After studying the same a moment, what will the manager of the plant discover? Among other things he will see at once:
(a) The total expense of operating each department in the works, with the principal items which go to make it up.
(b) That the total productive labor was 79.9% of the total monthly pay-roll while the non-productive was 20.1%; that the former has been apportioned over the various departments and every dollar of same accounted for.
(c) The ratio of expense to productive labor for each department reduced to a percentage, the average of which for all the productive departments is 25.7%.
(d) From the comparative figures, that the August percentage showed an improvement in operating expenses in most of the productive departments over those for July and that they are a trifle lower than the average for the first six months of the year.
(e) That the operating percentage for Department F has jumped up 4.7%, which means that something is wrong in that department, and must be investigated.
(f) That for every dollar spent for productive labor, he must add 56.8 cents to cover operating expenses, of which amount, 25.7 cents covers the expense of operating the shops and 31.1 cents covers the general expense of the plant.
The item of General Expense = 31.1% is not derived from any figures that appear in this statement, but is taken from the tabulation covering General Operating Expense presented later. It is desirable to have this appear here, as well as the Department average percentage, in order to show the total operating expense (56.8%) on the labor, bringing total plant results on one sheet.
35. General Expense Statement. This statement serves as the companion sheet to the one just shown for Departmental Expense, every operating expense appearing on either one of these two statements. It is drawn off in just the same manner as the Departmental statement, the total of the various expense accounts in the Private Ledger and the details of the four expense departments shown in Expense Ledger No. 1 checking the total General Expense Distribution account shown in the Private Ledger. It will be seen at once that the General Expenses of the plant may be reduced to the following general divisions:
Special Ledger Accounts: