department is one having both day and piece 
 workers, the total hours and amounts for piece workers 
 are entered on the Proof Report in a space alloted for that 
 purpose and included in the current day's allotment of 
 hours and amounts. 
 
 This system not only checks the day workers' tickets, 
 but catches errors in filling out these tickets and prevents 
 any being lost. It also checks the pay roll for day 
 workers. 
 
 The piece workers* pay roll cannot be checked until 
 the end of each week, when the pay roll is made up. The 
 time put in by piece workers, however, is checked against 
 
 156 
 
COST KEEPING SHORT CUTS 
 
 BURROUGHS ADDING MACHINE CO. 
 
 DETROIT, MICH. 191- 
 
 TO THE TIMEKEEPER: 
 
 Mr PAY FOR THE WEEK ENOINQ. 
 SHOULD BE AS FOLLOWS:^ 
 
 DAY WOKfC 
 
 ?/// .....,s,/.. 
 
 PIECE WORK. 
 
 
 TOTAL. 
 
 M,3J2.. 
 
 *.«.« i^.. «.». .^<^^-!. ^^^^i^.. 
 
 B. A. M. Co. Korm 45! Mm-3 2»-IO 0. M. A T. Co H'*^ 
 
 Pig. 53. Employe's Claim Ticket 
 
 PIECE WORK RATE . 
 
 DATE CTul.lJSio svM.No. Q03y^D 
 
 / 
 
 REMARKS: 
 
 #/J" 
 
 
 
 1 
 
 DEPT. 
 NO. 
 
 OPER. 
 NO. 
 
 OPERATIONS 
 
 Date 
 
 PRICE 
 PER lOO 
 
 DXTE 
 
 PRICE 
 PER 100 
 
 / 
 
 /O/ 
 
 5Uc£^ 
 
 
 
 
 .08 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Fig. 54. Piece Work Card 
 167 
 
COST KEEPING SHORT CUTS 
 
 
 Burroughs 
 
 > Addi 
 
 >ek Endln 
 ime 
 
 ng Machine Co. 
 
 „ DEC 15 1910 
 
 No. 850 Nj 
 
 
 Rate ^2^ Hours C^^ 
 
 Amount 
 ) 
 
 // 
 
 Si 
 
 (piece work amounts shown in rc» 
 
 Additions 
 
 
 
 
 Total 
 
 
 
 Deductions 
 
 
 
 
 Net Amount Due 
 
 
 
 w* IN OUT 
 
 IN OUT 
 
 IN OUT ?oT.Is 
 
 FBI 
 
 6.27 
 
 I2;28T~" 
 
 
 
 
 SAT 
 
 6:30 
 
 IZJO! ^ 
 
 
 
 
 SUN 
 
 
 
 1 
 
 
 
 
 
 MON 
 
 6;Z5 
 
 
 12:25 
 
 
 
 
 
 TUES 
 
 6:30! 
 
 12:29! 
 
 
 
 
 WED 
 
 6:29 
 
 
 \l'\'^ 
 
 
 
 
 THUR 
 
 6:27 
 
 
 f2:20 
 
 
 
 
 Rece 
 
 irad PaymenL 
 
 
 B. A. M. 
 
 CO. FACTORY FORM NO. 892 Q- M. * T. CO. 
 
 
 Fig. 55 
 
 Clock Card 
 
 158 
 
COST KEEPING SHORT CUTS 
 
 the clock cards daily and any undertime or overtime is A 
 accounted for on the time keeper's Daily Report. System 
 
 After the checking has been completed, which by the 
 way is accomplished in very short time, the day workers' 
 tickets, the duplicates of the piece workers' tickets and the 
 Daily Proof Report are sent to the Cost Keeping Depart- 
 ment, where they are used in figuring the cost of the var- 
 ious jobs and in making the labor distribution to accounts. 
 
 The time keeper then files, by workmen's numbers, 
 the original copies of the piece workers' tickets in an 
 ordinary cabinet file behind guide cards, which bear the 
 numbers of the workmen. They remain here until the end 
 of the week when the pay roll is made up. Then they 
 are taken out and added on the machine, getting the 
 total time and earnings for each man. The total time 
 for each man is then checked against the time shown on 
 his clock card and the total earnings are checked against 
 his claim ticket, which is turned in previous to making up 
 the pay roll, and shows what he has calculated to be his 
 earnings for the week. See Figure 53. 
 
 In case there is a discrepancy of more than five cents 
 between the time keeper's total and the workman's 
 calculation, the time keeper refers the matter to the 
 foreman for adjustment. After the weekly totals for the 
 piece workers have been checked, the amount is entered 
 on the clock cards from which the pay roll is prepared. 
 The total earnings for day workers are entered on the day 
 workers' clock cards by extending the total number of 
 hours worked and the rate per hour. 
 
 There is a cabinet containing rate cards, similar to 
 that in Figure 54, on which is written the rate per hundred 
 or per piece for every part manufactured. These are 
 referred to from time to time for checking the rates entered 
 on the piece workers' tickets, it having been found un- 
 necessary to check all the tickets daily in this way. 
 
 U9 
 
COST KEEPING SHORT CUTS 
 
 A The Burroughs Pay Roll Sheets are tabulated on a 
 System Duplex Cost Machine, which has two complete sets of 
 adding wheels or counters, enabling the operator to record 
 the hours and amounts of earnings for both day workers 
 and piece workers and at the same time to accumulate the 
 total hours and amounts for day workers and piece 
 workers, together with a grand total for both. This is all 
 done at one operation, the work appearing as shown in the 
 columns on the left hand side of the pay roll sheet in 
 Figure 56. 
 
 In order that this work may be done in one operation, 
 the keyboard of the Duplex Cost Machine is split into 
 three sections, one of which records the rates of day 
 workers, another adds hours and fractions of hours and 
 the other the amounts earned. This is done by setting 
 up in the hour section the number of hours put in by a 
 workman and in the amount section the wages earned and 
 pulling the handle, both items printing and accumulating. 
 In case a rate is used it can also be printed at the same 
 time the hours and amounts are printed and added. 
 
 The two counters comprising the Duplex mechanism 
 are controlled by a little lever located at the left hand side 
 of the keyboard. By means of this equipment the 
 machine can add and list the hours and earnings of both 
 day and piece workers and secure the total hours and 
 earnings for both in one operation. When the machine 
 is to be used for ordinary adding and listing, the upper 
 counter is thrown into operation by shifting the Duplex 
 control lever into the upper position. When necessary 
 to use both upper and lower counters, as when the earn- 
 ings for day and piece workers are added and listed at one 
 operation, the upper counter items are entered with the 
 control lever in the upper position and the lower counter 
 items are entered with the control lever in the lower posi- 
 tion. The lower counter items are distinguished from the 
 former by the little dot and bar, shown in the illustration. 
 
 160 
 
COST KEEPING SHORT CUTS 
 
 Furthermore, it is possible to accumulate items in the A 
 upper counter and to print the total of these items and at gystem 
 the same time clear the upper counter for another addition 
 and transfer the total into the lower counter. This is 
 accomplished by setting the Duplex control lever in the 
 upper position and using the transfer total button instead 
 of the regular total button. When the machine is work- 
 ing this way the lower counter acts as a kind of reservoir 
 for the totals accumulated in the upper counter and thus 
 automatically recapitulates a grand total for any number 
 of totals that may be printed with the upper counter. 
 The grand total may be printed at any time by shifting 
 the Duplex control lever to the lower position and then 
 depressing the regular total button and pulling the handle. 
 The working of this machine as applied to pay rolls will 
 be more clearly understood by following the method 
 described in preparing the Burroughs Pay Roll. 
 
 The first thing the operator does is to clear both upper 
 and lower counters. This is done first by shifting the 
 Duplex control lever into the lower position, pressing the 
 total button and pulling the handle and then repeating 
 the operation with the control lever in the upper position. 
 This gives assurance that both counters are cleared for 
 action. 
 
 All piece workers' time and earnings are then added in 
 the upper counter and all day workers' rates, time and 
 earnings are added in the lower counter, the items being 
 taken directly from the clock cards. (Figure 55.) 
 
 Upon listing the last item, the control lever is shifted 
 to the lower position and a sub-total taken. This opera- 
 tion prints the total day workers' hours and earnings. 
 Then the control lever is moved to the upper position and 
 a transfer total is printed which prints the piece workers' 
 total hours and amounts. Since the printing of the sub- 
 total does not clear it from the lower counter and since the 
 total in the upper counter has been transferred to the 
 
 161 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 
 BURROUGHS ADDING MACHINE COMPANY 
 
 
 
 
 SHEET NO. 1 » 
 
 
 
 o 
 
 OEPT 
 
 8 » PAY ROLL FOR WEEK ENDING 
 
 I ,19 
 
 . 19.11* 
 
 Pltct «>.> 
 
 DAV »ORk 
 
 A0OITlO^i. 
 
 DtrxCTioss 
 
 ««V«KS 
 
 LMCLOIti' 
 
 ""'dcT' 
 
 lU. 
 
 H— 
 
 A— 
 
 H.^ 
 
 A— 
 
 »-. 
 
 A*.- 
 
 
 
 ! 
 
 
 
 
 : 
 
 
 
 i 
 
 
 
 5 4 
 
 18.5 8 
 
 
 
 
 
 
 900 
 
 1 8.5 8 
 
 32 
 
 
 2 4.00 : 
 
 
 
 
 
 
 80 1 
 
 24J30 
 
 
 22 
 
 53il 
 
 94 
 
 1 1.83: 
 1 5.7 
 
 
 
 
 
 
 802 
 803 
 
 I 1.83 
 1 5.7 
 
 
 3 4''i 
 
 1 1.9 3 
 
 
 
 y. 
 
 5 
 
 
 805 
 
 1 1.88 
 
 
 
 4 9 '/. 
 
 17.5 8 
 
 
 
 
 
 
 ' 806 
 
 17.5 8 
 
 
 
 
 1 3.3 5 
 
 
 
 
 
 
 807 
 
 13.35 
 
 2 
 
 
 X 6.80 : 
 
 
 
 
 • 
 
 ■^ 
 
 608 
 
 1 0.8 
 
 
 22 
 
 
 1X15 : 
 
 1-9.0 8 
 
 
 
 
 
 
 809 
 
 810 
 
 1.05 
 19.0 8 
 
 
 
 I 7.87 
 
 
 
 k 
 
 15 
 
 
 8 1 1 
 
 I 7.7 2 
 
 
 
 4 8 i 
 
 1 5.7 8 
 
 
 
 
 
 
 812 
 
 1 5.7 8 
 
 
 
 5 Jk 
 
 1 8.3 7 
 
 
 
 
 
 
 813 
 
 18.37 
 
 2* 
 
 
 1 2.9 6 : 
 
 
 
 
 
 
 814 
 
 1 2.96 
 
 
 26 
 
 34 
 
 14,04 : 
 
 17.2 1 
 
 
 
 
 
 
 815 
 8 16 
 
 I 4.0 4 
 17.21 
 
 
 4 4 ■/. 
 
