:AL COST SYSTEM 
 
 PRINTING 
 
 R.T. PORT]: 
 
o c/ 
 
The Practical Cost System 
 for Printing Offices 
 
 BY 
 
 R. T. PORTE 
 
 h 
 Author of "How to Figure Costs in 
 
 the Printing Business"- 
 Compiler of "Franklin Printing Price List" 
 
 REVISED EDITION 
 
 Copyright 1920 
 PORTE PUBLISHING COMPANY 
 
 SALT LAKE CITY 
 UTAH 
 
TO the grand fellowship of the 
 Printing Craft, without whose wis- 
 dom, knowledge, craftsmanship, and 
 business acumen, the great world of 
 letters, literature and art, and the vast 
 energies of commercial life would still 
 be groping their way through the 
 shadows of the dark ages, this book is 
 most respectfully dedicated. 
 
FOREWORD 
 
 IN PRESENTING this revised edition of the Practi- 
 cal Cost System for the consideration of the printing 
 craft, we are but responding to a continued and in- 
 creasing demand for an accurate, inexpensive and 
 simple system of finding cost of production in the 
 medium and small printing offices. 
 
 The universal satisfaction expressed by the users of 
 the first edition of this book has convinced the pub- 
 lishers that a revised edition, brought fully up to date, 
 replete with modern ideas, and equipped with the latest 
 and simplest forms, would meet with an even more 
 enthusiastic reception. 
 
 There are no ideas or forms in this revised edition 
 but what have been thoroughly tried out and tested in 
 actual use and found to be entirely satisfactory before 
 being incorporated in this edition of the Practical Cost 
 System. 
 
 The original edition of this Practical Cost System 
 was the very first attempt ever made to put cost-find- 
 ing for printing offices into book form. 
 
 The first edition was prepared some twelve years 
 ago by Mr. Roy T. Porte, then the head of the Porte 
 Printing Company, of Fargo, North Dakota, assisted 
 by some other cost enthusiasts, who even then saw in 
 
iv THE PRACTICAL COST SYSTEM 
 
 cost-finding the salvation of the printing business the 
 book was published soon after the work of preparation 
 was completed. When this first edition was published 
 there was no other book on the subject of cost-finding 
 in printing offices in existence. 
 
 There was, at that time, no other cost-finding 
 system for printing offices known, except the system 
 previously worked out and installed in a few printing 
 offices in the city of Minneapolis, Minnesota, by Mr. 
 Robert F. Denham, to whom must be given the full 
 credit of being the father of all real cost-finding 
 systems as applied to the printing business. Mr. Den- 
 ham's system was, however, too cumbersome and too 
 full of details to be used successfully in the medium and 
 smaller printing offices, and this early book of Mr. 
 Forte's was a successful attempt to simplify the Den- 
 ham system and also to so arrange its methods and 
 forms as to make it applicable to the smaller printing 
 offices where the publishing of a daily or weekly news- 
 paper was combined with the production of commercial 
 printing. 
 
 This book met with instant success, but being the 
 first book on cost-finding for printing offices ever pub- 
 lished, a pioneer in the field, it contained a few errors 
 of method and application. These errors, however, 
 were quickly discovered and reported, and those por- 
 tions of the book were at once changed and a corrected 
 edition sent out, which was still the first book on cost- 
 finding in printing offices in the field and the only one 
 on the subject for several years. 
 
 The advent of a convenient, complete and mathe- 
 matically accurate Selling Price List for the products 
 
FOREWORD v 
 
 of the printing office, has, for a short time, drawn the 
 attention of the craft away from the necessity of in- 
 stalling a cost system to determine the production 
 costs in their own plants. They are now, however, 
 awakening to a realization that a cost system will not 
 only give them a knowledge of their own production 
 costs, but will also give a much needed check on the 
 efficiency of their plants in all departments, of their 
 employees and of the entire administration, in both 
 shop and office, of their business as a whole. Further 
 than this they also realize that a cost system will show 
 them the discrepancies, extravagances, and leaks in 
 the business and its administration all of which make 
 serious inroads into the profits. This realization has 
 created a continuous and increasing demand for a new 
 and revised edition of the Practical Cost System, which 
 we are now presenting to the craft. 
 
 The author wishes to express his sincere thanks to 
 the many friends and supporters who have so freely 
 contributed of their ideas and experiences in aiding in 
 the perfecting of the revision of this book; especially 
 to Mr. George E. Wray for his careful and painstaking 
 editing of the text ; to Mr. Frederick W. Smith for his 
 thorough and scientific work in rewriting, checking and 
 editing the technical portions of the book; and to all 
 those others who have by their confidence and support 
 made this edition possible. 
 
 We cannot claim that this Practical Cost System is 
 absolutely perfect and complete, for the science of cost- 
 finding, like all sciences, is subject to the law of evolu- 
 tion, and new ideas and new methods are constantly 
 presenting themselves. We can and do claim, however, 
 
vi THE PRACTICAL COST SYSTEM 
 
 that this revised edition of the Practical Cost System is 
 far in advance of any book on the subject of cost- 
 finding in printing offices now on the market. As new 
 ideas and methods appear they will be, when thor- 
 oughly tried and tested, incorporated in future editions 
 of this book. 
 
 We are now submitting this Practical Cost System 
 to our fellow members of the printing craft with the 
 sincere hope that they may find it of the greatest 
 material benefit in their business and a very helpful aid 
 in the solving of the problems of their production costs. 
 Yours very sincerely, 
 
 THE AUTHOR. 
 November, 1920 
 
THE PRACTICAL COST SYSTEM FOR 
 PRINTING OFFICES 
 
 INTRODUCTION 
 
 A cost system is like a building each part com- 
 plete in itself the parts to be erected one upon the 
 other, until they constitute a finished structure. The 
 building may be elaborate, many little touches given 
 to it here and there, niceties of finish, and extras of all 
 kinds ; all very fine for those who wish something elab- 
 orate. The elaboration may be carried to an extreme, 
 but the fundamentals of sound business structures are 
 all the same. 
 
 There has been a need of a cost system structure, 
 with the fewest frills ; one that is simple, complete and 
 accurate. A plan that can be understood and carried 
 out along the simplest lines to give accurate results. 
 This has been the aim of the compiler and he describes 
 a system that will meet the needs of the great majority 
 of printers, those employing ten or less employees. 
 But, not to be misunderstood, this system is capable of 
 being extended, with but a few changes, larger forms, 
 etc., and will then fit any printing plant in existence. 
 
 The blanks here shown, are especially intended for 
 the use of the smaller shops, and particularly those 
 
2 fftE PRACTICAL COST SYSTEM 
 
 publishing weekly or daily newspapers in connection 
 with job offices, where there are no hard and fast lines 
 as to employees working in only one department, and 
 where the work of the employees is liable to be of a 
 mixed nature. 
 
 A careful reading of the descriptions and study of 
 the forms, with an earnest determination on the part of 
 the user, will give results; you can install as good a 
 cost system in your own plant as can possibly be in- 
 stalled and without engaging an expensive cost expert. 
 
 Over a hundred different forms were examined, 
 and a practical tryout of the system made before it 
 was offered to the printers. It is now in use in all 
 kinds and sizes of printing offices, from a one-man 
 shop to a shop having typesetting machines, cylinder 
 presses, job presses, and a complete bindery, and in 
 others where a daily and weekly newspaper is pub- 
 lished. In all this range, there has not been a failure in 
 its findings where the system has been carried out 
 according to instructions ; everyone has been satisfied 
 and more than pleased. 
 
 This is written to impress you with the idea that 
 you need not be afraid to try it; it will work, and do 
 everything any cost system will do in any plant and 
 without individual expert cost instruction. 
 
 In order that you may distinguish plainly the items 
 of expense involved in the production of a job of print- 
 ing, we insert here this diagram. (Cut number 12.) 
 
 This diagram fully illustrates all the items that 
 enter into the cost of a job of printing, and the relation- 
 ship which each item of cost bears to every other item, 
 and also the relation of the whole to the selling price. 
 
u 
 
 1 
 
 
 
 si 
 
 * 
 
 r 
 
4 THE PRACTICAL COST SYSTEM 
 
 It is well worth close study, because of its graphic 
 portrayal of the costs of producing a job of printing in 
 their relative order. It plainly shows each increment 
 of cost added to the job in its progress through the 
 factory and their accumulation into the total cost, profit 
 and selling price. 
 
 The Stock or Merchandise group is shown on the 
 right. The guide line shows the direct connection of 
 the job of printing through stock to cost. The smaller 
 squares attached to the stock square give force to the 
 fact that cost of stock is the price paid plus the 
 handling cost. 
 
 The central group shows the Time Used as the first 
 item of cost, and this is directly connected with labor, 
 showing that labor cost is a burden on the Time Used 
 for the job of printing. Labor cost is made up of the 
 price paid for labor plus the cost of the non-chargeable 
 time as shown in the diagram. The non-chargeable 
 hours in a factory are carried by labor and so add to the 
 cost of the productive labor-hour. 
 
 The third group at the left is the Investment group. 
 Investment cost is made up of rent and direct expense 
 plus depreciation and interest. The line from Time 
 Used to Investment indicates that this expense is also 
 a burden on the time used. The line running from 
 Investment to Labor demonstrates that labor cost plus 
 investment expense makes up the actual cost of the 
 time used on the job of printing. 
 
 The short line connecting these two groups with 
 Office Expense indicates that to the cost of time used 
 must be added an increment of office expense to com- 
 plete the manufacturing cost. To this cost square the 
 
MANUFACTURING OVERHEAD 
 
 line from the Stock or Merchandise group also leads to 
 complete the cost of the job. To cost is attached the 
 profit and to profit the selling price. 
 
 This diagram fully illustrates the line of relation - 
 ship of all the items which the cost of a job must 
 include, and also the relationship of the cost, the profit 
 and the selling price. 
 
 The following diagram shows the typical elements 
 of Burden or Overhead Expense in a printing plant as 
 used in the Practical Cost System for Printing Offices. 
 A study of these expense relations will make clear the 
 general principles involved in the classification and 
 distribution of the various items of Manufacturing 
 Burden or Overhead Expense : 
 
 Equipment Charges 
 Insurance 
 Taxes 
 
 Interest on Investment 
 Depreciation 
 
 Rent and Heat Factory 
 
 Direct Department Expense 
 
 Department Payroll 
 
 Department Supplies 
 Repairs to Equipment 
 General Factory Supplies 
 Non-Productive Labor 
 Power 
 
 Fuel Cost 
 
 Labor Cost 
 
 Power Plant Supplies 
 
 General Superintendence 
 Proprietor's Salary 
 Office Payroll 
 Estimating Department 
 Cost-finding Department 
 General Office Expense 
 
 The Total Manufacturing burden is made up of the 
 Productive Center, or shop, burden and the Adminis- 
 
 (Fixed 
 
 
 
 Charges 
 
 
 
 
 Productive 
 
 
 
 Center 
 
 
 
 Burden or 
 
 
 
 Overhead 
 
 Total 
 
 Operating 
 " Charges 
 
 
 Manufacturing- 
 Burden or 
 
 
 
 Overhead 
 
 Administrative 
 
 
 Burden Overhead 
 
 
6 THE PRACTICAL COST SYSTEM 
 
 trative, or office, burden. The Productive Center bur- 
 den is made up of the Fixed Charges and the Operating 
 Charges. All these items of the fixed charges are in- 
 cluded in the cost of operation of every printing office, 
 however small, as are also all the items of the operating 
 charges except that sub-items under power would not 
 be used in many plants. Under Administrative burden, 
 the item of general superintendence, would be used 
 only in the largest plants where a superintendent has 
 general supervision not only of the plant but also of the 
 selling and a part, at least, of the business of the office. 
 The item of propietor's salary should appear in every 
 plant, large or small, although if he works in the shop 
 his salary would appear on the shop pay roll to the 
 amount of his labor in that department. The estimat- 
 ing and cost-finding items may be combined with other 
 office work and so not appear as separate items in the 
 cost charges in medium and small shops, but this work 
 should be considered as a part of the administrative 
 burden 
 
CHAPTER I 
 
 THE WORKING OF THE SYSTEM 
 
 As every building must be erected on suitable 
 ground, so as to be able to stand, a cost system must 
 have ground to build upon ; the groundwork here is a 
 Job Register. 
 
 The Job Register: The simplest form possible is 
 used for the Job Register. The first space is the place 
 for the number of the job. Each job going through the 
 office must bear a number, and the Job Register is 
 used to make sure there is no repetition of numbers 
 and no unrecorded jobs. The first job in the illustration 
 of the Register is for a weekly newspaper. The other 
 jobs are a miscellaneous collection of work such as 
 come into any office. Where a price is given in ad- 
 vance, it is so recorded, and that there may be no 
 question about the price at the time of settlement. 
 Cut number 1, on page eight, illustrates a simple, yet 
 complete, form of a Job Register which contains all the 
 necessary record details. 
 
 The Job Register is your ground, and from the jobs 
 placed on it, the structure is to be built. The first 
 thing is the foundation, and that foundation is the Job 
 Ticket. 
 
JOB REGISTER 
 
 Date 
 
 Description 
 
 Price 
 
 Numbp 
 
 FOR 
 
 Date 
 
 Quantity 1 Description 
 
 t too o 
 
 Price 
 
 Numb 
 
 FOR 
 
 ^ate 
 
 5-3 
 
 Quantity 
 
 riptiori 
 
 Price 
 
 J3 
 
 3 
 
 
 ''jmber 
 
 FOR 
 
 Date 
 
 Quantity 
 
 QOO 
 
 Desertion 
 
 Price 
 
 Number/ 
 
 FOR 
 
 />. 
 
 .Date 
 
 Quantity 
 
 Description 
 
 Price 
 
 NumbeC 
 
 /or 
 
 FOR 
 
 ^*Js&CA 
 
 Date 
 
 Quantity 
 
 Description 
 
 Price 
 
 "Number 
 
 J 
 
 FOR 
 
 Date 
 
 Quantity 
 
 Description 
 
 y<rC. 
 
 - A - ^ X ^ 
 
 Price 
 
 FOR 
 
 M 
 
 Date 
 
 Quantity Descriptiotr 
 
 Price 
 
JOB TICKET EXPLAINED 9 
 
 Job Ticket : The foundation must be solid, it must 
 be simple and complete. There is no need of fancy 
 trimmings, only the essentials. This Job Ticket is the 
 simplest form that can be devised, yet so well laid that 
 it will carry the entire structure. Cuts numbers 2 
 and 3, on pages 11 and 13. 
 
 The four great walls of the printing business are 
 the Stock (merchandise or printing paper), the Com- 
 posing Room, Press Room and the Bindery. These are 
 the primates, and there is no plant, however small, but 
 has these walls of the printing plant. The stock is 
 first, that is necessary in order to print ; the composing 
 room handles the type, the presses print, and finally 
 the bindery tabs the work, or folds it, trims it, or 
 wraps it for delivery and puts on the finishing touches. 
 
 To begin the work right the Job Ticket must have 
 space to tell all the particulars about the work to be 
 done in any of the departments. It contains the date 
 the job was received, and the job number the same as 
 entered on the Job Register; whom the job is for, with 
 address, quantity, and general description, whether 
 booklets, letterheads, envelopes, cards, folders, cata- 
 logs, or whatever the job may be. Then follows the 
 date when the work is promised, right where it cannot 
 escape notice, so that the work may be finished on time. 
 
 The Stock description needs no special rulings, or 
 diagrams, just a plain space where the description, size 
 and weight of paper to be used, can be placed. If it is 
 dodgers or hand-bills, "print paper, size 7x9," conveys 
 all that is necessary; if envelopes, the wholesale or 
 grade number, size of the envelope, etc. A simple 
 blank space is all that is necessary, and the printer can 
 
10 THE PRACTICAL COST SYSTEM 
 
 write the description in terms with which he is most 
 familiar. 
 
 The Composition section has a little more definite 
 wording. If the job is to be an exact reprint, a ring 
 around the words "Like Copy" tells the story. If the 
 printer cannot duplicate, and has a little leeway a ring 
 around the words "Like Sample as Near as Possible" 
 is all the description needed. Cut number 2. If the 
 . stone proof is to go to any particular person, his name 
 only is necessary, and if a revised proof is to go to the 
 customer or anyone else, room is provided. Cut num- 
 ber 3. If the copy is manuscript, a ring around the 
 different lines gives the compositor an idea as to the 
 setting of the job. Cut number 3. Any particular 
 instructions, such as width to set job, if a booklet or 
 pamphlet, size and style of type to be used, size of type 
 page, and whether to run in one or two colors, can all 
 be indicated. Cut number 3. This is the simplest way ; 
 all the essentials to the correct setting of the job can be 
 easily given, from an envelope corner to a large catalog, 
 with no confusing detail. 
 
 The Press Work space is boiled down to but two 
 special places. One for color of ink, and one to desig- 
 nate to whom the press proof shall be shown. Cut 
 number 2. The rest of the space is blank, but its uses 
 are manifold. Here can be told on what press to put 
 the job ; whether a cheap or high-grade job ; whether to 
 run "work-and-turn" and any other special instructions. 
 The workmen in the smaller shops, especially the small 
 town shops, are closer to the customer, and know what 
 he desires, so there is no need of a lot of diagrams or 
 special spaces, which only confuse. 
 
NOTE: Ticket must be mad* ut In full, aivlnft every Information aeceeMrjr for 
 completion r fob. Ufe c*rbon ipr and detach and file record. Number every job. 
 
 Date 
 
 No. 
 
 102. 
 
 For 
 
 Address 
 
 Quantity 
 
 /OOP 
 
 DESCRIPTIOI^K 
 
 PROMISED 
 
 STOCK 
 
 COMPOSITION 
 
 I Like Copy 
 
 I Sample 
 I as Near as' 
 iPossibIe> 
 
 Heavy 
 Light 
 Fancy 
 Plain 
 Nice Job 
 Cheap Job 
 
 Stone Proof to 
 
 <u 
 .a 
 
 Revise to 
 
 PRESS WORK. 
 
 Color Ink 
 
 Proof to 
 
 BIND 
 
 Block 
 
 Perforate 
 
 Deliver 
 
 Delivered by 
 
 To Be Called for 
 
 .Ship by 
 
 Via 
 
 Price 
 
 Cost of 
 
 Stock 
 
 PorforiMltMat Co- Salt Late 
 
 Journal 
 
12 THE PRACTICAL COST SYSTEM 
 
 The Bindery in the average small office is perhaps 
 the least used department of the shop, but the three 
 most important and used operations have spaces. If 
 the work is to be put in tabs or pads, room is provided 
 for that ; if to be perforated, there is a space where only 
 a check mark is needed, and if the work is to be num- 
 bered, the first number only is necessary to be put in 
 the place. 
 
