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Author: 
 
 Woods, Clinton 
 
 ar 
 
 itie: 
 
 Unified accounting 
 
 ods for in 
 
 e 
 
 Place: 
 
 w York 
 
 1919 
 
^^■^z/6.V-9 
 
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 PRESERVATION DIVISION 
 
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 Woods, Clinton Edgar. 
 
 Unified accounting methods for industrials, by Clinton 
 E. Woods ... New York, The Ronald press company, 
 
 x*yf!"484 p. nius tforms) fold, charts. 22^"". [$5.00 3 
 
 1, Factories — Accounting. 2.^ Efficiency, Industrial. UlAy^-X^ 
 
 0^ ' "17-5973 
 
 Library of Congress %■ J HF5686.M3W7 
 
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 LIBRARY 
 
 School of Business 
 
 0^>\«v3K^^ 
 
Unified Accounting 
 Methods for Industrials 
 
 BY 
 
 CLINTON E. WOODS 
 
 Industrial Engineer; Author of ''Woods' Reports,*' 
 ••Practical Cost Accounting," "Organizing a Factory,*' etc. 
 
 (Third Printing) 
 
 NEW YORK 
 
 THE RONALD PRESS COMPANY 
 
 X919 
 
w 
 ^ 
 
 Co 
 
 Copyright, 1917, by 
 The Ron/»ld Press Company 
 
 Orb. 
 
 William Q. Hewitt PreM. Brooklyn. PrinterE 
 .1 i. Tapley Co., New York. Binders 
 
 Dedicated 
 
 to 
 
 My Fellow-Workers 
 
 as an 
 
 Instrument to Help Them 
 
 Establish the Profession of 
 
 Industrial Engineering 
 
PREFACE 
 
 Somewhere, somehow, sometime, in the universal make- 
 up of things, a relationship will be found to exist between 
 all things that function toward a common end. Activities 
 using the same elements must in some way be dominated 
 by a common principle. If this can be discovered it will 
 serve as a clue to guide the investigator to his goal or enable 
 him to return to the beginning of things for a fresh start 
 if analytical ramifications have led him too far afield. It is 
 with this thought firmly fixed in his mind that the waiter 
 has undertaken this work. Its subject matter is not new, 
 but it is treated in a new way to reveal more clearly this 
 condition of relationship. 
 
 The scope of this work is limited to industrial or manu- 
 facturing activities, although the principles herein set forth 
 are susceptible of a much broader application. It should 
 be borne in mind that this is a day not only of specialists, but 
 also of specialities, and that the cunning of the inventor's 
 mind has lost no opportunity to lighten the burden, lessen 
 the cost, and make more accurate the work of the ofifice as 
 well as that of the factory. Any method of accounting 
 proposed at this time must therefore take full cognizance of 
 this fact if it is to be commensurate with modern progress. 
 
 The reader should recognize the fact that it is not to be 
 supposed that any and all industries offer the same oppor- 
 tunities for improvement as those cited in Chapter I of 
 this work, as in nearly all instances the examples used are 
 those where exceptional opportunity existed and was taken 
 advantage of, thereby becoming of educational value as a 
 
^j PREFACE 
 
 foundation for research work on the part of industrial 
 executives who care to study them. 
 
 It is to be noted that the forms presented, while selected 
 from those in actual use, are for illustrative purposes, and 
 there is no hard and fast rule preventing their modification 
 or change either in captions, size, or general arrangement 
 to meet any special requirements. 
 
 It has been deemed best to present the balance sheet in 
 the first part of the book. This means the giving first of that 
 which would ordinarily be given last ; but it is sometimes 
 well to picture a house before building it, and this would 
 seem to be one of those times. 
 
 The author realizes the impossibility of writing a book 
 of this character without leaving many questions un- 
 answered, and that it must necessarily be somewhat specific 
 in its subject matter. It has, however, been written for the 
 benefit of three classes of individuals, the executive, the 
 engineer, and the accountant ; but in the main, the present 
 work is one of accounting and as such is submitted to his 
 fellow-workers in the industrial world with but one thought 
 and one wish, and that is, that they may derive as much 
 profit from the application of its principles and precepts as 
 the author has had pleasure in formulating them. 
 
 In conclusion the author wishes to express his high 
 appreciation of the efficient editorial assistance given by 
 Dr. Carroll W. Doten, of the Massachusetts Institute of 
 Technology, and by the editorial staff of The Ronald Press 
 Company— assistance which has added much to the clear- 
 ness and general value of the book. 
 
 Clinton E. Woods 
 
 Bridgeport, Conn., 
 January 2, 1917. 
 
 CONTENTS 
 
 Chapter ^^^^ 
 
 I The Development, Elements, and Results 
 OF Industrial or Efficiency Engineer- 
 
 I 
 
 ING 
 
 A New Profession 
 
 Conditions Which Make Industrial Engineering Neces- 
 sary 
 Phases of Industrial Engineering 
 Principles of Industrial Engineering 
 Distribution of Expense 
 Unified Accounting 
 Unified Output 
 
 Function of a Sales Department 
 Results of a Unified Output 
 Stabilizing Production 
 Standardizing Output 
 Weil-Balanced Equipment 
 Standardization of Labor 
 Adjustment of Labor and Equipment 
 Results of Scientific Management 
 Broader Applications of Scientific Management 
 
 II Analyzing an Industrial Manager's 
 
 Monthly Balance Sheet ... 25 
 
 The Work of a Manager 
 
 Purposes of Unified Methods of Accounting 
 
 The Monthly Balance Sheet 
 
 Analyzing the Balance Sheet— From the Standpoint of 
 
 the Financier 
 Analyzing the Balance Sheet— From the Standpoint of 
 
 the Executive 
 Analyzing the Balance Sheet— From the Standpoint of 
 
 the Manufacturer 
 Availability and Value of Unified Balance Sheet 
 Manager's Daily Report 
 
 Vll 
 
^m?Mf 
 
 { 
 
 Vlll 
 
 CONTENTS 
 
 Chapter 
 
 III Purchasing and Receiving . 
 
 Work of the Purchasing Department 
 
 Purchase Specifications 
 
 Purchase Requisition 
 
 Purchase Order 
 
 Material Receipt and Notice 
 
 FiHng Purchase Requisitions 
 
 Filing Purchase Orders 
 
 Filing Material Receipt and Notice 
 
 Special Instructions for Handhng Invoices 
 
 IV General Stores 
 
 Orders 
 Qassification of Orders 
 
 (A) Contract or Sales Orders 
 
 (B) Manufacturing Orders 
 
 (C) Production Orders 
 
 (D) Prorating Orders 
 
 (E) Betterment Orders 
 
 (F) Repair Orders 
 
 (G) Stores Orders 
 
 Stores-Keeping 
 Stores 
 
 Requirements as to Stores 
 Routine of Stores-Keeping 
 General Stores Keeper 
 Stores Recorder 
 
 Bureau of Censorship of Materials 
 Control of General Stores 
 General Stores Record 
 Classification of General Stores 
 
 1. Office Materials — Classification 
 
 2. Factory Materials — Classification 
 Classification of General Stores — For Stores-Indexing 
 
 The Issuing of Material from Stores 
 
 General Stores Requisitions 
 Stores Credit Memorandum 
 
 Page 
 41 
 
 1 
 
 57 
 
 CONTENTS ix 
 
 Chapter Page 
 
 V Component and Finished Stores . . 9^ 
 
 Nature of Component and Finished Stores 
 
 Component Stores 
 
 Component Stores Record 
 
 Controlling Account for Component Stores 
 
 Finished Stores Record 
 
 VI Stores — Special Features .... 101 
 
 Assembly Requisition 
 
 Production Order Distribution of Material 
 
 Assembly Production Order Material Distribution 
 
 Extensions 
 
 Daily Report of Stores Balance 
 
 Objects of Stores-Keeping 
 
 Stores Keeper's Order 
 
 Goods Returned Memorandum 
 
 Accounting for Goods Returned 
 
 VII Preparation for the Handling of Produc- 
 tion 113 
 
 General Considerations 
 
 Analysis of Production Handling 
 
 Utilizing Plant Capacity 
 
 Production and the Sales Department 
 
 Schedule of Production 
 
 System of Numbering 
 
 Piece Key Card 
 
 Part Key Card 
 
 Unit Key Card 
 
 Preparation and Care of Cards 
 
 Uses to Which Key Cards Are Applied 
 
 Drawing and Tracing Card 
 
 Pattern Record Card 
 
 Pattern Location Card 
 
 VIII Analyzing and Grouping Machine Tool 
 
 Equipment 133 
 
 Machine Study Card 
 
 Tool and Fixture Key Cards 
 
X 
 
 Chapter 
 
 CONTENTS 
 
 Tool Key Card 
 Tool Set-up Key Card 
 Fixture and Die Key Card 
 Operation Studies 
 Operation Study Card 
 Making the Operation Study 
 Motion Study Card 
 Operation Key Card 
 Rate Memo 
 
 Page 
 
 IX Schedules . . . . . 
 
 Purpose and Scope of Schedules 
 Manufacturing Order — Master Schedule 
 Production Schedule 
 Purchase Order Schedule 
 Scheduling Labor 
 
 Scheduling Financial Requirements 
 Importance of Schedules 
 Graphic Charts 
 
 . 149 
 
 X Converting Labor, Material, and Expense 
 
 INTO Finished Product .... 165 
 
 Classification of Orders 
 
 Production Orders 
 
 Tracing Tag 
 
 Issuing Material Requisitions 
 
 Production Tickets and Daily Time Slips 
 
 Daily Defective Repairs Time Ticket 
 
 Daily Waiting Time Ticket 
 
 Prorating Orders 
 
 Daily Prorating Order Time Ticket 
 
 Daily Non-productive Labor Ticket 
 
 Plant Betterments and Repairs 
 
 Betterment Orders 
 
 Daily Betterment Time Ticket 
 
 Plant Repairs 
 
 Small Repairs 
 
 Daily Repair Time Ticket 
 
 Importance of Accuracy and Promptness 
 
 Cost of Production 
 
 CONTENTS 
 
 Chapter 
 
 XI 
 
 Page 
 
 Supplementary Tag 
 Rejected for Scrap Tag 
 Rejected for Defective Repairs Tag 
 Symbolical Control Chart 
 Planning Board 
 
 XI Employment and Handling of Labor . 197 
 
 Organization of Employment Department 
 
 Application for Employment Card 
 
 Letter Application for Employment 
 
 Reference Inquiry Letter 
 
 Requisition for Help Card 
 
 Employee's Rate Card 
 
 Quitting Card 
 
 Employees Dismissed and Resigned 
 
 Pay Period 
 
 Time Card 
 
 Pay Check 
 
 Time Sheet (First Form) 
 
 Distribution of Labor Costs 
 
 Time Sheet (Second Form) 
 
 Time Card (Second Form) 
 
 XII Distributions ...... 
 
 Organization 
 
 Organization diart 
 
 Factory Overhead Sheet for Distributions 
 
 Labor 
 
 Materials 
 
 Expense 
 
 Redistribution 
 
 Record of Production, Betterment, and Repair Orders 
 
 Production Cost Card 
 
 Sales Analysis Sheet 
 
 XIII Commercial or Office Accounting . 
 
 The Function of Commercial Accounting 
 General Stores under the Voucher System 
 Purchase Voucher 
 Charge Vouchers 
 Voucher Record 
 
 219 
 
 241 
 
Xll 
 
 CONTENTS 
 
 CONTENTS 
 
 Chapter 
 
 Page 
 
 XIV 
 
 XV 
 
 XVI 
 
 Incoming Cash Sheet 
 
 Check Record 
 
 Petty Cash Record and Voucher 
 
 Journal Register 
 
 Journal Voucher 
 
 General Ledger 
 
 Commercial Expense Distribution Sheet 
 
 General Commercial Expense 
 
 Selling Expense 
 
 Commercial or Office Expense Credits 
 
 Analysis of Overhead 
 
 Accounts Payable— Personal 
 
 Controlling Accounts — Nature ; Asset 
 Accounts 265 
 
 Purpose of Controlling Accounts 
 Chart of Controlling Accounts 
 Classification of Asset Accounts 
 Classification of Liability Accounts 
 Classification of Profit and Loss Accounts 
 Assets — A. Account 
 Assets — B. Inventory 
 Assets— C Investments 
 
 I 
 
 Chapter 
 
 xiu 
 
 Page 
 
 XVII 
 
 Inventory Tag 
 Disposition of Tags 
 Equipment Record 
 
 The Work of the Systematizer 
 
 Relation between Standardized Accounting and 
 
 Systematizing 
 Special Features of the Systcmatizcr's Work 
 Office Appliances 
 
 335 
 
 FORMS 
 
 Financial Statements and Reports 
 
 1. Industrial Manager's Monthly Balance Sheet 
 
 2. General Manager's Daily Report 
 
 Page 
 . 341 
 
 Controlling Accounts — Liability 
 Profit and Loss Accounts 
 
 Liabilities — D. Current 
 
 Liabilities — E. Reserves 
 
 Liabilities— F. Capital, Bonds, and Mortgages 
 
 Profit and .Loss — G. Revenues 
 
 Profit and Loss— H. Costs 
 
 Profit and Loss — J. Expenses 
 
 K. Profit and Loss 
 
 Taking the Inventory . . . , 
 
 Preliminary Steps 
 Formal Announcement 
 Organizing the Force 
 Classification of Assets 
 Pricing the Inventory 
 
 AND 
 
 299 
 
 Purchasing 
 3. 
 4. 
 
 5. 
 6. 
 7. 
 8. 
 
 AND Receiving 
 
 Purchase Requisition 
 Purchase Order 
 Purchase Order Tickler Card 
 Material Receipt and Notice 
 Purchase Order Numbers 
 Claim Voucher 
 
 351 
 
 General 
 
 317 
 
 Stores .... 
 
 9. General Stores Record 
 
 10. General Stores Requisition 
 
 11. Stores Credit Memorandum 
 
 12. Shop Stores Requisition 
 
 Component and Finished Stores 
 
 13. Component Stores Record 
 
 14. Finished Stores Record 
 
 • 357 
 
 . 361 
 
XIV 
 
 Stores- 
 
 contents 
 
 •Special Forms 
 
 15. Assembly Requisition 
 
 16. Production Order Distribution of Material 
 
 17. Assembly Production Order Material Distribution 
 
 18. Stores Clerk's Order 
 
 19. Goods Returned to Us Memorandum 
 
 Page 
 365 
 
 CONTENTS 
 
 XV 
 
 Page 
 
 Preparation for Production . 
 
 20. Piece Key Card 
 
 21. Part Key Card 
 
 22. Unit Key Card 
 
 23. Drawing and Tracing Card 
 
 24. Pattern Record Card 
 
 25. Pattern Location Card 
 
 371 
 
 Machine 
 
 AND Tool Studies . 
 
 26. Machine Study Card 
 
 27. Tool Key Card 
 
 28. Tool Set-up Key Card 
 
 29. Fixture and Die Key Card 
 
 30. Operation Study Card 
 
 31. Motion Study Card 
 
 32. Motion Study of Operations 
 
 33. Operation Key Card 
 
 34. Rate Memo 
 
 Schedules and Charts .... 
 
 35. Manufacturing Order 
 
 36. Production Schedule 
 
 37. Purchase Order Schedule 
 
 38. Graphic Chart— Component Schedule 
 
 39. Graphic Chart— Unit Schedule 
 
 Forms Relating to Production 
 
 377 
 
 Premium Production Ticket, including Time on 
 
 Premium Ticket 
 Daily Day-Work Production Time Slip 
 Daily Piece-Work Production Time Slip 
 Daily Premium Production Time Slip 
 Daily Defective Repairs Time Ticket 
 Daily Waiting Time Ticket 
 Daily Betterment Time Ticket 
 
 53. Daily Repair Time Ticket 
 
 54. Daily Prorating Order Time Ticket ^ 
 Daily Non-productive Labor Time Ticket 
 Supplementary Tag 
 Rejected for Scrap Tag 
 Rejected for Defective Repairs Tag 
 Order Control Chart 
 Order Control or Planning Board 
 
 46. 
 
 47. 
 48 
 49 
 50 
 51 
 52. 
 
 55. 
 56. 
 57. 
 58. 
 59. 
 60. 
 
 Forms Relating to Labor 
 
 405 
 
 . 387 
 
 40. Production Order 
 
 41. Betterment Order 
 
 42. Repair Order 
 
 43. Tracing Tag 
 
 44. Day-Work Production Ticket, including Time on 
 
 Day-Work Ticket 
 
 45. Piece- Work Production Ticket, including Time 
 
 on Piece- Work Ticket 
 
 391 
 
 61. Application for Employment 
 
 62. Letter Application for Employment 
 
 63. Reference Inquiry Letter 
 
 64. Requisition for Help 
 
 65. Employee's Rate Card, including Absent Record 
 
 66. Introduction Card 
 
 67. Change in Rate Card 
 
 68. Change of Department Card 
 
 69. Report of Absentees 
 
 70. Quitting Card, including Record of Employee 
 
 71. Monthly Record of Employees Dismissed or Re- 
 
 signed 
 
 72. Pay Check and Time or Clock Card 
 
 73. Time Sheet (First Method) 
 
 74. Time Sheet (Second Method) 
 
 75. Pay Check and Time or Clock Card (Second 
 
 Method) 
 
 Organization Chart ; Distribution and Analysis 
 Sheets ^^^ 
 
 76. Organization Chart 
 
 77. Factory Overhead Distribution Sheet 
 
XVI 
 
 CONTENTS 
 
 Page 
 
 78. Record of Production, Betterment, and Repair 
 
 Orders 
 
 79. Production Cost Card 
 
 80. Sales Analysis Sheet 
 
 Commercial Accounting 431 
 
 81. Purchase Voucher 
 
 82. Voucher Tickler 
 
 83. Charge Voucher 
 
 84. Voucher Record 
 
 85. Incoming Cash Sheet 
 
 86. Check Record 
 
 87. Petty Cash Voucher 
 
 88. Petty Cash Disbursements Sheet 
 
 89. Journal Register 
 
 90. Journal Voucher 
 
 91. Commercial Expense Distribution Sheet 
 
 Chart of Controlling Accounts 
 
 92. Chart of Controlling Accounts 
 
 Inventory Records . . . . 
 
 93. Inventory Tag 
 
 94. Equipment Record 
 
 Form 95. Stores Ledger . . . 
 
 443 
 
 445 
 
 449 
 
 Unified Accounting Methods for 
 
 Industrials 
 
 CHAPTER I 
 
 THE DEVELOPMENT, ELEMENTS, AND RE- 
 SULTS OF INDUSTRIAL OR EFFICIENCY 
 
 ENGINEERING 
 
 A statement of facts in connection with the 
 development of accounting and industrial 
 engineering, giving specific instances of the 
 improved conditions brought about in various 
 industries by the application, in their different 
 phases, of one or both of these. 
 
 I 
 
CHAPTER I 
 
 THE DEVELOPMENT, ELEMENTS, AND RE- 
 SULTS OF INDUSTRIAL OR EFFICIENCY 
 
 ENGINEERING 
 
 A New Profession 
 
 During the last few years a new profession has been 
 slowly developing in the industrial world, sometimes called 
 industrial engineering, sometimes efficiency engineering, or 
 again production engineering. While this in time promises 
 to be one of the most important of the engineering pro- 
 fessions, up to the present moment it has not received the 
 recognition required to clothe it with the dignity of a 
 collegiate degree as in other branches of engineering, and its 
 importance is but dimly recognized by manufacturers in 
 general, owing to the fact that the work of this new 
 profession has been done under many different names, and 
 by a wide diversity of individual effort. 
 
 To trace the development of industrial engineering in 
 detail would mean the writing of several books. Therefore, 
 in the present instance, the primary purpose will be an 
 effort to explain its scope, some of the results obtained 
 by its application to industrials, the necessity that exists 
 for such special service as the industrial engineer has to 
 offer, and in so far as possible to establish certain standards 
 for this new profession. 
 
 Conditions Which Make Industrial Engineering Necessary 
 
 The average manufacturer of today might be called the 
 most magnificent gambler the world has ever known. He 
 
 3 
 
^ UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 is a buyer, a producer, a seller, and a financier ; and in each 
 of these phases of his business he takes a hundred chances 
 where his business brother, the banker, on the one hand, 
 takes none, and the merchant, on the other, perhaps ten. 
 
 This relative business worth is reflected in every 
 banker's attitude toward an industrial, for, in making it a 
 loan, he will almost invariably ignore fixed assets or per- 
 manent investment and loan on quick assets only to the 
 extent of about fifty cents on the dollar; whereas he will 
 loan a merchant sometimes as high as 70% of his entire 
 inventory and will take the securities of other banks at par. 
 
 It might almost be said that banking, the world over, 
 is done today under a unified code of standards, insuring 
 not only safety to the banker and to the depositor, but an 
 earning on investments as well. Merchandising is also con- 
 ducted under a unified code of standards that minimizes the 
 risk ; yet, there are somewhere near 400,000 manufacturing 
 concerns in this country today whose methods of handling 
 the same industrial problems are as diversified as are the 
 things they make and the men who make them, and who, 
 for lack of unified standards to work under, are jeopardiz- 
 ing the interests of both labor and capital — and jeopardizing 
 them to such an extent that it is little wonder that labor 
 forms unions to protect itself, and that capital will buy 
 average industrial stocks or bonds only at a big discount; 
 in other words, on a speculative or gambling basis. 
 
 In saying that a manufacturer is taking considerable 
 risks, it is not meant that he does so from choice or that 
 his chance-taking is directly connected with money trans- 
 actions, but rather that it is due to the nature of the things 
 in which he is obliged to invest his money. 
 