 15.6 2 
 
 
 
 
 
 
 817 
 
 1 5.8 2 
 
 
 
 
 13.54 
 
 
 
 
 
 
 813 
 
 I 3.5 4 
 
 
 24 
 
 
 I 2.9.6 : 
 
 
 
 
 
 
 819 
 
 18.9 6 
 
 
 
 19J7 
 
 
 
 
 
 
 820 
 
 I 9,37 
 
 
 
 
 1 8.69 
 
 
 
 
 
 
 821 
 
 1*8.69 
 
 
 
 
 I 7.19 
 
 
 
 
 
 
 822 
 
 17J9. 
 
 28 
 
 
 I 5.3 Z: 
 
 
 
 
 
 
 823 
 
 15J2 
 
 
 40 
 
 
 2 1.60 : 
 l"8.7 5 
 
 
 
 
 
 
 324 
 
 825 
 
 2 1.60 
 18.7 5 
 
 
 
 1 6.6 9 
 
 
 
 
 
 
 826 
 
 1 6.8 9 
 
 
 33 
 
 
 17.8 2 = 
 1 5.2 1 
 
 
 
 
 
 
 828 
 
 17.8 2 
 1 5il 
 
 30 
 
 
 16.ZC: 
 
 
 
 
 
 
 829 
 
 1 6.2 
 
 
 24 
 
 
 1 2.9€ : 
 
 
 
 
 
 
 830 
 
 1 2.9 S 
 
 
 29 
 
 
 1 5.6 6 : 
 
 
 
 
 
 
 831 
 
 1 5.66 
 
 
 
 16.9 3 
 
 
 
 
 
 
 832 
 
 16.9 8 
 
 
 
 
 1 7 .3 6 
 
 
 
 
 
 
 833 
 
 1736 
 
 
 6 7 3'<, 
 
 1 8 7.0.0 5 
 
 
 
 1 
 
 20: 
 
 
 
 5 2 2J0S5 
 
 o 
 
 
 10 9'* 
 
 3 J 5.2 5 T 
 
 
 
 
 
 
 
 
 
 168 3 
 
 5 2 2.2 5 • 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Fig. 56 
 
 162 
 
COST KEEPING SHORT CTJTS 
 
 lower counter, it is obvious that the lower counter now A 
 contains an amount equal to the sum of both. By shift- gygteu, 
 ing the control lever into the lower position again and 
 taking a total in the usual way the grand totals of day and 
 piece workers' "1683" hours and "522.25'* are printed. 
 
 The cards are then turned through again and the 
 workmen's numbers and net amounts entered at one 
 operation, only the amounts totaling. This work is done 
 on the upper counter, the operation being identical with 
 that of a regular machine. - Next the additions and 
 deductions are added and listed and the sheet is proved by 
 checking the grand total of earnings plus additions against 
 the total net amounts, plus the deductions. 
 
 After the items have been run on the pay roll sheet, 
 the clock cards are re-distributed to the card racks where 
 each workman secures his card and signs it. He then 
 presents his card as a receipt at the pay master's window 
 and receives his pay. The cards are afterwards filed and 
 kept for a limited time and the pay roll sheets are placed 
 in a loose leaf binder, serving as a record of the amount of 
 money paid to the employes in the different departments. • 
 
 No names are recorded on the pay roll sheet. This 
 has been found unnecessary, because the clock card is the 
 original source of entry and also serves as a receipt from 
 the workman. In case any dispute should arise the clock 
 card is consulted rather than the pay roll sheet. 
 
 By doing away ^with writing the names we have 
 greatly simplified our pay roll and made it possible to 
 prepare it in much less time. The eflSciency of the system 
 can be judged by the fact that it takes care of some 1400 
 men weekly and has been in successful operation for more 
 than a year. 
 
 We also prepare a pay roll summary each week, 
 showing only the total amount of money paid out for 
 labor in the different departments. This summary is 
 made up with the adding machine as shown in Figure 57. 
 
COST KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 SUMMARY OF PAY ROLL 
 
 
 o 
 
 
 
 FOR WEEK ENDING 12-11, 1909 
 
 OEPT SHEET 
 
 DAY WORK 
 
 PIICC WOBK 
 
 TOT.. 
 
 DEDUCTIONS 
 
 .NET AMOUNT DUE 
 
 
 
 «• 
 
 * 
 
 <f 
 
 *■ 
 
 * 
 
 
 1 
 
 
 72130 
 
 225.45 
 
 946S5 
 
 650 
 
 940^5 
 
 
 2 
 
 
 6 4 5.6 
 
 
 6 4 5.6 
 
 
 6 4 5.6 
 
 
 3 
 
 
 83 3j05 
 
 
 83305 
 
 
 8 3 30 5 
 
 
 4 
 
 
 57550 
 
 42450 
 
 LCOOOO 
 
 2 5O0 
 
 9 7 500 
 
 
 5 
 
 
 2 8.0 3 
 
 447.96 
 
 6 5 601 
 
 33 6 
 
 6 5 2.6 5 
 
 
 6 
 
 
 1,20000 
 
 
 1,20000 
 
 
 1.200O0 
 
 
 7 
 
 
 6 3 3.4 5 
 
 
 6 3 3.4 5 
 
 
 6 3 3.4 5 
 
 
 e 
 
 
 
 73450 
 
 7 3450 
 
 
 73450 
 
 
 9 
 
 
 1,52305 
 
 
 1.5 2 30 5 
 
 50 5 
 
 1,5 180 
 
 
 JIO 
 
 
 35550 
 
 
 35550 
 
 
 35550 
 
 
 .11 
 
 
 6 4 4.6 6 
 
 
 6 4 4.6 6 
 
 
 644j56 
 
 
 .12 
 
 
 4 6 7.7 
 
 
 4 6 7.7 
 
 2O0 
 
 4 6 5.7 
 
 
 .13 
 
 
 
 5 2 350 
 
 52350 
 
 
 52350 
 
 
 .14 
 
 
 3 5 6.7 
 
 1 6455 
 
 521.25 
 
 
 5 2 1 .2 5 
 
 
 i5 
 
 
 
 1,52350 
 
 1,52350 
 
 350 
 
 1.520O0 
 
 
 J.6 
 
 
 2^10455 
 
 
 ?, 1 4 5 5 
 
 
 2,10455 
 
 
 J.7 
 
 
 2 3 5.6 6 
 
 
 2 3 5.6 6 
 
 
 2 3 5.6 6 
 
 
 .16 
 
 
 34456 
 
 
 34456 
 
 7O0 
 
 33756 
 
 
 i9 
 
 
 
 42555 
 
 42555 
 
 
 42555 
 
 
 .2 
 
 
 1 4 6.7 6 
 
 22555 
 
 3 7 2.C 1 
 
 
 3 7 20 1 
 
 
 .21 
 
 
 253^5 
 
 8 4.6 5 
 
 3 3 6.10 
 
 5O0 
 
 3 3 3.10 
 
 
 22 
 
 
 16455 
 
 97>i4 
 
 2 6 1 .9 9 
 
 
 2 6 1.9 9 
 
 
 .2 3 
 
 
 6455 
 
 
 6455 
 
 
 6455 
 
 
 .2 4 
 
 
 
 52 350 
 
 52350 
 
 
 52350 
 
 
 .25 
 
 
 1 5 5.6 6 
 
 7 3 650 
 
 8 9 2.16 
 
 1.15 
 
 6 9 1 1 
 
 
 .2 6 
 
 
 
 1 66.45 
 
 1 6 6.4 5 
 
 5O0 
 
 1 6 1 .4 5 
 
 
 .2 7 
 
 
 22350 
 
 89455 
 
 1.1 1 60 5 
 
 
 1.1 1,60 5 
 
 
 .2 8 
 
 
 1 6 3.4 5 
 
 L32555 
 
 l,4g9O0 
 
 
 1.4 8 9O0 
 
 
 .3 9 
 
 
 8 8.45 
 
 
 8^.4 5 
 
 lOO 
 
 8 7.45 
 
 
 30 
 
 
 
 1,2 0.0 
 
 1,2 coo 
 
 
 1,20000 
 
 o 
 
 31 
 
 
 
 1,52500 
 
 3.525O0 
 
 3.6 2 
 
 1.521.38 
 
 3 2 
 
 
 15 3>i5 
 
 500O0 
 
 65ZA5 
 
 
 653.45 
 
 
 
 
 1^26335* 
 
 11,746.40* 
 
 24,01 1.75* 
 
 6B.18« 
 
 23^94357* 
 
 Fig. 57 , 
 
 Summary of Pay Roll made on a Burroughs Adding Machine 
 
 1Q4 
 
COST KEEPING SHORT CUTS 
 
 The first thing done upon receipt of the workmen's A 
 time tickets in the Cost Department is to sort them by gystem 
 departments and accounts and get the total number of 
 hours and the amounts for each account in each depart- 
 ment by adding the tickets on the adding machine. 
 
 These totals are posted in the columns on the left hand 
 side of the proof reports for the various departments and 
 the grand total of the totals for the various amounts on 
 each card must agree with the current day's allotment, as 
 shown by the total hours and amounts which have been 
 entered by the time keeper on the right hand side of the 
 ca^d. In this way the daily distribution of labor, by 
 accounts and departments, is secured and checked. See 
 Figure 58. 
 
 In case the proof report is for a department in which 
 both day and piece workers are employed, the total 
 hours and amounts for the piece workers are entered in 
 spaces allotted for that purpose by the time keeper, so 
 that in the distribution of the day and piece workers' 
 tickets by various accounts the grand total will check 
 against the grand total that appears at the lower right . 
 hand side of the proof report. 
 
 After this operation is completed, the time tickets are 
 filed in cabinet files behind their respective cost record 
 cards and continue to accumulate day by day until the 
 cost keeper receives notification, in the form of a box 
 card which follows the job through the factory, that the 
 job has been completed. The proof reports in the mean- 
 time are filed in a separate compartment, and the six 
 cards for each department, covering one week, are recapit- 
 ulated at the end of the week, in order to secure the 
 weekly labor distribution by departments and accounts. 
 Figure 58 shows proof reports for a week and Figure 59 
 shows a sheet on which these proof reports have been 
 summarized, giving the total hours and amounts for 
 department 5 and accounts 15, 10 and 22 for one week. 
 
 105 
 
COST KEEPING SHORT CUTS 
 
 DAILY PROOF REPORT. dept nc 
 
 ._ Date L 
 
 Z DAILY PROOF REPORT. oept no._b5::_ date 
 
 HOURS AMOUNT 
 
 A? /tei^ i2,£? 
 
 /^■y 
 
 PRCCeoING DAVS ALLOTMENT 
 
 HOURS AMOUNT 
 
 /^JZ 3il ^ 
 
 I 
 
 I 
 
 HOURS AMOUNT 
 
 /^ /OS i2^ ^ PREC ED ING DAYS AL L OTMENT /(jTjg __ 3^ ^7 
 
 HOURS AMOUNT 
 
 DAILY PROOF REPORT. 
 
 Dept No ft- 
 
 v^ 
 
 HOURS AMOUNT 
 
 /qT* /go ^ 23 1* PR EC EDING DAYS ALLOT MENT /^^i? ^ Jjg f^ 
 
 HOURS AMOUNT 
 
 DAILY PROOF REPORT. 
 
 ~jj-j^r~ — 
 
 /^\ ffm 22Y**\ PRECEDING DAYS ALLOTMENT | //jg^ | ^ | ^^Yf_ 
 
 -1-^ 
 
 DAILY PROOF REPORT. 
 
 1j ^-| f^l I— ^ 
 
 11 
 
 77 
 
 4^^ 
 
 PRECEDING DAYS ALLOTMENT 
 
 HOURS AMOUNT 
 
 l.£^^^2^fL 
 
 DAILY PROOF REPORT. 
 
 lA. 
 
 /CO 
 
 ^. 
 
 d^ 
 
 PRECEOINO DAYS ALLOTMENT 
 
 M2. 
 
 34^ 
 
 V 
 
 ^ 
 
 ^ 
 
 PLUS NEW EMPLOYEES 
 
 ^ 
 
 S-o 
 
 Jz.tk'A 
 
 MINU S EMPLOY E ES QUIT 
 
 PLUS OR MINUS CHANCES Of RATE 
 
 PR ESENT A LLOTMENT 
 
 JJLL 
 
 % 
 
 J^L 
 
 PLUS OVERTIME AND ALLOWANCE 
 
 MINUS. ABSENT AND LATC 
 
 /Lf\ % \ ^^ \ ^ 
 
 payroll] /^f\%\ J^l^y 
 
 Hurroufttn Adding Maililne fo. Fsclorj Form No. 137 
 
 Fig. 58 
 Daily Proof ReporLs for one week for Department 5 
 
COST 
 
 KEEPING 
 
 SHORT CUTS 
 
 
 WEEKLY SUMMARY OF LABOR DISTRIBUTION 
 
 
 
 FOR WEtK ENDING ll-T. 1909 
 
 MPT MD 
 
 DCTAILS [ 
 
 ACCOUNT TOTALS J OEPARTMINT TOTALS 
 
 NOS. 
 
 HOURS j 
 
 AMOUNT 
 
 HOURS 
 
 AMOUNT 
 
 HOURS 
 
 AMOUNT 
 
 5 
 
 
 <, 
 
 
 
 
 
 1 5 
 
 10 2'A 
 
 105 
 
 100 
 
 9 8^ 
 
 99 
 100 
 
 2358 
 241 5 
 ^300 
 2 2.6 
 2 2.7 7 
 2300 
 
 604% 
 
 139.10* 
 
 
 
 1 
 
 42 
 16 
 •J7'A 
 4 1 
 4 
 3714 
 
 9.2 4 
 7.9 2 
 8.2 5 
 9j02 
 8.8 
 8.2 
 
 23 3% 
 
 51^3» 
 
 
 
 2 -^ 
 
 37 
 2154 
 35 
 2 5 
 37 
 2 4 5% 
 
 5.9 4 
 4.7 9 
 55 
 550 
 5.9 4 
 5.3 9 
 
 
 
 
 
 
 
 
 15014 
 
 3306» 
 
 9 8 ay. 
 
 22359« 
 
 1 8 
 
 256 
 
 251J4 
 340 
 
 24 5 
 
 24 7V4 
 ,3 5 1 
 
 5 6.3 2 
 55.28 
 5 2.8 
 5 3.9 
 54.45 
 5 5.2 2 
 
 1 490H 
 
 3 2 7.9 7 • 
 
 
 
 1 4 
 
 7 1 
 
 72 
 7 5'A 
 70 
 70 
 71 
 
 2201 
 2 2.3 2 
 ^3.41 
 
 21.70 
 2 1.70 
 2201 
 
 4 2 914 
 
 133.15* 
 
 
 
 1 2 
 
 1 9'A 
 1914 
 1 9% 
 19'A 
 19'A 
 19'A 
 
 60 5 
 60 5 
 60 5 
 605 
 605 
 605 
 
 117 
 
 3,6.3 0» 
 
 
 
 1 
 
 3 11% 
 
 27 
 
 2 5% 
 
 29 
 
 30 
 
 30 
 
 75 6 
 6.4 8 
 6.18 
 6.9 6 
 7.2 
 7.2 
 
 17 3'/. 
 
 4 15 e* 
 
 
 
 1 7 
 
 4 314 
 4 4 
 4 5 
 39 
 
 3 9 ft 
 
 4 0. 
 
 9.9 5 
 1 0.1 2 
 10.3 5 
 8.9 7 
 909 
 92 
 
 
 
 
 
 
 
 
 250% 
 
 5 7.6 8* 
 
 246114 
 
 5 9 6.6 8* 
 
 Fig. 59 
 
 Miniature reproduction of a Weekly Summary of Labor Distribution 
 
 prepared entirely with the Burroughs Adding Machine. The 
 
 hours find amounts are added and listed simultaneoulsy. 
 
 167 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 MONTHLY SUMMARY OF LABOR DISTRIBUTION 
 
 
 
 
 
 FOR 4 WEEKS ENDING 11 
 
 -28. 1 909 
 
 •eCOUNT 
 
 DETAILS 1 
 
 BURDEN 
 
 ACCOUNT TOTALS ( 
 
 TOTAL 
 
 HOURS 
 
 AMOUNT 
 
 HOURS 
 
 
 1 5 
 5 
 
 6 4 y. 
 610 
 6 1 5 V4 
 6 3 1 
 
 13 9 10 
 1 4 6 .4 
 1 4 7 .6 6 
 1 5 1 .4 4 
 
 
 
 
 
 10 
 
 114 7 
 1 2 1 4 'A 
 132 1 
 1212 
 
 2 6 3 .8 1 
 
 2 7 9.3 4 
 
 3 3.8 3 
 278.76 
 
 5 6 3.2 1 
 
 2461 
 
 5 8 4.6 0* 
 
 
 22 
 
 3 7 5'A 
 410 
 3 9 8 'A 
 360 
 
 1 16.4 1 
 1 2 7.1 
 12 3.4 6 
 111.6 
 
 1,1 5.3 
 
 4 9 4 'A 
 
 1,12 5.7 4* 
 
 
 1 8 
 6 
 
 1 49054 
 14 5 6 
 1 4 3 2 Vt 
 1 488 
 
 3 2 7.9 7 
 
 3 3 0.3 2 
 3 15.1 5 
 3 2 7.3 6 
 
 367i8 
 2, 3 5 .6 9 
 
 154354 
 3 89914 
 
 47837* 
 2,138.91* 
 
 4,2 2 4.6 0* 
 
 7 
 
 2 3 4 1'/. 
 2260 
 2 19 854 
 2 50 
 
 7-1720 
 7 3 3 .2 
 7 3.6 
 800.0 
 
 1,075.20 
 
 5 3 6 7/4 
 
 1,290.80* 
 
 
 9 
 
 1110 
 1 1 1 3 14 
 1 1 2 5 '/4 
 114 2 . 
 
 2 4 4 .2 
 2 4 4 .9 7 
 24736 
 2 3 1 .2 4 
 
 2,7 3 1.10 
 
 920 
 
 a9 4 4.0 0* 
 
 
 1 3 
 
 3 654 
 32 1 
 3 4 5'A 
 315 
 
 9 8.08 
 1 2 .7 3 
 11056 
 10 0.8 
 
 9 3 2.3 4 
 
 4 490% 
 
 9 8 7.97* 
 
 
 1 6 
 
 3 6 1'A 
 550 
 571% 
 569 
 
 17 407 
 17 050 
 1 7 7.2 4 
 17 6.3 9 
 
 3 9 5.6 
 
 1288 
 
 4 12.16* 
 
 
 17 
 
 780 
 787 
 7 92 'A 
 760 
 
 2 4 1 .8 
 2 4 3.9 7 
 2 4 5.6 8 
 2 3 5.6 
 
 6 5 1.2 2 
 
 2 2 5 2/4 
 
 6 9 8.2 0* 
 
 
 2 
 
 2 2 1 'A 
 2 23 1 
 2 2 5 1 '/4 
 3'2 6 
 
 4 8 4.3 3 
 4 9 0.8 2 
 4 9 5.2 8 
 4 9 7.2 
 
 92130 
 
 311914 
 
 967X35* 
 
 
 
 - 
 
 
 1,9 123 
 , 8;619JD6 
 
 •894 3% 
 3 5 1 6 1 V4 
 
 1,967^3* 
 9.267.81* 
 
 17.88 6.67* 
 
 Fig. 60 
 A Monthly Summary of Labor Distribution made with a Burroughs 
 Adding Machine. The hours and amounts are added 
 and Hsted simultaneously. 
 
 168 
 
COST KEEPING SHORT CUTS 
 
 The summary sheet also includes labor distribution A 
 for department 6 and accounts 18, 14, 12, 10 and 17, gystem 
 which is taken from similar proof reports for department 
 6. At the end of the month the four weekly labor 
 distribution summaries are recapitulated for the monthly 
 summary in such a way that the monthly totals of labor 
 distribution are shown for the various departments 
 falling under the different accounts. Thus in Figure 60 
 the upper part of the sheet shows the labor distribution 
 for account 15, which is the first item in the left hand 
 column and is divided to cover Departments 5, 10 and 22. 
 In this way we secure the total amounts of labor to be 
 posted to the various accounts in the factory ledger. 
 The posting is done once a month. 
 
 In addition to the labor distribution by accounts, we 
 keep a record of the distribution to sub-accounts, as 
 shown in Figure 61. In this case the account, No. .74-05, 
 refers to the repairs on tools and dies for the screw machine 
 department. 
 
 While the regular monthly distribution will show the 
 total labor and burden to be charged to account 74, it 
 does not analyze it sufficiently; hence the use of the sub- 
 account distribution cards. 
 
 The sub-accounts for repairs are closed monthly and 
 the time tickets, covering the labor for this purpose, are 
 sorted first by accounts and then by sub-accounts, then by 
 departments, and the total hours and total labor for 
 each department are secured with the adding machine and 
 posted on the card. Then from these cards the entries 
 can be made to the sub-accounts in the factory ledger. 
 
 When a job has been completed all the time tickets. 
 Figure 48, and material requisitions. Figure 62, referring to 
 that job and which have been filed behind the cost record 
 card, are first sorted by departments and then added and 
 listed on the adding machine, securing the total labor 
 cost for each department that has worked on the job. 
 
 169 
 
COST KEEPING SHORT CUTS 
 
 OPERATING EXPENSE SUB-ACCOUNTS no. 7^ OS 
 ....... ScAJLu^ "hLojJr.. cS^A^ !".?;„., (&/u,U^^ ^-0^*^ y (&.U^ 
 
 5^7/ 
 
 DEPT. 
 
 HOURS 
 
 LABOR 
 
 f 
 
 BURDEN 
 
 TOTAL 
 
 MATERIAL 
 
 MONTHLY 1 
 TOTAL 1 
 
 f/z6 
 
 / 
 
 z 
 
 
 •?? 
 
 
 3Z 
 
 
 
 
 
 
 
 
 z, 
 
 ..A. 
 
 13 
 
 .^^.... 
 
 / 
 
 24 
 
 oa 
 
 Iz 
 
 m 
 
 
 
 
 
 
 
 ^77 
 
 
 
 
 
 
 
 ft 
 
 4 
 
 9/ 
 S4 
 
 4 
 38 
 
 as 
 
 
 
 
 
 
 
 ,, 
 
 SI 
 
 /77 
 
 77 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ■ . *. M. CO.-l47»-»0O-*-I0-T 8. P.-COST-P. • ». 1 
 
 Fig. 61 
 Operating Expense Sub- Accounts Card 
 
 ORDER Ho fr.. 
 
 SYMBOL™ /.oh 
 
 SUPPLY REQUISITION. 
 
 .-,..,......DATE 7/ZSj/± 
 
 ._>CC'TNo. 
 
 // 
 
 QuAMTrrv 
 
 %ff 
 
 DES0R1PT10N 
 
 
 Value 
 
 ^^ 
 
 DELIVERED TO 
 
 , _JJ3_ 
 
 DELIVERED BY 
 
 J3l 
 
 :?^*^. 
 
 Burrouftts ><!()>•£ K^civn* CoJMrtorT ( 
 
 Fig. 62 
 Supply Requisition 
 
 170 
 
COST KEEPIXC; SHORT CUTS 
 
 COST RECORD lot no 
 
 DATE OF ORDER- 
 
 ^" ^-/O 
 
 NAME OF PART 
 
 STARTED IN_.--'Z— ^^ 
 
 .DEPARTMENT 
 
 :[-_; 
 
 DESCRIPTION OF MATERIAL OR PARTS UStD 
 
 
 JMBER PARTS WANTED 
 
 NUMBER PER BOX 
 
 »BER PARTS TRANS F D 
 
 MO. PARTS FINISHED 
 
 ^ 
 
 oo 
 
 //cT 
 
 G96 
 
 DATE DUE 
 
 NUMBER OF BOXES 
 
 y NUMBER PARTS DESTROYED I DATE REC'D FIN. STOCK 
 
 Fig. 63 
 
 SYMBOL a LOT NO. Z 
 
 LABOR & BURDEN COST /-aco/1:^7 
 
 )ATE 
 
 DEPT 
 
 HOURS 
 
 LABOR 
 
 BURDEN Ij SUMMARY 
 
 
 3 
 
 3S/4 
 
 i 
 
 // 
 
 jJ-\''^\ DETAILS 
 
 ITEM 
 
 TOTAL 
 
 7 
 
 / 
 
 91 
 
 / 
 
 
 LABOR 
 
 
 
 Zo 
 
 8o 
 
 -, 
 
 7 
 
 7 
 
 / 
 
 IS 
 
 / 
 
 
 
 
 
 
 
 27 
 
 ZS 
 
 s 
 
 *»s 
 
 ___4^^ 
 
 fO 
 
 BURDEN 
 
 
 
 // 
 
 /o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LESS ITEMS TRANSF D 
 F O 
 
 
 
 
 
 
 
 
 
 
 
 
 F. O 
 
 
 
 
 
 
 
 
 
 
 
 
 F O 
 
 
 
 
 
 
 
 
 
 
 
 
 F O 
 
 
 
 
 
 
 
 
 
 
 
 
 F O 
 
 
 
 
 
 
 
 
 
 
 
 
 MATERIAL 
 
 
 
 92 
 
 /? 
 
 
 
 
 
 
 
 
 ^ 
 
 rz^ 
 
 
 124 
 
 Of 
 
 i 
 1 
 
 
 
 i-J 
 
 
 
 UNIT COST • ' ' O 
 
 
 
 
 
 L_J 
 
 
 
 
 1 J 
 
 
 
 I^BO 
 
 
 _ 
 
 Fig. 64 
 171 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 A 
 
 Cost 
 System 
 
 These totals are then posted to the back of the cost 
 record card, Figure 63, as shown in Figure 64, which in 
 this instance is a cost record for a dash symbol. The 
 cost cards for straight and dash 
 symbols are blue and white, re- 
 spectively, in order that they may 
 be easily distinguished. 
 
 The object of securing the total 
 labor cost by departments is for the 
 purpose of extending the burden, 
 which varies according to the de- 
 partment. 
 
 After this burden has' been 
 extended, the total labor, material 
 and burden are entered on the 
 right hand side of the card and the 
 grand total shows the cost of the 
 job. Then by dividing this grand 
 total by the number of parts turned 
 out, the cost for the part is secured. 
 The number of parts and their 
 cost having been secured in this 
 manner, they are transferred to 
 the cost keeper's record of finished 
 stock, as shown in Figure 69. This 
 record is kept by the cost keeper, 
 in order that all finished parts 
 may be charged out at their cost. 
 The cost of parts often varies, 
 according to the conditions under 
 which they are manufactured, the 
 market price of raw material, etc. 
 The stockkeeper also keeps a 
 perpetual record of the finished 
 stock, but does not record the 
 Fig. 65 ^ost, his record having to do with 
 
 -:< 
 
 3.0 
 
 .8 
 
 6.0 
 
 2.0 
 
 4.0 
 
 2.0 
 
 3.0 
 
 5.0 
 
 3.0 
 
 1.0 
 
 2.0 
 
 2.0 
 
 3 3 .8 - 
 
 3 9.8 
 
 2.0 
 
 4.0 
 
 6.0 
 
 6.0 
 
 4.0 
 
 6 
 
 6.0 
 
 6.0 
 
 7 9 .8 s 
 
 9 9, 9 6 6 .2 
 
 . 4 6 .0 - 
 
 172 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 quantity only, as shown in Figures 67 and 68. The card A 
 shown in Figure 67 is his record of what we call straight gystem 
 symbols, meaning those parts which are of one piece only, 
 and the card shown in Figure 68 is the record for dash 
 symbols, which are parts composed of two or more pieces 
 combined. 
 
 In this connection attention should be called to the use 
 of the adding machine for checking these records. Figures 
 65 and 66 show the actual adding machine work to check 
 completely the straight and dash 
 symbol cards, respectively. 
 
 The method is as follows : Add 
 the amounts delivered and take a 
 total. Then add the balance on 
 hand at the beginning of the period 
 and the quantities received and 
 take a sub-total. Then add the 
 complement of the total amounts 
 delivered and the remainder should 
 agree with the last balance of the 
 "In Stock" column. Since the 
 items are carried over to the back 
 of the cards, when the face has 
 been filled, the machine is indis- 
 pensable for securing a quick 
 check on the last balance before 
 carrying it over to the back of the 
 card. 
 
 When a requisition is made on 
 the finished stock room for straight 
 symbols, the amount is entered on 
 the finished stockkeeper*s record 
 and the requisition forwarded to 
 the cost keeper, who enters the cor- 
 responding amount, together with 
 Fig. 66 the price, on his record. 
 
 173 
 
 'l' 
 
 4 0.0 
 
 4 0.0 
 
 8 .0 " 
 
 4 0.2 
 
 4.0 
 
 1 2.0 
 
 1 2.0 
 
 8.0 
 
 4.0 
 
 8.0 
 
 4.0 
 
 8.0 
 
 4.0 
 
 8.0 
 
 4.0 
 
 4.0 
 
 1 2 .2 s 
 
 9 9, 9 2 .0 
 
 4 .2 "''^ 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 
 STRAIGHT SYMBOL 
 
 3^^"^ ^^ 
 
 HIGH MARK 6 
 
 ENTERS DAS 
 
 H /-3it'>- 
 
 LOW MARK /J.OOO 
 
 
 
 AMOUNT USED IN FOLLOWING STYLES AND CONSTRUCTIONS: 
 
 PCS. 
 
 STYLE 
 
 C0M8T. 
 
 PCS. 
 
 STYLE 
 
 CONST. 
 
 PCS. 
 
 STYLE 
 
 CONST. 
 
 PCS. 
 
 STYLE 
 
 CONST. 
 
 ( 
 
 7 
 
 cut 
 
 
 
 
 
 
 
 
 
 
 / 
 
 9 
 
 aie 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ORDERED II RECEIVED 
 
 1 
 
 DATE 
 
 r 
 
 QUANTITY 
 
 |LOT 
 
 PAN NO. 
 
 QUANTITY 
 
 SCUPPIB 
 
 ^ DELIVERED 
 
 IN STOCK 
 
 /-/-// 
 
 
 
 b^ 
 
 
 c,^ 
 
 
 
 //^OAo 
 
 / 
 
 s 
 
 <fooo 
 
 
 
 
 
 
 
 Z/Zo 
 3/, 
 
 
 
 
 
 
 
 ^OOO 
 
 3.0 
 
 - 
 
 
 g ^. 
 
 /4/3/ 
 
 4-0 
 
 
 
 4Zo 
 
 
 i% 
 
 
 /Aoo 
 
 
 
 /(, Zo 
 
 7 
 
 
 
 lf^'^7 
 
 
 /:t.oo 
 
 
 
 ^g Zo 
 
 
 
 
 t% 
 
 'foo 
 
 ioo 
 
 
 
 26>i.o 
 
 „ 
 
 
 
 t" 
 
 fsss4- 
 
 tf-oo 
 
 
 
 4oZo 
 
 n 
 
 
 
 f'U 
 
 i'4-9ot 
 
 ioo 
 
 
 
 42ZO 
 
 It 
 
 
 
 !" 
 
 /VVVA 
 
 *f-oo 
 
 
 
 fS-aAo 
 
 A¥ 
 
 
 
 g% 
 
 
 ioo 
 
 
 
 (>oZo 
 
 Z7 
 
 
 
 r' 
 
 '33ft 
 
 4oo 
 
 
 
 <o^ZO 
 
 ti 
 
 
 
 s% 
 
 ifs-s-S 
 
 ?oo 
 
 
 
 , 7zi.o 
 
 df 
 
 
 
 i" 
 
 t33fZ 
 
 4oo 
 
 
 
 7(>Zo 
 
 •^M'l 
 
 
 
 /^ 
 
 /USiJ 
 
 tf-oo 
 
 
 
 SoZo 
 
 1 
 
 1 
 
 tooo 
 
 
 
 
 
 
 ^oZo 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ._H..oo.o..c-..co.™...... 
 
 ......... 
 
 Fig. 67 
 174 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 
 
 DASH SYMBOL 
 
 / 
 
 '36^^ #y 
 
 CONSISTS OF 
 
 
 
 / 
 
 34.i^^f 
 
 / 
 
 3iiL 
 
 
 
 / 
 
 JrS-^L'^ 
 
 / 
 
 (b 3^;^. 
 
 
 
 / 
 
 os-j^ 1 / 
 
 3<f:f. 
 
 
 
 
 
 ' 
 
 
 
 HIGH MARK ^GOO ENTEI 
 
 ^S DAS 
 
 H 
 
 IO«l MARK ^OOO ^Xle***^. 
 
 U<^ JL-^y^C. «^€X/ 
 
 AMOUNT USED IN FOLLOWING STYLES *NO CONSTRUCTIONS: 
 
 PCS. 
 
 STYLE 
 
 CONST. 
 
 PCS. 
 
 STYLE 
 
 CONST. PCS. 
 
 STYLE 
 
 CONST. PCS. 
 