 The Delivery of the work is important, and spaces 
 are left to denote whether work is to be delivered or 
 called for, and date delivered, and by whom. If the 
 product is to be shipped, there is room for instructions. 
 Cut number 3. 
 
 The very reason for doing the job the price has a 
 place, and then a space for the cost of the stock used. 
 And, last of all, a space for the Journal page when the 
 job is entered upon the books. An important feature of 
 the Job Ticket is that it is made in two parts. The first 
 is a fly sheet, cut number 2, tipped on over a duplicate 
 Job Ticket printed on the Job Envelope, cut number 3. 
 The reverse of the fly sheet is a Job Record, cut num- 
 ber 7. When the Job Ticket is made out, a sheet of 
 carbon paper is placed between the Job Ticket fly 
 sheet and the Job Ticket envelope, and then the direc- 
 tions and particulars of the job are written out, all 
 except the price, which is not usually carboned on the 
 Job Envelope. The fly sheet is detached from the 
 envelope, and placed in a ring binder. The number of 
 the job is again entered on the^reverse or Job Record 
 the_ fly sheet in the space left for thaFpurpose. 
 
 This Job Record remains in the ring binder, is kept in 
 the office and placed in the safe at night, as it will soon 
 
NOTE: Ticket must be made out In full, giving every Information necessary for 
 completion or Job. Use a carbon paper and detach and file record. Number every Job. 
 
 Date 
 
 No. 
 
 Address \J 
 
 Quantity 
 
 5oo 
 
 DESCRIPTION 
 
 PROMISED 
 
 STOCK 
 
 3^x36 fo 
 
 COMPOSITION 
 
 Like Copy 
 
 Like 
 Sample 
 as Near as 
 Possible 
 
 Machine 
 
 Stone Proof to 
 
 Revise to 
 
 PRESS WORK 
 
 _ 
 ( 
 
 Color Ink 
 
 Proof to 
 
 BIND 
 
 Block 
 
 In a Pad 
 
 Perforate 
 
 No. 
 
 Deliver 
 
 Delivered 
 
 Delivered by 
 
 To Be Called for 
 
 Ship by 
 
 'Via 
 
 Price 
 
 Cost of 
 Stock 
 
 Journal 
 
 Port* Pufellthlac Co. Silt Lik 
 
14 THE PRACTICAL COST SYSTEM 
 
 contain records as valuable as those in the ledger or 
 books of account. This Job Record will be fully ex- 
 plained further on. 
 
 In the Job Envelope the second part of the Job 
 Ticket is placed the copy for the Job, and having on 
 its face all the instructions for printing, goes to the 
 stock room, where the stock is cut, or ordered from the 
 paper dealer; then to the composing room where the 
 job is set; to the press room where the job is printed, 
 and to the bindery where the job is finally completed. 
 Then the envelope is sent back to the office, where it is 
 to be priced and entered upon the books. 
 
 In speaking of the composing room, press room, 
 etc., we have not in mind large offices where there is a 
 separate room or a separate floor for these processes 
 but use the terms to indicate the different departments 
 or production centers of a printing plant. 
 
 The Job Ticket, the Job Record, and the Job En- 
 velope has now been laid the foundation of the Cost 
 System. The structure cannot be built or finished or 
 have any value without this permanent and solid basis. 
 
 Now, having laid the foundation, you proceed with 
 the superstructure ; this too must needs be correctly 
 put together or the building is in vain. 
 
 The Daily Time Ticket is part of the material for 
 the superstructure. On the Daily Time Ticket is 
 entered all the time used in the execution of all orders. 
 This time ticket becomes the superstructure of the Cost 
 System. The time used in the different departments, 
 or production centers, of the plant is a prime factor and 
 the accuracy of the cost system depends largely on the 
 care used in keeping the daily time ticket. 
 
DECIMAL UNIT OF TIME 15 
 
 In building, the workmen do not cut boards to any 
 length that suits their ideas, the walls are not one size 
 on one side and different dimensions on the other sides, 
 but the whole is built according to a well-defined plan. 
 The rule of inches and feet is the unit of the building. 
 A stable structure is not possible if each man were to 
 follow his own ideas as to length or breadth. He must 
 use the unit of measurement and be guided by the 
 specifications of the master builder. The man at the 
 case or at the press mttet needs use a definite unit of 
 time so that the finished product may be produced on 
 the same unit bases in all departments, and correct 
 figures secured for use in the completed records. 
 
 The adoption of a unit of time is an important 
 matter in the work of keeping daily time tickets. For 
 general use, the unit of six minutes, this being one- 
 tenth of an hour, greatly simplifies the figuring of time 
 on all tickets and job records and all other time records 
 in the cost system. The six-minute (.1) unit is the 
 best, although the five-minute, the ten-minute, or the 
 fifteen-minute unit are sometimes used. In considering 
 all the units in use, and their applicability to the work 
 of a small office, the use of the six-minute (.1) or tenth 
 of an hour unit is recommended. 
 
 Using a six-minute unit, all work recorded on the 
 Daily Time Ticket is either .1 of an hour, .2, .5, etc., up 
 to .9, 1 hour, 1.1, 1.2, 1.5 and so on. This makes the 
 entering of time, on the part of the workmen and 
 extension by the cost clerk, very simple and easy. 
 While to the non-user of the Cost System, this may 
 seem somewhat awkward at first, in practical use it is 
 recognized as the correct way to record time, and the 
 
16 
 
 THE PRACTICAL COST SYSTEM 
 
 use of the decimal unit greatly simplifies the figuring 
 of all tickets and time reports. 
 
 Having adopted a unit of time, you can now easily 
 follow the working of the Daily Time Ticket. 
 
 Note. Unit Clock Faces. For the convenience of the 
 users of the Practical Cost System we have prepared two sizes 
 of clock faces, like the illustration, showing the six minutes, 
 (.1) of an hour, time unit. The hour hand points to the hours, 
 the inner circle of numbers, as usual, while the minute hand 
 points to the time units, the outer circle. The time shown in 
 the illustration is 1 o'clock and 9 units, .9 of the hour. Each 
 of the time unit squares on the Daily Time Ticket represents 
 .1 of an hour and the workman would record the time shown 
 on this clock face by drawing a pencil mark through nine of 
 the squares in the column headed 1 to 2. 
 
 These dials are printed on a heavy paper and can be 
 easily pasted on the face of a clock. Two sizes are carried in 
 stock 4 inch for the small bench clocks and 11 inch for the 
 large wall clocks. These sell for 50 and 75 cents each. 
 
REASON FOR TIME TICKETS 17 
 
 Note. Reason for Time Tickets. Before going any fur- 
 ther, we want to explain a few things in connection with the 
 time tickets and to allay any misunderstandings and supply 
 the reason and necessity for the Daily Time Ticket. 
 
 First and foremost, the Daily Time Ticket is not used for 
 a check on your workmen. It is the same in all essentials as 
 the sale slips generally used by stores throughout the country. 
 Clerks make out sale slips for whatever goods are bought in a 
 store. One of these slips goes to the bookkeeper that he may 
 charge the customer correctly with the goods bought. 
 
 The printer sells the products of labor, and he must 
 charge for every productive minute of this labor, just the same 
 as a merchant must charge for every item of his merchandise. 
 The printer cannot correctly charge his customer unless he 
 knows how much labor was used, the same as a merchant can- 
 not correctly charge a customer with merchandise unless the 
 sale slip shows the kind of goods and the amount sold. 
 
 Would you deal with a merchant who did not use some 
 system of recording your purchases, item by item, and charg- 
 ing you for them, but who should, instead, at the end of the 
 month make a guess at what you had bought and then charged 
 you for that? Not for a minute. If you buy $1.00 tea, and 
 only one-half pound, you want to pay for that and not be 
 charged with one pound of 50 cent tea. Without careful 
 records of time, used on each job sold, you are guessing what 
 you should charge. Quit guessing where certainties can 
 readily be secured. No man objects to paying a right price for 
 a right article, and a right price must include the correct 
 amount of labor-time used in its production. 
 
 The argument that the workman was slow, that the cus- 
 tomer does not get all he pays for when a job seems to carry 
 too much time, is about as clear as trying to say that a pound 
 of tea is worth 90 cents, but should be charged at only 60 
 cents, and anyway you got but 14 ounces. This argument will 
 not stand with the Daily Time Ticket as devised for this 
 system. The workman records all the time he is working, either 
 chargeable or non-chargeable, and if he worked eight hours a 
 day before the adoption of the system and got out the work; 
 and if, since the adoption he works eight hours and gets out 
 
18 THE PRACTICAL COST SYSTEM 
 
 the work, where is the difference? Even if it seems to take 
 longer to do the work than you thought, do not blame the 
 man or the system but blame yourself because you have been 
 guessing wrong during the past. Do not guess wrong any 
 longer, but record the facts. 
 
 It should be understood that a workman who does not 
 record his time rightly is in the same class as the clerk who 
 undercharges or overcharges a customer. In the one case he 
 cheats his employer and in the other he is cheating the 
 customer. 
 
 Honesty in recording time, so that the employer may 
 receive the full benefit of what he pays for, and that the cus- 
 tomer shall have charged to him just what he should pay for, 
 is the only correct principle. Unless the Daily Time Ticket 
 shows the time of the employee in full, for the day, an investi- 
 gation should be made as to why the time is not all accounted 
 for. 
 
 The Daily Time Ticket is the sales record of the 'system, 
 and on its faithful and honest keeping depends the uprightness 
 and prosperity of the business. If these time reports are kept 
 lira careless, slipshod manner, the whole cost system will be 
 disorganized, the charges on jobs will be as unreliable as the 
 old guess-work way unfair to both the seller and the 
 customer. 
 
 Time is one of the most important elements of the cost 
 of production and much depends upon a correct record of the 
 time for every process of work. 
 
 The employee should not get the idea that practically all 
 his time should be reported as on productive work. That idea 
 is wrong and, moreover, such a condition is impossible. In 
 the composing room, for instance, even in the most efficiently 
 conducted plants, the non-productive time will range from 25 
 per cent to as high as 40 per cent of the total time, and even 
 SO per cent is not uncommon. 
 
 The individual efficiency of the employee and the effici- 
 ency of the management are both important factors in 
 reducing production costs; and an even more important factor 
 is the efficiency of the plant itself. If the workman is com- 
 pelled to waste hours each week, because of insufficient 
 
20 THE PRACTICAL COST SYSTEM 
 
 material to work with, such waste will greatly increase pro- 
 duction cost. Under present conditions of labor cost and 
 business burden, or overhead, every minute of time wasted 
 actually costs the business an average of 4^2 cents, more than 
 this in the cylinder press room and less in the bindery. 
 Wages paid for time wasted, either through lack of equipment 
 or for any other cause, can never by any possibility be 
 recouped but are irretrievably lost. The amount so spent 
 would, if invested in more efficient equipment or in training 
 the employees to greater individual efficiency, and by that we 
 do not mean to work harder, bring in good dividend returns 
 every month of the year. 
 
 With these things impressed on your mind, and kept well 
 to the front in all the work of the cost system, you will be 
 ready to undertake the keeping of the Daily Time Tickets. 
 
 The Daily Time Ticket, as its name indicates, is a 
 report by the employee of all the time spent by him 
 each day while working for his employer. It has been 
 devised so that a reading will show exactly what he 
 has accomplished. This form is not merely "some- 
 thing to fill out." A properly designed form does not 
 call for any useless information, but it does call for all 
 the necessary information and every item called for on 
 this time ticket is necessary. 
 
 As he is being paid to work, you are entitled to 
 know what he is doing, and to what use he has put the 
 time bought. A clerk in a store records his sales, and 
 an employee, who is the primary recorder of the sale 
 of his time and labor, is in the same position as the 
 clerk and should accurately record the sale of his time 
 and to whom sold. If you meet with any objections to 
 the keeping of a Time Ticket by an employee a care- 
 ful explanation of what this means to you and an 
 insistence that it be done rightly will soon end all 
 

 
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22 THE PRACTICAL COST SYSTEM 
 
 argument. Because he has never done it before is no 
 reason why it should not be done now, and an employee 
 is honest with himself, his employer, and the customer 
 if he keeps his time report correctly. 
 
 A Daily Time Ticket is used each day by each 
 employee, his name, the date, the time he commenced 
 work and time he stopped is recorded on the top line. 
 
 If, in case of a small office, fires have to be built or 
 sweeping and cleaning done, this is recorded and 
 charged to Office Time, using No. 456 for kind of work 
 done. When actual productive or chargeable work is 
 begun, the number of the job worked on is recorded, 
 and also the name or initials of the customer, so that in 
 case an error in recording the number of the job is 
 made, it can still be identified. The time work began 
 and time ended must be indicated for each job. Idle 
 time, which is sure to occur, must be accounted for in 
 all cases, showing why idle. 
 
 The "Press Work" or "No. Impressions" column is 
 hot used in typesetting, except in the case of a type- 
 setting machine when ems or galleys of type set may be 
 recorded in this column. In all cases the column "Kind 
 of Work" is filled in, and the beginning and ending 
 time. 
 
 On the improved form of the Time Ticket, which 
 we recommend for the Cost System, cuts numbers 4, 
 5 and 6, each hour from 8:00 a. m. to 6:00 p. m. is in a 
 column separated from the others by a double line ; and 
 each square in this hour column represents the .1 of an 
 hour, or six minutes, time-unit. 
 
 After the workman has filled in the spaces for the 
 job number, name of the customer and the kind of 
 

 
 
 
 
 
 
 
 
 
 
 
 
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24 THE PRACTICAL COST SYSTEM 
 
 work he has only to draw a pencil line across the 
 squares from the time of starting the job to the time 
 of finishing. For example, if he starts in at 8 :00 on a 
 general clean-up of rule, leads, type, etc., the work will 
 be classed as distribution, with the work No. 55. If he 
 works at this until 8 :45 he will draw a pencil line from 
 the beginning of the hour to, and including, the time- 
 unit space numbered 48, as if the work lasts beyond the 
 42-minute space it must be considered as filling the full 
 space following. In other words, do not split a unit 
 of time, for the three minutes which might be added to 
 some jobs will not have any appreciable effect on the 
 cost of the job and will equalize itself in the course of 
 the day. When he completes the next job he will draw 
 a pencil line, in the space following the record of the 
 job number and the work number, starting with the 54- 
 minute space and stopping, as before, with the unit 
 space of the finishing time. See illustration of Time 
 Ticket, cuts numbers 4, 5 and 6. The right hand por- 
 tion of the Time Ticket, beyond the triple line, is for 
 office use only except that the column headed "Press 
 Work," "No. Impressions" may be filled in by the em- 
 ployee, if desired, as mentioned above. 
 
 A further advantage of the use of the improved time 
 report used in the Practical Cost System is that if the 
 workman has to stop on a job before completing it to 
 do some other work he will draw the pencil line 
 through the time squares to the point where he is in- 
 terrupted, do the other work, and when he returns to 
 the job in hand he will not need to re-enter the job 
 number and kind of work a second time but will record 
 the time of resuming work to the time of finishing. See 
 
WORK NUMBERS EXPLAINED 25 
 
 illustration of Time Ticket, cut number 4, second line 
 in the afternoon section. 
 
 On the back of the Daily Time Ticket, is printed a 
 list of the operations most common in a printing office, 
 and these will now be taken up one at a time and 
 explained. 
 COMPOSITION 
 
 1. Hand Composition. 
 
 2. Hand Alterations. 
 
 21. Advertising, Hand Work. 
 
 3. Make-up. 
 
 4. Lock-up. 
 
 5. Machine Composition. 
 
 6. Machine Alterations. 
 
 31. Machine Composition, Advertising. 
 (Non-chargeable) 
 
 51. Pulling Proofs. 
 
 52. Reading Proof. 
 
 53. Hand Set Corrections. 
 
 54. Machine Corrections. 
 
 55. Distribution. 
 
 56. Cleaning Machine. 
 
 PRESS WORK 
 
 101. Make Ready. 
 
 102. Holding Press for Proof. 
 
 103. Running. 
 (Non-chargeable) 
 
 151. Changes (Press Corrections). 
 
 152. Washup. 
 
 STOCK ROOM 
 
 201. Cutting Stock. 
 
 202. Handling Stock. 
 (Non-chargeable) 
 
 251. Unpacking and Shelving Stock. 
 
 252. Changing or Edging Knife. 
 
26 THE PRACTICAL COST SYSTEM 
 
 BINDERY WORK 
 
 301. Tabbing. 
 
 302. Trimming. 
 
 303. Folding and Inserting. 
 
 304. Gathering. 
 
 305. Perforating and Punching. 
 
 306. Stitching or Stapling. 
 
 307. Binding. 
 
 308. Numbering. 
 
 309. Counting. 
 
 310. Mailing. 
 (Non-chargeable) 
 
 351. Clean-up. 
 OFFICE WORK (Non-chargeable) 
 
 451. Bookkeeping. 
 
 452. Soliciting. 
 
 453. Collecting. 
 
 454. Delivering. 
 
 455. General Office Work. 
 
 456. Janitor Work. 
 
 Note All work numbers containing any 50's are non- 
 chargeable. 
 
 OFFICE WORK 
 
 Office Work is an original idea with the Practical 
 Cost System and came about because in the first at- 
 tempts at a simple system, the office part was neg- 
 lected, but in a few weeks came a host of inquiries as 
 to charging different kinds of time used in the office, 
 where the proprietor does work in the printing depart- 
 ments, and where to charge general cleaning up, and 
 other things. Then the "Office Work" column was 
 added and the troubles on that score ended. 
 
 Under Office Work we have No. 451, bookkeeping; 
 No. 452, soliciting; No. 453, collecting; No. 454, deliver- 
 
OFFICE WORK EXPLAINED 27 
 
 ing; No. 455, general office work, and No. 456, janitor 
 work. Nos. 451, 452, 453, are not used or especially 
 needed as separate time unless the proprietor so de- 
 sires. No. 455 covers nearly all the needs, but the 
 others are added to designate such things as generally 
 come under the heading of Office Work. No. 456 is 
 for janitor work, and is chargeable to the office as it 
 would be practically impossible to divide this time 
 against each separate department, and in any case a 
 general cleaning up is a general expense of the busi- 
 ness. Someone in the plant does this work, and the 
 time should be accounted for. 
 
 Where the proprietor or manager of a plant works 
 in the printing department, he will make out a time 
 ticket each day, so that his time can be accurately 
 divided against the departments where the work has 
 been done. It is plainly as important that all his work 
 should be charged for as that of the workpeople. If the 
 proprietor makes up the paper, sets a job, does the 
 mailing of the paper, that time should be accounted 
 for, and he will, therefore, as well as his employees, 
 make out a Daily Time Ticket. Unless he does this his 
 shop labor will not appear on the records and the 
 number of labor-hours recorded will be less with a 
 consequent increase in the hour costs. 
 
