Executive, Insurance, Taxes, Depreciation, Freight, Express, Cartage, Printing and Stationery, Telephone and Telegraph, Traveling, Postage, Legal, etc.
| Department A—Offices: | Clerks and supplies. |
| Department B—Storehouse: | Clerks, laborers, and supplies. |
| Department C—Power House: | Engineers, firemen, coal, etc. |
| Department D—Yard: | Laborers, teams, and supplies. |
| Unclassified Expense: | Not included in above. |
The General Expense Distribution account referred to originates by closing monthly all the various ledger accounts listed above into one account. This brings all these scattered expense accounts together in one total, necessary not only for the purpose of distribution, but for convenience in ascertaining and handling general expense. The details can be readily taken from the individual accounts before thus closed, while Departments A, B, C, and D are carried in detail in the Expense Ledger. The total General Expense shown then by the statement will check the total shown by the Distribution account in the Private Ledger.
The form Fig. 5, will be found a very convenient and satisfactory exhibit. Detailed explanation is quite unnecessary; the tabulation explains itself and needs no assistance. The general conclusion arrived at is that the plant's general expense is found for the month of August to be 31.1% of the productive labor; in other words 31.1 cents must be added to every dollar of productive labor to cover its proportion of the general and administration expense of the plant. The same figures are also shown for comparative purposes for the previous month, and also for the first six months of the year; the manager can see at once exactly how the plant is running.
The same summary figures are placed at the bottom of this statement as were shown on the departmental statement, that each may show the final results of the other.
36. Statements for Foremen. It is often asked whether or not it is a good plan to furnish the foremen of the various departments any cost figures. In a good many shops, it is the rule to tell them nothing and to keep them in entire ignorance of their expense costs, the feeling being that in case of an unsatisfactory showing they will be inclined to doctor their expense returns by diverting them into production in order to make a more favorable showing.
While it is undoubtedly true that a foreman is frequently tempted to resort to such measures—not a very far-sighted policy to be sure, for it is bound to be shown up later—it would seem advisable to furnish him a copy of his operating expenses not only for his information but as an incentive to practice economies on his own initiative without waiting for a call from the manager. Most foremen are quick to see that it is for their own interests to do this and to make the best possible showing for their department. It also creates a good-natured rivalry among the various foremen, which tends towards good results in which both foremen and management share.