 STYLE 
 
 CONST. 
 
 f 
 
 7 
 
 aet 
 
 
 
 
 
 
 
 
 f 
 
 ? 
 
 cue, 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ORDERED II RECErVED 
 
 
 DATE 
 
 LOT 
 
 OUAHTITY 
 
 |LOT 
 
 PAN NO. 
 
 QUANTITY 
 
 SCUfPU 
 
 DELIVEREO 11 IN STOCK 
 
 /■/-// 
 
 
 C 
 
 ^- 
 
 l.O-«-> 
 
 iZ^^^^ic/^ 
 
 
 
 1 s39^o 
 
 /o 
 
 
 
 
 
 / 
 
 
 3oo 
 
 S/^fo 
 
 ' /«- 
 
 
 
 
 
 
 
 9o 
 
 ,3^no 
 
 1% 
 
 
 
 
 
 
 
 Cioo 
 
 3ooo 
 
 
 
 
 
 
 
 Zoo 
 
 :iion 
 
 ^/,c 
 
 
 
 
 
 
 
 tfoo 
 
 il4-oo 
 
 IS- 
 
 
 
 
 
 
 
 too 
 
 a^oo 
 
 2o 
 
 
 
 
 
 
 
 3oo 
 
 /<foo 
 
 Zo 
 
 f(^ 
 
 dooo 
 
 Ito 
 
 
 
 
 
 
 Zo 
 
 
 
 
 
 
 
 oToo 
 
 /t^oo 
 
 is 
 
 
 
 
 
 
 
 f3oo 
 
 / / oo 
 
 2.1 
 
 
 
 
 
 
 
 / o o i t o oo 
 
 5// 
 
 
 
 
 
 
 
 aoo 
 
 ino 
 
 r 
 
 lO 
 
 
 
 /a/zo 
 
 
 Aoo 
 
 
 
 /ODD 
 
 
 
 ff^yy^ 
 
 
 4oo 
 
 
 
 /tloo 
 
 n 
 
 
 
 «^* 
 
 
 6oo 
 
 
 
 cL n oo 
 
 /d 
 
 
 
 //;* 
 
 
 (oOO 
 
 
 
 £.^oo 
 
 IS 
 
 
 
 </'^/ 
 
 
 ^oo 
 
 
 
 3 
 
 noo 
 
 n 
 
 
 
 
 
 
 
 Aoo 
 
 JP.^oo 
 
 /(? 
 
 
 
 /^'^?^ 
 
 t 
 
 6)00 
 
 
 
 .'3iAoo 
 
 *2/ 
 
 
 
 M 
 
 
 C>oo 
 
 ■ 
 
 
 ^oo o 
 
 It 
 
 
 wy%\ 
 
 6oo\ 
 
 
 
 ^^oo 
 
 
 •••" 1 
 
 Fig. 68 
 175 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 d 
 
 z 
 
 z 
 
 
 
 u 
 u 
 
 < 
 
 en 
 
 Q 
 liJ 
 I 
 (/) 
 
 z 
 u. 
 
 u. 
 
 
 Q 
 
 
 
 UJ 
 
 q: 
 
 N 
 
 UJ 
 
 _l 
 >- 
 
 
 
 
 -I 
 
 m 
 
 2 
 
 5 
 
 
 
 2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 u 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 z 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Q 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Q 
 u 
 
 D 
 
 0) 
 
 z 
 
 a 
 
 
 
 5 
 < 
 
 § 
 
 « 
 
 ^ 
 
 
 
 
 Q 
 
 * 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^>s. 
 
 «9 
 
 QK 
 
 NO 
 
 CO 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 \ 
 
 
 ^ 
 
 \ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 u 
 5 
 
 0. 
 
 
 5- 
 
 t 
 
 * 
 
 « 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2 
 < 
 3 
 O 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 
 
 
 O 
 
 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 Q 
 
 ^ 
 
 Q 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 v^ 
 
 
 ^ 
 
 -^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 < 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Q 
 UJ 
 
 > 
 
 UJ 
 
 1;! 
 
 z 
 
 D 
 
 
 l\ 
 
 
 
 
 
 r 
 
 
 
 
 
 
 
 
 
 
 
 
 Ci 
 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 "■■(> 
 
 
 
 
 
 Csj 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 •>^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 i 
 
 ^ 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 z 
 
 o 
 
 
 
 
 
 
 
 vo 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 O- 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 
 
 
 
 \o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 <n 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Ul 
 
 a 
 
 !5 
 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 !• 
 
 u 
 t- 
 
 Q 
 
 
 
 
 
 
 >J0 
 
 ■s. 
 
 
 
 
 
 
 
 
 
 
 
 « 
 
 176 
 
COST KEEPING SHORT CUTS 
 
 In the case of dash symbols the raw stockkeeper issues A 
 these upon requisition, but it is not necessary to forward SyTtem 
 the requisition to the cost keeper, because the cost record 
 card, covering the assembhng of these d^-sh symbols into 
 sections, shows the number of dash symbols that are 
 required for the job, together with the number of sections 
 to be made, so that after the job has been completed he 
 can make the proper deduction for the parts that make 
 up the dash symbols from his stock record by making a 
 simple calculation from data furnished by the cost card. 
 
 The cost keeper's stock records and those of the 
 finished stockkeeper are checked against each other -from 
 time to time in order that no discrepancies may creep in. 
 
 For the purpose of illustrating more clearly several of 
 the adding machine uses in connection with time tickets. 
 Figures 70, 71 and 72 are shown. 
 
 Figure 70 shows five tickets, representing work that 
 has been done in Department 18 and chargeable to 
 Account 31. These constitute only a part of the total 
 labor expended on a job, but show the amount expended 
 on Symbol 416 in Department 18. Since Department 18 
 carries a rate of burden different from any other depart- 
 ment working on Symbol 416, it is necessary to separate 
 the tickets for this department into a group to themselves, 
 and then add the labor hours to get the total. This 
 addition is shown in the upper half of the adding machine 
 example, the total being 22 hours. The burden rate per 
 hour for this department is 17 cents. The 22 is then 
 multiplied by the 17, as shown in the lower half of the 
 example and the total burden, $3.74, is secured. 
 
 Problems like this arise continually in our cost depart- 
 ment and are handled with great speed and accuracy on 
 the machine. 
 
 Figure 71 shows a group of five time tickets for day , 
 workers, the extensions of which are to be checked. The 
 first ticket has 2 hours at 28 cents per hour and an earning 
 
 177 
 
COST KEEPING SHORT CUTS 
 
 A of 56 cents. This extension is checked as shown in the 
 System ^^^^ problem at the right-hand side of the illustration by. 
 multiplying the 28 by 2 on the machine and pointing off 
 two places by drawing a line with a pencil or pen. 
 
 The next ticket is checked in a similar manner, using 
 5.^5 instead of 534 and pointing off the result four places. 
 
 A pile of tickets can be checked in this way, recording 
 the results on the adding machine tape and afterwards 
 reading back beginning at the top of the tape and with 
 the first ticket. 
 
 Fi'gure 72 shows five time tickets, the extensions of 
 which are to be checked. In this case, however, the 
 tickets are for piece workers and therefore the extensions 
 result from multiplying rates per hundred by the number 
 of pieces. 
 
 The same method is used as in Figure 71, the adding 
 machine figures being checked back, after running off 
 the extensions for a batch of tickets, one after another, 
 on the tape. . 
 
 These examples will give an idea of the immense 
 amount of time and labor that can be saved in handling 
 hundreds of tickets daily. 
 
 178 
 
COST 
 
 KEEPING 
 
 SHORT CUTS 
 
 Fig. 70. Five Time Tickets for Account 31, together with adding machine list of workmen's 
 
 earnings and calculation of burden. 
 
 179 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 Fig. 71 
 
 Five Time Tickets for Department No. la and Adding Machine slip 
 showing multiplication of time and rate in checking 
 the earning of each workman. 
 
 180 
 
COST KEEPING SHORT CUTS 
 
 TIME TICKET 
 
 Z^ 
 
 KMAN'S No. 
 
 2-<f/oB.^ /o3(.o 
 
 ii U-i-4- f^?^-<i 
 
 ^'/z 
 
 >9ro 
 
 ACCOUMT I 
 
 .^6- 
 
 i TIME TICKET 
 
 AOL 
 
 ^,-.«u-.<i^ 
 
 OsOtR NO. 
 
 SYMBOL 
 
 /7oj H 
 
 Box No. 
 
 /7//° 
 
 No. Piece 
 
 ^ 
 
 1± 
 
 3'4 
 
 Z2o 
 
 2/0 
 
 ACCOUMT ^ 
 
 3/ 
 
 Vk£ 
 
 TIME TICKET 
 
 WORKMAN'S I 
 
 ^^ 
 
 SYMBOL ^ 
 
 Us- "'A 
 
 Box No. 
 
 
 
 •^4, 
 
 ^"-2 
 
 T% 
 
 l4o. PlECi 
 
 n 
 
 Pieces 
 
 /c* 
 
 Z7i^ 
 
 9/ 
 
 TIME TICKET 
 
 Department No. 
 
 «7_ 
 
 jvC«-^s,i^ 
 
 ^/^/^^ 
 
 Box No. 
 
 'hh^ 
 
 cT/- ^ofl ;?^ -s4 - f<r^ 
 
 Time 
 4^ 
 
 */^^ 
 
 Name 
 
 ^ TIME TICKET 
 
 I 
 
 icJ' 
 
 z/^g 
 
 «?/ 
 
 / 2J 
 
 :>JL.^ 
 
 Symbol 
 
 U 
 
 // ^-ys-*/- 
 
 H /- 
 
 Operation 
 
 i>'U 
 
 No. Pieces 
 
 y^ 
 
 ^7^7 
 
 AcCOUMT No. 
 
 3/ 
 
 \?bi 
 
 ^.<yU(feU*"- 2 7.6 6* 
 
 3.8 
 
 3.8 
 
 3.8 
 
 3.8 
 
 3.8 
 
 3 8.0 
 
 - 3 8 .0 
 
 3 8.0 a 
 
 3 8.0 
 
 iWl-OO* 
 
 27.61* 
 
 2 2.0 
 2 2.0 
 2 2.0 
 2 2£)0 
 2 2.0 
 
 l\lO.OO* 
 
 2 7.6 2* 
 
 12X)0 
 1 2X>0 
 12.0 
 12XD0 
 
 1 2.0 
 1 2000 
 
 l\8 0O0* 
 
 2 7.6 8* 
 
 4.9 3 
 4.9 2 
 
 4.92 
 ■ 452 
 
 4.92 
 49J20 
 4 9.2 
 
 l\2 3X)0* 
 
 2 7.6 7* 
 
 50X)0 
 50j00 
 50X30 
 50O0 
 
 ■7 
 
 Time Finished 
 
 j:^^- 
 
 &:o. 
 
 FOREMAN'S O/K. 
 
 Fig. 72 ' 
 
 Five Time Tickets for Department No. 27 and Adding Machine slip 
 showing the multiplication of the number of parts by the rate per 
 hundred in checking the earning of each workman. 
 
 181 
 
Valuable 
 Data 
 
 CHAPTER XX 
 Information for the General Manager 
 
 THE following forms illustrate valuable d-ata that is 
 collected and tabulated by the adding machine. 
 This information is very instructive for the man- 
 agement and is brought together in a way that enables 
 the manager of a plant to gather, at a glance, the status of 
 his business, both regarding costs and sales. 
 