 For instance, he gambles with inventions, the develop- 
 ment of which is always a pure experiment. Many fac- 
 tories, especially automobile factories, are today filled with 
 
 EFFICIENCY ENGINEERING e 
 
 obsolete materials which, sooner or later, must be charged 
 to profit and loss as a result of such experiments. 
 
 The manufacturer gambles in buying equipment, which 
 may become obsolete before it shows visible wear, due to 
 the development of more efficient machines for doing the 
 same work. 
 
 He gambles every time he employs a new superintendent 
 or foreman, for the man's real knowledge may or may not 
 be to his advantage. 
 
 He gambles every time he takes on a new workman, 
 for the man's efficiency as regards quantity and quality 
 of work can only be determined by a try-out. 
 
 And so, failing to take into his reckoning all the costs 
 of these uncertainties in his business, he takes a final gamble 
 by meeting his competitor's price, who in turn is doing 
 exactly the same thing, with the result that sooner or 
 later they are both swallowed up by industrial failures. 
 
 It is these conditions in the industrial world that have 
 given birth to the new profession called "Industrial or Ef- 
 ficiency Engineering," the purpose of which, broadly speak- 
 ing, is to provide the manufacturer with a unified code of 
 standards to work under, which will put him on or some- 
 where near the same basis as the banker and the merchant 
 in chance-taking. 
 
 Phases of Industrial Engineering 
 
 The development of industrial engineering has thus far 
 been effected not through any educational institution, but 
 by two separate and distinct professions or classes of men : 
 the industrial or factory accountant, sometimes called a 
 systematizer ; and the mechanical engineer, sometimes 
 called an efficiency or production engineer. Both are nec- 
 essary to complete the work of industrial engineering, but 
 neither can do very much alone, for the simple reason that 
 
UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 EFFICIENCY ENGINEERING 
 
 the function of the former is largely analytical in its nature, 
 dealing only with results as a finality, while that of the 
 other is essentially creative, deaHng almost wholly with 
 causes. In other words, the one enables an executive to 
 measure results obtained, while the other sets into activity 
 causes that make possible a predetermination of results. 
 One has worked from the top down by the process of 
 deduction, while the other has worked from the bottom up 
 by devising means for eliminating unnecessary waste; the 
 combined effort of both resulting in a standardization of 
 factory operations. 
 
 Therefore, to qualify as an industrial engineer, a man 
 must not only be a master of both of these professions, 
 but also be able to reconcile the necessary workings of one 
 with the other. 
 
 Principles of Industrial Engineering 
 
 The analytical work that has been done by industrial 
 engineers in the last few years has been something tre- 
 mendous, and out of it have been developed certain 
 principles that will go a long way toward the required 
 unified code of standards. For instance, in industrial ac- 
 counting, the following facts have been developed and 
 standardized : 
 
 1. That no matter what a concern manufactures, the 
 elements of operation always reduce themselves to the same 
 primes — namely, labor, material, and expense — and are 
 therefore identical in accounting work for any and all manu- 
 facturing concerns. 
 
 2. That in principle, the accounting of investments and 
 depreciation are the same in every manufacturing business. 
 
 3. That in addition to depreciation, two accounts should 
 be maintained — one for obsolete equipment and one for 
 obsolete materials. 
 
 '3 
 
 4. That to secure uniformity of costs, repairs to fixed 
 assets should no longer be treated as an expense, but charged 
 to depreciation. 
 
 5. That labor, material, and expense constitute the 
 units of measure for cost of production. Therefore, the 
 total monthly value of these for any plant must be converted 
 into actual inventoried assets each month. 
 
 6. That the commercial transactions of an industrial 
 concern have absolutely nothing to do with production or 
 the costs of production. Therefore, accountants must sep- 
 arate absolutely such expenditures from the operations of 
 a factory. 
 
 7. That in addition to the usual accounts of assets and 
 liabilities, there are four analytical accounts — one of profit 
 and loss; one of commercial expense; one of factory over- 
 head; and one of factory production. 
 
 8. That through controlling accounts, the wide variables 
 in factory overheads are distributed so as to make the costs 
 of production uniform. 
 
 9. That costs divide themselves into two distinct phases : 
 those which pertain to production, or flat costs, and those 
 which pertain to expense which in turn must be absorbed 
 into costs of production. A careful departmental distribu- 
 tion of these expenses is therefore of the utmost impor- 
 tance. 
 
 Distribution of Expense 
 
 There is nothing that will mislead the management of a 
 concern more than a lump sum prorating of expense over 
 the product made, and a large percentage of industrial fail- 
 ures can be attributed to this cause alone, which too often 
 results in a selling of goods below cost or at no profit, as 
 the following instances well illustrate : 
 
 A large concern manufacturing automobile parts and 
 
8 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 kindred lines took in a great deal of outside contract work, 
 especially for drop forgings and nickel-platings. They were 
 always successful in getting all of the drop forging con- 
 tracts they wanted, but were unsuccessful in getting nickel- 
 plating contracts. The general overhead applied to every- 
 thing in connection with the factory was 125%. In making 
 up their estimates, this was applied to both nickel-plating 
 work and drop forge work; but the real facts of the case 
 were that the general overhead of the drop forge depart- 
 ment, as a factory in itself, was about 190%. Using only 
 125%, they were always low in their bids for drop forge 
 work, and consequently secured plenty of business; while 
 the reverse was the condition in the nickel-plating plant, in 
 which the overhead instead of being 125% was only about 
 50%. Consequently, in estimating, 125 %> always made 
 the bids for this department too high, with the result that 
 they could get no business. 
 
 This illustration shows the absolute necessity for de- 
 partmental overheads when outside contracts are taken into 
 the factory to fill-in with in some one department. This 
 particular drop forging department had done work for noth- 
 ing, or at a loss, for nearly ten years before the fact was 
 discovered. 
 
 To cite another case in point, a large furniture manu- 
 facturer had for years used a common overhead percentage 
 on his production. As a result, when a thorough analysis 
 of his business was made and a departmental overhead was 
 applied, it was proved that out of over 700 pattern numbers, 
 154 were being sold at an actual loss and 144 more yielded 
 from none to less than 5% profit, with the result that nearly 
 40% of the business done every year had been wasted effort. 
 Yet, on the basis of his own figures, which spread the 
 common overhead over both labor and material, everything 
 had previously shown a profit. The first year after 
 
 EFFICIENCY ENGINEERING g 
 
 all adjustments were completed, the net profits in- 
 creased 13^%. 
 
 As another instance, a large foundry had always done 
 all its costing on a *'per pound" basis. That is, the total 
 expense for labor, material, etc., in the foundry was always 
 divided into the tonnage obtained, and thus reduced to a 
 cost per pound for the entire output. An analysis of the 
 moulding work alone showed that these costs were wholly 
 erroneous. For example, the cost of moulding one pattern 
 weighing 200 pounds was $1.85 ; while the cost for moulding 
 on another pattern of exactly the same weight was $4. The 
 average of the two pieces would be $2.92 each for mould- 
 ing, which would be wrong in both instances, as it would 
 be too high for one and too low for the other. 
 
 It can readily be seen how such a condition as this would 
 affect estimating on job work, or costs on regular produc- 
 tion. To rectify the matter, costing was put on a "per 
 pattern" basis which resulted in a very marked difference in 
 making estimates, and increased the net profits of the con- 
 em nearly 9% for the first year. 
 
 Unified Accounting 
 
 In connection with accounting, all the requirements 
 for an industrial concern have been standardized and 
 unified by means of a set of controlling accounts which 
 give a manufacturer as much detailed information about 
 the operations of his factory and its output as they do about 
 the operations of his sales force or the condition of his 
 finances. 
 
 These principles have been so well worked out that they 
 will apply to any manufacturing plant, the only difference 
 being the nomenclature required to classify the details of 
 any particular business, such as (1) the kind of labor, (2) 
 the kind of material, (3) the kind of expense, and, (4) the 
 
lO 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 kind of output that is manufactured. Any manager who has 
 once learned to interpret figures from an accounting system 
 based on such principles, can apply them to any other busi- 
 ness, no matter how different it may be in its nature. 
 
 The development and standardization of a unified 
 method of accounting had of necessity to come first, other- 
 wise the engineer would have had no way of measuring the 
 actual value of economies that he might effect. Using such 
 methods his analytical work has been far-reaching, and, as 
 a result, he is today able to predetermine the operating 
 conditions required for many kinds of industrial plants. In 
 doing this, however, he realizes at the outset that in working 
 toward better conditions in any manufacturing business, 
 the real purpose should be to increase production per unit 
 of investment and cost. This is wherein, as an engineer, 
 he differs from the industrial accountant or systematizer, 
 for usually the very first subject he takes up is to determine 
 from the nature of the product made the equipment used, 
 the labor employed, whether or not the plant is yielding 
 all the output it should for the investment made, and, to 
 determine this, he must first standardize the product manu- 
 factured as regards kind and variety. 
 
 Unified Output 
 
 An analysis of present-day factories would show that 
 most of them are making two or three times the variety 
 of items that they should for the volume of their output; 
 that in many instances they are really doing a jobbing 
 business and not a manufacturing business; that they set 
 up, knock down, and set up on machine tools so often 
 in changing from one kind of work to another, that their 
 costs of production are abnormally high, and the workman- 
 ship usually poor ; that all this results in large waste through 
 spoiled work and an excessive investment in small tools — 
 
 EFFICIENCY ENGINEERING 
 
 II 
 
 to say nothing of the lost time of machines, which in itself 
 greatly reduces the output. 
 
 This unscientific policy is usually found in concerns that 
 are dominated by a sales policy rather than a manufacturing 
 one. Investment in a manufacturing business is for the 
 purpose of producing some item or items that will meet 
 with a steady market by virtue of merit and price. This 
 can only be done by a low cost of production. Therefore, 
 the first aim of any manufacturing concern should be to 
 keep its investment busy every minute of the time in order 
 to obtain this low cost, and any concern not doing so is 
 usually dominated by an administration that has not suf- 
 ficient control of its market or sales force to warrant the 
 investment ; in other words, stockholders' interests have not 
 been properly taken care of. 
 
 The big money-making plant of today is the one that 
 makes a small variety and a large volume of each thing 
 that it produces. The concern that makes a large variety 
 and a small output of each item is subject to such high 
 costs of production and fluctuation in volume of output per 
 item, that it can never meet the competition of those who 
 manufacture on a scientific basis. Those who manufacture 
 in an unscientific way are merchants rather than manufac- 
 turers and use the factory, with all of its investments, as a 
 servant for the sales department. 
 
 Function of a Sales Department 
 
 Almost any business manufacturing on a proper basis 
 and making good dividends, simply uses the sales depart- 
 ment as a servant to its investment, and does not allow it 
 in any way to interfere with manufacturing operations after 
 designs are once accepted by it. The management of such 
 a factory standardizes its product, schedules it to the extent 
 that will keep the investment and labor busy, and then de- 
 
12 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 EFFICIENCY ENGINEERING 
 
 13 
 
 mands of the sales department that it shall sell the specified 
 output in its standard form. There is usually no difficulty 
 in doing this, as such a manufacturing policy always brings 
 high quality and low costs — the only two things in the world 
 that can win every time in competition, provided always, 
 of course, that in design and utility the product made is 
 up to some recognized standard. Salesmen and sales man- 
 agers are only human, and work along the lines of least 
 resistance, usually with the idea that the larger the variety 
 of items they have to sell, the better they can control the 
 market and make sales. This may be true from their point 
 of view, but when variety reaches a point where it so in- 
 creases cost as to rob sales of all profit, the policy is fatal. 
 Therefore, standardization of the product is the engineer's 
 first problem. The result of correcting such conditions is 
 well illustrated by the following examples. 
 
 Results of a Unified Output 
 
 In one instance a variety of 89 Items of manufacture 
 was made. The annual net profits of the business averaged 
 5j^%. A careful analysis brought out the fact that the 
 sales on many items were so small as to make them profit- 
 less. In some instances they were made at a loss, due to 
 high costs of production, because of the small quantity 
 made. The variety was reduced from 89 to 56 profitable 
 items. The factory was put on a schedule basis of fairly 
 long runs for each different piece manufactured. By this 
 means, the cost of production was so greatly reduced that, 
 notwithstanding a considerable reduction in sales price, 
 which increased the volume of sales nearly 50%, a net 
 profit of 143^ % was realized the year following. 
 
 Another instance along these same lines was one con- 
 nected with the manufacture of units of very small value, 
 viz. : buttons. The concern in question manufactured about 
 
 a thousand varieties. The introduction of an analytical cost 
 system revealed the fact that out of the thousand kinds 
 nearly 600 kinds were sold at absolutely no profit or at a 
 loss. The total volume of business was in the neighborhood 
 of $400,000 a year. The concern paid small dividends, but 
 could have paid the same dividend on an output of less 
 than $200,000. Improved methods of manufacture re- 
 covered a profit on a little over 300 of the kinds that had 
 previously been profitless, and the manufacture of the other 
 kinds was abandoned. Result — a 10% dividend instead of 
 
 Another instance and one of considerable interest, was 
 in connection with a concern manufacturing bicycles and 
 kindred lines. The first complaint the manager made was 
 that his order department was continually in a mess and 
 he wanted that straightened out first. A thorough investi- 
 gation revealed the fact that (as is the custom in such a 
 business) he gave a large number of options in the shape of 
 tires, pedals, saddles, handle-bars, etc., on each model of 
 bicycle that he made, with the result that on one individual 
 model of bicycle 414 separate and distinct purchase orders 
 could be made. As he manufactured several models, it is 
 little wonder that his order department was in a continual 
 state of confusion. The remedy was to cut out the options 
 as far as possible and to standardize the entire line. By 
 doing this his inventory on materials was reduced 27%, 
 and for the first time in seven years the concern paid a 
 dividend. 
 
 Stabilizing Production 
 
 Another cause for many industrial disasters is that many 
 merchant managers run their factories altogether too much 
 according to varying sales conditions, increasing and de- 
 creasing their output and the amount of labor employed 
 
14 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 accordingly. On this account their investments are idle a 
 great deal of the time, simply showing that plant investments 
 have been made out of proportion to the market under 
 control. More money could be made by cutting selling 
 prices and keeping the investment and labor busy, because 
 the difference in cost of production would make this possible. 
 An instance which brings out the above facts very 
 forcibly was a concern which manufactured lamps of a cer- 
 tain kind as one department of its business. This department 
 had lost the company $25,000 the previous year and they 
 were about to abandon it. Before doing so, however, they 
 called in an industrial engineer to discover, if possible, what 
 was wrong. 
 
 A careful investigation of the lamp department showed 
 that the costs were abnormally high because the lamps were 
 made up on order, that is, as they secured one contract 
 after another. The quantities put through the factory varied, 
 being sometimes very small and sometimes quite large. 
 The engineer decided that, unless the volume of business 
 could be increased about fourfold, it would be necessary for 
 them to abandon the manufacture of lamps. 
 
 With this information in hand, he studied out just what 
 the costs ought to be, provided such a volume of business 
 could be put through the factory on a schedule basis. His 
 report to the manufacturers stated that they ought to save 
 about 16% on the cost of production, and that by virtue of 
 this reduction, they could cut their sales price 10% or 
 12%. Such a cut would undoubtedly increase their sales 
 up to the required amount. 
 
 After due consideration, the concern agreed to the sug- 
 gestions of the engineer, and instructed him to take hold of 
 the proposition from a manufacturing point of view. This 
 he did, and as an actual result made a reduction in costs of 
 18%, while sales increased something over threefold, and a 
 
 EFFICIENCY ENGINEERING 
 
 15 
 
 profit of over $8,000 was produced in the lamp department 
 the first year. 
 
 This same condition often exists where a concern makes 
 for its own use items that are a standard in the open market. 
 Their quantity requirements are often too small and the 
 variety too great for economical production. 
 
 For example, in a medium-sized concern that made 
 freight cars, they had always made their own bolts. As 
 they never had any cost system, they supposed, of course, 
 they could make their own bolts much cheaper than they 
 could buy them. A careful working out of costs showed 
 that it was costing 13% more to make their bolts than to 
 buy them, notwithstanding the fact that they had good ma- 
 chinery for bolt-making. The reason was easily ascertained. 
 The quantity was too small and the variety too great, and 
 they changed so often on the machines that these latter were 
 idle half the time. They never ran through more than 
 4,000 or 5,000 bolts at a time; and it was found that they 
 would have to run through at least 25,000 bolts at a time 
 in order to make them at a cost equal to that for which they 
 could be bought. 
 
 As a result of this careful study, the management ob- 
 tained outside contracts sufficient to give them the quantity 
 of production needed to produce their own bolts cheaply. 
 
 Standardizing Output 
 
 All of the foregoing instances simply illustrate the pro- 
 cess of trimming down variety; or, in other words, a 
 standardizing of the things to be sold. The real standardi- 
 zation of production comes in studying the possibilities for 
 using as many of the same pieces or parts on different 
 models or units as possible, and a careful analysis of the 
 operations, equipment, and labor required for producing 
 these. 
 
i6 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 In one instance a builder of houses designed the pieces 
 and parts for a roof so cleverly that eighteen distinctly 
 different roof models could be built from the same cuttings. 
 
 In a large concern manufacturing harvesting machines, 
 the inventories of raw material were reduced nearly a third 
 by an analysis of this kind, which revealed the fact that 
 there was not enough difference in many of the flat, round, 
 and angle irons used on the various models made to affect 
 them mechanically. This also applied to bolts, screws, rivets, 
 and many small castings. Standardizing these parts not 
 only resulted in reducing the inventory, but gave much 
 larger runs in each set-up of a machine, producing marked 
 economies in this way. 
 
 In an automobile plant making three sizes of motors and 
 eleven automobile models, a standardization of parts resulted 
 in effecting an interchangeability of individual pieces to 
 such an extent that 1,160 were discontinued. This not only 
 greatly reduced raw material and repair parts inventories, 
 but greatly increased the factory output and eliminated many 
 of the shortage troubles. This, like the harvesting machine 
 concern, was simply a case where the engineering depart- 
 ment and the manufacturing department had worked on 
 independent lines. Designers are not always manufacturers, 
 and as a consequence do not always take possibilities of this 
 kind into account. 
 
 Weil-Balanced Equipment 
 
 After an analysis of this kind, the industrial engineer 
 takes up the study of operations to be done on the different 
 pieces and parts made and the equipment available for doing 
 the work, both as regards quality and quantity; and right 
 here is where he runs across some very difficult problems 
 to solve. 
 
 If it were possible to get a total of idle time, and conse- 
 
 EFFICIENCY ENGINEERING 
 
 17 
 
 quently investment in unused tools and equipment, it would 
 be startling. The principal cause for this condition is that, 
 in many lines of manufacture, various departments and the 
 equipment of same are not so balanced with other depart- 
 ments as to produce a uniform output. An examination 
 of almost any factory would reveal the fact that many ma- 
 chines are idle from half to two-thirds of the time, while 
 other machines are not of sufficient capacity to meet the 
 demands made on them, even by running them overtime. 
 
 To illustrate this point more fully, an actual instance 
 may be cited : 
 
 A certain plant had a total investment of about $800,000, 
 yielding an average annual output of about $900,000. In 
 this plant, some of the departments and machine tools during 
 certain portions of the year ran overtime and night shifts, 
 while others had scarcely enough to keep them busy nine 
 hours a day and many were not used an average of three 
 days a week. 
 
 Fortunately, this company had plenty of opportunity to 
 expand its market, as it made only about 6% of the total 
 market requirements in its particular line. Therefore, the 
 expert went to work to find out what should be done to 
 balance up the output and the equipment in the plant. A 
 careful analysis, by operations, of the product manufactured, 
 and, a detailed study of what could be done upon each 
 machine, together with its capacity for doing the work 
 required, showed that the factory turned out its annual 
 output by running some machines eighteen months on a ten- 
 hour basis; while others were required but four or five 
 months on the same basis. 
 
 Under these conditions, the problem was to shift the 
 work around on different rhachine tools, to find out just 
 what machinery should be bought so as to balance up the 
 output, to keep all of the machine tools busy all of the time. 
 
1 8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 and to ascertain what output could thus be obtained. This 
 took the time of a number of men for several weeks, but 
 the results obtained warranted the expenditure many times 
 over. It was found that it required exactly $69,000 worth 
 of added machinery to balance up the plant for a uniform 
 output in all departments; and that by purchasing this 
 machinery, the output could be increased from $900,000 to 
 $1,500,000 per annum. 
 
 This factory gives an instance where a $69,000 increase 
 on an $800,000 investment produced an output 66% greater 
 than was already being produced. After this investment 
 was made, all overtime and night shift work was abolished. 
 Looked at from another point of view, on a $900,000 output, 
 the business was overinvested in by at least $275,000; and 
 overinvestment is a condition in hundreds of plants today. 
 
 Standardization of Labor 
 
 Next, and perhaps most important of all, comes the 
 standardization of labor and its application to equipment 
 usage — an analytical work that is usually done under the 
 name of "scientific management.*' 
 
 In most factories, both foremen and men do work after 
 a fashion of their own, according to their individual experi- 
 ence and judgment, both of which vary greatly with different 
 men. Consequently, there is no standard by which different 
 men shall do the same kind of work so as to produce the 
 same results. 
 
 As men leave a factory, one by one, and others take their 
 place, methods of doing the work vary accordingly. To 
 what extent these changes take place may be readily under- 
 stood by the statement that, in many lines of manufacture, 
 the change in men or **labor turnover," is equal to the entire 
 force annually. There are some automobile concerns where 
 it equals two and one-half times the average working force. 
 
 
 EFFICIENCY ENGINEERING 
 
 19 
 
 Consequently, the same work is subject to many different 
 methods of handling in the course of a year, with the result 
 that both the volume of output and the costs vary greatly, 
 as does also the quality of the work done. 
 
 The interchangeability of parts on American-made 
 machinery is a well-known feature and has been brought 
 about by a standardization of the various products made. 
 Scientific management is now endeavoring to do exactly the 
 same thing with labor. That is, it is determining methods 
 which will standardize the way in which work shall be done, 
 irrespective of foremen's or men's experience, so that no 
 matter how much the labor factor may change in a factory, 
 the work will always be done in exactly the same way, with 
 the same accuracy, and with practically the same speed. The 
 greatest obstacle to this work today is the instability of labor 
 in general ; there is little use in taking a force of workmen 
 through a course of motion study training if they are to 
 leave by the time or before they get through the course. 
 The first step is to insure (by establishing an incentive of 
 some kind) a stability that will warrant the proposed educa- 
 tion in efficiency. 
 
 Adjustment of Labor and Equipment 
 
 "Equipment" must also be considered in this connection. 
 If observations are taken on twelve different men, operating 
 exactly the same machine, on the same work, in the same 
 or different factories, a surprising difference will be found 
 as regards both the quality and the quantity of work done. 
 To standardize it, the possibihties of the machine and its 
 accessories, in the shape of tools, etc., as wtII as the operator 
 who runs it, must be studied. That is, the physical motions 
 of the man in handling the work and the machine, as well as 
 the performance of the machine itself in doing the work 
 must be carefully analyzed and synchronized. This only 
 
20 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 applies to the individual machine. Attention has already 
 been called to the grouping of machines and the balancing of 
 
 the equipment. 
 
 Results of Scientific Management 
 
 In concluding this introductory statement which is in- 
 tended to give an understanding of the principles of scientific 
 management and of what the work really means, a brief 
 review of some actual results obtained by its application 
 may be interesting. 
 
 In a plant where steam-heating apparatus was manu- 
 factured, a man had worked for years turning a certain 
 piece on a particular machine. He had always been paid 
 by the day, was considered a good man, and everyone was 
 satisfied until an exponent of scientific management entered 
 the shop to study its operations. 
 
 Among many other operating details the work of this 
 man received attention and the man, the work, and the 
 machine were carefully analyzed. The man had been 
 receiving $2 a day, and he turned out an average of ten 
 pieces a day. In other words, it cost the company 20 cents 
 a piece for labor on his work. The expert insisted that a 
 great deal more could be obtained from the man and the 
 machine. The superintendent did not believe it, but was 
 willing to try out the suggestion offered. The expert told 
 the superintendent that the work was worth about 10 cents 
 a piece. The man was offered 10 cents a piece, on a piece- 
 work basis, and was ready to quit his job, but the superin- 
 tendent prevailed upon him to try it. 
 
 To give the workman every chance to succeed, his work 
 was laid out in a scientific manner, he was told just how to 
 handle and place his work in the machine, the exact speed 
 the work was to be run at, the cut that was to be taken in 
 the metal by the cutting tool, etc., etc., and on the last day 
 
 EFFICIENCY ENGINEERING 
 
 21 
 
 of the third week of trial, he turned out thirty pieces, making 
 $3 for himself instead of $2, and the work cost his employer 
 only 10 cents a piece instead of 20 cents. The man had 
 literally been robbing both himself and his employers for 
 years without either one of them being aware of it, which 
 is a condition that exists in thousands of factories today. 
 
 In another instance, there was to be made in a factory 
 a certain part of a new gasolene engine. Both the superin- 
 tendent and the foreman of the department were called in 
 by the expert and asked what they thought would be a good 
 record day's work for a man on that particular piece. Both 
 of these men were old employees and had a thorough knowl- 
 edge of the machine on which the work was to be done and 
 of the man who was to operate it. After due consideration, 
 their answer was, that 350 a day was the absolute limit. 
 
 In the meantime, the expert had studied out his own 
 method of handling this particular piece in processing it, 
 the speed it could be run at, the changes in the shape of 
 cutting tools that were necessary to remove a given amount 
 of metal in a given time, what cuts should be taken first, 
 and just how the work and the machine should be handled 
 in every detail. Having this knowledge at hand, he im- 
 mediately told the superintendent and the foreman that 600 
 was to be the limit he would set on the piece. They said 
 emphatically that it was impossible, but at the end of the 
 seventh day the workman turned out 660 pieces as his work 
 for that day, earning a bonus of 10%. 
 
 Broader Applications of Scientific Management 
 
 These two instances illustrate only individual and simple 
 cases. It will be of interest to see how this sort of manajre- 
 ment has worked out in a broader application. 
 
 A certain manufacturer had about $300,000 invasted in 
 equipment. His factory was better than the average, and so 
 
22 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 were his foremen and men. An increasing demand for his 
 output brought him to the point where it seemed necessary 
 to spend at least another $100,000 for equipment. His 
 factory, however, was located in a large city, every inch of 
 floor space that he had was occupied, and there was no op- 
 portunity for him to purchase adjacent property for expan- 
 sion. So, a move was staring him in the face. 
 
 The manufacturer in this case knew little or nothing of 
 scientific management, for always having had a good money- 
 making business, he had never interested himself in such 
 questions. However, the problem was a difficult one and 
 he employed an expert to go into his factory. The result 
 of the expert's recommendations was an increase of 33% 
 in the output of the factory in a period of six months. In 
 many instances the work of individual tools was doubled. 
 On some it was increased 25% to 30%. The expert not 
 only saved his client the $100,000 investment, but also the 
 labor, power and expense that would have been required 
 to run the addition to the factory afterward. In fact, he 
 increased the efificiency and output of the existing equipment 
 and labor to such an extent as more than to double the actual 
 net profits of the business. 
 
 In the three cases cited on the foregoing pages, there 
 was unusual opportunity to apply the principles of scientific 
 management. Experience has shown that some kinds of 
 business are much more suited to these labor refinements 
 than are others, and that the degree to which they can be 
 carried depends in large measure on the nature of the 
 business. It is also true that the degree of efficiency to 
 which labor may be developed depends, in large measure, 
 upon the stability of the labor, as well as upon the kind of 
 output manufactured. For example, a certain concern em- 
 ployed 2,200 shop hands regularly; yet, during twelve 
 months they laid off 5,380 hands. Such instability of labor 
 
 EFFICIENCY ENGINEERING 
 
 23 
 
 as this makes the ultra refinements of scientific management 
 simply out of the question. 
 
 In conclusion, one more instance may be cited to show 
 the economies obtained through putting a factory and a sales 
 department on a schedule basis : 
 
 A concern manufacturing furniture handled its business 
 as do all such concerns, by manufacturing according to vary- 
 ing stock conditions. That is to say, whenever a pattern 
 number ran low, a cutting order was put in for some quan- 
 tity, according to the superintendent's or manager's judg- 
 ment. Each pattern was finished up to a certain point, and 
 then put into a warehouse until shipped, at which time the 
 final finish was made. This resulted in three undesirable 
 conditions : 
 
 1. A large warehouse inventory. 
 
 2. A large repair expense to stock. 
 
 3. A large loss on "close outs" semiannually, because 
 
 the cuttings were often greatly in excess of sales, 
 and new patterns would push older ones out of 
 the market. 
 
 To correct these conditions, the line was reduced in 
 variety by cutting out the small sellers ; the sales department 
 was required to go over its sales records on the remaining 
 patterns, and from them prepare a statement of the quantity 
 it would agree to sell of each pattern each month for the 
 next twelve months; and the factory was scheduled to pro- 
 duce each month the sales department's estimate of sales. 
 
 As a result of these changes, 75% of the total output 
 went right to the shipping room instead of to the warehouse ; 
 the inventory was reduced $55,000; $20,000 repair work to 
 stock was reduced to $4,000, and the semiannual "close 
 outs" were entirely eliminated. The whole plan amounted 
 to a saving of about $24,500 a year and a withdrawal of 
 
24 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 $55,000 from investment. Furthermore, the value of the 
 output was increased 23%, with the same pay-roll and equip- 
 ment, by properly organizing the factory to handle work on 
 the new lines. 
 
 Many other instances could be cited, but those given will 
 suffice to show how the industrial engineer is developing 
 his profession, and, in a measure, to what extent he has al- 
 ready obtained results. He is not merely a systematizer. 
 He is not simply an accountant. To him, these things are 
 only a means to an end. He analyzes, standardizes, organ- 
 izes, and unifies the workings of an industry in its entirety, 
 in his effort to obtain maximum production at minimum 
 cost and with minimum investment. He might well be 
 called "an industrial pilot to captains of industry/' 
 
 CHAPTER II 
 
 ANALYZING AN INDUSTRIAL MANAGER'S 
 MONTHLY BALANCE SHEET 
 
 An analytical treatment, demonstrating by 
 figures what Unified Accounting does and 
 its value as a controlling medium in connec- 
 tion with finances, inventories, investments, 
 sales, purchases, expenses, overheads, produc- 
 tion and organization, together with the rela- 
 tion of these to one another. 
 
CHAPTER II 
 
 ANALYZING AN INDUSTRIAL MANAGER'S 
 MONTHLY BALANCE SHEET 
 
 The Work of a Manager 
 
 An industrial manager, \n undertaking to accomplish 
 certain results, should shape his organization to that end, 
 assign the work to be done to the various department heads, 
 and then, himself, supervise their handling of detail. That 
 is the whole story in a nutshell, as to what the work of a 
 manager ought to be. 
 
 But a manager may have all the intellectual power 
 imaginable, and yet, lacking the absolute facts with which 
 to supervise his work, he is likely to become the slave of his 
 organization, instead of its master. His departments will 
 run him, instead of being run by him. The ship will have 
 twenty captains, instead of one, and it will be impossible 
 for him to steer a definite course to success. 
 
 To supervise intelligently, he must have facts — absolute 
 facts — concerning the operations of his business, at all points. 
 Verbal information is unreliable and always incomplete. 
 Special reports are frequently misleading. If he depends 
 upon this kind of information to guide him in his supervi- 
 sion, he is at the mercy of various department heads, and 
 must not only sacrifice most of his prestige, but will fail in 
 producing many possible economies, and will usually pile 
 up inventories instead of dividends. 
 
 To direct with certainty, he must be able to judge the 
 
 27 
 
28 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 work of others not by intentions, promises, and excuses, 
 but by cold, hard facts, as shown by some comprehensive 
 method of measuring the results obtained by those to whom 
 he has assigned the work. 
 
 Purposes of Unified Methods of Accounting 
 
 The unified methods of accounting which are here pre- 
 sented are intended to furnish an accurate instrument for 
 measuring results, in the form of a detailed accounting 
 system fitted to every element in a business, and governed 
 by a set of controlling accounts. The installation and opera- 
 tion of such a system is usually no more expensive than 
 the fragmentary systems used in most factories today; yet 
 the resulting benefits will easily be recognized by any manu- 
 facturer who will carefully study and apply the principles 
 discussed. 
 
 There have been many different accounting systems con- 
 structed for manufacturing concerns, some of which are so 
 elaborate and expensive as to be burdensome and top heavy, 
 simply because they compile regularly much information 
 that is never used by anyone. By these unified methods, 
 however, it is often possible to trim them down to a practical 
 system of accounting without sacrificing the good they may 
 have accomplished and without destroying the comparability 
 of the data. 
 
 What is required of any accounting system is certain, 
 definite information, every bit of which is usable and used, 
 which is founded on basic principles, and all of which is so 
 unified that every fact it presents is related to a common 
 whole. 
 
 The Monthly Balance Sheet 
 
 Any manager who is giving serious thought to the 
 success of his business desires first of all to know those 
 
 ANALYZING A MANAGER'S BALANCE SHEET 
 
 29 
 
 factors which control not only the business, but the personnel 
 of his organization as well. Nothing will give him this as 
 well as an analytical monthly balance sheet. 
 
 The manager of any large manufacturing concern should 
 no more undertake to run his business without a statistical 
 monthly balance sheet, than should a superintendent under- 
 take to make an automobile without detail drawings. 
 
 The balance sheets of many manufacturing concerns ap- 
 pertain to little more than commercial transactions. Usually, 
 where a cost system has been developed, bookkeeping is 
 one thing, cost accounting is another, while production is 
 treated as an incident in so far as accounting is concerned, 
 and often anything like accurate information about the busi- 
 ness as a whole is obtained but once a year. 
 
 The author has devoted much time and study to perfect 
 a unified method of accounting for industrials which should 
 be to the manager of a manufacturing concern what detail 
 drawings are to a superintendent, i.e., something definite to 
 work from, and he takes pleasure in presenting the results 
 of his labor in the form of a complete set of balance sheets 
 (Form 1) worked out in detail, showing an entirely new 
 arrangement of accounting, as obtained by unified methods, 
 especially as regards factory operations and production. 
 These sheets represent a unification of all cost accounting, 
 bookkeeping, and general accounting into one set of con- 
 trolling accounts, and give in addition the complete in- 
 ventories of production as well as the costs of production. 
 
 In other words, if a factory purchases so much material, 
 labor, and expense each month, the accounting system must 
 render an inventoried balance of these items, and this in 
 turn must be balanced with the controlling accounts. By 
 controlling accounts is meant a set of accounts that will give 
 certain balances in connection with a business entirely inde- 
 pendent of accounts as carried in current ledgers; in other 
 
 
30 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 words, the balances which constitute controlling accounts 
 are obtained from one source and compared against corre- 
 sponding amounts from the routine accounting work of 
 various departments. In this way, an absolute check on the 
 accounting work is obtained, as well as a control over the 
 various activities of the organization. 
 
 These balance sheets should be completed and in a 
 manager's hands not later than the eighth of each month 
 for the month previous. During the month a ^'General 
 Manager's Daily Digest" is used, which furnishes informa- 
 tion on sales, shipments, finances, purchases, labor, and 
 schedules in such a way that these balance sheets in part 
 are a monthly summary of the items appearing on the *'Daily 
 Digest" sheet. (See Form 2.) 
 
 These balance sheets show in detail not only what has 
 taken place in the business for the month, but also gives 
 comparisons from the month previous and cumulative statis- 
 tics down to date for the year. They also show comparisons 
 of the present year with the year previous on the same dates. 
 Further, the classification and statistical comparison as a 
 whole are such as will not only give any manager an oppor- 
 tunity to take immediate action in planning for the future, 
 but at the same time will give him control of the organization 
 under his charge, as will be shown in the general analysis. 
 
 In analyzing the balance sheets shown in Form 1 as they 
 should be analyzed by the manager of the company, it 
 is necessary to study them from three different points of 
 view ; first, from that of the financier ; second, from that of 
 the executive; and third, from that of the manufacturer. 
 
 Analyzing the Balance Sheet — From the Standpoint of the 
 Financier 
 
 Under this caption there are four prime factors of suc- 
 cessful operation to be considered : 
 
 i 
 
 ANALYZING A MANAGER'S BALANCE SHEET 
 
 31 
 
 1. The solvency of the company, determined by a com- 
 
 parison of its assets with its liabilities, giving due 
 consideration to the character of same. 
 
 2. Its earning capacity, determined by comparing its 
 
 total sales against gross and net profits. 
 
 3. Its earnings as compared with the investments made. 
 
 4. The handling of the business as a whole. 
 
 It will be noted in the balance sheet shown in Form 1,* 
 that current assets total $197,924.10; that the inventory of 
 materials and merchandise amounts to $283,563.70. This 
 is as far as the financier can go, because these two totals 
 constitute all of the quick assets, which amount to $481,- 
 487.80. Against this there are total current liabilities of 
 $170,685.78. In other words, there is $310,802.02 more 
 in quick assets than there is in current liabilities. A busi- 
 ness of this nature would be entitled to carry liabilities to 
 the extent of at least one-half of its total quick assets ; there- 
 fore, there is still a borrowing capacity of not less than 
 $70,000. 
 
 The profit and loss account shows that there was a net 
 profit of $14,955.63 for January, 1917, and that the net 
 profits for eight months have been $72,855 which, on the 
 total volume of sales for eight months ($785,804.75), equals 
 9.2%. Therefore, the business as a going concern is in a 
 very healthy condition, especially in view of the fact that 
 the net increase in sales for the current month has been 
 $42,745.14. 
 
 The total assets, including investment in the business, 
 are $859,643.16. The net profits for eight months having 
 been $72,855, the business is paying at the rate of about 
 13% per annum on the investments, which is very satisfac- 
 tory. 
 
 been'^ten in'ro'und^n^X'rs!'''"' "^'''' °^ *^' '"^°''"*' ^" '^'' discussion have 
 
 i 
 
 
32 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Conservatism is shown in the management of the busi- 
 ness by the fact that depreciation is charged into costs 
 monthly, and that accrued dividends on preferred stock are 
 not carried in Profit and Loss Account, General ; so that, 
 after deducting dividends on preferred stock, the $63,532.72 
 earnings in eight months are free to be applied as a dividend 
 on common stock and for surplus, according to the decision 
 
 of the directors. 
 
 Accounts receivable have increased only $20,000 on an 
 increased sale of $42,000, which indicates a healthy cash 
 market. Again, current assets have increased by over 
 $13,000, while current liabilities have decreased by $6,000. 
 Accounts payable have increased only $12,000 as against 
 an increase of $23,000 in general stores, all of which goes 
 to show a strong tendency to discount purchases. 
 
 That finances are being well handled is evidenced by 
 the fact that for the eight months cash discounts and interest 
 received have amounted to $14,196.60; furthermore, the 
 expense in the offi.ce, covering all accounting work, has 
 amounted to but $21,098.63 for the same period of time. In 
 other words, the accounting department has earned about 
 66^% of its own expense, or 22% of the entire general 
 commercial expense; therefore, to a banker, the entire 
 condition of the business would be most satisfactory in every 
 way, and one in which there would be no question concern- 
 ing a loan of $70,000 or $100,000 if for any reason it were 
 required; and if the present volume of sales were to keep 
 up, an increased investment, either of a temporary or 
 permanent kind, would probably soon become necessary. 
 
 Analyzing the Balance Sheet— From the Standpoint of the 
 Executive 
 When a manager creates an organization around him, 
 he should not, as is too often the case, assume the responsi- 
 
 ANALYZING A MANAGER'S BALANCE SHEET 
 
 33 
 
 
 bilities of his various department heads, or do their work 
 for them, but should throw the whole responsibility on them 
 and then judge them altogether by results. If the results 
 are not satisfactory, he should immediately make changes 
 in his organization and get men big enough for the positions. 
 To be able to work on these lines he must have a set of 
 controlling accounts that control not only the finances and 
 investments of his business, but his organization as well. 
 What is meant by this is illustrated in the following briel 
 analysis : 
 
 The manager would first check up the cashier's depart- 
 ment by asking for the bank balances at the terminating 
 period of the balance sheets. If they check with cash on 
 hand of $25,070.20, all is well. 
 
 He w^ould then ask the billing department for the balance 
 of accounts receivable as shown on the customers ledger, 
 which must check the controlling account of $120,172.80. 
 If their balances agree, their work is correct. If not, they 
 are in error and they must locate the discrepancy. 
 
 The bookkeeping department is then called upon for the 
 current accounts payable, which must check the controlling 
 account of $109,627.68. If it does not, they are again in 
 error and must locate the discrepancy. 
 
 Next, the same inquiry applies to general stores inven- 
 tory. The stores ledgers must check the controlling account 
 of $112,490, and so on for all important accounts con- 
 stituting liabilities and assets as shown on the balance 
 sheets. 
 
 After the heads of these particular departments have 
 been found in error two or three times by a manager, the 
 moral influence that these controlling accounts have over 
 them is far-reaching, as it not only compels them to do their 
 work right, but keeps them from defalcation of any kind. 
 This in itself is worth many times what it costs to get 
 
34 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 information in this form, as it in a way really constitutes a 
 self-auditing system. 
 
 Reviewing further, as an executive, the work of the 
 organization as revealed by the balance sheet, the next con- 
 sideration is the collection department. From this must be 
 obtained an explanation as to why accounts receivable past 
 due have been allowed to increase $7,314 or a little over 
 S0%, as shown on the balance sheet; and also why notes 
 receivable have been allowed to increase $512.25. In the 
 collection of these accounts, however, it is to be observed 
 that accounts receivable, consigned, have decreased over 
 $7,000. This, however, reflects a credit on the sales de- 
 partment rather than the collection department. 
 
 At first glance the condition in the purchasing depart- 
 ment is not altogether satisfactory, inasmuch as general 
 stores have increased $23,000, while factory production has 
 had a slight decrease in its use of general stores. This re- 
 quires information from the stores department as to what 
 the items are that have caused an increase of 25% in the 
 general stores inventory, and an explanation from the pur- 
 chasing agent. Nominally, the general stores inventory 
 should not be over 60 days* factory requirements, as most 
 materials can be obtained in less time than this from the 
 market. The production sheet shows that $45,000 worth 
 of general stores were used for the month, which would 
 make a maximum inventory of $90,000 ; whereas the inven- 
 tory is seen to be $112,490, or $22,490 too much. The 
 decrease in inventory on work in progress, semi-finished 
 stores, and finished stores, will be taken up from another 
 point of view. 
 
 From investment under assets, it appears that better- 
 ments have taken place this month to the extent of $5,442.90. 
 Further, the factory production sheet shows that better- 
 ments have been made for the eight months to the extent 
 
 ANALYZING A MANAGER'S BALANCE SHEET 
 
 35 
 
 of $22,780. From a knowledge of factory conditions, this 
 seems excessive for the current month. Therefore, the office 
 manager must give an explanation as to why it has been 
 necessary to expend $1,100 for office furniture and fittings 
 during the current month, which is apparently an excessive 
 amount. Next, the superintendent is asked for an explana- 
 tion as to why it has been necessary to spend $4,342.90 for 
 machinery and tools, dies and jigs, etc., during the current 
 month. 
 
 While it is true that both the office manager and the 
 superintendent have an absolutely free hand in making ex- 
 penditures, it is also true that they are answerable for 
 exactly what they do every thirty days, and after men have 
 been under such management as this for a few months, they 
 think out their problems with a great deal of care before 
 they make purchases of any character. 
 
 From the profit and loss sheet analysis, the sales depart- 
 ment is to be complimented, inasmuch as its net sales 
 have increased $42,745.14 for the month; especially is this 
 so after looking at the analysis of commercial expense, for 
 while sales have increased 42%, selling expense has only 
 increased 14% over the previous month. There is one 
 thing, however, to see the sales manager about immediately, 
 and that is the fact that sales have increased $34,762, or 
 400%, on one model, while they have been reduced by over 
 $20,000 on another, which is evidence that one model of 
 machine is taking the place of another in the market. If 
 this is so, manufacturing conditions must be immediately 
 adjusted accordingly; therefore, a complete explanation of 
 the means which have been adopted to increase the sales 
 on this particular model is demanded. This will probably 
 enable the manager to judge whether it is a permanent or 
 temporary increase and whether it is local or general in its 
 territorial expansion. 
 
36 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 The whole commercial analysis of the business, with 
 some few exceptions, shows it to be fairly satisfactory from 
 an executive point of view, especially in view of the small 
 net increase of $1,257.50 on total commercial expense as 
 compared with the total increase in sales. The only other 
 point in this connection would be to take up with the adver- 
 tising manager the total monthly advertising of $4,168.90, 
 which could possibly be reduced for a while, in view of the 
 increased sales. 
 
 The average yearly percentage of commercial expense 
 to sales is 15%. Therefore, 12.1% is extremely satisfactory 
 and shows that this percentage has been reduced during 
 the current month by 4.3% over the previous month. 
 
 Analyzing the Balance Sheet — From the Standpoint of the 
 Manufacturer 
 
 There are very few manufacturers today who know 
 what production they ought to get from their factories, what 
 they are getting, or in what shape they are getting it. In 
 other w^ords, they have no definite control over the opera- 
 tions of the most important thing they have to deal with, 
 i.e., their investment in plant, material, and labor. This is 
 what a unified accounting system provides for, so in the 
 present instance there is a long session to be held with the 
 superintendent. 
 
 The total production for the month is $110,800.57, or 
 $939.37 less than it was the previous month, notwithstand- 
 ing the fact that productive labor has been increased by 
 $3,218, as shown on the factory production sheet, and over- 
 head, by $2,101.85, as shown by the increased non-produc- 
 tive labor ($1,610) and non-productive materials ($491.85) 
 on the factory overhead sheet. 
 
 The decrease of $290 in general stores and of $6,441 in 
 semi-finished stores would seem to show that the produc- 
 
 ANALYZING A MANAGER'S BALANCE SHEET 
 
 37 
 
 tion for the month has been obtained by an abnormal in- 
 crease in labor on the work. By analyzing a little further, 
 it will be seen that while the factory used $27,221 in semi- 
 finished stores, it only delivered back to semi-finished stores 
 $21,200, and that out of the total production $5,442 was 
 charged to betterments. 
 
 The net increase in total production, finished, however, 
 was $16,188. This could only have been obtained, in this 
 case, by reducing a previous inventory which had already 
 had much labor applied to it, inasmuch as the previous work 
 in progress was $64,000, while the net work in progress for 
 the current month is only $47,000. "Assets — Inventory" 
 shows that work in progress was reduced $17,127.55, semi- 
 finished stores $13,021.25, and finished stores $1,814.38; 
 or a total of $31,963.18, which is exactly the amount neces- 
 sary to make the increased sales of $42,745, the cost of which 
 is shown to be $31,963.18. 
 
 This means that while the factory has delivered enough 
 to meet sales requirements for the current month, it has 
 drawn down inventories on work previously done to the 
 extent of over $31,000, and consequently is that much 
 behind sales in its production for the month. Therefore, 
 for the coming month under present sales conditions, the 
 factory would fall behind in its deliveries by something like 
 $50,000, except for the fact that, as shown under assets, 
 there is $47,000 work in progress, $67,000 worth of semi- 
 finished stores, and $56,000 of finished stores to draw upon. 
 
 It will not do, however, to reduce these inventories, as 
 they are not even normal as it is. $56,000 represents only 
 about 12 days' shipping requirements, while the inventory 
 ought never to be less than 30 days' requirements. Semi- 
 finished stores of $67,000 represent only a production of a 
 little over 60 days, as during the current month $27,000 
 was used in the factory and $7,000 was sold in parts, while 
 
38 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 work in progress is low by about $17,000; therefore, the 
 condition of the whole factory has to be keyed up, as the 
 inventories are all out of balance in their relation to one 
 another. 
 
 To do this, the factory must be re-scheduled ; more labor 
 must be put into the departments of first operation; and 
 next month's balance sheet ought to show an increase in 
 the use of general stores of at least $20,000 or $25,000, in 
 order to get work coming through the factory fast enough. 
 Therefore, in view of this situation, it is fortunate that 
 general stores inventory has been increased during the 
 present month by $23,000. 
 
 The factory overhead for the month shows 80.27%, 
 which is a reduction of 1.52% for the month previous; and 
 so far as this goes, it is very satisfactory. There are also 
 a large number of similar details in connection with this 
 balance sheet that could be analyzed, such as the percentage 
 of profits on the different items sold, the percentage relation 
 between depreciation and repairs, the various ratios between 
 non-productive and productive elements, etc., etc. 
 
 Availability and Value of Unified Balance Sheet 
 
 It should be explained that both in principle and detail 
 these unified methods of accounting can be applied to any 
 kind of manufacturing business, according to its own par- 
 ticular requirements. No matter what a concern manu- 
 factures, it can only use labor, material, and expense as 
 processing factors, and can only buy and sell as commercial 
 factors; and the principles laid down apply. If necessary, 
 inventories can always be divided up into more or less 
 numerous accounts; as can also labor and material or ex- 
 pense of any kind ; in other words, we can take the prime 
 totals of assets, such as current, inventory, and investment, 
 and divide them up into any classification that may be re- 
 
 ANALYZING A MANAGER'S BALANCE SHEET 
 
 39 
 
 quired. The same may be said of liabilities, also revenue 
 and costs of revenue, and so on for the other various divi- 
 sions that have totals. 
 
 The value of these balance sheets is also greatly increased 
 where data from the previous year are filled in, as provided 
 for in the last column, for a comparison of contractions or 
 expansions in volume can then be made on a long range 
 basis. Sufficient has been said to show the purpose of these 
 accounting methods, their scope, and also their value to any 
 executive who wants to manage a business on anything 
 like a scientific basis and keep right up to the minute in his 
 work. 
 
 If any manufacturer will give the time to analyze his 
 own business in the manner indicated, it will not take him 
 long to determine the invaluable assistance such accounting 
 methods can afford him; and the feeling of security he 
 would have in handling his business by reason of being in 
 absolute control of it, justifies many times over the expense 
 and trouble incident to their installation. 
 
 Manager's Daily Report 
 
 Nothing is of more value to a manager than a daily 
 report showing the relative value of sales and shipments, 
 and in addition, finances, bank balances, and such other 
 general information regarding agencies, number of em- 
 ployees, etc., as may be necessary to him. Such a report is 
 given in Form 2, which will at least offer a suggestion to 
 any manager for developing a report of this character for 
 any particular business. 
 
 The arrangement of the items under sales and shipments 
 should be made to correspond practically with the same 
 items as shown on the monthly balance sheet, which in 
 reality are a recapitulation of a general sales analysis made 
 at the end of the month. 
 
40 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Further information can be supplied on this report, 
 such as any outstanding obligations in the shape of purchase 
 orders, together with such data as "purchases made" of 
 different commodities each day. Other items will suggest 
 themselves to any manager according to his needs for 
 information. 
 
 CHAPTER III 
 
 PURCHASING AND RECEIVING 
 
 A method for making purchases and follow- 
 ing them up — the recording and checking of 
 all such transactions, and the receiving and 
 checking of the goods purchased. 
 
CHAPTER III 
 
 PURCHASING AND RECEIVING 
 
 Work of the Purchasing Department 
 
 While this chapter confines itself principally to the 
 specifications and forms required to make purchases, refer- 
 ence is made in several instances to a stores keeper and 
 stores recorder, simply to show the relation between the 
 purchasing agent and stores, and to evidence the fact that 
 any organization must be so worked out that the general 
 stores keeper may be responsible solely to the purchasing 
 department : 
 
 1. For the receiving and checking of all materials 
 
 against original purchase orders, in such manner 
 that all purchases can be checked before being 
 recorded on stores ledgers. 
 
 2. For the physical storage of materials and the de- 
 
 livery of same to the factory at either the store- 
 rooms or the factory departments, as may best 
 conform to the factory requirements. 
 
 Purchase Specifications 
 
 To make intelligent and satisfactory purchases, a pur- 
 chasing department should be guided and directed in every 
 instance by specifications, as to both quantity and quality, 
 for everything that is to be bought. Therefore, it is per- 
 tinent to take up at this point the following facts : 
 
 If a schedule for the making of goods to be sold has 
 
 43 
 
44 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 been authorized, it should cany with it authorization to 
 purchase the material, labor, and expense necessary for its 
 completion. 
 
 If a betterment or repair order has been authorized, the 
 same rule applies; and if office, operating, and factory sup- 
 plies have been covered by a maximum and minimum 
 amount for stores, this should be a standing authorization 
 for purchase up to the maximum amounts. In this way 
 the manager is relieved from the tremendous amount of 
 detail incident to passing on every requisition for purchase. 
 Therefore, a production department should prepare and 
 furnish to the purchasing department detailed specifications 
 as to quantity and quality of material required for goods to 
 be manufactured for sale. 
 
 On all betterment and repair orders which have been 
 O K'd by a manager, whether for the benefit of the produc- 
 tion department, factory superintendent, or any other de- 
 partment head, specifications for quantity and quality of 
 material should be furnished by the originator of the requisi- 
 tion, but perhaps should not in all instances be prepared by 
 him. 
 
 On all operating and general supplies, so far as 
 practicable, standard specifications should be furnished the 
 purchasing department by the factory or engineering, 
 laboratories. 
 
 Purchase Requisition 
 
 Purchase requisitions prepared by people absolutely 
 familiar with what is required as regards kinds, quantities, 
 dimensions, times of delivery, etc., give the purchasing 
 department an opportunity to devote all of its time to the 
 buying and getting in of material on the dates required. 
 
 Purchase requisitions should be made out in triplicate 
 at least, one copy on white paper for the originator of the 
 
 PURCHASING AND RECEIVING 
 
 45 
 
 requisition; one copy on yellow paper for the purchasing 
 agent ; and one copy on pink paper for the stores recorder. 
 (See Form 3.) 
 
 When the stores keeper has need of materials, either to 
 cover schedule requirements, to bring his stock above 
 minimum, or because of a general stores requisition for 
 which he cannot supply the material, he should make out a 
 purchase requisition, send yellow and pink copies to the 
 stores recorder, and keep the white copy himself until the 
 goods are received. The stores recorder will check the 
 requisition with the stores ledgers, fill in the additional data 
 required, keep pink copy, and send yellow copy to the pur- 
 chasing agent for execution. 
 
 In case the superintendent, or any other person author- 
 ized to do so, requires material which must be purchased, 
 he may make out a purchase requisition, holding white copy, 
 and send yellow and pink sheets to the stores recorder who 
 will check as above and forward yellow copy to purchasing 
 agent. 
 
 This procedure applies to anything which is to be pur- 
 chased, whether for a production, betterment, or repair 
 order, or for general or special supplies, as in this case the 
 unit of organization for handling materials is complete. 
 There are, however, in very large plants or where several 
 plants are controlled from one central office, reasons why a 
 separate order department should be established to handle 
 all planning and specification work and to control all pur- 
 chase orders, but they are the exception, not the rule ; 90% 
 of all industrials should be organized along the lines cited 
 above. 
 
 The manager, superintendent, or an order department, 
 should O K all purchase requisitions for manufacturing or 
 operating supplies not covered by maximum and minimum 
 amounts, and for all materials required in excess of 
 
46 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 authorized scheduled quantities. Requisitions for all office 
 supplies, printed matter, and catalogues should be O K'd 
 by the manager, as should also all original contracts cover- 
 ing schedule requirements. 
 
 The purchase requisition must in every case be checked 
 by the stores recorder before going to the purchasing agent, 
 so that material on hand can be checked and utilized, or sub- 
 stitution made if possible. He should fill in on the pur- 
 chase requisition (Form 3) the ''Quantity on Hand," the 
 "Quantity on Order," net "Quantity to Buy," and "Descrip- 
 tion of Item — or Symbol" (symbol to be given if used) ; 
 also giving "Last Price," which he obtains from his stores 
 ledger. This furnishes the purchasing agent with full in- 
 formation as to requirements and facilitates the placing of 
 purchase orders. The purchasing agent should be furnished 
 by the production department with all data relative to manu- 
 facturing schedules, in ample time for him to do the neces- 
 sary shopping around and contracting. 
 
 From the foregoing it is apparent that absolutely nothing 
 should be ordered directly by the superintendent or by heads 
 of departments; that all purchase requisitions must be 
 checked by the stores recorder; and that the stores keeper 
 and stores recorder must assume full responsibility for 
 goods bought and for their distribution to some other form 
 of inventory. 
 
 In this connection it must be borne in mind that the 
 general stores keeper is nothing more or less than a custodian 
 of the company's property and that he is accountable for its 
 disposition just as much as a cashier or comptroller is 
 responsible for the disposition of money intrusted to his 
 custody, and that a proper system of handling general ac- 
 counts for the company calls for just as close recording work 
 on stores-keeping as it does for actual money. Therefore, 
 no matter by whom this purchase requisition is made out, 
 
 PURCHASING AND RECEIVING 
 
 47 
 
 it must first be handed to the stores recorder who will check 
 it with the general stores ledger to determine whether he 
 has, or has not, any of the goods required on hand or on 
 order, or a satisfactory substitute; then, and then only, 
 sending it to the purchasing agent, as corrected by him, to 
 make the purchase. This will not only prevent overbuying, 
 but will often enable substitution of material to be made for 
 many kinds of small jobs. 
 
 This mode of procedure gives the stores keeper and 
 stores recorder absolute control of the quantities and 
 amounts of goods that are on hand, whether as applied 
 to specific requirements, or as applied to maximum and 
 minimum quantities of standard materials. 
 
 In every instance possible, the full information called 
 for by the purchase requisition should be filled in for the 
 guidance of the purchasing agent, as it will save a vast 
 amount of time, both in letter-writing and telephone work, 
 when making purchases. 
 
 Purchase Order 
 
 In connection with the purchase requisition (Form 3), 
 the purchasing agent must be provided with a form that 
 will constitute a contract for the purchase, as open order 
 placing, without proposals or bids, is very dangerous and 
 should never be tolerated except in an extreme emergency. 
 To meet this requirement most conveniently, the form of 
 the purchase order should be specific enough in its arrange- 
 ment and detail to constitute a contract. 
 
 A contract must specify quality, quantity, price, time of 
 delivery and point of destination, and an understanding as 
 to transportation charges. But few purchase orders would 
 seem to cover these points as a regular practice. The one 
 Qlustrated in Form 4 does. 
 
 The purchase order should be made out in several copies. 
 
48 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 The first or white sheet goes to the vendor; the third 
 sheet, which is pink, goes to the stores recorder ; while the 
 second sheet, which is yellow, is held by the purchasing agent 
 and filed by him with the yellow copy of the purchase requisi- 
 tion. The fourth, blue sheet, without quantity or price, will 
 be filed by the receiving clerk from which to check descrip- 
 tion of materials received when not accompanied by memo- 
 randum. By this color scheme the distinction of each sheet 
 can be determined at sight. Pink sheets for either requisi- 
 tions or purchase orders belong to the stores recorder and 
 yellow sheets belong to the purchasing agent. Additional 
 copies of the purchase order may be supplied the production 
 department and also the accounting department so that 
 invoices as they come in may be numbered and checked. 
 
 On the bottom of the purchase order there are figures 
 representing dates, from 1 to 31. These are provided 
 especially for reminder purposes to facilitate purchasing 
 When the purchasing agent makes a purchase which he 
 wishes to have followed up, he puts a check mark on the 
 date on which he expects these goods, or expects to hear in 
 regard to them, and also a pencil figure above the date 
 denoting the month ; thus, if a purchase was made on the 
 15th day of the 6th month and the goods were not expected 
 for 60 days, he would place a figure 8 over the figure 15 on 
 the purchase order ; or, if in 30 days he wanted to make 
 inquiry, he would in addition put 7 over the 15. 
 
 The filing clerk makes a memorandum of this order 
 number on a tickler card in the purchasing agent's tickler, 
 so that on the date checked the file containing the order and 
 its correspondence will be handed to the purchasing agent 
 for his attention. This makes an automatic tickler system 
 in connection with purchasing that does away with the 
 necessity for any other kind of follow-up system. Any 
 further information required for follow-up purposes can, 
 
 PURCHASING AND RECEIVING 
 
 49 
 
 of course, also be shown on these same tickler cards. All 
 the orders or data required to be brought up on any particu- 
 lar date will be put on one card and this card will be filed 
 ahead imder the index of the date required. (See Form 5.) 
 The purchasing agent should also keep a perpetual price 
 file. A card should be made out for each concern from 
 which goods are bought and on this card one or two lines 
 should be given to each of the articles purchased from them ; 
 the price and date of quotation should be given after each 
 article, and when any change is made in quotation, this 
 price card should also be changed showing date of new- 
 quotation. In this way the purchasing agent has always 
 before him the price of all material according to last quota- 
 tion. This would not apply to special items bought very 
 infrequently. 
 
 Material Receipt and Notice 
 
 Having requisitioned goods and provided a means for 
 purchasing them, the next step is to receive them at the 
 factory. Consequently, for the receiving department a 
 ''Material Receipt and Notice" (Form 6) has been provided 
 as the first step toward this end. All receipts of whatever 
 nature should be checked, counted, weighed, and entered 
 upon this receipt. Under no circumstances can the goods 
 be checked from the original invoice, as their receipt must 
 be invariably entered on this form. 
 
 The material receipt and notice should be made out in 
 several copies but must conform to the proper color scheme. 
 The following represents its full complement and disposi- 
 tion: a yellow sheet, which is to be given to the purchas- 
 ing agent ; a pink sheet for the stores recorder ; a blue sheet, 
 together with the goods, for the stores keeper ; a white sheet, 
 when necessary, to the production department; and one 
 sheet to be retained by the receiving clerk and filed in alpha- 
 
CO UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 betical order under the name of the concern ordered from. 
 Upon receipt of this memorandum, the purchasing agent 
 should immediately send out to the stores recorder the 
 original invoice. As soon as the stores recorder receives the 
 original invoice for any goods, it will be his signal to bring 
 together all four papers of the transaction held by him, viz : 
 
 1. Material receipt and notice, as made out by the re- 
 
 ceiving clerk (pink sheet). 
 
 2. The triplicate of the original "Purchase Order" 
 
 (pink sheet). 
 
 3. His own copy of the purchase requisition (pink 
 
 sheet). 
 
 4. The invoice from the dealer. 
 
 This method leaves absolutely no excuse for the stores 
 recorder's not getting the proper count and record of all 
 goods received, and it will settle all questions of difference 
 that may arise as to quantity, price, etc., before entry is 
 made in his stores ledgers ; in this way making the ledgers 
 absolutely reliable for the items which they cover. 
 
 It may be necessary under some conditions, such as an 
 urgent demand for material, slow arrival of material, or 
 non-arrival of invoices, to enter goods on the stores record 
 as received before checking with the invoice, but this prac- 
 tice should not be followed as a general rule. 
 
 The purchasing agent should impress all creditors with 
 the fact that invoices must be promptly forwarded so that 
 they will arrive by the time the goods do; therefore, on 
 the purchase order is a "Notice" for this purpose which 
 reads, ''All goods are held subject to your order until we 
 receive an invoice/' This means that no goods should go 
 into stock until the invoice is received, so that in case of 
 shortage or overage, or a lack of specified quality, adjust- 
 ments can be made to cover any consignment before it loses 
 
 PURCHASING AND RECEIVING 
 
 SI 
 
 its identity by being absorbed into stock or made up into 
 product. 
 
 Under no circumstances, except to obtain discounts from 
 reliable firms, should payment be made on consignment of 
 goods until they have been checked as indicated above. 
 After this checking has been done, the purchase requisition, 
 the copy of the purchase order, and the invoice, all duly 
 stamped and attested by the stores recorder as being correct, 
 should be immediately sent to the accounting department for 
 audit and payment, a copy of "Material Receipt and Notice" 
 remaining permanently with the receiving department. 
 
 Filing Purchase Requisitions 
 
 The factory may have requisitioned something the stores 
 keeper did not have on hand; if so, the stores keeper will 
 immediately make out a purchase requisition, attach the 
 general stores requisition to it, and file in a temporary file. 
 When the copy of the purchase order is received by him, 
 he will withdraw from the file the purchase requisition 
 which this covers and file them together alphabetically under 
 the name of the concern ordered from. 
 
 As soon as the original invoice for such goods has been 
 checked and entered on the stores ledger, the general stores 
 requisition will be honored and properly charged ; while the 
 purchase requisition, copy of the purchase order, and ma- 
 terial receipt and notice will be attached to the original 
 invoice and forwarded to the accounting department. 
 
 Filing Purchase Orders 
 
 Vertical filing cabinets should be provided for the pur- 
 chasing agent, and in these cabinets all purchase orders must 
 be filed in serial order. As soon as a purchase order is made 
 out, a file must be started, and in this file must be imme- 
 diately placed with the purchase order, the purchase requisi- 
 
52 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 tion ; then all correspondence relating to this particular pur- 
 chase order must be carried in the same file. When the 
 goods are received, the file must also contain the material 
 receipt and notice; or, if goods are rejected, the form or 
 letter showing material rejected must be placed in this file, 
 together with any and all other papers incident to this par- 
 ticular purchase order, it being understood, however, that 
 all correspondence and papers (including quotations on 
 machinery and shop equipment), not connected, directly or 
 indirectly, with the purchase order, are to be filed in the 
 regular files under subject indexing. This will cover the 
 purchasing order files both by number and by alphabet and 
 in this way a central filing and mailing department can be 
 
 established. 
 
 The purchasing agent should have a small set of cards 
 
 one card for each different firm, from whom the company 
 
 buys goods— on which will appear the various dates and 
 order numbers for each different purchase made of that par- 
 ticular firm. For instance, the card headed "Cleveland Twist 
 Drill Co.'' might have on it 6/30, 125 ; 7/5, 272 ; 7/10, 396 ; 
 7/18, 987 ; each of which would indicate a different purchase 
 order number and its date. By referring to the cards of 
 this concern, all the papers from the "Qeveland Twist Drill 
 Company" can be obtained relative to any purchases made 
 from them. (See Form 7.) 
 
 Purchase orders should be back-file referenced, i.e., if 
 orders Nos. 1, 17, 27, 40, etc., have been placed with the 
 Crucible Steel Company, order No. 40 should have in red 
 ink in a circle in the upper right-hand corner, the number 27, 
 which means that order 27 is the previous order given that 
 company; and if order No. 40 is not the particular one 
 sought, then order 27 will be looked at. Order 27 will 
 have on it No. 17, etc. This method enables a clerk to find 
 all purchase orders placed with a certain company by taking 
 
 PURCHASING AND RECEIVING 
 
 53 
 
 note of the last order placed. By this means Information 
 can be had as to the number of purchase orders placed with 
 any one concern, and also as to the degree of regularity 
 with which such purchases were made. 
 
 Filing Material Receipt and Notice 
 
 This receipt, as before stated, is made out in five copies 
 by the receiving clerk, one copy of which is kept by 
 him, one sent to the stores keeper, one to the purchasing 
 agent, one to the planning department, and one to the stores 
 recorder. When the purchasing agent receives this material 
 receipt and notice, it is a signal for him to look up immedi- 
 ately the invoice and to handle it in accordance with the in- 
 structions which are given hereafter. 
 
 As soon as the stores keeper receives his copy of ma- 
 terial receipt and notice, it is a notification to him to prepare 
 to receive the goods, physically or otherwise, and in many 
 instances they should be rechecked by him. If the goods 
 received have been specially ordered by anyone in the 
 factory, his file will contain the general stores requisitions, 
 and these goods should be immediately sent to fill such 
 requisitions. 
 
 The copy sent to the planning department should be 
 destroyed after it has served its purpose, while the one 
 to the stores recorder should be disposed of as previously 
 indicated. 
 
 Special Instructions for Handling Invoices 
 
 All invoices, upon receipt, should go first to the account- 
 ing department to be numbered and registered and then be 
 immediately sent to the purchasing agent. 
 
 The receiving of invoices in duplicate should be dis- 
 couraged whenever it is possible. If a company operates 
 several factories from one central point, however, it may be 
 
54 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 necessary to have invoices in duplicate. If they are so re- 
 ceived, one copy should immediately upon its receipt be 
 stamped "duplicate" in large letters across its face. 
 
 When the purchasing agent receives an invoice from a 
 shipper, he must take his copies of the purchase order, pur- 
 chase requisition, and material receipt and notice, and check 
 them against the invoice. If the price, quantity, and quality 
 of the goods received are found to be correct, he should O K 
 these in the proper places on the invoice, and immediately 
 forward this invoice to the stores recorder who, as before 
 stated, will recheck these papers, attach them to the invoice 
 and immediately forward them to the accounting depart- 
 ment. 
 
 In the event of there being a difference in the price, 
 quantity, or quality of the goods, the purchasing agent should 
 make out a claim voucher, giving the exact quantity and 
 quality of the goods received, also the amount of the claim, 
 what it is for, and on whom it is made. He must attach 
 this to the original invoice, and send it to the stores recorder. 
 (See Form 8.) 
 
 When the stores recorder receives an invoice with a 
 claim voucher attached, he will enter in his Stores account 
 the quantity of the goods received as designated by the 
 material receipt and notice, check invoice accordingly, and 
 if claim is for shortage of goods to be filled by subsequent 
 shipment, he must send only the invoice to the accounting 
 department. If this claim is for other than shortage, he 
 will attach all of his papers and forward them to the ac- 
 counting department as already described. 
 
 When the accountant receives an invoice with a claim 
 voucher chargeable to the consignor attached, he will deduct 
 the amount of claim, in the deduction column, from the 
 original invoice to the credit of the consignor, and charge 
 the Stores account with the net quantity. If the claim 
 
 PURCHASING AND RECEIVING 
 
 55 
 
 voucher is chargeable to a party other than the consignor, 
 however, the accountant must then enter the amount of the 
 original invoice to the credit of the consignor and charge 
 the Stores account with same, and then make out a charge 
 voucher to cover the amount of the claim, crediting stores, 
 and charging the party designated by the purchasing agent 
 for the amount of the claim. 
 
 It can readily be seen that this not only allows for the 
 immediate entry of material into stores, together with its 
 price, but that there is no chance of paying the amount in 
 full when there is a claim against the creditor. 
 
 When the claim is allowed and a credit memorandum is 
 received from the consignor, it must only be attached to the 
 charge voucher ; no entry of it is made, in the event of claim 
 being made for a shortage in shipment, as the additional 
 material sent at some subsequent date must have a new 
 invoice. 
 
 Upon advice from the consignor to the purchasing agent 
 that goods have been back ordered, in whole or in part, or 
 if for any other reason the purchasing agent wishes to cancel 
 an order and does so, copies of this cancellation should be 
 forwarded to the stores keeper, production department, and 
 stores recorder who will forward his copies on file for that 
 order to the accounting department, marking them "Balance 
 Cancelled" and giving date. 
 
 All freight or express bills presented must be checked 
 with receiving clerk's copy of material receipt and notice, 
 and O K'd by him after verifying each item. As the re- 
 ceiving clerk thus verifies each item of freight, he will enter 
 on his material receipt and notice sheet the date of his O K 
 and the date of the freight bill. The receiving clerk must 
 ordinarily O K the entire bill, if correct, before the freight 
 bill can be passed for payment. 
 
 The receiving clerk should be held strictly responsible 
 
S6 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 for all material received by him, and for freight and express 
 items O K*d by him, i.e., as to consignments, weights, etc., 
 and a regular audit of the freight bills with the stores 
 records should be made as with all other departments. 
 
 CHAPTER IV 
 
 GENERAL STORES 
 
 Their importance, their control, and their 
 relation to inventories, production, and ac- 
 counting, together with a classification foe 
 statistical purposes. 
 
CHAPTER IV 
 
 GENERAL STORES 
 
 The following is a brief outline of certain standardization 
 work, including its nomenclature, that must be agreed upon 
 or understood as a basis for factory operations, before going 
 into more complete detail concerning actual instructions, 
 specifications, etc., in connection with stores-keeping. 
 
 Orders 
 Classification of Orders 
 
 Before undertaking to lay out the detail incident to 
 planning and cost work in a factory, it becomes necessary, 
 as a first step, to understand under just what conditions 
 orders shall be issued; by what names; what relation they 
 shall bear one to another ; and the kind of work covered by 
 them. 
 
 The following tabulation shows the names of orders that 
 should be used in industrial work. Prefixing a letter to 
 each order number will always indicate the nature of the 
 order. By this means each kind of order can have its own 
 serial number. 
 
 (A) Contract or Sales Orders 
 
 (B) Manufacturing Orders 
 
 (C) Production Orders 
 
 (D) Prorating Orders 
 
 (E) Betterment Orders 
 
 (F) Repair Orders 
 
 (G) Stores Orders 
 
 59 
 
6o 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 These seven kinds of orders should cover anything and 
 everything in a factory pertaining to labor, material, and ex- 
 pense. 
 
 (A) Contract or Sales Orders 
 
 A ^'contract" or sales order is simply a means for regis- 
 tering, by name and number, the whole quantity of some 
 given contract which, if too large to be put through a factory 
 in total, would be divided into several production orders. 
 Or, again, if too small to be manufactured ecomically, the 
 sales order would be combined w^ith several other sales 
 orders into one production order, so as to provide a volume 
 sufficiently large to justify a schedule. (See Chapter IX.) 
 
 In the manufacture of such a product as rifles, for in- 
 stance, sales orders would naturally be large, and must be 
 divided into several production orders; first, because the 
 bulk is too great to put through a factory in one order ; and 
 second, because from a cost point of view information for 
 control of the output from week to week and month to 
 month would not be obtained often enough. In other words, 
 on a contract for rifles that required a year or more to manu- 
 facture there w^ould not be a satisfactory control of factory 
 operations during that period were it not divided up into 
 orders sufficiently small to give full and complete costs fre- 
 quently ; while a product like machine tools for instance — of 
 which but one or two are sold at a time — might be made up 
 in batches of twenty-five or fifty, either for stock or as a 
 combination of sales orders, so as to get a sufficient volume 
 on which to compute satisfactory costs. 
 
 (B) Manufacturing Orders 
 
 A '^Manufacturing Order'* is exactly like a contract 
 order; simply being a means for registration and showing 
 by this registration the divisions and quantities for proces- 
 
 GENERAL STORES 
 
 6i 
 
 sing purposes on which it is desirable or necessary to close 
 out total manufacturing costs under either one of two 
 methods : 
 
 1. By applying overhead as well as labor and material 
 
 costs to each component — perhaps also to each 
 operation, 
 
 2. By applying overheads to each complete unit covered 
 
 by a ^'Production Order." 
 
 For simplicity, the latter is preferable; for accuracy and 
 insurance purposes, the former is better. 
 
 (C) Production Orders 
 
 A "Production Order" is an order not only of registra- 
 tion but also of issue; i.e., it is issued to a factory for the 
 actual producing of something covered by a sales and manu- 
 facturing order (except in a plant run under conditions 
 whereby its product is all made for stock; in other words, 
 manufactured to finished stores stock, from which the sales 
 department would always draw goods). 
 
 All sales orders are necessarily received from sales or 
 executive department. All manufacturing orders are pre- 
 scribed by a works manager, together with a schedule 
 covering the same. All production orders are issued or pro- 
 vided for by a production department, and must be in 
 accordance with manufacturing orders and their schedules. 
 
 Therefore, the production order for an individual piece 
 or component would, in theory at least, be a sales order, 
 say No. 1501*, a manufacturing order, say No. 1; a pro- 
 duction order, say No. 1 ; plus the component symbol, say 
 "26-117," the whole presenting a symbology as follows: 
 
 "lSOl-l-l-26-lir 
 
 This would be the complete symbology for identifying 
 any and everything in connection with a piece or component 
 
52 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 with a sales order in which "1501" is the order from the 
 executive office; "1/' the order from the works manager to 
 the production department; and "1," the order from the 
 production department to the factory to make a certain piece 
 
 in some definite way. 
 
 Production orders are of several classes of var>'ing 
 
 purposes, as follows : 
 
 1. Processing Production Order 
 
 2. Assembling Production Order 
 
 3. Tools Stores Production Order 
 
 4. Prorating or Expense Production Order 
 
 Before going further in connection with orders, an 
 understanding should be had concerning the division in a 
 product requiring different orders. 
 
 A model of something is a final and complete expression 
 of production. A model may consist of units, parts, and 
 
 pieces. 
 
 A unit is something that is operative in itself and sub- 
 ject to usage on any one of several models; it consists of 
 an assembly of parts and pieces. 
 
 A part is an assembly of two or more pieces, in itself 
 inoperative until assembled into a unit or model, and consists 
 only of an assembly of pieces. 
 
 A piece is an individual component processed in some 
 definite form, which may be assembled into a part, into a 
 unit, into a model, or into all three. 
 
 For example, a rifle would be a model ; the lock mechan- 
 ism would be a unit; and the barrel or the butt a part. 
 Finally would come the individual pieces which are as- 
 sembled into, or with, the foregoing. 
 
 Therefore, a processing production order is issued to 
 cover the making of individual pieces; and an assembling 
 production order, for such things as constitute a part. These 
 
 GENERAL STORES 
 
 63 
 
 are then closed out into component stores and an assembling 
 production order issued for a unit, which might consist of 
 two or more pieces or parts, and which would again be 
 closed out into component stores and redrawn by a final 
 assembling production order for the completion of the model. 
 Again, tools that are manufactured in a tool room in 
 large quantities, such as reamers, drills, cutters, screw- 
 drivers, etc., are made under a stores production order, be- 
 cause when completed this order will be closed and the tools 
 charged to general stores, whence they are distributed to 
 the factory and thus become absorbed into expense. 
 
 (D) Prorating Orders 
 
 In nearly all lines of manufacture there are certain 
 materials used and certain work done which cannot be so 
 figured as to be directly chargeable to an individual piece 
 or component. By this is meant such things as plating, 
 painting, enameling; or, in rifle manufacture, browning, 
 heat-treating, hardening, etc. Therefore, it is proposed that 
 for such items, "Prorating Orders" be issued, which will 
 enable work of this character to be done for any one or for 
 several manufacturing orders combined. Then the total 
 expense of same for some timed period— in no instance 
 longer than a month's output— would be prorated over the 
 number of pieces done during that period. That is to say, 
 if 15,000 pieces were heat-treated during a month, each 
 component so treated would be charged with a pro rata 
 amount of expense for the work, which would be in addition 
 to the expense that was put upon it by the regular pro- 
 duction order. In other words, this is a sort of standing 
 order for all the work done by a certain operation, whether 
 the operation covers a piece from one or from several pro- 
 
 dviction orders. 
 
 If the operation on such work as this, however, is for 
 
64 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the same piece practically all the time, it would be con- 
 sidered as an operation in the regular processing of the piece 
 and would then come under a regular production order 
 number. 
 
 (E) Betterment Orders 
 
 A "Betterment Order" is an order issued to a factory 
 for the manufacture or installation of all items that increase 
 the inventory of fixed or non-merchantable assets, or, in 
 other words, investment assets — which consist of the plant 
 and the things that are used in or by it in its operation. 
 
 Betterment orders should be issued, for instance, for 
 real estate additions and improvements; for the making 
 of additions to buildings or building improvements; for 
 the installation of all machinery; for power improvements 
 or extensions, etc., etc., according to the classification sub- 
 mitted below — which would be considered a standard classi- 
 fication for such things; and for this reason assets are 
 divided up into this classification because each item calls for 
 a different percentage of depreciation, except real estate, 
 which, of course, rarely ever depreciates but usually appre- 
 ciates. It can be seen that this classification is laid out on 
 the Dewey Decimal System plan so that a distribution by 
 accounting machines, such as the "Powers," is possible. 
 Therefore, it must be borne in mind that each subdivision 
 must always be the same, for which the percentage of 
 depreciation indicated would be written off. 
 
 El Real Estate. No depreciation. 
 
 E2 Buildings and Building Equipment 
 
 E2.1 Buildings. 2 to 2y2^o per annum. 
 
 E2.2 Building Equipment. 12 to 15%. 
 
 E2.3 Electrical Service, outside of lighting, IS to 
 20% per annum. 
 
 GENERAL STORES 
 
 65 
 
 E3 Office Furniture and Equipment. 15 to 20% per 
 
 annum. 
 E4 Machinery and Tools. 7j^ to 10% per annum. 
 E5 Dies, Jigs, Fixtures, and Gages. 25 to 50% per 
 
 annum, according to their character and usage. 
 E6 Power Plant. 10% per annum. 
 E7 Shop Fixtures and Fittings. 25% per annum. 
 E8 Patents, Patterns, and Drawings 
 
 E8.1 Patents. According to their life. 
 
 E8.2 Patterns. 33J/3 to 100% per annum. 
 
 E8.3 Drawings. According to their character. 
 E9 Railroad and Railroad Equipment 
 
 E9. 1 Railroad. 1 5 % per annum. 
 
 E9.2 Railroad Equipment. 20% per annum. 
 
 This provides a symbology in which ''E" denotes fixed 
 investment or a "Betterment Order" ; the first figure indi- 
 cating the class of betterment order, and the decimals 
 indicating the subdivisions. Each of these nine classes can 
 be extended to cover all the subdivisions which may be re*- 
 quired. Thus machinery and tools can be divided into: 
 
 E4.1 Machines 
 E4.2 Tools 
 
 Machinery can be still further subdivided into planers, 
 automatics, screw machines, profilers, etc., etc., if anything 
 is to be accomplished by so doing. 
 
 From the foregoing it is perfectly evident that there ares 
 (1) for all improvements or betterments, a set of standing 
 orders covered by "E" plus the number indicated; and (2) 
 as repair orders can be indicated by "F," that for repairs, a 
 similar set of standing orders are to be used under 'T," plus 
 the number indicated; and (3) that still another set of num- 
 bers can be used to cover depreciations, so that for all 
 
66 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 investments and repairs to same there will be no other 
 orders of any kind issued. The entire arrangement is such 
 that all is subject to accounting machine methods of distri- 
 bution, and these same methods should be adhered to for 
 all distributions required by a factory. 
 
 Finally, it is to be understood in connection with all 
 betterment orders that they should bear the same overhead 
 or factory burden as manufacturing or production orders. 
 
 (F) Repair Orders 
 
 To repair anything is to restore it in some degree to its 
 original condition; i.e., to recover a loss that has taken 
 place due to usage, depreciation, etc. Based on this, in a 
 modern method of accounting, reservations should be made 
 for depreciation under such a combination of conditions that 
 it is permissible to draw upon these reservations to pay for 
 repairs. Otherwise there is a possibility of a big liability 
 account being established which may, in part at least, be 
 fictitious. In other words, if a certain sum of money is set 
 aside to cover depreciations, and depreciations are recovered 
 by the application of repairs, the money set aside for this 
 purpose should be used to pay for the repairs, and not have, 
 as is usual, a double expense thrust upon the business — one 
 in the form of depreciation for replacements, and another 
 for repairs. 
 
 The point to be made here, however, is that the same 
 classification as illustrated for "Assets," must be used for 
 **Repair Orders" (F). Looked at from another point of 
 view, it means that instead of having a large number of 
 kinds of repair orders, they would be confined simply to 
 a set of standing repair orders, classified exactly according 
 to the asset classification of investments, and, as illustrated 
 under ''Betterments," be carried into as fine a classification 
 as desired by simply adding figures on the decimal basis. 
 
 GENERAL STORES 
 
 67 
 
 The old-fashioned standing order has become practically 
 obsolete. There was a time when there were standing 
 orders to cover such items as were not charged to Plant 
 Assets, Plant Production, and Plant Repairs ; and these con- 
 sisted of such items as window washing, shop lubrication, 
 shop sweeping, shop trucking, watch and fire services, etc., 
 etc., all of which are absorbed into assets by way of over- 
 head charges put on production. 
 
 In fact, all old methods of accounting employed a large 
 number of standing orders, some of which related to labor, 
 some to material, and some to a combination of labor and 
 material. Most of them, however, upon close analysis, 
 lacked any possibility of placing direct responsibility on any 
 one for their variation from month to month and year to 
 year. 
 
 Later and newer accounting methods have entirely elimi- 
 nated the old-fashioned standing order, and furthermore, all 
 the elements of manufacture have been reduced to the three 
 primes : 
 
 1. Labor 
 
 2. Material 
 
 3. Expense 
 
 Therefore, all accounting work is so designed as to deal 
 directly with these three items, and to do so a certain method 
 of distribution must be adopted which will give the labor, 
 material, and expenses of each department — at least monthly 
 — divided into direct and indirect items. This has invariably 
 been found to be of much more value for administrative 
 action than was the old-fashioned standing order, 
 
 (G) Stores Orders 
 
 "Stores Orders" consist of orders placed in the factory 
 for the manufacture of those items of which a maximum and 
 
68 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GENERAL STORES 
 
 69 
 
 minimum quantity are supposed to be kept in stores. They 
 have particular reference to small tools, such as drills, 
 reamers, screw-drivers, taps, dies, etc., which are to be made 
 up in quantity under a stores order and taken into stores 
 as an asset and held there until distributed to the factory 
 over properly signed requisitions. Some of these articles, 
 such as screws, for instance, can be made up in one or two 
 days' output in sufficient quantity to cover the requirements 
 of a period of several weeks or months. 
 
 This arrangement gives the stores keeper full opportunity 
 for ordering anything that is carried in stores on a maximum 
 or minimum basis, whether it is to be purchased outside or 
 whether it is to be made in the factory. 
 
 Stores-Keeping 
 Stores 
 
 No department in any manufacturing business contrib- 
 utes more to its health or wealth than do the departments 
 of stores-keeping, which are always three in number and 
 sometimes four, as shown below : 
 
 General stores, which cover all purchases of any kind 
 whatsoever. 
 
 Component stores, which cover all pieces and parts that 
 have been completely processed. 
 
 Finished stores, which cover all completed units or 
 models ready for shipment. 
 
 Shop stores, which cover sub-stores stations as distri- 
 buting points for stores issued on a monthly supply 
 basis. 
 