 Delivering, No. 454 : The work number for this is 
 in the series covering office work for the reason that in 
 the small plants the proprietor often likes to deliver the 
 work so as to show the customer the excellencies of the 
 job, or his promptness, or as an opportunity to solicit 
 more work. In the larger plants, where they have 
 work for an errand boy, the delivery is sometimes con- 
 
28 THE PRACTICAL COST SYSTEM 
 
 sidered a part of the stock work and is further treated 
 under that heading. 
 
 We believe, however, that the delivery should 
 always be considered as a part of the office work for 
 the reason that the operation is a delivery of the 
 product of all the departments which have done work 
 on the job, and not of the stock room alone. Treating 
 it as an office charge the cost of deliveries will be 
 distributed against all departments in proportion. 
 
 STOCK WORK 
 
 On this Stock Work there may be some difference 
 of opinion, but from practical experience not theory 
 a stock handling charge or a cutting charge essen- 
 tially the same must be made on each and every job; 
 both a stock handling and cutting charge should not be 
 made. 
 
 Cutting Stock, No. 201 : No one will deny that it 
 takes time to cut stock, and that the time should be 
 recorded and charged for. It costs money for the labor, 
 rent is paid for stock and cutter space, there is depreci- 
 ation and interest on the cutting machine and cost of 
 shelving. There is no argument against a charge for 
 cutting stock, any more than against a charge of time 
 for setting the type ; yet very few, before the advent of 
 cost systems, ever thought of doing such a thing as 
 charging for cutting stock. Since this advent a few, 
 possibly not wishing to admit they have been so mis- 
 taken in the past, argue against such a charge and put 
 the whole stock room work into Office Expense. That 
 is ridiculous! There is no more reason for doing it, 
 
STOCK HANDLING CHARGE 29 
 
 than for putting press work or tabbing into office ex- 
 pense. Remember this : everything that goes into a job 
 of any kind must be charged for. Any other theory of 
 running a cost system is false, and fails in its purpose, 
 which is, the finding of the correct cost basis, through 
 correct hour costs, on which to build a fair and equit- 
 able selling price of the individual job of printing. 
 
 Handling Stock, No. 202: All that has been said 
 about cutting stock is true for handling stock, but per- 
 haps it needs a little more explaining. The idea of charg- 
 ing one or more units of time for taking down 500 
 envelopes and putting them on the press may seem 
 absurd. Is it? That stock occupies room, you have to 
 pay interest on the investment in the merchandise and 
 equipment, insurance, taxes, rent, and the price of 
 shelving to hold it. In the city shops the errand boy 
 very often has to go to the wholesale house for the 
 stock. All this expense must come out of the profits 
 if there are any and so it should be charged and paid 
 for. These matters have been neglected for years, and 
 have caused big leaks in the printing business. 
 
 A record must be made by the person who takes out 
 the stock, so that it will appear in the final record of 
 the job, showing who took out the stock, the units of 
 time required, and that the proper stock and the correct 
 amount was used. This is as important as to know 
 who set the type on the job. Two other charges are 
 made for stock work Delivering and Unpacking. 
 
 Note. In our opinion, one of the principal causes for 
 failure to make money in the printing business is because so 
 few have realized that it costs money to handle stock, and to 
 attend to a hundred other trifles. Good old Ben truly said: 
 
30 THE PRACTICAL COST SYSTEM 
 
 "Many mickles make a muckle, or one hundred cents make a 
 dollar." In talking with a prominent wholesale paper dealer, 
 recently, he stated that it cost him nearly fifty per cent to 
 handle broken ream lots, and that he is charging only twenty- 
 five per cent, and the rest comes out of the profits. He said 
 it was unfair to the paper house to only charge twenty-five 
 per cent on twenty-five sheets, as it took nearly the same time 
 and cost nearly as much as to count out a larger quantity, and 
 he contended that it would be much better to make a time 
 charge, but that it was practically impossible to do this, so he 
 must continue to charge on a percentage basis, though he 
 believed it wrong. Some who use a Cost System charge a 
 percentage on the cost of stock for handling, and by so doing 
 they charge more for handling expensive paper than the 
 cheaper. Is this right? Would it not be as correct to charge 
 for typesetting on a percentage of the cost of stock? 
 
 It has, however, become a custom of the trade to charge 
 ten per cent on the cost of the stock for handling in the plant, 
 and when the plant is located some distance from the paper 
 house, another ten per cent for freight and drayage into the 
 plant. The principle is wholly wrong as it penalizes the user 
 of the better grades of stock. The charge should properly be 
 for the units of time used in handling the stock while the 
 freight and drayage cost should be added to the cost of stock 
 in the shipment on the basis of weight. 
 
 The percentage basis in a cost system at any point is 
 absolutely wrong. The printer is selling labor, or its products, 
 on the basis of the time used, therefore it is that all labor, 
 going into the product should be sold at a rate that will be 
 profitable. Any percentage based on the cost of the paper, 
 any percentage used for ascertaining costs for a correct price 
 for the products of labor, is radically wrong. Customs and 
 habits are hard to change and the user of a cost system must 
 decide for himself whether he will handle this matter in the 
 correct way or follow the custom of the trade. 
 
 This may seem like a long argument, but at this point it 
 is really necessary, as the very first thing done on a job, or 
 which should be done, is the stock work, as that is where the 
 labor commences. 
 
DELIVERY NON-CHARGEABLE 31 
 
 Delivery, No. 454: This is a non-chargeable item, 
 as a direct charge cannot be made against the customer 
 for the reason that several jobs may be delivered at the 
 same time. This being non-chargeable is an additional 
 argument for making a stock handling charge. The 
 charge for cutting stock when cut, and for handling 
 stock from off the shelves, when in packages or boxes, 
 in the larger plants includes the cost of delivering, and 
 the cost of the time of the boy or man used in this 
 work is directly charged to that department. See, also, 
 under "Office Work." All labor-time must be reported 
 on the Daily Time Ticket; hence the employee should 
 keep as accurate a record of delivery time as of other 
 work. 
 
 The proper time to charge for stock handling is 
 when the stock is first taken from the shelves and the 
 delivery cost is covered in that charge unless it is 
 handled as an office charge as mentioned under "Office 
 Work." 
 
 Unpacking and Shelving Paper, No. 251: It takes 
 time to unpack a shipment of paper, check the invoices 
 and put the stock on the shelves ; and as it may be used 
 for several jobs, it is non-chargeable. 
 
 It is customary, in many plants, to make no dis- 
 tinction between the stock handling and the cutting, 
 but to treat them as belonging in the same department 
 and using the same work number for both. For many 
 reasons, especially in the smaller plants, this method is 
 advantageous as the time units are small for the hand- 
 ling. The only objection to this method is that it has 
 a tendency to make the handling charge a little greater, 
 because of the increment of interest and depreciation 
 
32 THE PRACTICAL COST SYSTEM 
 
 on the cutting machinery, but it will also tend to make 
 the cutting charges a little less. Neither the increase in 
 handling nor the decrease in cutting cost will make any 
 material difference in the cost of the completed job. 
 
 To Summarize: Every job must have either a stock 
 cutting or stock handling charge, but not both. Time 
 used in delivering and unpacking paper or shipments 
 of paper is stock work but the time is non-chargeable 
 against the department. We advise, however, that all 
 delivering be treated as office work. We now come to 
 that much-abused department, Composition. 
 
 COMPOSING ROOM 
 
 This department of the printing business has long 
 been called the "sink hole" of the printing office, and 
 many and long have been the articles published as to 
 how to make it pay. The much-abused "sorts questions" 
 "plenty of material," "new inventions," "quick meth- 
 ods," have all been written and talked about till every- 
 one knows them by heart but the one thing forgotten 
 has been : "Have you charged the right price for the 
 composition?" "Do you know how long it actually took 
 to set the job?" The question is not what time you 
 thought it would take or what time you guessed it did 
 take. Poor, dear, old composing room ! 
 
 A swift(?) would look over a piece of manuscript 
 for thirty minutes, figure it all out, then rush up the 
 job in fifteen minutes, and tell the boss he set the job 
 in fifteen minutes, and he was believed. Everybody 
 forgot about that thirty minutes of sizing up which 
 should have been included in the composition time, as 
 
COMPOSITION TIME DEFINED 33 
 
 such sizing is a necessary part of the work. No wonder 
 the composing room was a sink hole. 
 
 With a cost system The Cost System the correct 
 time must be given and the compositor must account for 
 his entire time, what he is doing all day. It will be 
 found that many of the jobs which were formerly 
 reported as set in fifteen minutes, now take forty-five 
 minutes. Remember that every unit of time, from the 
 unit when the compositor receives the copy until the 
 job is on the galley ready for pulling proof, must be 
 recorded as Composition or No. 1. 
 
 What is the good of "sorts," "lots of leads and slugs 
 and quads/' and all the rest, if the time required to do 
 a job is simply guessed at one-third the time it actually 
 takes? That is about the percentage of guesswork. 
 With the correct reporting of time used on the Daily 
 Time Ticket, you know the time used, and have a solid 
 basis on which you can charge for it. 
 
 The numbers used in the composing department run 
 from 1 to 6 and from 51 to 56, so that the composing 
 room numbers, all being less than 100, can be readily 
 recognized. Notice that there are two numbers, 21 and 
 31, which are for composition work on advertisements. 
 All these work numbers will be explained in detail. 
 All work numbers containing a 50 are non-chargeable 
 time. 
 
 Composition, No. 1: This includes all hand type- 
 setting and is counted from the time unit when the 
 compositor takes the copy until the job is ready for 
 pulling the proof. Where the composition has been 
 done on a machine the work is counted as hand com- 
 position from the time the compositor takes the slugs 
 
34 THE PRACTICAL COST SYSTEM 
 
 until the job is ready for proofing, even though it might 
 be the machine operator who does the work, it is hand 
 composition and should be so recorded. If the com- 
 position on a job is not finished during the day only so 
 much time is recorded as is put on it that day and the 
 continuance of the time on the job will appear on the 
 time ticket for the day when it is again taken in hand. 
 This time is chargeable. 
 
 Hand Alterations, No. 2 : All authors' changes from 
 the original copy, resetting of the job, through no fault 
 of the office, corrections and changes in a standing 
 form ordered by the customer, and all such alterations 
 and changes, are chargeable against the job and must 
 be figured into its cost. The neglect in charging such 
 items into cost has been in the past a source of heavy 
 loss in the printing business ; care should be taken that 
 all these items are recorded and charged for. 
 
 Advertising, No. 21 : This is a special work num- 
 ber and covers all hand work in setting advertisements. 
 This work includes also the trimming or cutting of 
 linotype slugs which are to go into advertisements in 
 the newspaper and the necessary whiting out of such 
 machine set lines, and any work done on advertising 
 cuts or plates to make them square, type-high or to 
 fit into the space. This work number would be used 
 only when the proprietor desires to keep the time on 
 advertisement composition separate from other com- 
 position for the purpose of ascertaining the cost of 
 advertising composition. In a job shop and ordinarily 
 in the country shop it will not be used. When it is, the 
 time should be added to the other composing room time 
 in Record of Chargeable and Non-chargeable Hours. 
 
COMPOSITION CONTINUED 35 
 
 Make-up, No. 3 : This is a regular part of the com- 
 posing room time, but we advise the keeping of this 
 process separate from composition, as such, because of 
 the additional statistical information that it gives the 
 proprietor on the division of the working time. It is 
 especially valuable in connection with the issuing of a 
 newspaper and of the work on large jobs. On the small 
 jobs, where there is nothing to be done except to lift 
 from the galley and lock in the chase, this item of work 
 may be omitted and the entire work, from the finishing 
 of the composition to the completed lock-up, may be 
 included in the lock-up which is also composing room 
 time. 
 
 Lock-up, No. 4: This work is also composing room 
 time and covers just what its name indicates: all the 
 work of locking up to get the form ready to put on the 
 press. It makes no difference if it is the pressman who 
 locks up this form, the time must be recorded under 
 this work number and recorded as composing room 
 time. When the pressman does this work a proportion- 
 ate amount of his wage will be charged against the 
 composing room, as will be taken up and explained 
 later when we reach that portion of the Cost System. 
 This time is chargeable. 
 
 Machine Composition, No. 5: This work number 
 covers all the productive composition on a typesetting 
 machine of any class and the same rules apply as in 
 hand composition. 
 
 Machine Alterations, No. 6: This work number 
 covers the same classifications and is governed by the 
 same rules as are Hand Alterations. The time used is 
 chargeable. 
 
36 THE PRACTICAL COST SYSTEM 
 
 Machine Composition, Advertising, No. 31 : This 
 work is, for the machine, the same as No. 21 is for hand 
 composition and is governed by the same rules. 
 
 Pulling Proofs, No. 51 : This item of work is classed 
 as non-chargeable time and should be so treated and 
 recorded. The reason for this is that as a general 
 thing several jobs are proofed at the same time and it 
 would be a difficult matter to so separate the time that 
 each job could be properly charged. In addition to this 
 the pulling of proofs is work done much more for the 
 protection of the office against errors than for the 
 benefit of the customer. For these and other reasons 
 the time of pulling proofs is considered and treated as 
 non-chargeable. 
 
 Exceptions: On large jobs, like books, pamphlets, 
 catalogs, briefs, herd books, fair books, telephone 
 directories, the newspaper, etc., which requires con- 
 siderable time for pulling proofs, and where the cus- 
 tomer asks for proofs and revises, the time may be 
 considered and treated as chargeable. This is a matter 
 that the proprietor must decide on each individual job 
 and should issue his instructions as to the proofing. 
 When this work is to be considered as chargeable time 
 the workman should record it on the time record, using 
 the same work number but prefixing or following the 
 number with a letter C, as C51 or SIC. This will 
 enable the cost clerk to recognize the time as charge- 
 able and make the proper charge for this work against 
 the job. This time, whether chargeable or non- 
 chargeable, must be recorded as part of the Hand 
 Composition work, as all used hours are to be entered 
 in the hour record later. 
 
ERRORS NON-CHARGEABLE 37 
 
 Reading Proof, No. 52: This work, in all essen- 
 tials, is similar to No. 51, preceding, and should follow 
 the same rules as to recording and as to whether it is 
 to be considered as chargeable or non-chargeable time. 
 This time should also be recorded in hand composition 
 department. When treated as chargeable the work 
 number should be used with the letter C as above. 
 
 Hand Set Corrections, No. 53 : As this work is the 
 correction of errors made by the compositor the time 
 required for them is non-chargeable and must be so 
 recorded as part of the time of this department. In 
 every line the business itself is held responsible for the 
 correction of errors and mistakes made by its em- 
 ployees and there is no reason why the errors in 
 composition should be made an exception to this rule. 
 Regardless of any who may argue to the contrary, a 
 printing office has no right, moral or legal, to penalize 
 a customer for its own errors and mistakes or lack of 
 efficiency. Under no circumstances, therefore, should 
 the correction of office errors be charged to the cus- 
 tomer. 
 
 Machine Corrections, No. 54: This work is the 
 same for the typesetting machines as the preceding 
 number is for the hand composition and should be 
 handled in the same way. 
 
 Distribution, No. 55: This work number includes 
 the time spent in the distribution of dead forms, the 
 cleaning and putting away of rules, leads, furniture, 
 quoins and all the material of the composing room 
 equipment, and in addition, all such work as cleaning or 
 wiping up the stones, blowing out cases and all the 
 miscellaneous clean-up work of the department, except 
 
38 THE PRACTICAL COST SYSTEM 
 
 such as may be classed as janitor work. This time is 
 wholly non-chargeable and must be so recorded. 
 
 Cleaning Machine, No. 56: This work covers the 
 cleaning, adjusting, oiling, etc., of the typesetting 
 machine, and in addition all work that may be done in 
 cleaning, straightening and repairing of the matrices, 
 space-bands and all the other appurtenances of the 
 machine, including the re-melting and pigging of metal. 
 
 This completes the work numbers used for the com- 
 posing room and they will cover all the work usually 
 done in that department. In all plants where a type- 
 setting machine is used this department is a double- 
 header, as the time work of the hand composition must 
 be kept separate from that of the machine workers. 
 
 Numbers 1, 2, 3, 4, 21, 51, 52, 53 and 55 belong to 
 the hand composition, and 5, 6, 31, 54 and 56 to the 
 machine composition. Impress it thoroughly on who- 
 ever does the figuring on the time reports that in 
 extending the time into the "For Office Use Only" 
 section of the time report that each item of machine 
 composition time, either chargeable or non-chargeable, 
 must be ringed. The reason will be taken up later. 
 
 PRESS ROOM 
 
 This production center of the plant follows natur- 
 ally after the work of the composing room. All the 
 numbers of this department are in the 100's so that the 
 work will be easily distinguished from that of the 
 composing room. 
 
 Make-ready, No. 101: This work number covers 
 all the time used in putting the form on the press, 
 
PRESS EFFICIENCY RECORD 39 
 
 underlaying and overlaying and regulating the impres- 
 sion, regulating the ink, determining the margins, 
 setting the gauge pins or feed guides and pulling a 
 press proof, special wash-up to change ink for a job, 
 and also any other work necessary to be done before 
 starting the press on the "run." It is often necessary 
 to stop the press, for additional make-ready or for 
 making customer's changes, after the run has been 
 started, which should also be recorded under this work 
 number. This time is chargeable against the job and 
 a careful record should be made of it. 
 
 Note. In connection with this work we would suggest 
 that a record be kept of the output of each press to determine 
 the efficiency in use of each. In order to do this, number each 
 jobber from 1 up and assign letters to the cylinders beginning 
 with A. When the pressman enters the work number, have 
 him affix the number of the press to the work number. Thus, 
 make-ready on jobber No. 1 would appear on the time record, 
 in the kind of work column, 101-1, or if on a cylinder, 101-A. 
 The same plan should be followed with the other work num- 
 bers in the press room. This will enable the cost clerk to 
 determine the press that the job was run on and especially as 
 to whether it was run on jobber or cylinder press. The cost 
 clerk, when extending the time into the "Office Use" columns, 
 should ring the time when cylinder press is indicated by the 
 work number. 
 
 Holding Press for Proof, No. 102: This work is 
 chargeable time where the customer demands a press 
 proof of his job. If on cylinder press, ring the time. 
 
 Running, No. 103: The column for "Number of 
 Impressions" should be filled as well as time record kept 
 on this work. This will make a showing on the press 
 efficiency, which is important information. Only the 
 
40 THE PRACTICAL COST SYSTEM 
 
 number of impressions actually run during the running 
 time marked on daily time ticket should be entered, 
 regardless of the number required for the entire job. 
 The additional impressions for the job will naturally 
 appear and be entered on the daily time ticket when 
 running is again resumed. If this "number of impres- 
 sions" record is to be accurately kept a counter on the 
 press will be a necessity. Running time means the 
 time the press is actually printing on the job in hand. 
 Cost clerk should ring this time if run on cylinder 
 press. 
 