 The sheet illustrated in Figure 73 shows how a monthly 
 summary of materials charged to various accounts can be 
 recapitulated on the Burroughs Machine. This is secured 
 by sorting every week all material requisitions on com- 
 pleted jobs by accounts and recapitulating them on the 
 machine. By using a Duplex Machine the totals for each 
 account and the grand total for all accounts are obtained 
 at one run. 
 
 The facsimile sheet in Figure 74 is a Cost of Produc- 
 tion Report that is collected from data furnished by the 
 cost department. The amounts are fictitious but illus- 
 trate the principle. They show the number of various 
 kinds of machines manufactured during the month, their 
 cost and the average cost per machine. A glance at this 
 sheet gives as much information as an hour's study of a 
 detailed cost record. 
 
 The illustration in. Figure 76 is a comparative state- 
 ment of sales. The amounts are fictitious but the sheet, 
 when made up of actual figures, shows the number of 
 hand machines made, the styles, value, cost and profit on 
 each style, both for the current month and for the corres- 
 ponding period the previous year. 
 
 A statement of this kind is easily prepared on the 
 adding machine and furnishes valuable data to the man- 
 agement. It is a growth indicator that can be read in a 
 
 182 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 REPORT OF RAW MATERIALS AND SUPPLIES USED 
 
 o 
 
 
 STORES FOR 4 WEEKS ENDING. 1 1 -28. 1 909 | 
 
 ACCOUNT 
 
 WEEK ENDING 
 
 WEEK ENDING 
 
 WEEK ENDING 
 
 WEEK ENDING 
 
 11 -a» 
 
 WEEKENDING 
 
 TOTAL 
 
 «i>. ' 
 
 1 
 
 15336 
 
 1 6 3.4 5 
 
 16 8.6 7 
 
 13436 
 
 
 6 2 0.2 4* 
 
 
 
 2 
 
 430O6 
 
 4 2 4 .0 
 
 4 0.0 
 
 5 2 3 .4 
 
 
 1,777.4 6* 
 
 
 
 3 
 
 1 3 4 .6 
 
 1 6 0.0 
 
 19 4.6 7 
 
 10436 
 
 
 5 9 3.8 3* 
 
 
 
 4 
 
 1 5 6.0 6 
 
 18,6£)7 
 
 1 3.0 5 
 
 1 6 6.6 6 
 
 
 61 1.84* 
 
 
 
 5 
 
 5,0.6 7 
 
 84£)5 
 
 7 33 7 
 
 1 2.0 3 
 
 
 220.32* 
 
 
 
 6 
 
 766X)7 
 
 73430 
 
 7 3 6.7 8 
 
 7 4 5.6 
 
 
 2,9 8 2.95* 
 
 
 
 7 
 
 3 2 0.3 5 
 
 22030 
 
 40035 
 
 i 0430 
 
 
 1.C4 5.7 0* 
 
 
 
 8 
 
 4 4 6.6 
 
 50000 
 
 47430 
 
 2 6 4 .4 6 
 
 
 1,68535* 
 
 
 
 9 
 
 3 6 5.6 6 
 
 374.07 
 
 264X55 
 
 4 10.2 4 
 
 
 1,414X52* 
 
 
 
 .10 
 
 157.88 
 
 1 0437 
 
 1 4 6.7 8 
 
 1 8 0.8 9 
 
 
 5 9 0.12* 
 
 
 
 .li 
 
 78jOO 
 
 e0X)0 
 
 9 03 6 
 
 6 6.09 
 
 
 ^14.6 5* 
 
 
 
 .12 
 
 1 00X)0 
 
 103>V0 
 
 10435 
 
 1 4 4 .6 
 
 
 45 235* 
 
 
 
 .13 
 
 7 5.6 6 
 
 8 0.6 6 
 
 7536 
 
 2 0.45 
 
 
 2 5 2.3 5* 
 
 
 
 .14 
 
 3 6 5.6 6 
 
 411.30 
 
 2 5 5.7 
 
 264.45 
 
 
 1,2 9 7.11* 
 
 
 
 .15 
 
 53450 
 
 To 6.7 8 
 
 202»5 
 
 23 336 
 
 
 1.377.29* 
 
 
 
 .16 
 
 24j00 
 
 1 2 0.6 7 
 
 14.7 2 
 
 11.3 5 
 
 
 1 7 0.7 4* 
 
 
 
 J.7 
 
 .18 
 
 1 7437 
 
 275j06 
 
 1 4 4 .4 4 
 
 1 7037 
 
 
 7 6 4.6 4* 
 
 
 
 9 7.7 
 
 8 7.7 8 
 
 7 6.9 
 
 1 2£) 5 
 
 
 3 6 6.4 3* 
 
 
 
 .19 
 
 2 4 4.6 
 
 29930 
 
 2 8 6.6 7 
 
 2 8 7.7 6 
 
 
 l.l"l833* 
 
 
 
 £0 
 
 2 8 7.6 7 
 
 290X>0 
 
 23430 
 
 233.44 
 
 
 1.0 4 5.61* 
 
 
 J31 
 
 1 3530 
 
 1 8430 
 
 17036 
 
 13 4.6 
 
 
 6 2 5.16* 
 
 
 .2 2 
 
 5 4 5.6 
 
 5 8 8.0 5 
 
 53336 
 
 53330 
 
 
 2,2 0.71* 
 
 
 .23 
 
 20436 
 
 3 2X)S 
 
 204X)5 
 
 A02A6 
 
 
 1.1 13.1 2* 
 
 
 
 .24 
 
 2 2.2 
 
 2 5 6.7 7 
 
 2 4 6.7 
 
 2 4 5.6 6 
 
 
 95133* 
 
 
 o 
 
 .2 5 
 
 1 2 23 a 
 
 1 6 6.8 8 
 
 1 3 6.3 5 
 
 1 2 2£l5 
 
 
 5 4 7.7 8* 
 
 
 
 
 %1 74J33* 
 
 Si604.63* 
 
 5,7 4 1.6 6* 
 
 5^619^8* 
 
 
 24,1 40j03< 
 
 
 Fig. 73 
 
 Report of Raw Materials and Supplies prepared with a Burroughs 
 Adding Machine. 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 
 
 COST OF PRODUCTION 
 
 
 o 
 
 MACHINES MANUFACTURED MONTH ENDING 11-30. 1909 
 
 STYLE AND 
 CONSTRUCTION 
 
 QUANTITY 
 
 COST 
 
 COST PER MACHI 
 
 ME 
 
 MONTH 
 
 YEAR 
 
 MINIMUM 
 
 
 * 
 
 * 
 
 
 
 
 
 6--X 
 
 .12 
 
 1,10 6.6 4 
 
 9 2.2 2 
 
 9 1.3 
 
 9 0O4 
 
 
 6— H 
 
 J.4 
 
 1, 8 2 4 .9 
 
 13 0.35 
 
 1 2 9.31 
 
 1 2 7^0 7 
 
 
 6-H 
 
 .12 
 
 1.8 3.9 6 
 
 1 5 0.3 3 
 
 1 5 2.4 6 
 
 15 0.4 4 
 
 
 7-H 
 
 21 
 
 2,786.07 
 
 1 3 2.6 7 
 
 1 3 3.0 
 
 1 3 1.2 5 
 
 
 7-G 
 
 JZO 
 
 3.2 4 8.8 
 
 16 2.4 4 
 
 1 6 5.3 5 
 
 1 6 2 .0 7 
 
 
 7-H 
 
 .1 4 
 
 2,2 7 3.0 4 
 
 1 6 23 6 
 
 1 6 0.8 6 
 
 1 5 9.0 9 
 
 
 7— H-El . 
 
 22 
 
 4,3 4 3.6 8 
 
 197>»4 
 
 19855 
 
 1 9650 
 
 
 9-H 
 
 .15 
 
 2,7 85.95 
 
 1 8 5.7 3 
 
 1 84>t6 
 
 1 8 3.2 
 
 
 9— H-El. 
 
 .15 
 
 2^4 7 0.7 
 
 2 3 1.3 8 
 
 2 3 0.31 
 
 2 2 8.3 3 
 
 
 9-G 
 
 1.6 7 
 
 3«S,001.£4 
 
 1 9252 
 
 29651 
 
 1 9 1 .3 
 
 
 9— G-El . 
 
 2.0 6 
 
 4 8,2 2 6.6 6 
 
 2 3 4.11 
 
 2 3 5 .1 7 
 
 2 3 2.0 4 
 
 
 9-H 
 
 2.3 5 
 
 4^3 6 6.7 6 
 
 19 3.0 5 
 
 1 9552 
 
 1 9 0.2 4 
 
 
 9— S&n-El. 
 
 1.9 6 
 
 4 6,455^3 
 
 2 3 7-.0 2 
 
 2 3 7.3 3 
 
 2 3 1.0 4 
 
 
 9— H-El . 
 
 2.40 
 
 5 4,2 6 6.4 
 
 2 2 6.11 
 
 2 2 5.16 
 
 2 2 0.0 6 
 
 
 9— K 
 
 .7 5 
 
 16,5 8 4.7 5 
 
 2 2 1.13 
 
 2 2 2.7 7 
 
 216.33 
 
 
 9-K-El. 
 
 .3 
 
 7,5 3 2.70 
 
 2 5 1 .0 9 
 
 2 5 0.1 2 
 
 2 4 7.0 6 
 
 
 9— S&N-K-El. 
 
 .12 
 
 3,2 5 4.7 6 
 
 2 7 1 .2 3 
 
 2 7 2.4 1 
 
 2 7 0.13 
 
 
 .1 1-H 
 
 1>»6 
 
 3 2, 5 3 9 .0 3 
 
 2 2 2.8 7 
 
 2 2 2.4 7 
 
 2 2 .0 4 
 
 
 .1 1— S&ll-H 
 
 •43 
 
 9.7 2 3.0 
 
 23130 
 
 2 3 2.14 
 
 2 3.1.0 3 
 
 
 il--H-El. 
 
 J51 
 
 6^7 18.7 5 
 
 2 8 1.2 5 
 
 28451 
 
 2 8 0.3 
 
 
 .1 3-H 
 
 .13 
 
 2,79636 
 
 2 3 3.0 3 
 
 2 3 3.6 6 
 
 2 3 1.12 
 
 
 •13-H-El. 
 
 4 
 
 1,1 SBAa 
 
 2 8 2.1 2 
 
 2 8 5.7 5 
 
 2 8 0.2 3 
 
 
 J. 5— Stll-H 
 
 ^a 
 
 2^392.00 
 
 2 7 6.0 
 
 2 7 3.1 3 
 
 2 7C.0 4 
 
 
 .15— SMI-H-El. 
 
 1.6 3 
 
 4 7, 6 1 2.3 
 
 2 9 2.10 
 
 2 9 0.13 
 
 2 8 5'5 
 
 
 J. 5— S&K-K-El . 
 
 .9 5 
 
 3 1,4 4 5.9 5 
 
 3 3 1 .0 1 
 
 3 3 2.1 4 
 
 3 2 8.2 2 
 
 
 .1 6— VS-H-El . 
 