 Requirements as to Stores 
 
 Many plants undoubtedly run under what is known as 
 "continuous manufacture." A contract for 240,000 units 
 
 would mean a contract order for that many. If these are 
 to be made up in a year's time, they could be divided up 
 into twelve manufacturing orders of 20,000 each. 
 
 These manufacturing orders would then be divided again 
 into production orders, i.e., a production order for each 
 component required, and for each assembly required whereby 
 components are assembled into a complete unit. Therefore, 
 on a contract order, the purchasing agent would go to 
 market for materials long in advance of actual manufactur- 
 ing requirements and would make contracts for such materi- 
 als under specified deliveries. 
 
 From this it can readily be seen that if it takes 30 days 
 to get material from the market, and 30 days to process the 
 component from this material, orders for material will have 
 to be placed at least 60 days (plus some factor of safety) 
 in advance of the placing of a manufacturing order in a 
 factory; consequently, all terminating dates on a schedule 
 for purchases should be determined at least 90 days in 
 advance of the final assembly dates, specifications for which 
 should be furnished by the production department. 
 
 It will usually be necessary to have nearly all productive 
 material protected by reservations, and these reservations 
 will be a very important factor in stores-keeping ; therefore, 
 stores balance sheets have been provided to take care of this 
 in detail. 
 
 Routine of Stores-Keeping 
 
 In order to understand how dependent accounting is on 
 a proper classification of orders, it is necessary to have a 
 clear idea of what the fundamental basis of industrial stores- 
 keeping and accounting is. 
 
 All materials upon their receipt must be put into general 
 stores — general stores being so broad in its scope as to cover 
 everything that is purchased. Not only does it include 
 
70 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 material for processing and supplies for operating, but also 
 everything in the shape of equipment. In other words, if a 
 new machine is bought it must first go into general stores 
 (at least by way of record) and be held there in inventory 
 until it is delivered to the factory over a properly signed 
 requisition chargeable to a betterment order, to which will 
 then be added the labor and materials used for installation, 
 the completion of which will transfer the entire cost to 
 another form of inventory. 
 
 The same rule applies to any piece of furniture or office 
 or shop equipment which may be bought, for it is only 
 by thus passing everything through general stores and 
 rendering a requisition in payment for it when it is drawn 
 out, that a distribution of these stores can be made either to 
 production orders, assets, or operating expense, and it is the 
 only basis upon which an order department can maintain 
 a control of orders and their proper distribution. In other 
 words, materials after going into general stores are held 
 there in inventory until they are requisitioned out for some 
 production order, betterment order, repair order, or stores 
 order; the requisition being used simply to credit "General 
 Stores" and to charge the order. Thus all production, 
 betterment, and stores orders become *'Work in Progress." 
 
 At the end of any month the total amount of the produc- 
 tion and betterment orders completed are credited to 
 "Work in Progress" and charged to Fixed Assets, Com- 
 ponent Stores, or Finished Stores, as the case may be. That 
 is to say, as material is drawn from general stores for any 
 production or betterment order, it has added to it the 
 labor and expenses incident to its processing operations, and 
 is constantly held in inventory as "Work in Progress" by 
 the use of requisitions and time tickets. Upon completion, 
 the total cost of the order is credited to Work in Progress 
 and charged to its proper classification. 
 
 GENERAL STORES 
 
 71 
 
 By this relationship between orders, general stores, 
 requisitions, and time tickets, protected by a proper system 
 of names and numbers, a perpetual inventory in all stages 
 of conversion between the purchase of the material and its 
 transformation into something else is made possible. In 
 this way all labor, material, and expense used in a factory 
 are actually converted into tangible assets at the end of each 
 and every month. 
 
 Usually all the work connected with the keeping and 
 recording of stores is placed under a general stores keeper 
 and a stores recorder, whose duties and relations may be 
 outlined briefly before going into stores-keeping in general. 
 
 General Stores Keeper 
 
 The attempt is often made to put the entire stores-keep- 
 ing system under a production or planning department. 
 Usually this is not very satisfactory, for the reason that the 
 purchasing agent and the stores keeper have large problems 
 in the handling of material entirely foreign to production, 
 such as the buying and handling of all factory operating 
 supplies and general office supplies, which are nearly always 
 maintained on a maximum and minimum basis. These in- 
 clude fuels, oils, waste, small tools, etc., and in addition 
 thereto, equipment, furniture, fittings, stationery, catalogues, 
 etc., and it must be borne in mind that all of these materials 
 should be handled just as carefully as the productive 
 materials. It is the physical storage, handling, and delivery 
 of these materials that constitute the real work of a general 
 stores keeper. 
 
 To cover the requirements, the organization should be 
 laid out in such a way that the general stores keeper and 
 purchasing agent may work together as closely as possible ; 
 that is, the general stores keeper should be directly respons- 
 ible to the purchasing agent in so far as all general stores 
 
72 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GENERAL STORES 
 
 73 
 
 (raw material) and their inventories are concerned, but 
 should be under a works manager in everything pertaining 
 to the physical conditions required in a plant for the storing 
 or shelving of goods and for the physical methods to be 
 employed for the delivery of goods to the various parts of 
 the factory. 
 
 Stores Recorder 
 
 There are two methods by which a stores recorder can 
 be governed in an organization — first, whereby the stores 
 records or ledgers are controlled by the purchasing agent 
 (which under ordinary circumstances is the usual way) ; and 
 second, whereby the records and all work pertaining to them 
 are controlled by a production department. 
 
 As the general stores keeper should be at liberty to give 
 most of his personal attention to the movement of stores 
 as a physical requirement, there will have to be, in either 
 case, a stores recorder to take care of all stores transactions 
 by way of the stores ledger, to check purchase requisitions, 
 to price general stores requisitions, to check invoices, and to 
 make out purchase requisitions to cover maximum and mini- 
 mum amounts. 
 
 The undesirability of putting the stores ledgers and 
 records in the charge of any other than the stores keeper 
 and the purchasing agent, is again apparent here, for the 
 simple reason that all non-productive materials and operat- 
 ing supplies must be carried in exactly the same ledgers as 
 productive material. However, as stores cannot be carried 
 in one general stores room, but must of necessity be located 
 at different points, the location of the stores recorder will 
 have to be at some central point of operation, preferably in 
 or adjacent to a production department, to which he can 
 supply whatever information it may require. In addi- 
 tion to this, the general stores keeper should have charge of 
 
 the receiving department and have under him a receiving 
 clerk in charge of such department. 
 
 By this method of organization, the purchasing depart- 
 ment is held entirely responsible for the purchase of 
 material, its delivery into stores, its placing into a stores 
 inventory account, and its final delivery to the factory for 
 processing or usage. The responsibility in connection with 
 the latter will be set forth later, but attention is here called 
 to the fact that this method creates a complete unit of or- 
 ganization in itself, a highly desirable thing to do if possible. 
 
 Bureau of Censorship of Materials 
 
 On the other hand, it is quite possible that it may be 
 necessary in a plant of large size to have a "Bureau of 
 Censorship" on materials, first, to cover purchasing, and, 
 second, to cover withdrawals of materials from stores for 
 usage ; in which case all requisitions for purchase which are 
 or are not covered by a production order, betterment order, 
 repair order, or maximum and minimum quantities, would 
 have to be referred to the bureau of censorship for approval. 
 This bureau of censorship would naturally be controlled by 
 the production department. As all requisitions for the actual 
 withdrawal of material from stores would be made out in 
 this same department, it would be necessary to place in this 
 department a stores recorder who would have charge of all 
 stores transactions, as stated above. 
 
 Under this system, foremen and all others having 
 authority to do so, have to use a "request ticket," and this is 
 converted into a general stores requisition by the stores 
 recorder or his assistants. In so far as the accuracy of stores 
 records are concerned, this plan may be as good as the other, 
 but there would seem to be two undesirable things about it. 
 First, the purchasing agent or stores keeper cannot be held 
 responsible for the inventories of material which he has 
 
74 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 under his charge, and, second, it would seem that a great 
 deal of delay in getting requisitions filled for the factory 
 might be occasioned. In other words, from an accounting 
 point of view it would not make any difference; from an 
 organization point of view and from a delivery point of view 
 it might not work so well. 
 
 Control of General Stores 
 
 As has already been explained, materials are bought and 
 passed into general stores and held there in inventory until 
 they are requisitioned out for some production order, better- 
 ment order, repair order, or standing order; a requisition 
 being used to credit general stores and to charge the order. 
 Thus all production and betterment orders become "Work 
 in Progress.'* At the end of the month, the total amount of 
 production and betterment orders completed is credited to 
 *'Work in Progress" and charged to Investment, Assets, 
 Corr^onent Stores, or Finished Stores, as the case may be. 
 
 Under this routine, as material is drawn from general 
 stores for any production or betterment order, it has added 
 to it the labor and expense incident to its processing opera- 
 tions, and is constantly held in inventory by the use of 
 requisitions, time tickets, etc., until the work upon it is 
 completed; then credits, as cited above, are made and the 
 total cost of the production order, when completed, is 
 charged into Component Stores for all finished pieces or 
 parts as may be required for stock, and into Finished Stores 
 for all completed units. Then, Finished Stores is credited 
 and Sales is charged for all goods shipped, after which the 
 transactions become current bookkeeping. Therefore, from 
 this it can readily be seen that it is absolutely necessary 
 to keep control of materials by the proper use of requisitions, 
 time-keeping tickets, and means for expense distribution, 
 because the whole process is one by which all the material, 
 
 GENERAL STORES 
 
 75 
 
 labor, and expense of a factory are converted into assets at 
 the end of each month. 
 
 From the above, it becomes apparent at once that, first, 
 the stores keeper is the merchant of the plant ; second, that 
 every requisition is a check given in payment for material ; 
 third, that as in a banking business, a centralized clearing 
 house must be organized to handle checks and get them 
 cleared to their proper charge account. 
 
 General Stores Record 
 
 Theoretically, a stores record sheet has many functions. 
 It is a record of all material given out, and shows for what 
 purpose it is given out, etc. ; it is a perpetual inventory of the 
 quantities and the value of materials on hand at any given 
 time, and a perpetual inventory of the quantity outstanding 
 on orders and under reserve ; it is a means for pricing all 
 requisitions calling for material ; and, finally, it becomes a 
 complete record of any and all variations in price, and 
 furnishes chronological information as to quantities of 
 material consumed for any given time. 
 
 A thorough understanding of the means of recording 
 the issue of material from stores into "Work in Progress" 
 and vice versa may be derived from a consideration of the 
 form of general stores record shown in Form 9, the headings 
 of which are almost self-explanatory. 
 
 It will be noticed that the heading of this sheet is made 
 to show not maximum and minimum quantities (as is 
 usual), but such an amount of material as will protect a 
 factory's operation for whatever length of time it takes to 
 get material from the market, taking into consideration res- 
 ervations. Thus, the caption "When balance on hand, less 
 
 reservation, is under , order , means 
 
 that no reservation can be considered available in consider- 
 ing the low point at which to buy, and that when the 
 
76 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GENERAL STORES 
 
 17 
 
 
 quantity is down to a very low point additional quantities 
 must be ordered up to some maximum point. 
 
 If a unit of any kind is to be made at the rate of 3,000 
 per day, and it takes ten days to get stock after placing the 
 order, the minimum inventory at the factory would be, 
 under ordinary conditions of operation, sufficient materials 
 of all kinds for 30,000 units, and it would be the stores 
 keeper's business to notify immediately the purchasing agent 
 when the inventory on such material was down to the 
 ordering point, as the 30,000 minimum would be practically 
 all consumed by the time the new shipments were received. 
 A factor of safety should be allowed which would perhaps 
 make material for 40,000 units the low point at which to 
 re-order. 
 
 At the top of the record sheet is also shown a description 
 of each item — each item being on a separate sheet. The 
 unit of measure by which the item is bought is given, as 
 pounds, gallons, pieces, yards, etc., and immediately under 
 this is shown the location of material as to building number, 
 floor number, aisle number, and bin number. In this way 
 the stores recorder will have absolute information as to the 
 location of any and all kinds of material, and can quickly 
 and easily find or check it over if it becomes necessary. 
 Further, this gives the stores recorder absolute command 
 of all stores, by record, and will enable him to show location 
 on requisition, so that the stores keeper can send stores 
 clerks or truckmen to the proper point for the drawing of 
 material to be delivered. 
 
 In a properly arranged stores-keeping department the 
 entire layout of a floor space, aisles, bins, etc., should be 
 represented by a drawing or diagram. This will greatly 
 facilitate the work of the stores keeper, and simplify the 
 breaking in of new clerks, stock men, etc., as they are taken 
 into the employ of the company from time to time. 
 
 These stores record sheets must be Indexed under the 
 classification mentioned hereafter for ready reference and 
 handling, as regards posting, etc. The stores recorder 
 should be held absolutely responsible for the placing of his 
 requisition for purchase or manufacture (the latter in case 
 of items made by the factory and carried in stock, such as 
 drills, reamers, taps, dies, etc.), but not for delays in pur- 
 chasing or deliveries, provided his requisition has been given 
 to the purchasing department or the production department 
 in time. 
 
 The first entry on the stores record sheet will be the 
 inventory at the time the sheet is opened, under the 
 ''Received" column, showing the date of inventory, etc.; 
 following this, in the first column, ''Ordered," will be en- 
 tered the date, purchase order number, and quantity. Upon 
 receipt of "Material Receipt and Notice" by stores record 
 clerk, he will immediately enter the amount shown on same 
 in the "Received" column of the stores record sheet, giving 
 date, purchase order number, and quantity; checking his 
 "Material Received" memorandum, purchase order and pur- 
 chasing requisition at the same time. Upon receipt of in- 
 voice, these three forms will be assembled with the invoice, 
 and the unit price entered in its proper place, and all papers 
 then forwarded to the accounting department. This opera- 
 tion will be repeated for all items received. 
 
 As fast as requisitions are received at the stores room 
 and the material is delivered, the quantity, called for by the 
 requisition will be entered in the "Issued" column of the 
 stores record sheet, showing the requisition number and 
 date on which the material was delivered, together with the 
 quantity and unit price. At the same time that this is done, 
 the unit price and amount will be extended on the requisition, 
 and always the balance of the quantity on hand must be 
 entered in the "Balance" column. A column has been pro- 
 
 
 I?* 
 1- 
 
 i1 
 
78 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GENERAL STORES 
 
 79 
 
 vided showing "Reserved," so that no subsequent produc- 
 tion order can be put into the factory demanding the same 
 kind of material and obtain it, unless there is an excess of 
 the amount reserved for the first production order. Under 
 the "Reserved" caption the date and quantity of the reserve 
 are entered, and under "For" will be shown the order number 
 for which the material is reserved. As fast as the production 
 order number is provided with this material, it will be en- 
 tered in the "Issued" column, the same as any other material. 
 Therefore, it can readily be seen that the amount available 
 for any new production order will be the difference between 
 the balance in stores and the total amount reserved. 
 
 At the extreme right of the stores record sheet are pro- 
 vided five columns for "Balances" ; the first column showing 
 balance "On Order," the difference between the "Quantity" 
 column of "Ordered" and "Received"; the second column 
 showing balance "In Reserve," the difference between "Re- 
 ceived" and red ink entries under "Issued" column ; the third 
 column showing "Available," the difference between "In 
 Reserve" and "On Hand in Stock" ; the fourth column show- 
 ing, quantity "On Hand in Stock," the difference between 
 "Received" and "Issued" ; and the fifth column, "Value on 
 Hand," or inventory value of "On Hand in Stock." 
 
 The unit price entered on the stores record must be the 
 absolute cost, which means that all trade discounts must be 
 deducted, and the net price per piece or quantity used, instead 
 of the total purchase of any particular material. By this 
 means this sheet becomes not only a stores record of goods 
 received and given out, but also the standard price sheet for 
 the use of the purchasing agent and the source from which 
 the stores recorder enters on the requisition for purchase 
 the last price paid and other data required. A ten days' cash 
 discount, etc., should never be taken off the figures as shown 
 on the invoices, as this form of discount is an earning of 
 
 the financial department and should be credited to its ad- 
 ministration and not taken into consideration in connection 
 with the cost of production. 
 
 The price to be used for any costing or inventory pur- 
 poses should always be the last purchase price from any 
 regular source of supply. If, however, material has been 
 purchased in large quantity, or of special quality or price, 
 an effort should be made by the record clerk to carry these 
 prices with the quantity so purchased. 
 
 The particular thing to which attention should be called, 
 in connection with the keeping of stores and stores records, 
 is the importance of keeping these records posted up to 
 date — up to the minute — as to the quantity received, quan- 
 tity given out, balance on hand, and prices. The value of 
 this cannot be overestimated, as these records become a 
 bureau of information for several purposes; first, for the 
 purchasing agent; second, for the planning department; 
 third, for the cost department in making costs and distribu- 
 tions (as on these sheets every requisition is priced for the 
 amount of material drawn over the requisition). They give 
 a chronological history of each item of stores, and of the 
 quantities and various kinds of materials or supplies used, 
 so that in a very short time the stores keeper and purchasing 
 agent can establish from this history absolutely correct maxi- 
 mum and minimum quantities, and thus reduce the cost of 
 investment for material to a minimum. An examination 
 of these stores record sheets will always indicate to the 
 purchasing agent or works manager how well purchases are 
 being made and how much unnecessary investment may 
 have been made in any items by purchasing in too large 
 quantities. Finally, the perpetual inventory is kept checked 
 against the controlling account by means of these stores 
 records. 
 
 From the foregoing it can be seen what an all-important 
 
8o 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 proposition the keeping of the stores records is, and particu- 
 larly the keeping of these records posted accurately and 
 right up to date, and with due consideration for reservation. 
 
 Classification of General Stores 
 
 There are two prime classifications into which general 
 stores should be divided, for statistical and indexing reasons : 
 
 (1) Office Materials, (2) Factory Materials. A com- 
 plete classification for accounting and general purposes is 
 given in the stores ledger shown in Form 95. 
 
 Factory materials for such purposes are divided into 
 four classes as follows : 
 
 (a) Operating Supplies 
 
 (b) Manufacturing Supplies 
 
 (c) Manufacturing Materials 
 
 (d) Equipment 
 
 This classification is not used for keeping stores or for 
 accounting work, but is used for indexing purposes; and 
 also provides a means whereby statistics can be obtained 
 at any time regarding the amounts of such materials used. 
 These statistics are very valuable because of the fact that 
 contracts are often made and prices obtained based on the 
 quantities consumed of any particular commodity, and a 
 little adding machine work on the stores records in connec- 
 tion with this classification will always reveal this for either 
 statistical or purchasing purposes. In order to make this 
 classification perfectly clear, the kinds of items that would 
 go into them are given below, 
 
 1. Office Materials — Classification 
 
 These consist of any and all kinds of supplies for office 
 work, for recording and accounting work, advertising 
 
 GENERAL STORES 
 
 8l 
 
 matter, etc. This kind of material should be classified on the 
 indexes for stores-keeping about as follows : 
 
 Advertising Matter 
 Bands, Rubber 
 Baskets, Waste 
 Blotting Paper 
 Brushes, Typewriter 
 Carbon Paper 
 Clips 
 
 Copy Paper 
 Envelopes 
 Erasers, Pencil 
 Erasers, Typewriter 
 Forms, Cards 
 Forms, Loose-Leaf 
 Forms, Printed 
 Inks, Stamping 
 Inks, Writing 
 
 Ink Wells 
 
 Letterheads 
 
 Pads, Scribbling 
 
 Paste 
 
 Pencils 
 
 Punches 
 
 Pen Holders 
 
 Pens 
 
 Pins 
 
 Ribbons, Typewriter 
 
 Rulers 
 
 Second Sheets 
 
 Shorthand Books 
 
 Stamp Pads 
 
 Trays, Letter 
 
 Twine, etc. 
 
 2. Factory Materials— Classification 
 
 These, as stated above, are divided into four classes for 
 indexing purposes only, the first of which is: 
 
 (a) Operating Supplies. These consist of all such 
 supplies as are used for operating, or making repairs to the 
 plant or to the machinery in the plant, and will consist of 
 about such a classification of items as given below, although 
 it must be borne in mind that there are items in this classi- 
 fication that might be used as productive material. 
 
 Asbestos 
 
 Babbitt 
 
 Belting 
 
 Materials 
 
 Brooms 
 Brushes, Air 
 Brushes, Motor 
 
82 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GENERAL STORES 
 
 83 
 
 Carbon 
 
 Packing 
 
 Compounds 
 
 Piping 
 
 Electrical Supplies 
 
 Plumbing Supplies 
 
 Emery Cloth and Paper 
 
 Potash 
 
 Excelsior 
 
 Rivets 
 
 Fuels 
 
 Rope 
 
 Gaskets 
 
 Rubber 
 
 Glass 
 
 Sandpaper 
 
 Glue 
 
 Soap 
 
 Inks, Office 
 
 Tin 
 
 Iron, Galvanized 
 
 Toilet Paper 
 
 Leather, Lace 
 
 Twine 
 
 Nails 
 
 Waste 
 
 Oil Cans 
 
 Wax 
 
 Oils 
 
 Wire 
 
 Tools — Small and Hand 
 
 Bits 
 
 Handles 
 
 Checks 
 
 Jigs 
 
 Chisels 
 
 Knives 
 
 Dies 
 
 Miscellaneous 
 
 Drills 
 
 Soldering Irons 
 
 Emery Wheels 
 
 Stones 
 
 Files 
 
 Torches 
 
 TTammers 
 
 Wrenches 
 
 (b) Manufacturing Supplies. These will consist of all 
 kinds of material that are used in the product made for sale, 
 and measured out in quantities in such a way as not to be 
 chargeable to any specific piece, part, or unit, for the reasons 
 that it would be almost impossible to measure the exact 
 quantity used in or upon any individual part. This kind of 
 stores is often drawn out in bulk, such quantities being used 
 as are required, and the remainder returned to stores on a 
 
 credit memorandum ; for it is impossible in many instances 
 to specify the exact amount of material needed. The fol- 
 lowing items indicate the nature of the articles that go into 
 this classification: 
 
 Alcohol, Spirits 
 
 Screws, Machine 
 
 Alcohol, Wood 
 
 Shellac 
 
 Oil 
 
 Tape 
 
 Paints 
 
 etc. 
 
