19. Power. While the cost of operating the power-house is unquestionably a legitimate charge to the operating expense of each department according to quantity used, it is noted that, by the journal entry just made, the cost of same is closed into General Expense Distribution.
In a plant operating a central power station with electrically driven machinery, the power used in each shop can be metered and accurately known, in which case, each shop can be charged with the amount actually used. To do this requires considerable extra expense, and although it is done in many works, most plants do not consider the expense worth the results, and are inclined to treat all power as general expense rather than departmental.
In a plant driven by shafting and belting, the power consumed cannot be registered or recorded, and the power required only estimated from tests made as often as desired. Although there may be a heavy draft on the power-house at certain times, when all the machinery is in operation, there are frequently times when but few machines are running and the power required is down, although there is no way of recording it.
It is, therefore, extremely difficult to arrive at the actual power used during a month, and for this reason most plants do not attempt its calculation, and are quite ready to charge its cost off as a whole to general expense. To departmentalize it, means extra expense with no benefit gained—except to engineering science.
Fig. 3. Expense Distribution Account in Private Ledger
20. Productive Labor and Expense Compared. Having now dissected the pay-rolls and drawn off the departmental and general expense accounts, it is but a matter of bringing these two statements together to produce the final results. It will be remembered that all that is necessary to know is the rate between the two, therefore place them side by side, item for item, as already shown:
| Productive Labor | Expense | % Expense to Prod. Labor | |||||
| General | $67,840 | 00 | 32.6 | ||||
| Department | E | $104,409 | 00 | 22,731 | 00 | 21.8 | |
| " | F | 31,429 | 00 | 5,419 | 00 | 17.3 | |
| " | G | 5,528 | 00 | 2,465 | 00 | 44.6 | |
| " | H | 10,659 | 00 | 3,174 | 00 | 29.8 | |
| " | I | ||||||
| " | J | ||||||
| Etc. | 26.5 | ||||||
| Total | $208,133 | 24 | $122,985 | 00 | 59.1 | ||
The percentage columns shown give us what may be considered a very close figure as to what are the actual factory conditions of operating expense and productive labor, and the relationship of the former to the latter. These results are all the more reliable because they are based on actual figures taken from the books of the company, thereby eliminating all estimating and the basing of important calculations on guesses and assumptions, which later generally prove to be far from the real facts in the case. The above results, gathered from six months' operation of the plant, are a fair statement of what the same expenses will be found to be in the long run, although if it is desired to go into the matter still deeper, the same tabulation may be made covering a year, with practically the same results.