 .4 2 
 
 13,12 2.90 
 
 3 1 2.4 5 
 
 3 1 0.6 6 
 
 3 7 .0 4 
 
 
 .1 5— VS-K-El . 
 
 .17 
 
 5,6 4 4.3 4 
 
 3 3 2.0 2 
 
 3 3 2.2 8 
 
 3 3 0.0 5 
 
 o 
 
 S 5— H-ACT-El . 
 
 .16 
 
 5^45952 
 
 3 4 1.2 2 
 
 341^10 
 
 34056 
 
 
 .15— H-Shut-El. 
 
 .14 
 
 2 0.0 ON- 
 
 4,664.10 
 4 6 9,579.64* 
 
 3 3 3.15 
 
 3 3 0.0 2 
 
 3 2 8.2 4 
 
 Fig. 74 
 
 Production Cost Report made on the Burroughs Adding Machine. 
 The descriptions are written with a typewriter. 
 
 184 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 o 
 
 COMPARATIVE STATEMENT OF SALES 
 
 
 CURRENT MONTH 
 
 CORRESPONDING PERIOD LAST YEAH I 
 
 satcm 
 
 COST or 
 
 SALES 
 
 mtOFIT 
 
 . »-" 
 
 SALES 
 
 raoriT 
 
 outirriTY 
 
 lUMt 
 
 -- -/ 
 
 »>UIC 
 
 
 • 
 
 • 
 
 . 
 
 . 
 
 
 « 
 
 . 
 
 > 
 
 
 3 
 
 -17 
 
 ^82535 
 
 3il73.12 
 
 652.23 
 
 
 
 
 
 
 4 
 
 1 4 
 
 2i6«355 
 
 ^14235 
 
 52120 
 
 
 
 
 
 
 6-n 
 
 J22 
 
 ^52455 
 
 4,52435 
 
 1,00000 
 
 20 
 
 4, 5 4 >1 
 
 3i782.94 
 
 7Z1A6 
 
 
 6-12J 
 
 ZX 
 
 £i256O0 
 
 4,134.50 
 
 1.121>»0 
 
 i8 
 
 3.4 6 032 
 
 2.82707 
 
 63325 
 
 
 7-B 
 
 32 
 
 e.83450 
 
 7,3 6 2.25 
 
 1.4 7 2.2 5 
 
 25 
 
 6i2 5 5.7 5 
 
 ^1 32.75 
 
 112300 
 
 
 7-12i 
 
 35 
 
 1Q53450 
 
 8153434 
 
 acooie 
 
 27 
 
 6,7 5 621 
 
 £i643£8 
 
 1,11233 
 
 
 9-10 
 
 1.7 5 
 
 6eil34J0O 
 
 54,4 12.60 
 
 13.721.40 
 
 1.45 
 
 3 9,9 4 73 
 
 3 4,5 8 2.9 5 
 
 ^36455 
 
 
 9-l2i 
 
 1.3 3 
 
 49,52430 
 
 4 1,9 12.0 9 
 
 7,61 2>«1 
 
 125 
 
 37,5 4 3.75 
 
 32,40920 
 
 ^13435 
 
 
 9-12J-SI 
 
 125 
 
 5C1245aO 
 
 4 1.2 8 23 9 
 
 e,9 6 2j»l 
 
 1^2 
 
 4Z1C50.40 
 
 3 4,7 153 5 
 
 7,33435 
 
 
 9-18-SI 
 
 1..5 
 
 58,02035 
 
 45^87930 
 
 12,14125 
 
 120 
 
 48^232X30 
 
 4C1337>I5 
 
 7,94435 
 
 
 Xl-12i 
 
 16 
 
 ^805.75 
 
 5^84035 
 
 96520 
 
 4.2 
 
 4,84430 
 
 4,05955 
 
 78435 
 
 
 11-12J-SI 
 
 3t 
 
 13H43JJ5 
 
 11,4 2 1.8 3 
 
 1.7 2 1.4 2 
 
 22 
 
 9,3 6 24 
 
 8iC'l6.7 
 
 1,345.40 
 
 
 11-12-i-Sint 
 
 12 
 
 ^405^5 
 
 4,61738 
 
 7 8 7.6 7 
 
 40 
 
 4,225X30 
 
 3,46634 
 
 7 5 6.6 6 
 
 
 13-I2i 
 
 e 
 
 3^803^5 
 
 3^269.25 
 
 53420 
 
 6 
 
 ^7 2j0 4 
 
 2188^0 
 
 513>«4 
 
 
 13-12i-Smt 
 
 23 
 
 9,9 2 5£0 
 
 4200.70 
 
 1,72430 
 
 42 
 
 £i704X38 
 
 4,65938 
 
 1,04430 
 
 
 15-121- SB 
 
 li3 
 
 46^17500 
 
 4^05433 
 
 %J2 0J.7 
 
 1j0 2 
 
 45194458 
 
 3et58»3i 
 
 r.35 j30 
 
 
 15-l8-srf 
 
 26 
 
 1^5 2X35 
 
 1C1602XJ5 
 
 1.90000 
 
 23 
 
 lCi9 3 2£2 
 
 9,29 837 
 
 J.63<>»5 
 
 
 l5-l2i-SBt 
 
 35 
 
 1613 2 23 
 
 1M88J27 
 
 2^13423 
 
 29 
 
 i.0,*56A6 
 
 9,3 3 60 6 
 
 1.1 20^0 
 
 
 lV12i-VS 
 
 35 
 
 19,23330 
 
 14993^5 
 
 2,24036 
 
 31 
 
 1^281£2 
 
 13,6 4 83 6 
 
 £^633^4 
 
 
 15-18-73 
 
 26 
 
 14,30639 
 
 1^366^5 
 
 t9 4 0.10 
 
 24 
 
 1564046 
 
 11.53736 
 
 210230 
 
 
 15-12i-ACI 
 
 e 
 
 4,244;a0 
 
 3;28338 
 
 9 6 0,4 2 
 
 
 
 
 
 
 15-12i-Sht 
 
 4 
 
 %3463Q 
 
 1,7 6 4X3 8 
 
 5 8 2^2 
 
 
 
 
 
 
 
 1052* 
 
 4 1 8^7 7 5^0* 
 
 35(i95951* 
 
 67.8 15^9* 
 
 8.63» 
 
 ?iai8 9 44 9* 
 
 264,23331* 
 
 4^66038*' 
 
 o 
 
 
 
 
 
 
 
 
 
 ^ 
 
 Fig. 75 
 
 This Comparative Statement of Sales is a valuable index to the growth of 
 
 the business. All except the description is tabulated 
 
 with the Burroughs. 
 
 185 
 
COST K E E P I N G i jS H O R T CUTS 
 
 
 COMPARATIVE STATEMENT OF EARNINGS 
 
 
 
 MONTH ENDING 11-30. lOOgj 
 
 o 
 
 PARTICULARS 
 
 CURRENT MONTH || COR. PERIOD LAST YEAR | 
 
 JAN. 1, 09. TO DATE | 
 
 AMOUNT 
 
 <T...L<> AMOUNT 
 
 TO ••ica 
 
 AMOUNT 
 
 <To..m 
 
 
 
 
 
 
 
 
 
 Gross I.:fpr. Profit: 
 
 * 
 
 
 * 
 
 
 * 
 
 
 
 Rognlftr y.achlnes 
 
 115v467J!5 
 
 
 10^416^35 
 
 
 1,121,40650 
 
 
 
 Special :.:Rchlnes 
 
 8 2,315.17 
 
 
 7 3> 2 0.1 5 
 
 
 e 7 5, 4 5 2.6 5 
 
 
 
 rapor i Hibbon 
 
 1^2 4 7.2 5 
 
 
 ^0 3 2.0 5 
 
 
 2 6^301.40 
 
 
 
 nachlno Parts 
 
 4,6 6 83 
 
 
 3kl 11^0 
 
 
 46,321.20 
 
 
 
 Repairs 
 
 2,1 6 25 
 
 
 1,862/47 
 
 
 2 £i 1 6 5 .0 7 
 
 
 
 Total 
 
 2 6,8 6 0.6 7* 
 
 
 182,62233* 
 
 
 1^0 9 1.6 4 6,8 2* 
 
 
 
 Deduct loss on 
 
 
 
 
 
 
 
 
 Stands 
 
 7 2 5^0* 
 
 
 6 2 0.2 6* 
 
 
 7,0 0.2 5* 
 
 
 
 Gross Earnings 
 
 206^1 35J27* 
 
 
 18^0020 7* 
 
 
 £^0 9 1,6 4 6,8 2* 
 
 
 
 Deduct Expenses 
 
 * 
 
 
 «• 
 
 
 it 
 
 
 
 Selling & Distri- 
 buting 
 
 General t Admln- 
 IstratlTe 
 Machines under 
 Guarantee 
 Machines ' DlsnantlAd 
 
 7 7,567.20 
 
 
 6 9, 4 6 0J3 2 
 
 
 7 9,451J20 
 
 
 
 2 4,300.28 
 
 
 16^76150 
 
 
 2 5 1.2 0.0 5 
 
 
 
 4,25055 
 1.260J37 
 
 
 3^721.20 
 1,0 7.6 
 
 
 4 1.4 6.2 3 
 12,6 8 7.7 9 
 
 
 
 Total Expenses 
 
 10 7,3 7 8J3 4* 
 
 
 9?. 9 5 05 2* 
 
 
 1,0 8 4,7 4 5.2 7'' 
 
 
 
 Net Earnings 
 ftrom operations. 
 
 961757X)3* 
 
 
 89,05155* 
 
 
 1,006,90155* 
 
 
 o 
 
 
 
 
 
 
 A 
 
 
 Fig. 76 
 
 Comparative Statement of Earnings made with an adding machine 
 and a typewriter. 
 
 186 
 
COST 
 
 K i: E PING 
 
 SHORT 
 
 CUTS 
 
 
 
 COMPARATIVE STATEMENT 
 
 
 OF 
 
 SELLING AND DISTRIBUTING EXPENSES 
 
 PARTICULARS 
 
 TOTAL CURRENT MONTH 
 
 COR. PERIOD LAST YEAR 
 
 JAN. 1 TO DATE j 
 
 AMOUNT 
 
 I TO »»L£S 
 
 AMOUNT 
 
 .YOSALtS 
 
 AMOUNT 
 
 . TO S/U.tS 
 
 cor-rissions 
 
 * 
 
 ^ 
 
 
 .. 
 
 
 o 
 
 Ifcchlne Sales 
 Rebnllt Sales 
 Foreign Saleo 
 tiachlne Rentals 
 
 11Q46530 
 
 17,320.40 
 
 16y4 62X)0 
 
 762>i0 
 
 
 9 9,2 4 3.4 5 
 
 15,335.34 
 
 iaC30.50 
 
 7 2 2.4 4 
 
 
 I,00a3^4.45 
 
 1 53^45 2>»5 
 
 1 5a23050 
 
 7,335O0 
 
 
 
 SALAHIES 
 
 2^432>15 
 
 
 2 1,16 5\3 4 
 
 
 2 14,62350 
 
 
 
 MACHII.-E REPAIRS 
 
 9,2 5 6.4 
 
 
 7.94450 
 
 
 8 9.4 5 2.30 
 
 
 
 FREIGHT & EXPRESS 
 
 5,6 7 5.7 8 
 
 6 2 4 .4 
 1 5 250 
 3 7 5.8 
 
 
 4,9 3 3.3 5 
 
 1,2 5 4.30 
 7 5O0 
 
 8852 
 
 
 6£34500 
 
 41,23450 
 1,4 2 3.4 
 2,2 5 0.30 
 
 
 DUTY 
 
 ~ra~Machlne8 
 On Pmtg & Stany 
 On Repair Parts 
 
 
 PRIOTIHG and 
 
 STATionsirr 
 
 OFFICE SUPPLIES 
 
 1,60000 
 8 9 2.7 5 
 
 
 1.4 3 2O0 
 7 5 OOO 
 
 
 lSi345O0 
 7,5 3.4 
 
 
 
 POSTAGE 
 
 1,43153 
 
 
 1,243.^5 
 
 
 13,5 2 3.4 4 
 
 
 
 TELEGRAPH etc. 
 