 Putty 
 
 
 (c) Manufacturing Materials. These consist of all 
 materials which are used in the actual product made for 
 sale, and which are charged directly to piece, part, unit, etc., 
 or to a production order in its entirety. 
 
 Properly speaking, both manufacturing supplies and 
 materials are one and the same thing; but the reason for 
 recommending a subdivision of these two is that it is neces- 
 sary to exercise a great deal more care with manufacturing 
 supplies than it is with manufacturing materials in issuing 
 them to the factory, since the exact quantity of the former 
 required for a given production order is frequently not 
 specified or limited. 
 
 (d) Equipment. For indexing purposes, this consists 
 of all such equipment and machinery as is bought for the 
 plant, and not, as yet, charged out to the plant under a 
 betterment order. 
 
 Classification of General Stores— For Stores-Indexing 
 
 It is almost impossible to provide at the start every item 
 of classification that will be required ; but a general scheme 
 should be adopted which may be added to from time to time 
 as classifications for inventory become necessary. It is 
 preferable to classify primarily under the kinds of materials 
 used, for two reasons : it makes the handling of the stores 
 
84 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 record sheets much more rapid, and at the same time it gives 
 a statement every month of the consumption of the various 
 kinds of materials that are used. 
 
 As before stated, general stores are divided into two 
 prime classifications: (1) office materials, and (2) factory 
 materials, which are the same for both stores-indexing and 
 statistical purposes. The subdivisions of these two classes 
 are as given below: 
 
 Office Materials. Subdivision same as already given. 
 
 (See pages 80, 81.) . 
 
 Factory Materials. For purposes of stores-indexing, 
 these materials should be classified about as follows ac- 
 cording to the kind of material and the items made of that 
 material : 
 
 I. Brass and Bronze 
 
 Castings 
 Cocks 
 
 Cups, Grease 
 Cups, Oil 
 Sheet 
 Rod 
 
 11. COMPOUNM 
 
 Commutator 
 
 Cutting 
 
 Drilling 
 
 Screws 
 
 Valves 
 
 Washers 
 
 Wire 
 
 Miscellaneous 
 
 Polishing 
 Miscellaneous 
 
 III. Copper 
 
 Sheet 
 Tubing 
 Wire 
 Rivets 
 
 Washers 
 Castings 
 Miscellaneous 
 
 GENERAL STORES 
 
 85 
 
 IV. Emery 
 
 
 Cloth 
 
 Wheels 
 
 Powder 
 
 Miscellaneous 
 
 V. Fibre 
 
 
 Rings 
 
 Gaskets 
 
 Disks 
 
 Miscellaneous 
 
 VI. Fuel 
 
 
 Coal 
 
 
 VII. Glass 
 
 
 Disks 
 
 Window 
 
 Tubes 
 
 Miscellaneouii 
 
 VIII. Iron 
 
 
 Bar 
 
 Sheets 
 
 Bolts 
 
 Screws 
 
 Castings, Gray 
 
 Tubes 
 
 Castings, Malleable 
 
 Washers 
 
 Forgings 
 
 Wire 
 
 Nails 
 
 Miscellaneous 
 
 Rivets 
 
 
 IX. Stf.f.l 
 
 
 Shafting 
 
 Tool 
 
 Sheet 
 
 Tubing 
 
 Bar 
 
 
 X. Lumber 
 
 
 Boards 
 
 Timber 
 
 Planking 
 
 Miscellaneous 
 
 XL Oils and Grease 
 
 
 Lubricating Oils 
 
 Greases 
 
86 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 XII. Packing 
 
 
 Asbestos 
 
 Metallic 
 
 Gaskets 
 
 Wick 
 
 Hemp 
 
 Miscellaneous 
 
 XIII. Paper 
 
 
 Books 
 
 Stationery 
 
 Catalogues 
 
 Wrapping 
 
 Circulars 
 
 Sand 
 
 Drawing 
 
 Miscellaneous 
 
 Printed Form 
 
 
 XIV. Rubber 
 
 
 Diaphragms 
 
 Seatings 
 
 Gaskets 
 
 Sheet 
 
 Hose 
 
 Tubing 
 
 Rings 
 
 Washers 
 
 XV. Leather 
 
 
 Belting 
 
 Washers 
 
 Lace 
 
 Miscellaneous 
 
 The Issuing of Material from Stores 
 General Stores Requisitions 
 
 Form 10 is to be used for the purpose of obtaining 
 material and supplies from stores, as no items of whatso- 
 ever nature bought by the company should be issued by the 
 stores keeper except over this form properly signed. The 
 production department will issue all requisitions for materials 
 needed for regular production orders, but not always for 
 supplies for operating the plant. The requisition must, 
 under all circumstances, show the order number to which 
 the material is to be charged, as well as the number of the 
 department which draws the material. Where materials for 
 
 GENERAL STORES g^ 
 
 operating supplies, etc., are drawn, which are not covered 
 by any production, betterment, repair, or standing order 
 number, the requisition must, without exception, show the 
 department drawing the material and must be properly 
 signed by the head of that department. Under no circum- 
 stances can the head of one department use his requisition 
 to draw material from another department, or from the 
 inspectors ; through general stores only will it be honored. 
 In every instance the quantity and kind of material must 
 be plainly set forth upon the requisition as follows : 
 
 L Material, symbol, and number of requisition. 
 
 2. Charge number or order number which is entered 
 
 against the proper class of order as shown on the 
 requisition. The symbols shown thereon desig- 
 nate the following classes of orders : 
 
 (A) Contract or Sales Orders 
 
 (B) Manufacturing Orders 
 
 (C) Production Orders 
 
 (D) Prorating Orders 
 
 (E) Betterment Orders 
 
 (F) Repair Orders 
 
 (G) Stores Orders 
 
 3. The quantity designated and a clear description of 
 
 the article. 
 
 4. The department to which delivery is to be made and 
 
 the time when delivery is required. 
 
 5. The signature of a duly authorized party. 
 
 6. The date on which made out. 
 
 Exceptions may be made to this rule in the case of the 
 manager and any superintendent, by allowing them to use 
 their respective pads, which should be especially assigned 
 to them by a key number, as they find it necessary. When 
 this is done the requisition must be O K'd by the superin- 
 
88 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 pTooIrlv 'if '^"^""'T' '°' ^^'^'^ '""^ '"^'^"-1 - drawn 
 W oJth T' '"^ ' ''^•^'' n^emorandum made out in 
 
 and Z f r'""'"' ^'""^ ''^^'^ 'h^ ""^'^ri^l was taken 
 and this must be attached to the requisition 
 
 stores Cer'is^r' '" "!!"'' '' P^'^'^"^^^ ''''''^' '^^^ the 
 bouS A ^.l . '""■'''""' °^ *'^^ P'^"t' that everything 
 bought by the factory is put into his custody to be so d Z 
 
 h.m to the various departments, and that these requst^ons 
 are nothmg more or less than checks made out and 7^Z 
 
 and a, he" " ''' T"^'^*"" '^ "°' Properly' made out 
 
 th,/V' 7'"''" '^^' '^' ''°''' ^''P'' should bear in mind 
 that his department must be conducted as an ab oSv 
 
 mdependent business; he buys goods over his purcha e ' 
 
 quisuion. and sells these goods to the facto" ove, s 
 
 gnera stores requisitions. Every night his sJock shouH 
 
 atltatr "'' '' '' '' ""• '' ^' '^ ^ ^^^^ -ictly 
 
 chart callS "sT '' r' "'"'"' '' '''''''' '''''^' *« have a 
 Chart called Stores Location Chart." so that the stores 
 
 re order can accurately route each requisition by entering 
 this .nformatxon in the space provided on the form ^ 
 
 out nduXatr rr?' '''' *'"^ "^"'^'*'°- ^^ -de 
 out m duplicate. The stores recorder will be either located 
 
 n. or adjacent to, the planning department. All requisitions 
 for production material will be accompanied by a roudn^ 
 
 ag which should be attached by the st'ores kee^r to tch 
 lo of material called for by a requisition. C^all ofh^ 
 materials, such as operating supplies, etc., which mth be 
 
 equisitioned direct by department heads, the storeTkeeper 
 should put a routing tag on the material toTs pX 
 destination which, of course, will be indicated on the requfs 
 
 GENERAL STORES 
 
 89 
 
 tion Itself. It IS a much safer way to route material than 
 It IS to make duplicate requisitions which cannot be fastened 
 or tied to the material in any convenient way. 
 
 Stores Credit Memorandum 
 
 Form 1 1 is to be used by all heads of departments for 
 creditmg any department with materials drawn from stores 
 which It cannot or does not use, and which are returned to 
 stores. It must be borne in mind that all material drawn 
 over a requisition is charged up to its proper order or account 
 number immediately after it is taken from the stores depart- 
 ment, and if subsequent work or operations show too much 
 material has been drawn, or defects are discovered in the 
 material, this form is used to give a credit to the job. For 
 this purpose it is immediately sent to the stores keeper 
 together with the surplus or rejected materials. Unless the 
 material accompanies this credit memorandum, the stores 
 keeper will not accept it, for he must get his material back 
 mto stores before he can apply the credit. The credit 
 memorandum must be signed by the planning department 
 or a department head authorized to do so, and also by the 
 stores keeper, before it is turned over to the stores recorder, 
 where the material must be priced exactly the same as in the 
 requisition, be entered on the received side of the stores 
 record, and, under 'Trom Whom," the production order 
 number be entered in red ink. 
 
 ^ This stores credit memorandum is of as much importance 
 in the handling of stores as is the requisition, these two 
 kinds of forms constituting the debits and credits in so far 
 as general stores-keeping and the factory are concerned 
 For example, if 100 bolts are drawn out of general stores 
 tor a production order and 10 of them are found defective, 
 10 more bolts will be drawn out on another requisition ac- 
 companied by a credit memorandum for 10 bolts, and the 
 
90 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 10 bolts drawn out on the second requisition will be charged 
 off by the record clerk to either "Scrap" or "Defective 
 Pieces," so that by this means the balance of his stores 
 record sheets will always check his stock, and at the same 
 time dispose of any defective material. 
 
 Again, the tool room might draw out on requisition a 
 dozen \2" flat files. Immediately afterwards another fore- 
 man might present a requisition for these files, and, there 
 not being any in stock, he might be given six of the files that 
 had been taken out by the tool room. In such case the six 
 files would be passed back into general stores from the tool 
 room by a credit memorandum, and the requisition from the 
 other foreman changed to six and turned into stores ; thus 
 leaving six files charged to each department. It must be 
 borne in mind, however, that these transactions must not 
 take place between departments, but through the stores de- 
 partment as a clearing house. 
 
 These stores requisitions and credit memoranda can 
 both be used in conjunction with component stores in the 
 same way as they are with general stores, if desired, but 
 it is much better to use for this purpose a combined form 
 headed "Component Stores Requisition and Credit" but 
 otherwise bearing the same data. 
 
 CHAPTER V 
 
 COMPONENT AND FINISHED STORES 
 
 Showing how they differ from general stores 
 both in character and their method of record; 
 together with a discussion of their inven- 
 toried values, their control, and their relation 
 to accounting. 
 
CHAPTER V 
 
 COMPONENT AND FINISHED STORES 
 
 Nature of Component and Finished Stores 
 
 When material is issued to the factory for the manu- 
 facture of pieces or parts, it is charged to a production order 
 covering same; and the amount of material, as well as the 
 labor on this production order, is charged up to a controlling 
 account called **Work in Progress," where it remains until 
 the entire production order is completed. When the pro- 
 duction order is finished, "Work in Progress" account is 
 credited, and "Component Stores" is charged. Here the 
 item remains in inventory as "Component Stores" until 
 withdrawn again for assembling, where it will be charged 
 against "Work in Progress" until this assembHng produc- 
 tion order is completed, when "Work in Progress" will 
 again be credited and "Finished Stores" charged. Here it 
 will remain until sold, when "Finished Stores" will be 
 credited and "Sales" charged. In this way the controlling 
 accounts give the summaries of perpetual inventories, as it 
 can readily be seen that at the end of the month any uncom- 
 pleted orders must necessarily be in "Work in Progress" 
 and all completed orders must be in either Component or 
 Finished Stores. 
 
 Now, it should be borne in mind that no items other than 
 those processed by the factory itself should be included in 
 the classification of "Component Stores" or "Finished 
 Stores," for if this is done there is no check on inventory 
 records as related to production orders, or no distribution 
 
 93 
 
UNIFIED ACCOUNTING FOR INDUSTRIALS 
 94 
 
 of a proper amount of overhead to production orders. There- 
 fore it is worth while to say again that such things as 
 screws, nails, bolts, wire, or any finished parts bought out- 
 side, do not, under any circumstances, become identified with 
 component or finished stores records ; they are simply C^en- 
 eral Stores." Even if parts for a unit or model of any kind 
 should be bought, they would be general stores until drawn 
 into the factory by some production order, which would 
 convert them into "Work in Progress." 
 
 Component Stores 
 
 Component stores do not include any component parts 
 or pieces in progress, and, until a piece or part is fimshed, 
 it is still *'Work in Progress." When, however, this piece 
 or part is finished and in such shape as to be carried m stock 
 for assembling purposes, it then becomes "Component 
 Stores " Therefore, these component stores bear no rela- 
 tion to general stores or to finished stores, simply bemg a 
 necessary transformation convenience in accounting for 
 factory operations. Component stores should be directly 
 in charge of the production department and be replenished 
 and drawn on in accordance with instructions issued by this 
 department to the factory for making up finished umts or 
 models as called for by some schedule or schedules. 
 
 As component stores are the result of having processed 
 certain pieces and parts on some particular production order, 
 they must be costed out on a separate production order in 
 order to get the final cost of the different units in which 
 
 they may be used. r .^^ { 
 
 This method of procedure is carried still further for 
 the reason that costs must be divided not only into umts, 
 but into parts of units; and parts, into pieces and operations 
 on these pieces and parts. Therefore, a manufacturing order 
 calling for the production of any given unit or number of 
 
 COMPONENT AND FINISHED STORES 
 
 95 
 
 units is converted into production orders for the various 
 parts and pieces required. 
 
 The principal reason for this procedure is on account of 
 sub-assembly; one example of which might be the lock 
 mechanism of a rifle. This is composed of a certain number 
 of pieces, which, when assembled into the lock mechanism, 
 constitute a unit, inasmuch as it can be assembled and be- 
 come operative independent of the model upon which it 
 goes and, under certain circumstances, may be used on 
 several models of rifles. Therefore, the pieces that make up 
 this part should be assembled into it under a production 
 order for assembling separate from the one covering the 
 general assembly of rifles. 
 
 Component Stores Record 
 
 The "Component Stores Record" (Form 13) is to 
 component stores exactly what the "General Stores Record" 
 is to general stores; viz., a record of all pieces and parts 
 processed in a factory, taken into stores, and then delivered 
 to assembly orders. It shows also inventory values of com- 
 ponent stores whenever it is necessary to have such informa- 
 tion. The entries in the component stores record are similar 
 to those found in the general stores record, and likewise are 
 governed to a certain extent by maximum and minimum 
 amounts. 
 
 To illustrate this point, if a sales department were re- 
 quiring, say, 30 engines a day of a particular model, the 
 minimum inventory of that engine in finished stores would 
 be determined by whatever length of time it takes the factory 
 to assemble that kind of an engine. If this time wTre 10 
 days, the minimum inventory on finished stores would be 
 300 engines. 
 
 To go a step further, if four of a particular piece were 
 required to an engine and 30 days were necessary to get 
 
96 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the piece through the factory, then the minimum in com- 
 ponent stores would be four times 30 for each day, and for 
 '30 days, 30 times this number, or 3,600 pieces. This same 
 comparison would apply to all articles of manufacture, such 
 as rifles or similar weapons, wherein a complete model is 
 composed of an assembly of several parts, some of which 
 are duplicate parts. 
 
 When any finished pieces or parts are received in stores 
 from "Work in Progress" in the factory, they should always 
 be accompanied by a tracing tag, showing production order 
 number, lot number, and net quantity received. As soon as 
 it is received by the stores keeper, he should enter on this 
 tracing tag the actual count of the goods received, date, 
 and sign same, and then turn it over to the stores recorder 
 who will immediately post to his stores record under "Re- 
 ceived" the quantity specified, with the order number upon 
 which it has been made. 
 
 This material will usually be received in the stores as 
 only a part of some production order; that is to say, there 
 may be a production order in the factory for 10,000 pieces, 
 and these may come into component stores in lots of 2,000 
 or 3,000. The entries for such receipts must be made in the 
 column captioned "Received on Unfinished Order," for the 
 reason that goods received in instalments in this way have 
 not as yet been costed out, and consequently must be held 
 in this column until the cost is known, which will be upon 
 the completion of the production order. 
 
 When pieces on uncompleted orders arc entered in the 
 column "Received on Unfinished Orders," the quantity is 
 also added to the balance in the column headed "Balance 
 on Hand— Unfinished Orders," given on the outside. It 
 may be that several instalments of finished parts or units 
 will be received into component stores before the entire 
 order is completed ; but, as soon as the total order and cost 
 
 COMPONENT AND FINISHED STORES 
 
 97 
 
 of the order is received, the total quantity made on the 
 order is extended to the column "On Hand — Component 
 Stores," and the cost price is entered as above. 
 
 When the stores recorder receives a requisition calling 
 for component stores and these have been delivered, he will 
 enter in the "Issued" column the date of issue, order num- 
 ber for which the material is to be used, together with the 
 quantity. The amount is then extended to "Balance on 
 Hand — Component Stores" and the inventory value is then 
 carried out at once. 
 
 In the event of its being necessary to give out component 
 stores that have been received on an unfinished order, the 
 order number and the quantity are entered in exactly the 
 same manner as above, and the quantity is deducted from 
 the "Balance on Unfinished Orders," as there is no balance 
 in "Component Stores"; for, as stated above, although the 
 goods may be received into the component stores department 
 in instalments from some production order, they cannot 
 become "Component Stores" as a matter of record, but will 
 remain "Work in Progress" until the costs are ascertained 
 and closed out. 
 
 It may be necessary at times to draw from both "Balance 
 in Component Stores" and "Balance on Unfinished Orders." 
 To illustrate this, suppose a requisition calls for 3,000 parts 
 and there are 1,000 parts in "Balance in Component Stores," 
 while there are 4,000 in "Balance on Unfinished Orders." 
 Obviously, all there are of component stores, which is 1,000, 
 will be taken, and the difference must come out of the "Bal- 
 ance on Unfinished Orders"; and, if it becomes necessary 
 to price all that are drawn out, the price for the number 
 taken from the "Balance on Unfinished Orders" must be 
 the last cost price, but this should never be resorted to except 
 for special purposes. 
 
 When costs of any parts which are carried in "Balance 
 
u 
 
 98 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 on Unfinished Orders" are received, the quantity should 
 then be transferred to "Balance in Component Stores," to- 
 gether with unit prices, total values, etc. 
 
 Controlling Account for Component Stores 
 
 In the controlling accounts of a company, there should be 
 an account which governs "Component Stores"; and the 
 aggregate inventory value, as shown by the component 
 stores record, should at any time practically agree with the 
 controlling account, from which it will be noted that a check 
 is thus kept on the inventory from two separate and inde- 
 pendent sources. 
 
 In first establishing any such inventory, conditions may 
 be met which will make it almost prohibitive to maintain a 
 minimum inventory on account of the demand for parts for 
 assembling purposes. Therefore, it may become necessary 
 to draw a large part of assembling requirements from com- 
 ponent stores on unfinished orders. 
 
 In order to maintain a controlling account properly, and 
 have the monthly balance sheet a true interpretation of in- 
 ventory conditions governing component stores, the stores 
 recorder, at the end of each month, should draw off from 
 his records all parts issued from stores on unfinished orders 
 and enter the same on the component stores record in red ink 
 under the column "Balance on Hand — Component Stores." 
 This red ink balance will indicate a delivery to component 
 stores, which, in so far as regular records are concerned, is 
 not yet recorded as received in component stores, and will 
 not be so recorded until the entire production order is com- 
 pleted. The stores recorder should also draw off, at the 
 end of each month, all finished stores issued as unfinished 
 orders. A memorandum entry should in both cases be 
 shown in red ink on the monthly balance sheets, but must 
 not be actually entered on the balance sheets of private 
 
 COMPONENT AND FINISHED STORES 
 
 99 
 
 ledger accounts, as would be the case where a production 
 order was completed and the entire cost charged to stores 
 and credited to "Work in Progress." 
 
 The purpose here is to create temporarily a credit to 
 "Work in Progress" of such items as have been used in 
 some other form of inventory. Otherwise, any units finished 
 on an uncompleted assembly production order that were 
 sold and shipped would still be in the "Work in Progress" 
 inventory, and also in the accounts receivable, thus creating 
 double value on inventory as a whole for such items. 
 
 What has been said above as regards unfinished balance, 
 is absolutely necessary in connection with the keeping of 
 finished stores ; but in connection with component stores, the 
 regular form of general stores record could be used, by 
 sacrificing accuracy and always using last cost price obtained 
 on issue of any component stores, making a new price when- 
 ever a production order was closed out. 
 