 Changes (press corrections), No. 151: This work 
 covers the errors in composition which were not caught 
 when they should have been. They are purely plant 
 errors and as such are non-chargeable time. The press 
 changes on account of customer are treated in No. 101. 
 
 Wash-up, No. 152: This work covers all the reg- 
 ular wash-ups and is non-chargeable time. This number 
 should also be used for all time spent in a clean-up of 
 the presses and press room except such as would be 
 classed as janitor work. Wash-ups for a change of ink 
 for a job are treated in No. 101. 
 
 General Information : When two people, as press- 
 man and feeder, work on a cylinder press at the same 
 time the time record is made for one man only. The 
 other should enter under "Kind of Work" the word 
 "Assistant" or "As't" and should also enter the number 
 of the press and number of job. His time, in this case, 
 is non-chargeable against the job but as his wages for 
 the time put in are charged against the department the 
 labor-cost of his time automatically becomes a part of 
 the departmental hour cost. 
 
PRESS CLASSIFICATIONS 41 
 
 Where a cylinder press with attached folder is used 
 and an extra man is put on to feed an insert his time 
 can be recorded in the same manner as that of the 
 assistant, mentioned above, or it can be recorded as 
 bindery time under number 303. Folding is essentially 
 bindery work and we would consider this method the 
 better way in which to handle this work. 
 
 Where a plant has several different sizes of cylinder 
 presses they should be classed in sub-departments and 
 separate time kept for each class as the hour costs will 
 be different. Cylinders 22x32 and smaller are classed 
 as "pony ;" from that size to and including 32x44, and 
 in the case of a newspaper press, 33x48, would be 
 classed as "medium," and the larger cylinders should 
 be in a class by themselves. Not more than two of these 
 classes will usually be found in the smaller shops. 
 
 It is also advisable to do the same with the jobbers. 
 The 10x15, or 11x17, and smaller should be in one class 
 and the 12x18 and larger in another. If you have an 
 automatic feeder attached to one of the jobbers this 
 should be in a class by itself as the greater investment 
 makes it necessary. In making the time record on a 
 jobber with attached feeder where the pressman is also 
 at the same time running another press or doing other 
 work will require a little additional explanation. A 
 second time ticket should be made out for the auto- 
 matic fed press with the workman's name and time 
 started and stopped, etc. On this time report the job 
 numbers and kind of work for this press should be 
 entered and also the output in the proper column. The 
 labor, except for the time of the make-ready will be very 
 little but the press must receive the credit for its running 
 
42 THE PRACTICAL COST SYSTEM 
 
 hours. On his regular time ticket the workman should 
 carry the job and work numbers for the jobs being run 
 on both presses on separate lines of the time ticket. 
 On the line following the job number of the job being 
 run on the hand-fed press he should carry his time as 
 usual. On the line recording the number of the job on 
 the automatic-fed press he should enter just the units 
 of his time which are used in attending to that press, 
 in removing the printed sheets and adding stock for the 
 run, in starting it again after an automatic stop, etc. 
 In case any of these attentions require less than a unit 
 of time he can combine two or more of them and record 
 them by drawing the line as usual. The reason for 
 this is that the automatic-fed press should be charged 
 up with the proper proportion of his labor which makes 
 a part of the hour-cost of that press. The time used in 
 attending to the automatic should, of course, be de- 
 ducted from the time of the hand-fed press, and the best 
 way to handle this is to leave breaks or blank units in 
 the line recording the time on the hand-fed press to 
 correspond with the time-lines shown for the auto- 
 matic. The hand-fed press is, naturally, not producing 
 when the workman is attending to the automatic. The 
 same method should be used if the workman is doing 
 other work than feeding press while attending the 
 automatic. 
 
 In extending the time on the daily time reports the 
 cost clerk should make a ring around all the time of 
 the cylinder press work. This is necessary in order to 
 distinguish between the cylinder and the jobber time in 
 the records to be made later. Some distinguishing 
 mark should also be used for an automatic feed press. 
 
BINDERY WORK NUMBERS 43 
 
 BINDERY WORK 
 
 The Bindery is probably the least used department 
 in the average shop, and in the smaller shops the 
 greater portion of this time has been given away and 
 no charge made for the most of its work. While the 
 equipment of this department is usually small, yet 
 from somewhere its interest on investment, insurance, 
 etc., as well as its labor must be paid. It is not possible 
 to run any business with success unless every expense 
 is provided for by an equivalent charge against the 
 product. For easy recognition, all time in this depart- 
 ment is carried under work numbers in the 300's. 
 
 Tabbing, No. 301 : This work, sometimes called 
 padding, or blocking, covers all the time of straighten- 
 ing the sheets, cutting the straw-board, preparing and 
 spreading on the "goo," and the final cutting apart and 
 wrapping for delivery. This time is chargeable and as 
 accurate a record should be kept of it as of any other 
 time in the plant. 
 
 Trimming, No. 302: In most shops this work has 
 always been one of the lost "Babes in the Woods" and 
 has disappeared when the charge was made for the job. 
 This work covers any trimming or cutting after a job 
 is completed and is as certainly chargeable as any other 
 time in the plant. 
 
 Folding and Inserting, No. 303 : This work covers 
 all folding, whether hand or machine, and all inserting 
 work in a job of books, pamphlets, etc. Where a news- 
 paper is issued it also covers the folding on that, either 
 hand or machine. 
 
44 THE PRACTICAL COST SYSTEM 
 
 This department is really a double-headed depart- 
 ment. Where the plant does much of its folding by 
 machine the machine folding should be kept as a 
 separate department and the time ringed in the exten- 
 sion columns of the daily time ticket and the other 
 time records. Use the same work number but follow 
 that number by a letter "M" to designate machine 
 folding. In the case of a cylinder press with an attached 
 folder, however, this letter distinction is not necessary 
 as the simpler way is to carry the folder investment as 
 a part of the cylinder press. In that case the only time 
 record to be made would be the time of the feeder, as 
 an assistant to the pressman, when an insert is being 
 folded into the main sheet, and this can be done under 
 No. 303. See, also, second paragraph under General 
 Information following "Press Room." 
 
 Gathering, No. 304: This work covers just what 
 the name indicates and is chargeable time. In the 
 smaller shops there is so little of this work that it can 
 as well be carried as part of the folding and inserting 
 time under that number. 
 
 Perforating and Punching, No. 305: This work 
 covers the items mentioned when done on perforating 
 or punching machines. It does not cover hand punch- 
 ing nor perforating on the press. Where a small hand 
 punch is used the work is hand work and may be car- 
 ried under some of the other hand work numbers, as 
 307. Perforating on a press where the perforating is 
 done in the same run as the printing there would be no 
 extra time charge as the extra time used in putting in 
 the perforator would be covered in the make-ready and 
 the slower run on press where a perforator is used 
 
BINDERY WORK CONTINUED 45 
 
 would be covered by the additional time charge on the 
 job. When perforating is done on a press in an extra 
 run it should be treated as press work and recorded as 
 Running time, No. 203. 
 
 Stitching or Stapling, No. 306: This work covers 
 the use of stitching or stapling machines only. Hand 
 stitching or sewing should be included in numbers 303 
 or 304. 
 
 Binding, No. 307: This work is all hand work in 
 the smaller shops and covers all classes of binding that 
 is likely to be done in the small plant, such as order 
 books with tag-board or check-board covers as well as 
 stiff covers, pamphlet binding where the cover is glued 
 on, check book binding, receipts, etc. For the larger 
 plants the cost system includes more detailed forms to 
 cover the various departments of this work. In the 
 smaller shops this detail is not necessary nor advisable. 
 
 Numbering, No. 308: This work covers hand ma- 
 chine numbering on checks, receipts, order books, 
 tickets, etc., but does not cover numbering on press. 
 That work is press room time and should be charged as 
 an extra run, if run that way, and be cared for the same 
 as press perforating mentioned above. 
 
 Counting, No. 309 : This work covers the counting 
 on those jobs where the sheets must be counted into 
 accurate quantities before binding, as with orders, 
 receipts, checks, etc., where they are to be numbered 
 either before or after binding, or wherever the work 
 has to be counted. This time is chargeable, and record 
 should be made of it. 
 
 Mailing, No. 310 : In the average printing plant the 
 greater part of this work will be on the newspaper. 
 
46 THE PRACTICAL COST SYSTEM 
 
 The time is chargeable and should be accurately re- 
 corded and charged against the newspaper. It will also 
 include time used in mailing out any jobs that may be 
 delivered in that manner. It will cover the time used in 
 writing or running off the addresses on the mailing 
 machine, wrapping, etc. 
 
 Clean-up, No. 351: This time is non-chargeable 
 and covers all time used in cleaning up the bindery 
 department, washing glue brushes, paste dishes, and 
 all the clean-up work except what would be better 
 carried as janitor work. 
 
 General Information: In the larger shops the bind- 
 ery work is cared for in four different departments: 
 "A" The heavier machines, cutters, ruling machines, 
 etc., usually run by men. "B" Men's hand work, such 
 as finishing, forwarding, etc. "C" Girls' small ma- 
 chine work, perforating, punching, stitching, etc. "D" 
 Girls' hand work which would include all the cheaper 
 processes, counting, gathering, numbering, sewing, etc. 
 
 In the smaller plants we would advise the two 
 department plan unless there is a fairly complete bind- 
 ery in connection. In the average small shop the "A" 
 and "B" classes are not used. "C" should be made up 
 of the work of trimming, folding where a separate 
 folding machine is used perforating and punching, 
 and stitching or stapling. The investment would be 
 greater in machinery in this department and the hourly 
 costs higher than for hand work. 
 
 Where there is but one paper-cutter in the plant 
 assign about one-third of the value of the cutter with 
 its interest, depreciation, etc., to Bindery "C" in the 
 departmental inventory. 
 
CHARGEABLE TIME DEFINED 47 
 
 All the other classes of work would be carried in 
 Bindery "D," regardless as to whether the work is done 
 by men or girls. In the smaller shops it is simpler to 
 combine all the bindery work in one department charg- 
 ing against it the value of all the bindery machinery 
 and the proportion of the cutter as mentioned above. 
 This would make the hour-cost of the hand work a 
 little more and the machine work a little less, but not 
 enough in either case to make any material change in 
 the job cost. 
 
 CHARGEABLE AND NON-CHARGEABLE 
 TIME 
 
 We have accounted for all the different processes 
 liable to be used in the making of a job of printing, and 
 explained each. Perhaps the words Chargeable and 
 Non-chargeable require some explanation. The work- 
 man fills in no blanks beyond the triple line on the time 
 ticket, except in the "No. Impressions" column pre- 
 viously mentioned. 
 
 The first time ticket reproduced, cut number 4, is 
 one as handed in by the employee at the end of the day. 
 All the items under the heading "These columns for 
 office use only" are then filled out, and totaled by the 
 cost clerk. Every department except "Office Time" is 
 subdivided into two items, chargeable and non-charge- 
 able time and are defined as follows : 
 
 Chargeable Time: All those productive units of 
 time used on a job that can be charged direct to and 
 become a part of the cost of the completed work. 
 
48 THE PRACTICAL COST SYSTEM 
 
 Salable units of time as compared with the time that 
 has no salable value such as distribution, office work 
 or janitor work. 
 
 Non-chargeable Time: All other portions or units 
 of time used by the workman in his daily work, non- 
 productive time, that cannot be charged against a par- 
 ticular job, or where he assists at a machine whose time 
 is already charged through another workman. 
 
 The only items that are generally non-chargeable 
 are, in the composing room Nos. 51 to 56; in press 
 room, 151 and 152; in stock room, 251 and 252; in 
 bindery, 351; and all the office work, 451 to 456, as 
 none of these items can be properly charged to any job. 
 The office work items form a part of what is commonly 
 spoken of as "administrative overhead" or "business 
 burden" while the other items are a part of the "plant 
 overhead" or "shop burden." All the cost of this non- 
 chargeable time as well as the overhead or business 
 burden expense must be carried by the chargeable hour 
 and becomes a part of the hour-cost of those hours. 
 
 Extending Chargeable and Non-chargeable Time: 
 After the workman hands in his time ticket for the 
 day, and before the work can be charged to any par- 
 ticular job, all items must be extended to the charge- 
 able and non-chargeable columns. All time in office 
 work is extended to that column. If one of the shop 
 workmen waits on customers, answers telephone calls, 
 or does any of the office work the time so used is to be 
 entered on his time report, using the proper office work 
 number, which is generally No. 455, and the extension 
 is to be entered in the office column. A portion of his 
 wage will be charged to office as shown later. 
 
RINGING STOCK ROOM TIME 49 
 
 All work in the numbers under 99 is extended in 
 the composing room time columns, but in the case of 
 machine composition a ring should be placed around 
 the time to keep it separate from the hand work, as the 
 two kinds of work are in different sub-departments. 
 
 All work in the 100's is extended as press room time 
 in the proper columns, but in case of cylinder press- 
 work, a ring is placed around the time for the same 
 reason as above ; in case of different sized cylinders or 
 jobber with feeder attached the cost clerk must use 
 care that the items are kept separate for use in other 
 records. This will be easy if the various machines are 
 numbered or lettered. Where there is no typesetting 
 machine or cylinder press in the plant the ringing of 
 the time in these two columns is not necessary. 
 
 All work in the 200's is extended to the proper stock 
 or bindery columns but a ring is placed around the 
 stock room time for the same reason as above. 
 
 All work in the 300's is extended in the proper stock 
 or bindery columns, without a ring. All work numbers 
 containing a "50" are non-chargeable time. 
 
 Now the time is posted up in each column, but ma- 
 chine composition time, cylinder press time of the 
 different sizes, the job press with attached feeder, and 
 stock room time is kept separate in the totals as shown 
 in the time ticket reproduced, cut number 5. The total 
 time, both chargeable and non-chargeable on each 
 workman's time record, must equal his entire day's 
 work. 
 
CHAPTER II 
 
 THE JOB RECORD 
 
 The Job Record : We have accomplished the build- 
 ing of the structure, but we must now go back and 
 take up the Job Record, the reverse side of the fly sheet 
 attached to the Job Envelope, which is the foundation 
 of our Cost System, and to which the structure is 
 firmly attached. 
 
 The Job Record is a summary of the time used on 
 any particular job and is taken from the Daily Time 
 Tickets. Even though the work on the job may take 
 several days in any one or several departments yet, as 
 the work progresses each day, the time is taken from 
 the Daily Time Tickets and is entered on the Job 
 Record. The Job Record has four sections that con- 
 form to the extension columns on the Daily Time 
 Ticket, and in these sections the daily items of time put 
 in on a job are collated until the job is completed. See 
 illustration in cut number 7. 
 
 1. Stock Work: Here the employee's initials or 
 name, with date, and the kind of work, entered by the 
 work numbers, and the total time of that kind of work 
 on the job, in hours and units or tenths is entered. 
 
0$. 
 
 JOB RECORD 
 
 STOCK WORK 
 
 PRESS WORK 
 
 EMPLOYE 
 
 DATE 
 
 KIND OF 
 WORK 
 
 TMC 
 
 Press 
 No. 
 
 EMPLOYE 
 
 DATE 
 
 K'ND OF 
 WORK 
 
 TIMC 
 
 M 
 
 M 
 
 H 
 
 M 
 
 fifi 
 
 v/4/ 
 
 ZoZ 
 
 
 3 
 
 1 
 
 /?/? 
 
 "// 
 
 101 
 
 
 <r 
 
 
 
 
 
 
 
 
 
 
 N 
 
 /o3 
 
 1 
 
 -. ___ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 COMPOSITION 
 
 
 
 
 
 
 
 EMPLOYE 
 
 DATE 
 
 KIND OF 
 WORK 
 
 TIME 
 
 
 
 
 
 
 
 H 
 
 M 
 
 ft P. 
 
 4 /V 
 
 / 
 
 / 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE) Indicate Cylinder Press Work by ring 
 around the tint* 
 
 
 
 
 
 
 SUMMARY OF COST 
 
 
 
 
 
 
 ITEMS 
 
 TIME 
 
 COST 
 
 M 
 
 M 
 
 9 
 
 c 
 
 
 
 
 
 
 STOCK 
 
 
 
 j 
 
 /^ 
 
 
 
 
 
 
 STOCK WORK 
 
 
 ^ 
 
 
 *f 
 
 
 
 
 
 
 MACH. COMP. 
 
 
 
 
 
 NOTE) lad cste Machine Compaction by a ring 
 round the time 
 
 ^HAND COMP. 
 
 f 
 
 ^ 
 
 y 
 
 ft? 
 
 BINDERY 
 
 /CYLINDER PRESS 
 
 
 
 
 
 CVPLOYE 
 
 DATE 
 
 KIND OF 
 WORK 
 
 TIME 
 
 JOB PRESS 
 
 1 
 
 ^* 
 
 J? 
 
 2S 
 
 H 
 
 M 
 
 RP 
 
 S/y 
 
 3o'i 
 
 
 
 
 INK 
 
 
 
 
 JO 
 
 tl 
 
 if 
 
 Jo* 
 
 
 ^ 
 
 BINDERY 
 
 
 IP 
 
 
 *l 
 
 
 
 
 
 
 RULING 
 
 
 
 
 
 
 
 
 
 
 ELECTROS 
 
 
 
 
 
 
 
 
 
 
 ENGRAVINGS 
 
 
 
 
 
 
 
 
 
 
 EXTRAS 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL COST 
 
 i 
 
 It 
 
 
 
 
 
 
 PROFIT 
 
 
 
 
 
 
 
 
 LOSS 
 
 
 W 
 
 
 
 
 
 
 SELLING PRICE 
 
 ty 
 
 oo 
 
 
 
 
 
 
 
 
 
52 THE PRACTICAL COST SYSTEM 
 
 2. Composition: This work is to be entered on 
 the Job Record in the same manner as above but care 
 must be taken to put a ring around the time of the 
 typesetting machine. We would advise the entering of 
 the hand composition time in the upper portion of this 
 ' space and the machine composition in the lower 
 portion. 
 
 3. Press Work: In this the number of the press 
 should be used as well as the initials of the workman 
 and the date and kind of work. Care should be taken 
 to ring the cylinder press time and also to properly 
 designate the time of a jobber with attached feeder 
 and the different classes of cylinders. 
 
 4. Bindery Work: If you are keeping records of 
 more than one class of this work the time of the differ- 
 ent classes should be designated by using a ring for 
 one class or by some other distinguishing mark, as, for 
 instance, using a ring around machine, or class "C" 
 work. 
 