 2 9 0.16 
 
 
 24356 
 
 
 1.845O0 
 
 
 
 TPJIVELIIIG EXP. 
 
 1,2 4 1.7 5 
 
 
 1.C5 35 5 
 
 
 10,1120 
 
 
 
 TAr^ES & IBS 
 
 1,87557 
 
 
 1.786O0 
 
 
 18,5 5 5.3 3 
 
 
 
 ADVERTISIMC 
 
 4,275>»0 
 
 
 '54 2 3>»0 
 
 
 4^23050 
 
 
 
 HALF TOIIES etc. 
 
 5 3 250 
 
 
 4 8 6.6 6 
 
 
 4,2 4 5.6 5 
 
 
 
 COHVEHTIONS 
 
 6 9i.3 
 
 
 8 2 230 
 
 
 5^22050 
 
 
 
 SALESMEH'S SCHOOlJ 
 
 43650 
 4756 
 
 
 5 2 1.3 
 45O0 
 
 
 2,74450 
 522O0 
 
 
 KAGAZIHES 
 
 o 
 
 SALESIEH'S PRIZES 
 
 6 3 3.4 
 7855 
 
 
 4 2 2J0 
 50O0 
 
 
 6,3 4 55 
 73450 
 
 
 STREOPTICAD 
 
 inSCEI,LAIIE0U3 
 
 4 21.3 4 
 
 
 252.45 
 
 
 3^503/45 
 
 
 
 TOTALS 
 
 196^174^1* 
 
 
 1 75k314/41* 
 
 
 l,868il02J7* 
 
 
 Fig. 77 
 
 Another machine-made statement that is exceedingly 
 valuable to the management. 
 
COST 
 
 KEEPING 
 
 SHORT 
 
 CUTS 
 
 o 
 
 
 
 INVENTORIES 
 
 
 
 
 DETAILS 
 
 MONTH tNOlNC 
 
 COR. PERIOD LAST YEAR 
 
 AS A 
 
 T DEC. 31. 1908 
 
 OUANTITY 
 
 v»Lue 
 
 QUANTITY 
 
 VALUE 
 
 QUANTITY 
 
 VALUE 
 
 Faotory Style 3 
 
 * 
 
 .2 
 
 3,4 4 6.2 
 
 .1 6 
 
 a? 5 6.9 6 
 
 .17 
 
 2.9 2 9.2 7 
 
 
 4 
 
 .1 6 
 
 ^485.1 2 
 
 .13 
 
 2,C19.16 
 
 .14 
 
 2. 1 7 4 .4 8 
 
 
 6 
 
 .1 8 
 
 2;9 5 8.12 
 
 .15 
 
 2 4 6 5 .1 
 
 .1 6 " 
 
 2, 6 2 9 .4 4 
 
 
 " 6 
 
 .19 
 
 3v2 7 3.8 9 
 
 .2 
 
 3,4 4 6.2 
 
 .21 
 
 3,6 1851 
 
 
 " 7 
 
 .2 3 
 
 4,14700 
 
 .2 
 
 3,770.00 
 
 .2 1 
 
 3,9 5 65 
 
 
 " 7 
 
 .21 
 
 3i677.31 
 
 .16 
 
 2,8 1.7 6 
 
 .17 
 
 2,9 7 6.6 7 
 
 
 9 
 
 .7 4 
 
 1 8,9 6 8.4 2 
 
 £5 
 
 l'i,C9 0.15 
 
 .6 3 
 
 \l 6,1 4 8.7 9 
 
 
 " 11 
 
 31 
 
 8^9 10.3 3 
 
 .3 
 
 8,6 2 2.9 
 
 .3 2 
 
 9,19 7.7 6 
 
 
 " ^3 
 
 .12 
 
 3i 19 6.8 
 
 .12 
 
 3.1 9 6.8 
 
 .15 
 
 3,9 9 6.0 
 
 
 " .15 
 
 .46 
 
 13^9 01.6 6 
 
 .3 3 
 
 9,9 7 2.9 3 
 
 .4 2 
 
 12.692.82 
 
 
 Total Paotory 
 
 2.7 9* 
 
 64,964.65* 
 
 2.3 0* 
 
 5 3,1 4 9.9 6* 
 
 258* 
 
 6 0,3^2.4 4- 
 
 
 
 * 
 
 * 
 
 « 
 
 «- 
 
 ~ 
 
 V 
 
 
 Agenoles Style 3 
 
 4.9 7 
 
 8 5, 6 3 8 .0 7 
 
 3.8 8 
 
 6 6,8 5 6.2 8 
 
 3.9 2 
 
 6 7,5 4 55 2 
 
 
 4 
 
 2.8 5 
 
 4 4,266.20 
 
 25 
 
 3 ae 3 0.0 
 
 2.4 6 
 
 3 6.208.72 
 
 
 6 
 
 4.4 
 
 72,309.60 
 
 3.7 6 
 
 6 1,7 9 1.8 4 
 
 3.61 
 
 6 2,61 354 
 
 
 6 
 
 4.3 5 
 
 74,954.85 
 
 3.2 3 
 
 5 5,6 5 6.13 
 
 3.3 
 
 5 6,86 2.30 
 
 
 " 7 
 
 17.6 
 
 3 3 1,7 6 0.0 
 
 16.6 6 
 
 314,04 lOO 
 
 17.2 2 
 
 324,597. 
 
 
 7 
 
 18.7 5 
 
 3 2 6^3 31.2 5 
 
 17.6 7 
 
 3 9,4 19.3 7 
 
 18.11 
 
 3 1 7, 1 2 4 .2 1 
 
 
 " 9 
 
 40,42 
 
 X03^C85£6 
 
 3 8.8 7 
 
 996,354.71 
 
 3 8.4 4 
 
 9 8 5,33252 
 
 
 " .11 
 
 1 1.3 5 
 
 326^233X35 
 
 12.4 4 
 
 3 5 7,562.92 
 
 13.2 2 
 
 3 7 9,9 8 2.4 6 
 
 
 " .1 3 
 
 3.7 
 
 9^568.00 
 
 3.7 7 
 
 10Q432.80 
 
 4.11 
 
 10 9,4 9 0.4 
 
 
 " .15 
 
 1 8.6 6 
 
 5 6 3,9 2 3.8 6 
 
 16.3 3 
 
 4 9 3i 5 8.9 3 
 
 1455 
 
 4 3 9,7 155 5 
 
 
 Total Agenolea 
 
 127.05* 
 
 2,962070.74* 
 
 119.11* 
 
 2,794,4 5 3.98* 
 
 1 19.14* 
 
 2,7 8 1.4 7 2.2 2*- 
 
 
 llodela 
 
 .6 3 
 
 19,7 5 25 5 
 
 51 
 
 15,61 2O0 
 
 55 
 
 16,91350 
 
 o 
 
 Finished Parte 
 Vork In Frooeee 
 Raw Stock & Sup, 
 Small Toole etc. 
 Paper S> Rlbbone 
 So rap 
 
 
 # 
 
 16 0,0 5 2.0 
 
 153,201.25 
 
 141,32650 
 
 1^3 5 5.7 5 
 
 2 4,302.12 
 
 1,87550 
 
 
 15£i2 14.12 
 
 14 7,6 2 1.3 
 
 13 5,406.25 
 
 14,22150 
 
 2 0,1 2 1^0 
 
 1,25000 
 
 
 15 7,333.25 
 
 15 1.22350 
 
 1 3 6, C 2 4 .2 2 
 
 15,C1 0.00 
 
 2 0, CI 2.2 
 
 1. 3 1 1 .3 3 
 
 
 Total 
 
 
 4 9 6,113.12* 
 
 
 472^63457* 
 
 
 4 8 0,9 1450*' 
 
 
 Grand Total 
 
 I3 0v4 7~ 
 
 2i5 4£i9 0,9 6* 
 
 121.92* 
 
 ^337,05051* 
 
 12 2.27* 
 
 2^3 3 8,7 2 2.6 6*' 
 
 Fig. 78 
 
 The quantity and price of the numerous items going into the 
 
 inventory can be quickly and accurately recorded 
 
 with the Burroughs Adding Machine. 
 
COST KEEPING SHORT CUTS 
 
 very few minutes. If the growth is healthy, well and good, A 
 but if there is a dropping off in any line, it is shown up gystem 
 immediately. 
 
 Figure 76 is a comparative statement of earnings, 
 which, for obvious reasons, contains fictitious amounts. 
 It is in the nature of a general recapitulation and is com- 
 parative, showing the resiilts for the current month and 
 same month the previous year. 
 
 The comparative statement of Selling and Distribu- Compari- 
 ting Expenses in Figure 77 is a general summary of ^^"^ 
 expenses of all kinds for the year to date, the current 
 month and the corresponding month the previous year. 
 
 The monthly inventory of machines in Figure 78 
 shows the quantity of the different styles on hand, both 
 in the factory and in the agencies, together with the value. 
 The same information is also given regardmg the inventory 
 for the corresponding month the previous year, and the 
 number and value of machines in factory and agencies at 
 the end of the previous year. 
 
 This record is a handy guide for the distribution of - 
 machines between factory and agencies, as well as a 
 comparative record of this distribution. 
 
 Such records are valuable to us and emphasize the fact 
 that with an adding machine it is possible to prepare 
 statistics of this nature with very little extra expenditure 
 of time and labor. 
 
 Any manufacturer would like to have similar informa- 
 tion about his business, but deprives himself of it because 
 he thinks it costs too much, and his conclusions are 
 correct unless he is operating an adequate cost system. 
 
 A cost system of the right kind, however, automatic- 
 ally produces the vital information so that the preparation 
 of summaries and comparative statements of costs, etc., 
 is merely a recapitulation and tabulation of the items 
 with a machine. 
 
 180 
 
COST KEEPING SHORT CUTS 
 
 A When a machine handles the details, it is possible to 
 
 System operate a cost system at far less cost than the value of the 
 
 information given. Without a machine this is practically 
 
 impossible. 
 
 190 
 
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