Fig. 23. Journal Showing Adjusting Entries
Manufacturing account has been charged for the cost of manufacture—material, labor, and expense—and credited with the cost of finished goods. This does not close the account, however, because all jobs started have not been finished, as there still is work in process. The balance of the manufacturing account, then, represents the cost of this work and should agree with an actual inventory of work in process.
No attempt has been made to describe a cost system for a particular business—principles only have been considered in this discussion. Proper application of these principles, however, will result in a practical system for any manufacturing business. The exact manner of applying these principles—the detail—depends on the nature of the business; the results desired are the same in all lines. Physical conditions, nature of the product, the policy of the management, the manner in which the business is conducted—all of these factors must be studied and given due consideration in outlining the system. Then the most simple system that will produce results is best, but in the effort to make the system simple, necessary details should not be overlooked. It must be remembered that in a comparison of details of cost, increases are more quickly located than if the comparison refers to finished work.
PART OF THE INTERIOR OF THE GENERAL STORES OF THE SANTA FE AT TOPEKA
Showing Arrangement of Racks and Shelving for Holding Materials, and Longitudinal Disposition of the Bins Enabling the Foreman, from His Office at the End, to Command a View of the Whole Floor. Courtesy of the Engineering Magazine.