 As the job goes through the plant to completion, 
 whether in one day or in several days, the time on that 
 job is collated on this job record. When the job is 
 completed and the job envelope is returned to the 
 office, the time used in each department is totaled and 
 carried to the Summary of Cost on the Job Record and 
 entered opposite the proper items the total of the 
 hours and units used in each process. This time is then 
 multiplied by the hour cost used and the amount 
 entered in the column headed "Cost." See illustration 
 cut number 7. 
 
 The first item in the Summary of Cost is Stock. 
 Get from the Job Envelope the details of the stock used 
 
INK AND EXTRA JOB ITEMS 53 
 
 on the job and figure the cost laid down in your stock 
 room, if you keep your stock costs that way ; otherwise 
 use the cost at the paper house plus ten per cent for 
 freight and drayage and plus another ten per cent for 
 handling into the house and onto the shelves and for 
 spoilage, and enter this in the "Cost" column. See 
 note following handling stock No. 202. 
 
 Do not forget the cost of the Ink on the job. This 
 is printed large on the job record so that it will not be 
 forgotten. This cost should be at least ten cents, even 
 for the smallest run of cards, for the wastage in wash- 
 up and drying in the containers must be cared for in 
 this charge. On longer runs charge fifteen cents for 
 the first thousand and ten or twelve cents for additional 
 thousands. This will probably care for the ink wasted 
 in wash-up and also for what will dry and harden in the 
 cans. 
 
 Ruling is the next item. Enter here the cost which 
 must also include transportation and handling cost of 
 special ruled stock that may be required for the job. 
 
 Where electrotypes or engravings are required for 
 the job, enter their cost opposite those items in the 
 summary. Following these are two blanks for extras. 
 Enter here the cost of any other extras for the job such 
 as cords and pencils for dance programs, telegrams or 
 telephone tolls if used to get specific instructions or 
 order special stock, postage when job is mailed to 
 customer, etc. 
 
 If all the work up to this point has been carefully 
 kept track of and properly recorded you have stopped 
 all those little leaks which may have nearly swamped 
 your business boat in the past and your plant should 
 
54 THE PRACTICAL COST SYSTEM 
 
 now show you a profit. Of course, it requires some 
 exercise of the backbone to stop these leaks and some 
 nerve to add a fair profit to the job cost as shown on 
 this summary. These should be cultivated and devel- 
 oped. 
 
 One advantage of the Job Record in the front office 
 is often lost sight of ; it is a daily record of the progress 
 of the job itself in the factory. This is particularly true 
 of a job of more or less size and importance. A refer- 
 ence to the Job Record shows its exact location in the 
 plant and the amount of time so far spent on it. An 
 irate customer calls up the head of the firm regarding 
 the non-delivery of a certain job. Personally, the head 
 of the firm may know nothing of the job, may not 
 have seen it, and perhaps knows little of its actual 
 progress in the plant. While talking on the 'phone he 
 gets the Job Record and thus instantly gets a thorough 
 grip of the situation and knows how far along toward 
 completion the job has progressed ; he can then talk 
 intelligently about the matter. 
 
 You now have all the items of cost, and by adding 
 these up you get the cost of the job, and it is only 
 necessary to add your profit, and there is your selling 
 price. Seems easy, doesn't it? But how do we know 
 what price to charge per hour. This is the question you 
 now ask, and it must be answered, not by what it costs 
 others but by what it costs you in your own shop. 
 
 Now comes the capstone of your building, or the 
 roof, to cover it all, and then, finally, the finishing, the 
 doors and the windows that let the light into your 
 business and completes the whole structure. 
 
CHAPTER III 
 
 THE FINISHING TOUCHES 
 
 The Finishing Touches: Having completed the 
 foundation and superstructure, we are ready for the 
 roof or capstone, and this consists of the Record of 
 Chargeable and Non-chargeable hours for one month. 
 This is a summing up of the time, and is necessary 
 before anything can be done to ascertain the cost of 
 labor-hours. This procedure is very simple. 
 
 Record of Chargeable and Non-chargeable Hours: 
 This record, for each month, occupies two pages in the 
 Summary Book. Notice that there is a line for each 
 day of the month. Across the top of the page are head- 
 ings for the various department columns and each 
 column has two spaces, one for the chargeable and one 
 for the non-chargeable hours. Illustration, cuts num 
 bers 8 and 9. 
 
 Note. The blank heading following the "Job Press" can 
 be used for a second classification of jobbers or cylinders. In 
 case your plant has more cljipartments than this record will 
 accommodate we can furnish you with larger forms for this 
 purpose. 
 
 Each day the daily time tickets are extended and 
 the time in each department totaled. The totals for 
 
Record of Chargeable and Non-Chargeable Hours 
 
 Machine Comp. Hand Composition Cylinder Press Job P.uaa 
 
 /JL 
 
 22. 
 
 2 
 
 J 
 
 But* 
 
 
 n 
 
 ,5" 
 
 Number 8. 
 
Month of. JL^r-/^tf 
 
 Pat/ J?o// Summary 
 
 Rinlcry 
 
 Stock Handling 
 
 Total Horn* 
 
 NAMES 
 
 )i!y Time Koport* 
 
 Tola! WMU'CH 
 for Month 
 
 ChortfO. 
 
 flt.l 
 
 Nan- . 
 
 ClmrffO'ibla 
 
 b! * 
 
 Non- 
 
 Chtrue.bM 
 
 All Departments 
 
 InrluJ. only ^r^n^who^ 1 
 
 
 
 
 
 
 7 
 
 
 
 27 
 
 
 
 ^^. /O. fott-d^tsr^j* (fcafil 
 
 
 / 
 
 *)0 
 
 oo 
 
 
 
 
 
 
 
 
 
 
 
 ' 
 
 
 
 
 
 
 
 
 
 
 s 
 
 
 J" 
 
 17 
 
 . 
 
 ft^JLn^nL (PfJ^^*^*^ 
 
 
 / 
 
 so 
 
 JLQ. 
 
 
 
 
 
 / 
 
 _ 
 
 
 
 -27 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ,? 
 
 
 
 -2 
 
 . 
 
 
 
 
 tfl 
 
 a A 
 
 
 
 
 
 
 -2 
 
 
 
 22 
 
 
 
 
 
 
 
 
 
 
 
 
 
 7 
 
 / 
 
 
 
 ^7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 rf 
 
 
 
 2-h 
 
 A 
 
 
 
 
 
 
 
 
 
 
 
 jf 
 
 
 
 -2-7 
 
 
 
 Total 
 
 
 3 
 
 90 
 
 00 
 
 
 
 
 
 
 V 
 
 
 
 a/ 
 
 J 
 
 Total Hours, all Departments 
 
 A*S- 
 
 
 
 
 
 
 3 
 
 
 
 j><< 
 
 
 
 Cost per Hour, all Hours 
 
 
 
 
 
 
 
 J- 
 
 
 ^ 
 
 2/* 
 
 ^ 
 
 RECAPITULATION j^ 
 
 o total Hours, lioth Chargeable mid 
 n-Chargoable for all Department* 
 
 
 
 
 
 
 7 
 
 / 
 
 5~ 
 
 2/ 
 
 f 
 
 
 
 
 
 
 
 
 
 
 
 Departments 
 
 No. Hra. 
 
 H()ur Cr 
 
 Totii 
 
 Labor 
 
 Cost 
 
 
 
 
 
 
 ? 
 
 
 ^y 
 
 _2j 
 
 5 
 
 Office 
 
 1*0 
 
 
 
 / 
 
 <)2 
 
 it 
 
 
 
 
 
 
 A 
 
 
 
 Z 
 
 6 
 
 Machine Compomtion 
 
 
 
 
 
 
 
 
 
 
 
 
 .r 
 
 
 
 ,9(0 
 
 * 
 
 Hand Composition 
 
 354 
 
 
 
 / 
 
 5$ 
 
 K7 
 
 
 
 
 
 
 3 
 
 
 
 
 .?rf 
 
 V 
 
 Cylinder Press 
 
 /^T 
 
 
 
 
 ? 
 
 ,fV 
 
 
 
 
 
 / 
 
 
 
 
 
 ^7 
 
 
 
 Job Press 
 
 />/ 
 
 
 
 
 ?v 
 
 73 
 
 
 
 
 
 
 // 
 
 
 
 22. 
 
 f 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Bindery 
 
 t>X 
 
 
 
 
 if 
 
 *!( 
 
 
 
 
 
 
 
 
 
 2-7 
 
 
 
 Bindery 
 
 
 
 
 
 
 
 
 
 
 
 
 -e 
 
 
 
 JL7 
 
 
 
 -dfcc^ 9Ja^,^Ai^j 
 
 / / 
 
 
 
 
 ^ 
 
 ^ 
 
 
 
 
 
 
 y 
 
 
 
 3/ 
 
 7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 3.S 
 
 .r 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .<? 
 
 v 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Tota. i-sr^s'rs 
 
 H 
 
 
 
 J 
 
 'C 
 
 oo\ 
 
 
 
 
 
 
 
 
 
 
 
 NOTE: -The above ia to be used only where employees who use 
 Time Reports work in nil departments. If employees work hi separ- 
 ate departments, without interchanging work, their salaries should 
 be charged direct to their department. The salaries of all others 
 not using Time Report* should be put on line "General Office 
 Sulnries as an ottke expense. 
 
 
 
 
 
 
 
 
 
 
 at 
 
 5 
 
 
 
 
 
 '? 
 
 ,} 
 
 ^ 
 
 2 
 
 6M 
 
 f 
 
 
 
 
 
 
 
 
 
 
 
 Number 9. 
 
58 THE PRACTICAL COST SYSTEM 
 
 each department collated from all the time tickets for 
 the day, are then added up and the total time in each 
 of the different departments is then entered on the line 
 numbered for that day in the Record of Chargeable and 
 Non-chargeable hours under the proper department 
 heading. Be sure that the chargeable and non-charge- 
 able time is kept separate and is entered in the proper 
 column. There is but one column for office time as this 
 is non-chargeable. 
 
 When all the time for the day has been properly 
 entered on this Record cross-add the time, both charge- 
 able and non-chargeable, and enter the amount in the 
 "Total Hours" column. If the figuring has been done 
 correctly this total will equal the total time for the day, 
 of all shop employees, as shown on the daily time 
 tickets. If it does not equal this time the work should 
 be gone over for errors until these two totals agree. 
 The date line on which Sundays or holidays fall will 
 be skipped, unless work is done on these days. At the 
 end of the month, the entire time is added up in both 
 chargeable and non-chargeable columns. Then cross- 
 add the totals of the departmental columns which 
 should equal the amount of the "Total Hours" column. 
 If it does, the work is correct ; if it does not, the error 
 should be found and corrected. Cuts numbers 8 and 9. 
 
 Having ascertained the time consumed in each de- 
 partment for a month, you are now ready to finish the 
 building, and know your costs of production in your 
 own plant. For this we have a blank called Summary 
 of Cost and Profit and Loss, and we will take this up 
 item by item, and explain each fully, as we have in all 
 the rest. Illustration, cuts numbers 10 and 11. 
 
RESULT OF WORK OF MONTH 59 
 
 SUMMARY OF COST AND PROFIT AND LOSS 
 
 The erection of the foundation and superstructure 
 of a building by good workmen, is an easy matter, and 
 can be done without much trouble, but when it comes 
 to the "finishing/' a different problem is at hand. The 
 finer touches must be given in the finishing and it is 
 the same with the cost system. 
 
 The keeping of the Job Register, the Daily Time 
 Tickets, the Job Record, and your Record of Charge- 
 able and Non-chargeable Hours can be done very 
 easily and by a clerk or girl somewhat familiar with 
 the printing business. 
 
 The Statement of Cost, however, presents a differ- 
 ent problem, and needs more study and closer appli* 
 cation and insight into your business than any other 
 part of the cost system. 
 
 The Statement of Cost may well be compared to the 
 doors and windows of a building, through which one 
 can receive light and enter into a full understanding of 
 the productiveness and the profitableness or lack of 
 it of the entire plant, or any department of it. 
 
 Here are gathered all the results of the month's 
 work. You take your expenses, your pay roll, your 
 depreciation, interest on investments, taxes and every 
 expenditure made for the benefit of the business, and 
 come to the final steps in determining the time cost of 
 your productive hours; only salable hours are pro- 
 ductive hours ; all non-salable hours are non-pro- 
 ductive. The office work hours, distribution and clean- 
 
Statement of Cost and Profit and Loss 
 
 DEPT INVESTMENT 
 
 *J0y^ 
 
 i 
 
 *3ozri 
 
 */O/Sr** 
 
 ^SfS" ^ 
 
 
 Units of Investment 
 
 /-2 
 
 
 I2.Z 
 
 tt 
 
 2*f 
 
 
 ITEMS OF EXPENSE 
 
 Office 
 
 Mach ne Com P . 
 
 Hand Comp. 
 
 Cylinder Press 
 
 Job Press 
 
 
 Department Pay Roll 
 
 
 / 
 
 o 
 
 ; 
 
 y^ 
 
 
 
 
 
 
 
 / 
 
 f 
 
 t 
 
 X^ 
 
 
 
 
 f 
 
 ,ry 
 
 
 
 1< 
 
 ' ^^ 
 
 
 
 
 
 Re 
 
 nt and Heat 
 
 
 
 
 ^ 
 
 Oft 
 
 
 
 
 
 
 
 
 ^ 
 
 if 
 
 00 
 
 
 
 
 ^ 
 
 ^o 
 
 
 
 
 ?^ 
 
 
 
 
 
 Light 
 
 
 
 
 < 
 
 oc 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Po 
 
 wer 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ? 
 
 f?(9 
 
 
 
 \ 
 
 ^r? 
 
 
 
 
 
 Insurance and Taxes 
 
 
 
 
 I 
 
 2.rf 
 
 
 
 
 
 
 
 
 / 
 
 ; 
 
 90 
 
 
 
 
 V| 
 
 30 
 
 
 
 
 ?tfr? 
 
 
 
 
 
 Interest on Dep. Investment 
 
 
 
 
 j 
 
 o4 
 
 
 
 
 
 
 
 
 / 
 
 /, 
 
 -)<? 
 
 
 
 
 ^ 
 
 37 
 
 
 
 
 1,5"^ 
 
 
 
 
 
 Depreciation 
 
 
 
 
 2 
 
 <fa 
 
 
 
 
 
 
 
 
 V 
 
 
 
 ,ff 
 
 
 
 
 X 
 
 tt 
 
 
 
 ! 
 
 'ff 
 
 
 
 
 
 
 Bad Accounts 
 
 
 
 
 s 
 
 ,fo 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 Spoiled Work 
 
 
 
 
 ? 
 
 7.tf 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 | Office Stationery and Postage 
 
 
 
 1 
 
 % 
 
 M 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 * 1 Advertising 
 
 
 
 I 
 
 ,5 
 
 W 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 | 
 
 Telephone. Telegraph, etc. 
 
 
 
 
 /- 
 
 f f 
 
 C-", 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 j 
 
 Selling Expense and Com. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 General Office Salaries 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 i 
 
 jj 
 
 tions, Charity, etc. 
 
 
 
 ? 
 
 3 
 
 fr 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 i 
 
 J 
 
 Water, Soap Towels, etc. 
 
 
 
 
 3 
 
 rf 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Purchase Contracts 
 
 
 
 
 /> 
 
 ?$ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 M 
 
 scellaneous Expense 
 
 
 
 
 /> 
 
 ,T(^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 . 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Total Office Expense 
 
 
 z 
 
 2 
 
 3 
 
 /^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 D 
 
 rect Department Expenses as per Summary* 
 
 
 
 
 
 
 
 
 
 ^ 
 
 ,fi? 
 
 
 
 
 ,^ 
 
 te 
 
 
 
 
 ?f<? 
 
 
 
 
 
 Total Department-Cost, without Office Expense 
 
 
 
 
 
 
 
 ^ 
 
 f 
 
 r r 
 
 // 
 
 
 
 * 
 
 5 
 
 it 
 
 
 
 ,f, 
 
 ^^ 
 
 
 
 
 
 Distribution of Office Expense 
 
 
 
 
 
 
 
 / 
 
 ? 
 
 I 
 
 z^ 
 
 
 
 
 * 
 
 3/ 
 
 
 
 3. 
 
 P/X 
 
 
 
 
 
 Total Ost of Departments 
 
 
 
 
 
 
 
 Ar 
 
 3 
 
 
 
 3y 
 
 
 
 $ 
 
 
 
 iVf 
 
 
 
 ^r 
 
 ; 7(T 
 
 
 
 
 
 Chargeable Hours of Each Department 
 
 
 ! 7iT 
 
 IZL 
 
 S6" 
 
 
 Net Cost per Chargeable Hour 
 
 
 _2.-V<5 
 
 %<% 
 
 /,74 
 
 
 A 
 
 ^erage Net Cost for Months 
 
 
 
 
 
 
 Number 10. 
 
For the Month of. 
 
 \*37m 
 
 $/?cm 
 
 *SS#o% 
 
 Dept. Expense Summary 
 
 Direct Department Expense L no 
 
 STATEMENT OF PROFIT AND LOSS 
 
 \ IP 
 
 / 
 
 3.ZZ 
 
 Bindery 
 
 Stock Handlicg 
 
 Total 
 Disbursements 
 
 STOCK HANDLING 
 
 Items 
 
 Amount 
 
 
 J 
 
 f 
 
 ?/ 
 
 
 
 1 
 
 w 
 
 
 fi 
 
 9 
 
 
 
 c>n 
 
 Knife Grinding 
 
 
 
 
 fro 
 
 Amount of Job Work for Month 
 
 / 
 
 W; 
 
 > 00 
 
 
 
 ^ 
 
 /if 
 
 
 
 t 
 
 <tio 
 
 
 
 ,f 
 
 
 
 /?(> 
 
 Wrapping Taper, 
 Twine, otc. 
 
 
 
 / 
 
 to 
 
 Amount of Advertising for Month 
 
 / 
 
 ? x 
 
 f oo 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 <?<? 
 
 Other Expense 
 
 
 
 
 so 
 
 Amt Rec'd on Subscription for Mo. 
 
 
 9t 
 
 I oo 
 
 
 
 
 
 
 
 
 
 
 
 
 f 
 
 7^ 
 
 T ? f .| 
 
 
 
 2 
 
 go 
 
 Miscellaneous Receipts 
 
 
 ,?,' 
 
 too 
 
 
 
 / 
 
 ,5-3 
 
 
 
 
 K 
 
 
 
 7 
 
 a 
 
 ?;/ 
 
 MACHINE COMPOSITION 
 
 Total Rece pts 
 
 
 Ui 
 
 ' 00 
 
 
 
 ( 
 
 m 
 
 
 
 
 'iff 
 
 
 
 3 
 
 t 
 
 ja 
 
 Oil, Gas'ne. Gas 
 
 
 
 
 
 At shown on Job Tickets 
 
 | 
 
 ':?; 
 
 '00 
 
 
 
 3 
 
 /i 
 
 
 
 j 
 
 'Yff 
 
 
 
 6 
 
 / 
 
 /^ 
 
 Metal Waste 
 
 
 
 
 
 Gross Profit 
 
 ; 
 
 *lt 
 
 Oo 
 
 
 
 
 
 
 
 
 
 
 
 
 .< 
 
 ^> 
 
 Repairs 
 
 
 
 
 
 Less Total Expense (t) 
 
 ( 
 
 lit 
 
 r r^> 
 
 
 
 
 
 
 
 
 
 
 
 
 ? 
 
 ^^ 
 
 Other Expenses 
 
 
 
 
 
 Ne* Profit 
 
 
 3m 
 
 $'20 
 
 
 
 
 
 
 
 
 
 
 
 2 
 
 f 
 
 M 
 
 Total 
 
 
 
 
 
 Net Loss 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 / 
 
 ^ 
 
 if 
 
 HAND COMPOSITION 
 
 Statement of Profit and Loss from Job Tickets 
 
 
 
 
 
 
 
 
 
 
 
 
 f 
 
 ^<> 
 
 Benzine and Lye 
 
 
 
 / 
 
 90 
 
 Amt of Profit Shown on Job Tickets 
 
 
 frt 
 
 ?<r 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Proof Pjpor and 
 
 
 
 
 frtf 
 
 Amt of Losses Shown on Job tickets 
 
 
 f?< 
 
 ^Q 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Other Expenses 
 
 
 
 ? 
 
 ?f 
 
 Net Profit Shown on Job Tickets, 
 
 
 Zi 
 
 >fa 
 
 
 
 
 
 
 
 
 
 
 
 2 
 
 3 
 
 ^^J 
 
 Total 
 
 
 
 ,f 
 
 f-0 
 
 Let Losses Shown on Job Tickets 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 tf 
 
 ^ S CYLINDER PRESSES 
 
 Statement of Profit and Loss on Newspaper 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 /- 
 
 w|!! T y m P an Pa p fir 
 
 
 
 
 fO 
 
 Amt of Advertising for Month 
 
 i 
 
 '2^ 
 
 1 oo 
 
 
 
 
 
 
 
 
 
 
 
 
 f 
 
 ,fO 
 
 Rollers & Repairs 
 
 
 
 i 
 
 00 
 
 Amt Rec'd on Sub. for Month 
 
 
 it 
 
 7 oo 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Oil, Rags, etc. 
 
 
 
 
 Zfi 
 
 Total Receipts 
 
 
 iii 
 
 ' Ob 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Cost of Paper for ivlonth 
 
 
 iz, 
 
 ' rf 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Other Expenses 
 
 
 
 
 
 Net Profit on Newspaper 
 
 
 
 
 f 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Total 
 
 
 
 
 
 ?f 
 
 Net Loss on Newspaper 
 
 
 
 
 ?&>s 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 BINDERY EXPENSE SUMMARY 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 JOB PRESSES 
 
 A B 
 
 c 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Tympan Paper 
 
 
 
 / 
 
 00 
 
 Knife Grinding 
 
 
 
 fo 
 
 
 
 Z 
 
 /o 
 
 
 
 
 ^XQ 
 
 
 
 3 
 
 <7 
 
 (?>f 
 
 Rollers & Repairs 
 
 
 
 7 
 
 yo 
 
 Glue, Paste 
 
 
 
 * op 
 
 
 fl 
 
 I 
 
 19 
 
 
 
 3( 
 
 i/J 
 
 
 4 
 
 9 
 
 3 
 
 ^^ 
 
 Oil, Rags, etc. 
 
 
 
 
 w 
 
 Repairs 
 
 
 
 
 
 V 
 
 7 
 
 /I 
 
 
 
 f 
 
 r3/ 
 
 The abo 
 total in can- 
 Profit amfL 
 in the spa 
 marked with 
 (t) 
 
 ve 
 
 
 
 
 
 
 Gas or Gasoline 
 
 
 
 ho 
 
 
 f 
 
 f 
 
 6i 
 
 
 
 H 
 
 fW 
 
 
 
 
 
 
 
 
 
 
 
 AST 
 
 I2t 
 
 
 'a 
 
 Other Expenses 
 
 
 
 
 
 Other Expenses 
 
 
 
 
 I /.</V 
 
 .2.3? 
 
 
 Total 
 
 
 
 ^ 
 
 fn 
 
 Total 
 
 
 
 ? /(> 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Number ii. 
 
62 THE PRACTICAL COST SYSTEM 
 
 up hours are of no value to the customer and are, 
 therefore, non-salable hours. 
 
 The first important question in figuring your costs 
 is: What is the value of the plant? If you have an 
 accurate inventory, this work is fairly easy. If not, 
 there is only one of two things to do ; take an inventory 
 of your plant, or make a fair and full estimate of its 
 value by departments. Using either plan the value of 
 the plant should be fixed on the present purchase prices 
 of the various items of the equipment, and not on what 
 was paid for them when purchased nor on an appraised 
 value of present worth which would be used for insur- 
 ance purposes. The reason for this will appear later. 
 
 The top line of the blank for obtaining your costs is 
 headed "Department Investments." By this is meant, 
 what each department is actually worth at present 
 purchase value. Do not figure what the "business" is 
 worth, but what the material of the equipment in each 
 department is worth at the purchase cost of today, not 
 what it may have cost you when bought. (For addi- 
 tional data on valuation, see page 73.) 
 
 That you may have a fair idea of what should be 
 included in each department, we will enumerate items 
 under separate headings. To the value of the material 
 in each department should be added a fair amount to 
 cover the freight and installation charges on the equip- 
 ment, especially so on all machinery in the plant. In- 
 stallation charges include the cost of all wiring for 
 motors, all belting and other power connections, also 
 where a cement or other foundation or pit has been put 
 in for the cylinders or other machinery, the cost of 
 these should all be added to the departmental value. 
 
DEPARTMENTAL INVENTORY 63 
 
 Office: The amount for this department should 
 include all office furniture, such as desks, chairs, tables, 
 typewriters, safes, books, and other items for office use 
 in conducting the business. 
 
 Machine Composition: Present cost value of the 
 machine, including all extras, extra magazines, all 
 matrices and liners, metal melting pot, motor or engine, 
 linotype metal, small tools, cabinets, etc. If a mono- 
 type, include both caster and keyboard, compressors, 
 motors and all extras. 
 
 Hand Composition : The present purchase value of 
 all type, rules, leads, and slugs, wood and metal furni- 
 ture, cabinets, galleys, stands, stones, proof presses, 
 cuts, chases for cylinder presses, quoins, and every 
 item used in setting type and getting forms ready for 
 the press room. 
 
 Cylinder Press: The value of the press, extra rol- 
 lers, belting, power wiring, motors or engine and all 
 extras of every nature. If attached folder is used, in- 
 clude this in the value. If a detached folder, include 
 that in the bindery. 
 
 Job Presses: Value of the presses, including 
 motor or engine wiring, power switches, belting, etc., 
 all extra rollers, extra chases, drying racks, stock 
 table, and everything pertaining to the presses. If you 
 have one engine or motor that runs both the cylinder 
 and job presses, the cost should be divided proportion- 
 ately between the two production centers, on the basis 
 of power required by each. 
 
 Bindery: In a small office, this would only be run 
 as one department and the value of stapling or stitch- 
 ing machines, unattached folder, one-third the cost of 
 
64 THE PRACTICAL COST SYSTEM 
 
 the paper cutter, tabbing implements, perforator, and 
 all other machinery and tools used in the bindery. In 
 larger shops classify the equipment according to the 
 explanation given in chapter covering the bindery work 
 hours, between the two or three bindery departments. 
 
 Stock Room : Two-thirds of the value of the paper 
 cutter, the value of the shelving, tables and everything 
 used to store and handle stock, but not the cost of the 
 paper or other merchandise on the shelves. 
 
 With these items figured out, and put at the head 
 of each column on line "Department Investment," you 
 have made the first step in getting your own costs of 
 production. 
 
 Department Pay Roll : The next item to figure out 
 is the pay roll. This is one of the hardest parts to figure, 
 but we have tried to make the proposition as simple 
 and easy as possible. On the page where you have 
 filled out the chargeable and non-chargeable hours 
 used in your plant, you will find at the right a space 
 headed, "Summary of Pay Roll." Illustration, cut 
 number 9. On the spaces place the names of the em- 
 ployees who have used daily time tickets for the month, 
 and opposite the names the amounts paid them in 
 wages for the month. 
 
 Care must be taken to use the full number of work- 
 ing days for the calendar month not a period of four 
 weeks. The amount of the wages should cover all the 
 time for the month, regardless of whether the amount 
 has been paid the employee or is still to be paid. In 
 other words, this amount is the labor-cost for the month 
 not the amount paid out. Salaries of people who are 
 not using the daily time tickets, yet draw pay, will be 
 
DEPARTMENTAL LABOR COST 65 
 
 taken care of later. If the proprietor or manager or one 
 of the office force uses a daily time ticket his salary 
 covering the hours on his time report must be included 
 in the pay roll. 
 
 Add up the total pay roll ; then add up the total num- 
 ber of labor-hours, both chargeable and non-chargeable, 
 used during the month from your Record of Charge- 
 able and Non-chargeable hours. The total amount of 
 the pay roll is then divided by the number of labor- 
 hours, and the result is the labor-cost unit per hour 
 in your own plant. 
 
 The next step is to ascertain the labor-cost of each 
 department. For this, take the labor-cost per hour as 
 the unit and then multiply the total number of labor- 
 hours, both chargeable and non-chargeable, of each 
 department by the labor-cost unit, which gives the cost 
 of the labor for each department. Add these, and if they 
 do not exactly agree with the total pay roll, make such 
 slight changes in the several departments as will make 
 the two totals agree. 
 
 But, you may say, I pay one employee only $20 a 
 week and another $35, why combine them? The ques- 
 tion of the differences between the individual labor or 
 wage costs has comparatively little effect upon the 
 ultimate cost per hour. The $20 a week man no doubt 
 needs and gets supervision by the $35 a week man, 
 and to get a correct cost, the wages of the two must be 
 combined in the totals, and you cannot get labor-hour 
 cost except in this manner. 
 
 Remember we advocate this simple way of ascer- 
 taining the labor cost in offices where the employees 
 work in all the departments. If the case should be 
 
66 THE PRACTICAL COST SYSTEM 
 
 that an employee is employed on a typesetting machine 
 or the job presses, exclusively, then that labor cost may 
 be charged directly to that department, and the hours 
 not taken into consideration in dividing the labor cost 
 in the other departments. We do not, however, advise 
 this method because as a general principle, for the 
 smaller shops, the first method gives a better and more 
 uniform cost, as general supervision is practically 
 always given by the higher priced help, even though 
 the actual work supervised may not be done in their 
 department, and all departments should bear a just 
 proportion of the supervision cost. 
 
 Note. Many so-called cost experts have fallen down on 
 this by trying to make the distribution of cheaper labor wage 
 meet the preconceived, and usually erroneous, ideas of the 
 "front office." If you want the actual costs, and not such as will 
 conform to a preconceived idea, you must take into consider- 
 ation some allowance for supervision. The labor-hour cost is 
 but one factor in your hour cost of production, just as rent, 
 heat, etc., are but single factors. You can never base a real 
 cost of production on the price paid for labor, as will be 
 readily seen when you consider all the other elements which 
 enter into the production costs. 
 
 All the hours are used in ascertaining the labor-hour 
 cost, and that is one of the reasons why both charge- 
 able and non-chargeable hours have been so carefully 
 kept track of. The non-chargeable time is a large factor 
 in the labor cost, as all the expense of this time must 
 be borne by the chargeable, or productive hours, for 
 these latter are the only salable hours. 
 
 Rent and Heat: The next factor or unit of cost is 
 rent and heat. The rent is an easy problem as it is 
 
RENT OF OWNED BUILDING 67 
 
 usually paid by the month. For the item of heat use 
 1/12 of the total cost for the year, adding the amount 
 to the rent each month. This amount is to be charged 
 against the departments in proportion to the floor 
 space occupied by each department. In determining 
 the space for each department measure up the square 
 feet of floor space used by each department for its 
 operations. Do not take into account the floor space 
 used for aisles or passageways, toilet rooms, coat 
 rooms, stairways, elevators, etc. This space is for 
 general use and should not be charged against any of 
 the departments. Omitting this space will simply raise 
 the rental rate per square foot of used space a trifling 
 amount and each department will automatically assume 
 its cost in the slightly increased charge for the space 
 they use. 
 
 Note. If the building housing the printing plant is owned 
 by the business itself or is listed as a part of its assets, as in 
 the case of a corporation, or is owned by the proprietor of 
 the business, a rental for the space occupied must be included 
 in the monthly expense to the same amount as would be paid 
 for the same space to any other landlord. In the absence of 
 any stated figure the proper rental charge may be determined 
 as follows: Figure the interest on the present sale value of 
 the land and building, not the appraised value for taxation 
 purposes, at not less than 6 per cent per annum and at a 
 higher rate if local conditions warrant. To this amount add 
 the taxes on the property and the insurance on the building, 
 and also all the expense items which naturally are carried 
 against such property, such as street improvements, street 
 sprinkling, sidewalk and sewer taxes and repairs, using the 
 average annual amount. Depreciation on the building must 
 be figured at a fair and equitable rate. On brick, stone and 
 cement buildings the usual rate for depreciation is from 2 to 
 
68 THE PRACTICAL COST SYSTEM 
 
 3 l / 2 per cent, and on frame buildings from 5 to 7 per cent per 
 annum, based on the building cost and the character of the 
 building originally. This amount is to be added to the 
 amounts above, the total divided by 12 which gives the monthly 
 rental charge on the building at cost, but to this should be 
 added a fair rental profit, as the owner is properly entitled to 
 a profit over and above the interest on his investment. If 
 the building is occupied by others besides the printing office 
 the amount of the rental should be adjusted fairly as between 
 the occupants. 
 
 Light: Enter the total amount of the cost of lights 
 in the column headed "Office," when it will be later 
 distributed against the departments. 
 
 Note. The old method of distributing light expense in 
 proportion to the candle-power of the lamps installed for use 
 in the departments is palpably wrong, and results in penal- 
 izing the less important production centers which are usually 
 located in the darker portions of the work rooms. Every 
 production center is entitled to sufficient light for its oper- 
 ations and if it is so located that it does not receive enough 
 daylight for that purpose it should not be loaded with the 
 expense of artificial light because of its unfortunate location. 
 Light, like water supply, is a general expense and should be 
 carried into the general or office expense where it will be 
 distributed against the various production centers in a proper 
 proportion. 
 
 Power: This item should be charged only against 
 the departments using power. If a gasoline engine is 
 used, take the total amount of gasoline used for the 
 month and include all oils, waste, and other costs for 
 running the engine, and divide according to the horse- 
 power-hours. Where the machines are motor driven 
 divide the amount of the power bill each month against 
 
POWER FROM LIGHT WIRES 69 
 
 the departments using power according to the horse- 
 power-hours. 
 
 Note. To find the horse-power hours when the machines 
 are equipped with individual motors: Multiply the running 
 hours of each machine for the month by the indicated horse- 
 power of the motor attached, as shown by the number plate 
 on motor. This result will be the horse-power hours for that 
 machine. Repeat the process for each machine using power. 
 
 To distribute the power bill : Total the horse-power- 
 hours for all machines. Divide the amount of the 
 power bill by this total and the result will be the unit 
 of cost of the horse-power-hour. Multiply the horse- 
 power-hours of each machine by this unit. The result 
 will be the charge for power against that machine. 
 Total the accounts for all machines and see that the 
 total agrees with the amount of the power bill ; if it 
 does not, then add or subtract a few cents to or from 
 the amounts for each machine until the two totals 
 agree. If there are two or more machines in the same 
 departmental groups, as two jobbers, total the amounts 
 of the power cost for the machines in that group. Enter 
 the power cost for each machine or group of machines 
 on the Power line in the Statement of Cost under the 
 proper department heading. 
 
 Note. In a plant where the machines, or groups of 
 machines, are driven from one or more large motors the pro- 
 cedure is similar to the above. The running hours of each 
 machine are to be multiplied by the power required to drive 
 that machine. A 10x15, or smaller, jobber requires y 2 horse- 
 power, larger jobbers % horse-power, a Universal type jobber 
 1 horse-power, a pony cylinder \y 2 horse-power, a drum cylin- 
 der newspaper press 2 l / 2 horse-power, two-revolution cylin 
 
70 THE PRACTICAL COST SYSTEM 
 
 ders 3 to 5 horse-power according to size. If some of the 
 machines have individual motors find the horse-power hours 
 of these and add them to the amounts found for the other 
 machines, then distribute the power bill as shown above. 
 
 Where the machines are driven by a gasoline engine, 
 find the amount of the power cost as indicated above and 
 distribute as for one large motor. 
 
 Even where a gasoline engine is used, the typesetting 
 machine is usually driven by electric power, and probably 
 from the light circuit, in which case there would be no 
 separate electric power bill. This machine should be charged 
 with the power it uses and this can be found as follows: 
 Electric light bills are usually rendered at a specific price per 
 kilowatt-hour of current used. The motor on a typesetting 
 machine is usually Y$ horse-power. Fifld the horse-power 
 hours of this motor as above and multiply these hours by 
 .746 and the result will be the number of kilowatt-hours con- 
 sumed as power for the typesetting machine. It is only 
 necessary to multiply these kilowatt-hours by the price shown 
 on the electric bill to obtain the amount to be charged against 
 this machine for power. This amount should be deducted 
 from the electric bill and the remainder entered as light on 
 the "Statement of Cost sheet." 
 
 Other Cost Items: You now come to the items 
 which depend entirely upon the amount invested in the 
 respective departments, viz : Insurance and Taxes, 
 Interest on Department Investment, and Depreciation. 
 
 To make easy figuring, it is suggested that you 
 divide the investments into $10, $25 or $50 units, 
 according to whether you have a small or large plant. 
 If a small plant, $1,000 or $2,000, use the $10 unit. If 
 large, use either of the others. After you have the 
 total units, you can easily work out the amounts. The 
 $1,000 plant will have one hundred $10 units. A $5,000 
 plant will have one hundred $50 units, and so on. 
 
INTEREST ON INVESTMENT 71 
 
 Insurance and Taxes : Use one-twelfth of the total 
 amount of insurance and taxes paid for the year. Divide 
 this amount by the total number of investment units 
 of the whole plant and then multiply this result by the 
 number of units in each department. Total these 
 amounts and if the total does not agree with the first 
 amount make such slight changes in the various de- 
 partmental amounts until the two amounts are the 
 same. Then enter these amounts in the respective 
 department columns. 
 
 Interest on Department Investment: You are en- 
 titled to a certain and fixed amount of interest on the 
 capital you have invested in your plant, because if it 
 were invested in any securities it would bring you an 
 interest return and the investment here must do as 
 much. As explained about department investment, this 
 is not what the business is worth, it is not profit, but it 
 is the interest that your invested capital must earn 
 before you can make any profit. Interest on your in- 
 vestment must be figured into cost of production, even 
 if there is no profit shown in the business. What that 
 interest rate should be is for you to decide. Practically 
 all cost system users figure the rate at seven per cent 
 except in those states where the common rate is more. 
 It should never be less than six per cent. Capital in- 
 vested in a manufacturing business is not as secure as 
 if invested in farm mortgages and should, therefore, 
 carry a higher interest rate. Ten per cent would not 
 be too high, under most conditions, for a printing plant. 
 The units mentioned under insurance and taxes are to 
 be used again. One-twelfth of the amount of Interest 
 on Investment lor the year is divided by the total 
 
72 THE PRACTICAL COST SYSTEM 
 
 departmental units, and this result is multiplied by the 
 number of units of each department to get the proper 
 amount to be charged to each. If the total of these 
 departmental amounts does not agree with the total 
 Interest on Investment, slight changes should be made 
 in each department, to make the totals agree. 
 
 Depreciation: The principal reason for figuring 
 depreciation in cost-finding is that the wear and tear 
 on your printing equipment must be cared for through 
 your costs, as it is a legitimate expense of the business. 
 The true purpose of depreciation is to establish a re- 
 placement fund, which will care for the natural wear 
 and tear of the equipment, and also provide for the 
 destruction of any portion of its usefulness through 
 accident or breakage. The amount figured for depreci- 
 ation should be carried on your general ledger as a 
 Replacement Fund account. 
 
 Type, machinery and other equipment will wear 
 out, and must needs be replaced. There is no exact 
 basis on which to figure the time it takes for the 
 material to wear out, as some presses, for instance, 
 have been in use for twenty years or more and are 
 still doing good or fair work. New inventions, new 
 styles in type and improved materials and machinery 
 are coming out at frequent intervals, causing obsoles- 
 cense of the old type and machinery, and the new will 
 be used to replace the old and obsolete. The natural 
 wear and tear must also be taken care of, and so de- 
 preciation becomes a large factor in the cost of pro- 
 duction. In all modern cost systems for printing plants 
 depreciation is figured at the rate of 10 per cent per 
 annum on all machinery and equipment except type, 
 
REPLACEMENT FUND NEEDED 73 
 
 and this is figured on a basis of 25 per cent per annum. 
 Because the life of much of the machinery and equip- 
 ment of the printing plant will in actual service wear 
 longer than the ten years indicated by this percentage, 
 it may look large, but in that amount must be contained 
 an amount for replacement to provide for the junking 
 or scrapping of machinery or other material which will 
 be replaced before it is worn out by new and more 
 efficient machinery or equipment. It must also pro- 
 vide for accidental breakages. It has now become the 
 custom of the trade to figure all depreciation on the 
 bases given above. 
 
 As stated in the paragraph devoted to inventory, all 
 machinery, type and equipment should be carried on 
 the books on the basis of the present purchase values 
 not what it cost you ten years ago, and not an appraisal 
 value because any replacements made in your equip- 
 ment, and any additions to the equipment purchased 
 out of your capital stock investment, must necessarily 
 be made at the present purchase price, not at the price 
 of ten years ago. If the older basis of prices were used 
 when your replacements are purchased the replacement 
 fund would be very quickly exhausted, as the present 
 prices are approximately double what they were ten 
 years ago, and the investing of the entire replacement 
 fund would not restore the equipment of your plant to 
 its original efficiency and value. For this reason we 
 strongly advise the figuring of depreciation into your 
 costs on the basis of the present purchase price of all 
 your machinery and other equipment. 
 
 Note. We would suggest that the monthly increment of 
 the depreciation be set aside and, if possible, deposited in the 
 
74 THE PRACTICAL COST SYSTEM 
 
 bank under a separate fund for replacement purposes, so that 
 when any of your equipment wears out or needs to be 
 replaced you will have the cash on hand to so replace it. 
 
 In distributing the amount of the depreciation to 
 the various departments of the plant use one-twelfth 
 of the annual depreciation as outlined above. The 
 same process of figuring is used as in the distribution 
 of the interest on department investment, viz: divide 
 the total annual depreciation by twelve, divide that 
 result by the total of the departmental units, then 
 multiply this unit of distribution by the number of 
 departmental units in each department. Total these 
 results and if it does not agree with the total amount 
 of the depreciation make a few minor adjustments in 
 the various departments until these totals do agree. 
 Then enter the proper amounts under the department 
 headings on the "Depreciation" line. 
 
 You are now done with the Department Invest- 
 ment ; the rest of the factors in your costs are items of 
 general expense that become a direct charge to the 
 respective departments, and must be different in every 
 office and are changed as experience and costs show. 
 These factors will be taken up and discussed. 
 
 OFFICE EXPENSE 
 
 Bad Accounts: The average business loses one 
 per cent of its accounts each year. If you do $1,000 
 worth of work a month, at least $10 should be set apart 
 to take care of uncollectible accounts which will come 
 up, if not in this month then in some other, and must 
 be provided for. Bad accounts are part of the expense 
 
SPOILED WORK WILL OCCUR 75 
 
 of doing business and must be taken into account in 
 finding the costs. You cannot run a business of any 
 size or kind without losing some money ; you are pre- 
 pared for this loss if you have the amount figured into 
 your costs. 
 
 Another method, frequently used, of ascertaining 
 the monthly increment of bad accounts to be included 
 in production costs is to take from your book accounts 
 the actual losses for a period of two to five years past, 
 average these losses to find the average loss per year 
 and then use one-twelfth of this amount each month. 
 
 This item should be entered in the office column 
 only. 
 
 Spoiled Work: Of course you spoil a job once in a 
 while and as long as dependence must be placed on 
 human heads and hands mistakes will be made. This 
 expense is a legitimate part of production cost and 
 must be provided for. Thus it becomes a part of the 
 expense of your business, and must enter into your 
 costs. Sometimes jobs have been spoiled that you 
 knew nothing of. With the introduction of a Cost 
 System, jobs are accounted for, and when a job is 
 spoiled it has to be done over, and a new Job Ticket 
 made out. The amount is usually two per cent of the 
 total business, but records carefully kept may change 
 this. If you have no spoiled work this month, you may 
 have some later, so it is necessary to be prepared for it. 
 The amount should be placed in office column only. 
 Spoiled work may be charged each month as made, if 
 so desired, and this is possibly the better way. All 
 these special items should be charged month by month 
 
76 THE PRACTICAL COST SYSTEM 
 
 and your experience will show which is the best way to 
 handle them under the conditions in your plant. 
 
 Office Stationery and Postage. This is an item of 
 expense, hence all stationery, office and cost system 
 forms, etc., printed should be figured at cost prices and 
 the amount entered into the expenses. Postage under 
 this heading does not include postage paid for mailing 
 the newspaper; the latter is a cost against the paper 
 and not against the entire business. The amount is 
 entered in the office column only. 
 
 Advertising. Every well-conducted printing office 
 does some advertising. May be it is only a few im- 
 prints, or blotters, or it may be a well-defined campaign 
 of publicity. However much or little, it is a legitimate 
 business expense, and should be figured into the cost 
 of doing business. If you advertise your job printing 
 in your newspaper, the paper should be given credit 
 for that, and the amount charged to expense. If you 
 make an exhibit of your productions at the county fair 
 the cost of making the exhibit, including the prepara- 
 tions of the specimens should be entered as Advertis- 
 ing. The same holds true of a window display. These 
 items should all be charged and then be sure that you 
 do the right kind of advertising advertising that will 
 bring results for the amount charged. This amount 
 is placed in the office column only. 
 
 Telephone, Telegraph, Etc. This includes the reg- 
 ular monthly telephone charge, all long distance tolls, 
 and all telegrams. This amount is placed in the office 
 column only. 
 
 Selling Expense and Commissions. This is probably 
 but very little used in the average small shop. It covers 
 
SALARIES OF OFFICE FORCE 77 
 
 the cost of salesmen who solicit work either on salary 
 or commission. It does not include salaries or com- 
 missions paid for selling advertising in or subscriptions 
 to, the newspaper. That is a distinct charge to the 
 paper. In city shops, this item may be used to cover 
 commissions to printing brokers. Any allowances or 
 deductions made to secure a settlement of an account 
 receivable should also be included in this amount. This 
 amount should be placed in the office column only, as 
 it is wholly a general expense. 
 
 General Office Salaries. This is for salaries of all 
 persons in the office who do not make out daily time 
 tickets, but are carried on the pay roll, and draw a 
 salary, this includes the proprietor who must also 
 draw a salary just the same as any other employee 
 of the business. If you are a proprietor of a shop and 
 have no fixed salary, the first thing you should do is 
 to decide on the salary, and then get it just the same 
 as your employees. It is a mighty poor business that 
 will not pay a salary to at least one "Boss." If you are 
 just drawing enough out of your business to live on 
 you cannot count that as a salary and it certainly is 
 not a profit. A mere-existence style of living is a poor 
 advertisement of the prosperity of your business. You 
 are entitled to wages the same as your employees but 
 at a considerably higher rate because of the greater 
 responsibility, and in addition to that a legitimate 
 profit over and above all salaries and expenses, as 
 compensation for all your worry and trouble, to say 
 nothing of what you have invested in the business and 
 from this you are fully entitled to receive a reasonable 
 interest return. Put yourself on the pay roll for a 
 
78 THE PRACTICAL COST SYSTEM 
 
 salary and draw it. Then if there are any profits 
 left you are making money, but not otherwise. This 
 amount should be placed in the office column only. 
 
 Organization Dues, Donations, Etc. You say, per- 
 haps, that you cannot afford to belong to a printers' 
 organization. You can if you use a cost system, as 
 this item is figured into the costs. Organizations are 
 necessary for mutual protection and benefit of the 
 members of the craft and their interests and the ex- 
 pense is a part of the cost of properly carrying on your 
 business. Donations may be only a little yet printers 
 often give more liberally than they should. All dona- 
 tions made for business reasons are an expense and 
 should enter into your costs. If you do a job for 
 nothing for church or lodge (which you should not do) 
 the amount of the job at full price, should appear in 
 this item. In this item should also be included sub- 
 scriptions to the trade papers and all technical expenses 
 of like nature. The amount is entered in the office 
 column only. 
 
 Water, Soap, Towels, Etc. The dear old office 
 towel would be renewed oftener, and might occasion- 
 ally visit the laundry, if you could afford it. These 
 three items are a necessity, though often considered 
 a luxury, and are an item of expense that enter into 
 your costs. The amount should be entered in the office 
 column only. 
 
 Interest on Borrowed Money or Purchase Contracts. 
 In discussing this item some time ago, a printer said 
 this should come out of the profits. We don't see 
 why. It is part of the expense of the plant. It is 
 necessary in a great many instances to borrow money 
 
TREATMENT OTHER EXPENSE 79 
 
 to start in business and interest is demanded on de- 
 ferred payments when machinery is bought on the 
 installment plan. That is a part of the expense of doing 
 business and should be figured in the costs. If your 
 business has expanded beyond what your own capital 
 will carry and it is necessary to borrow money to keep 
 the business running smoothly, interest on such bor- 
 rowed money becomes a proper charge against cost 
 and should be included. Such money becomes, in fact, 
 a part of the invested capital and as such is entitled 
 to an interest return. There are so many chances of 
 not making a profit, that every legitimate item of 
 expense should be considered and included. If, by good 
 luck, the printing business shall ever get to the point 
 where the printer can make a certain and sure profit 
 on every job, and get out of debt, this item need not 
 worry him; but until that blessed day, it should be 
 an item of cost. The amount is placed in the office 
 column only. 
 
 Miscellaneous Expense. Under this head may come 
 any additional expense that has not been enumerated 
 above. You may have some unusual expense that 
 comes up and should be taken care of. The amount 
 should be charged to the department which receives 
 the benefit, or if it is for the benefit of the business 
 as a whole it should be entered in the office column. 
 You now have all your office expense, which is totaled 
 at the bottom of the office column, on the line entitled 
 "Total Office Expense." 
 
80 THE PRACTICAL COST SYSTEM 
 
 DIRECT DEPARTMENT EXPENSE 
 
 A special summary has been placed on the blank 
 that the many small direct expenses in each of the 
 departments may be taken care of and then brought 
 forward to the line of direct department expenses. 
 Illustration, cut number 11. These can be gathered 
 from your cash-book expense and the monthly bills. 
 These items should be entered for the month in which 
 they were incurred, even though they may not have 
 been paid in that month. They are a part of the cost 
 of doing business for the month. 
 
 In the Stock Room you have knife grinding, wrap- 
 ping paper, twine, etc., repairs, and other small ex- 
 penses. 
 
 In Machine Composition you have oil, gasoline or 
 gas, metal waste, repairs, etc. The metal waste on a 
 typesetting machine is a big item. It is asserted that 
 metal deteriorates at the rate of 20 per cent per annum. 
 Of course this depends largely upon the amount of 
 metal in use, and how often it is remelted. The value 
 of the amount of the metal on hand, at current prices, 
 should be ascertained, and a proper charge made for the 
 waste. In the smaller plants, probably, 12 to 15 per 
 cent per annum of the metal value would cover this 
 waste. One-twelfth the annual amount should be 
 charged the department each month. All repairs should 
 be charged to this department as made. 
 
 On Hand Composition, there is benzine and lye for 
 washing type, proof paper and twine, and other small 
 expenses. 
 
TOTAL OF SHOP EXPENSES 81 
 
 The Cylinder Press requires oil, rollers, tympan 
 paper, rags and other items, which are an expense to 
 this department. There is always a loss of time with 
 poor rollers, and enough should be charged to cover 
 the buying of proper rollers so that good work can be 
 done. 
 
 On the Job Presses there will be the same items of 
 expense as on the cylinders and the same disposition is 
 made. 
 
 The Bindery uses glue, paste, brushes, gas or gaso- 
 line to heat the glue, and the knife of the paper cutter 
 needs sharpening. These items all enter into your 
 costs. 
 
 After ascertaining the direct department expenses 
 the amount should be brought forward and entered 
 under the right department heading and on line en- 
 titled "Direct Department Expense." 
 
 The departmental columns should then be added up 
 and the total entered on the line "Total Department 
 Cost Without Office Expense." This will give the 
 amount of the cost of the different departments. You 
 have still the cost of the office overhead or adminis- 
 trative burden left to be distributed against the depart- 
 ments. 
 
 Distribution of Office Expense: Right here is 
 where a large amount of beading, brackets, wainscoting 
 and other fancy trimmings can be added to the build- 
 ing now nearly completed. In the large plants there 
 are several classes of expense which should, techni- 
 cally, be distributed on different bases to obtain 
 accurate results. In the small and medium plants 
 there are practically none of the classes of expense 
 
82 THE PRACTICAL COST SYSTEM 
 
 which would, in the large plants, technically require a 
 different base for distribution. Nearly all the expenses 
 in the smaller plants have a direct relation to the 
 product which is salable, or chargeable, hours so the 
 base of distribution here used is, to all intents and 
 purposes, technically correct. As the Practical Cost 
 System is intended more particularly for the medium 
 and small plants, and as we desire to make it as simple 
 and easily handled as possible, we very strongly advise 
 that this item of office expense be distributed against 
 the departments on the basis of the chargeable hours 
 of each department. This method is much the simpler 
 and fully as accurate. 
 
 We have figured the summaries in a number of the 
 medium and small plants in all the various ways and 
 we find this simple method is as fully accurate as the 
 others and that the variations in the hour costs found 
 as between this method and the others is too small to 
 be of any real moment, as it amounts to less than a 
 quarter of a cent on the average hour. 
 
 We have now reached the chargeable hour again. 
 On the line reading "Chargeable Hours of Each De- 
 partment," place the number of chargeable hours as 
 given in the pay roll summary. The costs are ascer- 
 tained according to the chargeable hours, and the 
 chargeable hour is, therefore, the unit or factor that 
 determines the cost of your product. 
 
 Enter the number of chargeable hours on the line 
 "Chargeable Hours of Each Department," and in the 
 proper department column. Total these hours and 
 divide the amount of "Total Office Expense" by the 
 total number of the chargeable hours. This will give 
 
AVERAGING MONTHLY COSTS 83 
 
 the hour cost of the office overhead, or the hour unit 
 of office cost. Multiply the number of chargeable 
 hours of each department by this unit which gives the 
 amount of office expense to be charged against each 
 department. Total these amounts and if this total is 
 not the same as the total of the office expense, make 
 such slight changes in the departmental amounts as 
 may be necessary to make them agree. 
 
 Now find the total department cost by adding the 
 two amounts, in each departmental column, of "Total 
 Department Cost Without Office Expense" and "Dis- 
 tribution of Office Expense." This amount represents 
 the total overhead, both shop and administrative. 
 
 The hour cost of each department may then be 
 found by dividing the "Total Cost of Departments" by 
 the chargeable hours shown for each department. In 
 finding the hour cost, if there is a fourth of a cent or 
 more fractional remainder, add the full cent to the 
 hour cost. 
 
 If this work has been done correctly and no details 
 of expense omitted, you will now have the accurate de- 
 partmental hour costs in your own plant. These will 
 enable you to fill out the Job Record summary of job 
 costs with authoritative figures from which there can 
 be no appeal. It will then only be necessary to add to 
 the cost of a job whatever amount you consider to be 
 necessary as a profit and thus get the selling price of 
 the job. 
 
 Average Hour Costs : When you have obtained the 
 hour costs for the first month, in each of your depart- 
 ments, they will be entirely reliable for use as a basis 
 of obtaining your job costs and, consequently, the 
 
84 THE PRACTICAL COST SYSTEM 
 
 selling price of your product for the second month. 
 When the hour cost has been obtained for the second 
 month, we advise the averaging of the hour costs for 
 the two months for use in figuring job costs during the 
 third month. 
 
 In getting the average hour costs for the two 
 months do not add these hour costs together for each 
 department and divide by two, as that will not give 
 you the true average. This method is merely aver- 
 aging averages and is not mathematically correct. The 
 true way of obtaining the average hour cost is as fol- 
 lows : Taking for example the department of hand 
 composition, add together the total "cost of depart- 
 ment" for the first and second months. Divide this 
 amount by the total productive hours for the two 
 months. The result will be the actual average hour 
 cost for these two months. Do the same with each of 
 the departments. 
 
 At the end of the third month find, by the same 
 method, the average hour cost for the three months. 
 Repeat this process each month during the first year 
 of the use of the system. You will then have your 
 average hour costs for the preceding twelve months. 
 At the end of the thirteenth month drop the figures 
 representing the department cost and productive hours 
 of the first month and in their place use the department 
 cost and productive hours of the thirteenth month. At 
 the end of the fourteenth month drop the same items of 
 the second month and use those of the fourteenth 
 month. Continuing this month by month, you will 
 always have an average hour cost for the preceding 
 twelve months. 
 
AVERAGE COVERS VARIATION 85 
 
 The reason for using these average hour costs is: 
 That during some of the months of the year your pro- 
 ductive hours may very materially fall off, thus largely 
 increasing your hour costs for that month. During 
 other months of the year you may be rushed with work 
 and your productive hours will greatly increase which 
 will make your hour cost for that month lower. You 
 can readily see that if an active month is followed by a 
 month of low production, that you will be losing money 
 in using your low hour cost for making selling prices 
 during the month of smaller production. The reverse 
 of this is also true. By averaging these hour costs for 
 a series of months, the Exceptionally high and the ex- 
 ceptionally low monthly hour costs are both absorbed 
 in the average hour costs. This gives an hour cost 
 which is wholly safe to use in establishing selling 
 prices for the product of your plant, as it covers all 
 changes in production costs. This method of averaging 
 the hour costs also provides for a gradual increase in 
 cost caused by increase in labor cost, or an increase in 
 material cost or in rent. It would also equally well 
 provide against any reductions in the cost of doing 
 business ; so that there will be neither a sudden increase 
 in your hour costs nor a sudden decrease. 
 
 While finding the average cost entails a little more 
 work, it still amounts to but a few minutes each month, 
 and it provides a measure of safety and protection, both 
 for yourself and your customer, which renders it well 
 worth while. 
 
CHAPTER IV 
 
 PROFITS OR LOSSES 
 
 The cost structure is now finished ; you have ascer- 
 tained what the hour cost is in your own plant and by 
 carefully studying the result, many leaks that appear 
 can be traced and stopped. If the hour cost of a depart- 
 ment seems too large, or is greater than the average in 
 other plants, about the only known and practical 
 remedy for that condition is to get more work for that 
 department with a consequent increase of its pro- 
 ductive hours. The hour costs found by the working 
 of this Practical Cost System are absolutely accurate 
 and correct under the existing conditions in your plant. 
 
 The Right Price: A printer needs only deter- 
 mination and backbone to get the right price for his 
 work and be sure of a profit on all work done. What 
 is a just profit? The general opinion is that 25 per 
 cent of the cost is about right on the general run of 
 work in the smaller plants. That means a one-fifth 
 or 20 per cent net profit on the selling price. 
 
 Profit and Loss: For a further statement of the 
 details of the business, and to put on an extra finishing 
 touch, we have added a "Statement of Profit and Loss/' 
 
FINDING PROFIT OR LOSS 87 
 
 This is a simple little form that is certainly an eye- 
 opener. Illustration, cut number 11. 
 
 All the job records that have been completed the 
 previous month are taken and their amounts added and 
 the total amount shown entered on the line provided. 
 The total amount of advertising for the month is 
 entered, then the total amount received on subscrip- 
 tions. These, with miscellaneous receipts, which are 
 not usual but may sometimes appear, are then totalled, 
 which gives the total receipts or the gross amount of 
 business done for the month. The total amount of the 
 stock used for the month, including ink as shown by 
 the job records, which will, of course, include the stock 
 and ink used for the newspaper, is then deducted from 
 the gross amount of business. This gives the gross 
 profit, and from this must be deducted all the expenses 
 as shown by total of column headed "Total Disburse- 
 ments" in the statement of cost. The result will show 
 whether you have made any real money or not. If 
 you do not publish a newspaper, the part pertaining 
 to it need not be taken into consideration. 
 
 Another statement form is that of profit and loss as 
 shown by job tickets. Every job record has a place for 
 profit or loss. Add these items up as shown by the 
 job records for the month, deduct the losses shown on 
 the job records and you can easily see what the result is 
 and whether the job end of the business has made a 
 profit or a loss. 
 
 To find whether you are making or losing money on 
 your newspaper, take the job records showing the cost 
 of your paper for the month, then figure the amount of 
 your advertising, add the amount received on subscrip- 
 
88 THE PRACTICAL COST SYSTEM 
 
 tions to this and deduct the cost of producing the paper 
 and you will then know whether the paper is a paying 
 or losing game, and what you will have to do to make 
 it pay if it shows a loss. 
 
 The Newspaper: The printing of your newspaper 
 should be like the printing of any other job in your 
 office. A job ticket should be made for every issue, 
 daily or weekly, and all the time used on the paper, and 
 all the extras such as plate, ready-prints, editors' and 
 reporters' salaries or the portion of the proprietor's 
 salary for the time he may spend in editorial work 
 should be charged directly to the job record. This will 
 give the cost of the paper, issue by issue. It is not 
 possible to run a system satisfactorily any other way, 
 and you cannot get your correct hour costs without 
 treating the newspaper just as though it were an out- 
 side job. 
 
 Paying Investment: If you will take the time to 
 build your cost system and to keep its records accu- 
 rately you will find it the best paying investment you 
 ever made, for no work you can possibly do will bring 
 you better returns for the time required and money 
 invested. 
 
 A Larger System: This system here described is 
 especially suitable for the small and medium sized 
 offices of ten or less shop employees, where the owner 
 desires to operate a cost system without the need of 
 calling in an expensive cost expert. In fact, the ser- 
 vices of a cost expert are wholly unnecessary, for with 
 this Practical Cost System, if the user will but give 
 these instructions close study and proceed with the 
 
EXPERTS SOMETIMES WRONG 89 
 
 work step by step, as here indicated, he cannot fail to 
 get the accurate hour costs for his shop. 
 
 Large offices will probably find it a paying invest- 
 ment to hire an expert, although this Practical Cost 
 System, with the use of more and larger forms, can 
 readily be installed and operated by anyone who has a 
 fair knowledge of the principles underlying the science 
 of cost-finding. 
 
 A great many experts who do not thoroughly under- 
 stand cost-finding work nor cost systems have entered 
 the field and printers should be warned that incapable 
 cost men do more harm than good. 
 
 Should you desire to extend your knowledge of 
 figuring and finding costs or to learn of short cuts, or 
 to extend your knowledge of the principles involved, 
 send for Mr. Forte's book "How to Figure Costs in 
 the Printing Business." 
 
INDEX 
 
 Page 
 Advertising 
 
 Hand Composition on 34 
 
 Machine Composition on 36 
 
 Of Business 76 
 
 Work number of 34 
 
 Alterations 
 
 Authors' 34 
 
 Hand Composition, what are 34 
 
 Machine Composition, what are 35 
 
 Attached Folder 
 
 Classification of 43 
 
 Feeder, as press assistant 41 
 
 Feeder, time of 41 
 
 Feeder, wage of 41 
 
 Automatic Feeder 
 
 Classification of 41 
 
 Time on, how kept 41 
 
 Bindery 
 
 Little used 12, 43 
 
 Binding 45 
 
 Classification of work 43-46 
 
 Expense, distribution of 81 
 
 Folder, attached, time on 41, 44 
 
 Folder, hand fed, time on 43, 44 
 
 Folding, hand 43, 44 
 
 Folding, machine 43,44 
 
 Inventory of 62 
 
 Work numbers of 43 
 
 Work of 43 
 
 Burden 
 
 Diagram of 5 
 
 Elements of 6,48 
 
 Business 
 
 Bad accounts in 74 
 
 Borrowed money for 78 
 
 Expansion, capital for .... 78 
 
 Profit or loss, found 86, 87 
 
 Changes 
 
 Authors 34 
 
 On press 40 
 
 Chargeable Time 
 
 Definition of 17, 48, 59 
 
 Distribution of 82, S3 
 
 Record of 55, 58 
 
 Classification 
 
 Automatic fed jobber 41 
 
 Bindery 46, 47 
 
 Folder, attached 41 
 
 Folder, hand feed 41, 44 
 
 Paper cutter 4o, 63 
 
 Presses, cylinder 39, 41 
 
 Presses, platen 39, 41 
 
 Presses, proof 63 
 
 Clock 
 
 Unit face for 1 
 
 Page 
 Commissions 
 
 Agents .76, 77 
 
 Disposition of 77 
 
 Newspaper, on 77 
 
 Composing Room 
 
 Expenses, list of 80 
 
 Inventory of 63 
 
 Sink hole, was 32 
 
 Work numbers of 33 
 
 Work of 33 
 
 Composition 
 
 Alterations 34, 35 
 
 Clean up, hand 87 
 
 Clean up, machine 38 
 
 Corrections : 
 
 Non-chargeable 37 
 
 What are 37 
 
 Distribution: 
 
 Non-chargeable 37 
 
 What is .27 
 
 Time of sa 
 
 Time, guessing at 32. 33 
 
 Work of 33, 31 
 
 Cost of 
 
 Departments, how found 81, 82 
 
 General relations 5 
 
 Handling stock 29 
 
 Labor hour 65 
 
 Job, relation to 4 
 
 Production 5, 18, 50 
 
 Statement of 59-82 
 
 Summary of 59 
 
 Cost Clerk 
 
 Extending time 48, 49 
 
 Ring time, auto feeder 42 
 
 Ring time, bindery work 49, 52 
 
 Ring time, cylinders 49 
 
 Ring time, stock room 49 
 
 Ring time, linotype 38, 52 
 
 Cost Experts 
 
 Mistakes of 66 
 
 Needless, this system 2, 88 
 
 Warning 89 
 
 Cost System 
 
 Larger form 1, 88 
 
 Need of 1 
 
 Now in use 2 
 
 Paying investment 88 
 
 Custom of Trade 
 
 Handling stock 29 
 
 Cutting Stock 
 
 Combination, handling 31,32 
 
 Losses on 28, 29 
 
 Why chargeable 28 
 
92 
 
 INDEX 
 
 Page 
 Cylinder Presses 
 
 Classification of 41 
 
 Feeder, time on 40 
 
 Inventory of 63 
 
 Ringing time on 42, 49 
 
 Daily Time Ticket 
 
 Accuracy of '. 14 
 
 A sales record 18, 20 
 
 Explanation of 20-26 
 
 Extension, time on 42, 47-8-9 
 
 Extension to hour record 55, 58 
 
 Improved form 24 
 
 Reason for 15, 17 
 
 Working of 20 
 
 Work numbers on 23, 26, 48 
 
 Delivering; 
 
 Chargeable to office 27, 28 
 
 Chargeable to stock 31 
 
 Time ticket for 31 
 
 Departments 
 
 Classification of . . 14, 25, 32-47, 55 
 
 Cost of, how found 81,82 
 
 Direct expense of . 80, 81 
 
 Labor cost of 6 5 
 
 Pay roll, summary of . . . G 4 
 
 Depreciation 
 
 As replacement 72 
 
 Bases of 72, 73 
 
 Distribution of 74 
 
 Rate of 7^ 
 
 Why used 72 
 
 Diagrams 
 
 Expense relations 5 
 
 Job of printing, costs 3 
 
 Distribution 
 
 Chargeable time 47, 48 
 
 Composing room 37 
 
 Department investment 62,63 
 
 Ditto, interest on 71, 72 
 
 Depreciation 74 
 
 Direct expense 80, 81 
 
 General expense 74-79, 81-85 
 
 Heat 66, 67 
 
 Insurance 71 
 
 Interest: 
 
 On borrowed money 78, 79 
 
 On investment 71, 72 
 
 On purchase contracts 78, 79 
 
 Light 68 
 
 Miscellaneous expense 79 
 
 Office expense 74-79, 81-85 
 
 Pay roU 5, 6, 64 
 
 Power 5, 69 
 
 Rent 67 
 
 Selling expense 77 
 
 Spoiled work 75 
 
 Taxes 71 
 
 Page 
 Efficiency 
 
 Of employees 18 
 
 Of equipment 18, 19, 20, 33 
 
 Of management 18 
 
 Envelope 
 
 Job. explanation of 9-13 
 
 Job, copy in 14 
 
 Expenses 
 
 Direct department 80, 81 
 
 General 74-79 
 
 Miscellaneous 79 
 
 Office 74-79 
 
 Power, relation to 5 
 
 Experts 
 
 Cost, mistakes of 66 
 
 Cost, needless 2,88 
 
 Cost, warning 89 
 
 Extending: Time 
 
 On job record 50-54 
 
 On job tickets 47, 48 
 
 To hour record 55-58 
 
 Feeder 
 
 Auto, press, time on 41, 42 
 
 Cylinder, time on 40 
 
 Folder, time on 41 
 
 Press assistant 40 
 
 Fly Sheet 
 
 As job record 12, 50 
 
 Job ticket, part of 12 
 
 Kept in office 12 
 
 Folder 
 
 Attached, time on 41 
 
 Inventory of 63 
 
 Separate, time on 43, 44 
 
 General Expense 
 
 List of 74-79 
 
 Handling; Stock 
 
 Cost of 29 
 
 Inventory 64 
 
 Losses of 29 
 
 Hour Cost 
 
 Average 83-85 
 
 How found 83 
 
 Relation to newspaper 88 
 
 Inventory 
 
 Installation cost, part of 62 
 
 Items of 63, 64 
 
 Present cost used 63, 64 
 
 Valuation bases 63, 64 
 
 Investment 
 
 Amount, how found 62 
 
 Department 62, 63 
 
 Interest on 71 
 
 Valuation bases 62 
 
 Interest 
 
 Distribution of 71, 72 
 
 Time burden 4,5 
 
 Use in cost system 4, 5, 71, 78 
 
INDEX 
 
 93 
 
 Page 
 Insurance 
 
 Distribution of 71 
 
 Impression* 
 
 Record of 39 
 
 Job Costs 
 
 Diagram of 3 
 
 How found 50-54 
 
 Record of 50-54 
 
 Total of 52, 53 
 
 Job Envelope 
 
 Description of 9 
 
 Fly sheet, part of 12 
 
 Simple form of 9-13 
 
 Use of 9-13 
 
 Job of Printing 
 
 Diagram of 3 
 
 Progress in plant 3,4 
 
 Cost on 50-54 
 
 Job Presses 
 
 Automatic fed 41 
 
 Classification of 39, 41 
 
 Inventory of 63 
 
 Job Record 
 
 Advantage of 54 
 
 Form of 51 
 
 Profit and loss from 50-54 
 
 Time to 50-56 
 
 Use of 50 
 
 Job Register 
 
 Description of 7,8 
 
 Job Ticket 
 
 Explanation of 9-13 
 
 Labor 
 
 Burden on 3,4 
 
 Cost of 4, 20 
 
 Cost of, to find 65 
 
 Hours, cost of 83 
 
 Supervision of 65, 66 
 
 Leaks and Losses 
 
 Alterations 34 
 
 Bindery 43 
 
 Cutting stock 28 
 
 Guessing time 33 
 
 Handling stock 29, 30 
 
 Inefficiency of plant 29, 30 
 
 Proprietor, work of 6, 27 
 
 Spoiled work 75 
 
 Trimming 43 
 
 Wasted time 20 
 
 Light 
 
 General expense only 68 
 
 Power from, wires 70 
 
 Newspaper 
 
 Advertising job work 76 
 
 As a job 88 
 
 Commissions on 77 
 
 Direct expense on 77, 88 
 
 Profit or loss on, how found. . . .87, 88 
 Relation to hour cost 88 
 
 Page 
 Non-chargeable Hours 
 
 Burden on labor 4, 48T66 
 
 Not salable 59 
 
 Record of 48, 55-58, 68 
 
 Unavoidable 18 
 
 Office Expense 
 
 Distribution of 74-79, 81-85 
 
 Office Work 
 
 Delivery as 27, 28 
 
 Description of 26-28 
 
 Non-chargeable 42, 61, 62 
 
 Organizations 
 
 Dues to 78 
 
 Necessity of 78 
 
 Overhead 
 
 Administrative 5, 6, 74-79 
 
 Diagram of 5 
 
 Elements of 5,6 
 
 Office expense as 6, 74-79 
 
 Part of cost 6 
 
 Pay Roll 
 
 Hour cost of 65,66 
 
 Office, disposition of 5, 6, 77 
 
 Proprietor on 5, 6, 65 
 
 Shop, distribution of 5, 64 
 
 Percentage 
 
 Handling stock on 30 
 
 Wrong principle . . . 30 
 
 Plant Inventory 
 
 Basis of value 62 
 
 Items of 63, 64 
 
 Power 
 
 Distribution of 5, 69 
 
 Division of 68 
 
 From light current 70 
 
 From one motor 69,70 
 
 From gasoline engine 68, 70 
 
 Press Room 
 
 Auto, feeder 41 
 
 Classification in 39-41 
 
 Inventory in 63 
 
 Number impressions 22 
 
 Production Cost 
 
 Labor, relation of 66 
 
 Office expense part of 4, 5 
 
 Shop expense part of 4, 5 
 
 Profit and Loss 
 
 Job work, how found 50-54 
 
 Newspaper, how found 87, 88 
 
 Summary of 86,87 
 
 Proofs 
 
 Exception, chargeable 36 
 
 Pulling, non-chargeable 36 
 
 Reading, non- chargeable 37 
 
 Proprietor 
 
 Salary of 6, 65 
 
 Shop work of 6, 27, 65 
 
94 
 
 INDEX 
 
 Page 
 Record 
 
 Chargeable hours 55-58, 66 
 
 Hours, extension to 55-58 
 
 Job record 50-56 
 
 Rent 
 
 Distribution of 67 
 
 How to find 67, 68 
 
 Replacement 
 
 Fund for 73 
 
 Why needed 72, 73 
 
 What it is 72, 73 
 
 Ringing Time 
 
 Cylinder press 42, 49 
 
 Stock work 49 
 
 Type setting machine 49 
 
 Salaries 
 
 General office 4, 5, 77 
 
 Proprietors 4, 5, 77 
 
 Stock Room 
 
 Cutting, cost of 28, 31, 32 
 
 Delivery, work of 31 
 
 Handling stock 29, 31, 32 
 
 Unpacking and shelving 31 
 
 Page 
 
 Summary of Cost 
 
 Job record 54 
 
 Plant, total of 59 
 
 Time 
 
 Burden on 4 
 
 Chargeable 55 
 
 Element of cost 18 
 
 Non-productive 18 
 
 Unit of 15, 16 
 
 Time Ticket 
 
 Explanation of 14 
 
 Illustration of 19, 21, 23 
 
 Reason for 15,17 
 
 Working of 20 
 
 Type Setting Machine 
 
 Cleaning 33 
 
 Inventory 63 
 
 Power, to find 70 
 
 Work, Classes of 
 
 Bindery 26, 43-47 
 
 Composing room 25, 33-37 
 
 Office 26, 27 
 
 Stock room 25, 26-32 
 
 Work numbers 25, 26 
 
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