 Finished Stores Record 
 
 The keeping of this record (Form 14) is identical with 
 that of component stores, inasmuch as all the receipts from 
 production orders are entered in the "Received" column, 
 and everything given out on a shipping order (instead of a 
 requisition or a production order) is entered under "Issued." 
 
 In the issuing of shipping orders, two copies should 
 always be given to the shipping clerk, one a shipping memo- 
 randum, returnable to the accounting department for billing, 
 and the other a shipping memorandum to accompany the 
 shipment to the consignee. These are the only papers he 
 should have for the shipment of goods. 
 
 On the shipping memorandum returnable to the account- 
 ing department, provision should be made for the entry of 
 the cost of all the items shipped on finished stores, as these 
 figures are necessary for making a sales analysis. 
 
 I 
 
CHAPTER VI 
 
 STORES—SPECIAL FEATURES 
 
 Illustrating forms to be used as a check on 
 materials drawn against orders, and explain- 
 ing in detail the stores keeper's responsibili- 
 ties in ordering goods made in the factory, 
 and his procedure in disposing of returned 
 
 goods. 
 
CHAPTER VI 
 
 STORES— SPECIAL FEATURES 
 
 Assembly Requisition 
 
 Duplicate requisitions are used in requisitioning ma- 
 terial for assembly purposes. One, a blue sheet, for the total 
 list of material required to cover specified lots on a given 
 production order, will be filled in, in the first two colimms 
 only, showing the number of pieces or parts required, and 
 the piece or part number, together with the date and pro- 
 duction order or lot number at the top. (See Form 15.) 
 
 The assembly requisition, filled in as described, is turned 
 over to the stores keeper, who immediately proceeds to fill 
 the requisition. Owing to low balances on hand in stores, 
 however, he may frequently be unable to make complete 
 delivery of all the parts called for. Therefore, the duplicate 
 of the assembly requisition, a pink copy, has been pro- 
 vided to take care of these "Shorts." As soon as the stores 
 keeper gets out and delivers to the department requiring it, 
 what material is available, he enters under "Delivery" on the 
 blue sheet the date and quantity delivered. When the sheet 
 or sheets covered by this requisition are thus filled out, the 
 stores keeper checks on the pink sheet the quantities of 
 each part still undelivered, as shown by the blue sheet. 
 
 The following day, the pink sheet is gone over, the items 
 which are undelivered balanced, if possible, and delivered; 
 any quantity so delivered will be entered on the right side 
 of the requisition, and the balance still unfilled will be trans- 
 ferred to another pink sheet for the third day. This will 
 be carried on from sheet to sheet, from day to day, until the 
 
 103 
 
I04 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 total assembly requisition has been completed. In this way, 
 the stores keeper is made responsible for looking after the 
 complete filling of the requisition after it has once been 
 given to him in its entirety. 
 
 The reason for this procedure is that all requisitions 
 must be turned in to the record clerk each day, so that the 
 stores account may be kept up to date, and the distributions 
 made to production orders and departments, and not held 
 up until the full amounts of various parts have been de- 
 livered. 
 
 Production Order Distribution of Material 
 
 The production order distribution of material (Form 
 16) is a new form which has been provided to take care of 
 the distribution of material to both production orders and 
 departments, and also to give a daily check on the additional 
 amount of material allowable to be drawn on any production 
 order. 
 
 The clerk who has charge of the record should work 
 alongside the clerk in charge of the general and component 
 stores records in the handling and posting of requisitions 
 coming into the stores keeper's office. These two clerks 
 should handle them jointly, as described hereafter. A pro- 
 duction order distribution of material sheet, or sheets, 
 should be opened for each production order number, and 
 should then be filed in a binder in the order of issue. The 
 stores clerk is provided with a complete set of pieces, parts, 
 and unit key cards, which show in detail the kinds and 
 quantity of material required to make any one piece, part, 
 or unit. 
 
 As soon as the stores keeper receives his copy of a pro- 
 duction order from the planning department, the production 
 record clerk immediately opens up a sheet for this produc- 
 tion order number, showing the quantity required, piece 
 
 STORES— SPECIAL FEATURES 
 
 105 
 
 number, and order number. He then turns to his key cards 
 and ascertains the amount of material required per piece, 
 and opens up a column on this distribution sheet for each 
 kind or size of material required to manufacture the item 
 called for, inserting the name of the material, the total 
 requirements for the production order, etc., and he is then 
 ready to receive requisitions against the production order. 
 No material whatever should be delivered until the stores 
 keeper's copy of the production order has been received, 
 and this production order material distribution sheet has 
 been opened. 
 
 This production order distribution sheet will also answer 
 for the distribution of material to departments, thus saving 
 the entire time previously taken in the posting of requisitions 
 to departments separate from the production order. This 
 combination of posting to production orders and depart- 
 ments will be accomplished in the following manner: 
 
 When the first requisition for material chargeable to a 
 production order comes in and is posted on this production 
 order material sheet, the department which draws the ma- 
 terial should be entered just above the words "General" or 
 "Semi-Finished Stores" (which is the same as "Component 
 Stores"), the classification of material showing just below. 
 As each kind of m.aterial on any production order will al- 
 ways be drawn by the same department, the monthly total 
 of the material drawn, in any one column, may be recapitu- 
 lated from that column to the "Recapitulation of Material 
 to Department." Thus the posting to production orders 
 .will be all that is necessary to get a departmental distribu- 
 tion as well as the classification of material used by each 
 department. 
 
 Moreover, it will not be necessary to figure the extension 
 of the individual requisitions going through, which will save 
 a great deal of time. This will be properly taken care of by 
 
 I 
 
I06 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the footing of these pages at the end of the month, when 
 closing the production order for posting to the production 
 and betterment order record ; that is, the unit price will be 
 shown for each requisition drawn, but the extension is made 
 on the monthly totr.l drawn instead of on each individual 
 requisition. 
 
 These last two features, the combining of the depart- 
 mental and classification of material posting on the same 
 sheet with the production order distribution, and the extend- 
 ing of the requisitions only by the monthly total drawn, will 
 prove a great saving of time in the handling of this record. 
 Of course, if the unit price shows any change, it may require 
 two or more different extensions for the month, but, as a 
 usual thing, the unit price will be the same during any one 
 month. 
 
 Assembly Production Order Material Distribution 
 
 The "Assembly Production Order Material Distribu- 
 tion" form has been provided to take care of the distribution 
 of material on assembly production orders in a way similar 
 to that in which the production order distribution takes care 
 of the distribution of material on production orders for 
 pieces and parts. (See Form 17.) 
 
 At the time a production order is issued by the schedule 
 clerk and a lot is started, this sheet will be typewritten from 
 the unit key cards by the order department, it being a copy 
 of the assembly requisition. This sheet shows the produc- 
 tion order number and the department number drawing the 
 material, the quantity required, part or unit number, and 
 part or unit name. At the time this sheet is made out, the 
 first two columns only are filled in, showing the number of 
 pieces required of each piece or part, and the piece or part 
 number; it thus constitutes c. bill of material for the lot 
 specified on the production order. As soon as this is made 
 
 STORES-SPECIAL FEATURES 
 
 107 
 
 out, the original copy, being a requisition, is forwarded to 
 the foreman of the department who turns it over to the stores 
 keeper as soon as he is ready to receive the material. The 
 assembly sheet is turned over to the distribution clerk in 
 the stores keeper's office, who inserts it in his binder of 
 material distribution as an authorization to deliver the 
 quantity of goods specified. As assembly requisitions and 
 the "Short" list of the same are turned in daily by the 
 stores keeper, the items delivered on them are posted into 
 the four "Delivered" columns on this sheet, each time show- 
 ing "Date," "Quantity Delivered," and "Unit Price" ; this 
 entry being made at the same time that the stores record 
 clerk makes the credit entry on the stores record, giving the 
 distribution clerk the unit price. 
 
 The extensions are not made on these individual de- 
 liveries, as this is unnecessary, the assembly production 
 order material distribution sheet being the first and final 
 distribution of this material, both to department and pro- 
 duction order. The unit price is provided in each column 
 to cover cases where it may have been changed during the 
 life of the production order. 
 
 When the total pieces on any part are delivered, the total 
 quantity will be extended in the "Total Quantity" column, 
 and the extension made and entered in the "Total Amount" 
 column, and the material classification entered in the last 
 column. As soon as the production order is completed, this 
 form will be closed out and filed in the finished order binder, 
 after having been extended, and the totals inserted on the 
 copy of the production order, which is turned in to the dis- 
 tribution department. 
 
 Extensions 
 
 All extensions on the material issued on production 
 orders should be made by means of a mechanical calculator 
 
$ 
 
 lo8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 at the time the production order is completed, thus saving 
 the time of the clerk, who posts only the quantities, and 
 greatly expediting the worh of closing up production 'ders, 
 as well as saving a large amount of time in har ''.ing the 
 distribution of the requisitions through not extending each 
 individual requisition. 
 
 Daily Report of Stores Balance 
 
 The stores record clerk should draw off, at the close 
 of each day, a recapitulation of the balances on hand of all 
 manufacturing materials in general stores, and of all semi- 
 finished and finished stores. This balance sheet must be 
 made out in triplicate, one copy being sent to the works 
 manager, one copy to the purchasing agent, and one copy 
 to the planning and production department. Eventually, 
 when these daily balance sheets become thoroughly regu- 
 lated, the use of the stores clerk's order described below may 
 be done away with ; for this balance sheet in the hands of 
 the planning department, together with the repor': of finished 
 parts received in stores, from tracing tags, will provide 
 full information as to starting operations for the manufac- 
 ture of the parts nearing minimum, so that the reaching 
 minimum will be readily anticipated, and the customary 
 procedure of crying "Short*' wiU become a thing of the 
 past. 
 
 Objects of Stores-Keeping 
 
 ^ From the foregoing it can easily be seen that four great 
 objects in keeping stores are : 
 
 1. To maintain a perpetual inventory. 
 
 2. To prevent the use of material without its being ac- 
 
 counted for, or without authorization. 
 
 3. To prevent unnecessary investment in material, by a 
 
 STORES-SPEQAL FEATURES iqq 
 
 proper specifying of maximum and minimum 
 amounts. 
 4. The manufacture of materials on a balance schedule 
 basis in an economical manner, by the working 
 together of the order and stores departments. 
 
 Stores Keeper's and Stores Clerk's Orders 
 
 As the stores keeper has full control of maximum and 
 minimum amounts in stores, the responsibility is his, of 
 course, for maintaining these amounts. In case of general 
 stores, where the stock is bought, he should make out a 
 regular requisition for purchase; but in the case of com- 
 ponent stores or finished stores, where any maximum or 
 minimum amounts have been established, he should use a 
 stores clerk's order, as a requisition to have such parts 
 made up ; and as the maximum amount for any item is an 
 authority for the manufacturing of such items when it is 
 brought down to minimum, the stores clerk's order to manu- 
 facture will be turned over to the order clerk for his guid- 
 ance in starting the work on the parts required. 
 
 This order (Form 18) is made out in duplicate by the 
 stores clerk ; one copy remains with him, and the other goes 
 to the schedule clerk in the production department. As soon 
 as this is received, it will be handled by him in exactly the 
 Same way as any other production order, by the issuing 
 of the necessary production order for the manufacture of 
 the item in accordance with the production order method 
 in use. 
 
 The rule governing the issuance of these orders by the 
 stores clerk is that he should never issue an order (except 
 in special instances) until the stock is reduced to the min- 
 imum, and the "Amount on Hand" must always be shown 
 opposite the space provided for in the stores clerk's order. 
 One order may cover several different items, but each item 
 
ii 
 
 no UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 must be covered by a separate production order on the part 
 of the production department. 
 
 Goods Returned Memorandum 
 
 Goods that have been sent out of a factory and returned, 
 cannot be taken back into stock until some special considera- 
 tion has been given them. Therefore, for this purpose, a 
 "Goods Returned to Us Memorandum" (Form 19) has been 
 designed on which may be entered the receipt of all goods 
 of any nature whatsoever that are returned, whether they 
 are returned for repairs, non-acceptance, or for any other 
 reason. 
 
 This form is made out in triplicate; the white copy is 
 kept by the receiving clerk; the second copy (pink) is 
 immediately sent to the stores department; and the third 
 copy (blue) is sent to the sales department. As all goods 
 returned are usually a question of sales, the sales depart- 
 ment must first decide what is to be done with the returned 
 goods. It will then write upon this form such instruc- 
 tions as its correspondence indicates is necessary, whether 
 the returned goods are for repairs or for acceptance back 
 into stock. If for repairs, the sales department immediately 
 fills out one of the copies and forwards it to the order depart- 
 ment to make the repairs, entering the repair order into 
 sales the same as any other order. If the goods are to be 
 taken back into stock, the copy will be so marked, and one 
 copy of the receipt is returned to the stores keeper, who will 
 act according to the instructions received thereon. 
 
 All information called for on this form must be filled 
 out by the sales department and shipping department, and 
 where a credit is to be given it must be so stated. As soon 
 as all this information has been obtained, the third copy 
 (blue), held by the sales department, must be signed by the 
 manager and sent to the accounting department. 
 
 STORES— SPECIAL FEATURES 
 
 III 
 
 If repairs are to be made, the copy to the shop super- 
 intendent means that a production order must be made out 
 to cover the repairs; and whether it is for a customer or 
 to go into stock must be clearly indicated. 
 
 In other words, the whole question of returned goods 
 is, first, if they are returned for repairs to be made on them 
 for the benefit of the customer, they must be handled by the 
 sales department, as this is either a question of sales or a 
 question of making good some previous sale. On the other 
 hand, if they are returned because they are rejected, it is a 
 question of sales cancellation to be followed by instructions 
 for disposition. In either case, one of two things must 
 take place : either they must be repaired to be put into per- 
 fect salable condition again through a production order 
 for repairs for this particular item, or else they must go 
 into stock as finished stores, the original instructions for 
 which must emanate from the sales department. 
 
 Accounting for Goods Returned 
 
 Returned goods, in this instance, means something which 
 the company has manufactured and has previously sent out, 
 and which has been returned for some one of many different 
 causes. 
 
 The goods may be returned because they are unsatis- 
 factory to the customer, perhaps as to quahty, perhaps as 
 to time of delivery, or for other reasons. The nature of the 
 return from the customer will affect the accounting. If 
 the goods are not in shape to go back into stock, certain 
 repairs must be made so as to put them into shape in order 
 to get them back in stock. Now, it is obvious that such 
 repairs cannot be charged as an additional cost to the goods ; 
 it is usually an expense due to bad sales, or bad selling 
 policy, and in such case should be charged up as a sales 
 expense, inasmuch as the goods, after being put into perfect 
 
 
 I' 
 
 I i 
 
H2 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 repair, must go into finished stores at the same price as 
 other items of the same nature. Any losses due to the dis- 
 satisfied customer will then, nine times out of ten, be a 
 direct charge to the selling department, and not to the 
 factory or to goods made by the factory, unless they are 
 defective by manufacture. 
 
 This same rule also applies in cases where the sales de- 
 partment issues orders to have manufactured certain types 
 of product, as for instance, engines, and for certain sales or 
 credit reasons these orders are cancelled or returned, and 
 these special types of engines have to be made over into 
 other types. The expense of rebuilding these engines can- 
 not be considered as an additional cost to the goods, being 
 due to bad sales or credit policies, and must be charged up 
 as a commercial expense. 
 
 Again, goods are returned to be repaired for a customer, 
 which, in a motorcycle department, is quite a general thing, 
 and, as the number of machines put out grows, this work 
 also grows rapidly in proportion. In such cases, an order 
 must be made out to have each particular article repaired, 
 followed by a production order for use in the factory, so that 
 all labor and material for making the repairs will be charged 
 up to the original item, in addition to which must be charged 
 the prorated amount of general overhead. 
 
 Other complications that come into this accounting are 
 in the nature of such repairs as cannot be done in the factory 
 itself, but must be sent out for the customer. In such cases 
 the article may be sent back to the factory, or shipped direct 
 by the customer to the place where it is to be repaired, for 
 all of which, special provisions must be made, but not 
 primarily as is often done in the cost department. 
 
 CHAPTER VII 
 
 PREPARATION FOR THE HANDLING OF 
 
 PRODUCTION 
 
 Illustrating and describing in detail the neces- 
 sary classification of pieces, parts, and units, 
 and their relation to stores, schedules, etc. 
 
1 
 
 m 
 
 ¥4 
 
 I 
 
 CHAPTER VII 
 
 PREPARATION FOR THE HANDLING OF 
 
 PRODUCTION 
 
 General Considerations 
 
 In the next few chapters the preparation necessary for 
 handling production on a more or less scientific basis will 
 be described in considerable detail. In no other way could 
 the relation between works management and correct ac- 
 counting methods and its dependency on them be shown so 
 well. It also shows how low costs of production may be 
 obtained and maintained. 
 
 To express the whole matter briefly, the real purpose of 
 any manufacturing concern should be to get out of invest- 
 ment, labor, and material all that can be obtained therefrom 
 in the shape of product. The few chapters devoted to the 
 handling of product are brought in to show its close relation- 
 ship to accountancy and the dependency of the one on the 
 other for economical results. If it were not for this con- 
 sideration, questions of shop practice would not enter into 
 a work of this character at all. 
 
 Analysis of Production Handling 
 
 The work of production handling naturally resolves it- 
 self into the following divisions and order of arrangement : 
 
 1. A standardization of the pieces, parts, units, and 
 models to be manufactured, their relation one to 
 another, and the materials required for each. 
 
 lis 
 
"i 
 
 1' 1 
 
 If 
 ■I 
 
 I 
 
 Il6 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 2. A Standardization of the operations and rotation of 
 
 operation on all pieces, parts, units, models, etc. 
 
 3. The standardizing and indexing of all dies, jigs, 
 
 fixtures, gages, etc., required for same. 
 
 4. A balancing and grouping of the machine tool equip- 
 
 ment so as to show the pieces and operations pos- 
 sible on each machine or group of machines. 
 
 5. The tabulating of pieces and operations that it is 
 
 possible to do on each different type of machine 
 tool. 
 
 6. The making of time studies on all of the operations 
 
 of each piece, and the allotting to same of a stan- 
 dard time for doing the work on each operation ; 
 this time to be the basis for premium or piece- 
 work rates and for possible plant output. 
 
 7. The scheduling of sales requirements for the season's 
 
 output, and from this, scheduling the manufactur- 
 ing requirements on a parts balance basis so as to 
 maintain a full complement of parts and pieces 
 required for assembling. 
 8. The developing and installing of a method for putting 
 production through a factory on a parts balance 
 schedule basis so that at all times the entire plant 
 capacity will be under full control. 
 
 Utilizing Plant Capacity 
 
 One of the most important features in efficiency work is 
 the ascertaining, developing, and utilizing of plant capacity 
 to its utmost. To do this there must first be a complete 
 tabulation of all pieces, parts, and units that are to be manu- 
 factured (with material required), and then the require- 
 ments of production handling, as outlined above, can be 
 carried out in detail. 
 
 Having established a standard design for the pieces, 
 
 PREPARATION FOR HANDLING PRODUCTION 117 
 
 parts, and units to be made, and having made an analysis of 
 the machine tools available, all of the operations on each of 
 these pieces must be standardized to determine with what 
 tools and on what machines each piece of work can be done 
 to the best advantage. Everything is then ready for making 
 time studies on these operations and preparing for the 
 schedule of production. When this schedule has been laid 
 out and the whole proposition developed and standardized, 
 then, and not until then, may the planning of production be 
 installed on an economical basis and as it should be carried 
 out ; thereby utilizing the entire plant capacity and meeting 
 the predetermined manufacturing requirements as per 
 schedules of output. 
 
 One of the great problems before manufacturers today 
 is to discover the weak places — the points at which their 
 plants lack capacity to manufacture the volume of product 
 required on a balanced basis. It must be understood that 
 full plant capacity cannot be reached until its equipment is 
 developed to the point where time studies may be made for 
 obtaining data on ultimate capacities. Undoubtedly, there 
 can be an approximate estimate of what the capacity will be, 
 based on the manufacturer's machine tool rates of output, 
 but in most lines of work such estimates have been found, 
 in the ultimate analysis of time studies, so erroneous as to 
 necessitate a complete change in the whole organization of 
 the plant. 
 
 It would seem that no more profitable work could be 
 done in any plant than to establish for a while a pace-making 
 department for all pieces and parts to be manufactured. 
 This should be done in order to obtain machine capacity, 
 man capacity, plant capacity, and time limits, with a rate- 
 setting based upon these. It also enables the determination 
 of the necessary operations with rotations of same. 
 
 The compiling of data from which this information may 
 
 |ii 
 
II 
 
 Il8 UNIFIED ACCOUNTING ' FOR INDUSTRIALS 
 
 be obtained is most valuable work, as it shows not only the 
 points which need building up in equipment, but also, if ad- 
 ditional equipment is not put in, what finished or partly 
 finished parts must be bought outside, in order to let the 
 departments of greater capacity work up to their maximum. 
 The condition of any plant in which this work is under- 
 taken is usually such as to require considerable time for the 
 compiling and analyzing of the complete data of its capacity, 
 but when once this is done, the manufacturer will have a 
 control of production which very few executives enjoy 
 today. Although the executive control which this standard- 
 ization work gives is very desirable and necessary, the prime 
 reason for such standardization i: to obtain a radical reduc- 
 tion in the cos: 3 of manufacture, due first to the greatly in- 
 creased efficiency of the plant from a machine point of view, 
 and second, to the very material increase of output which 
 can be obtained from the plant with less expenditure for 
 labor. 
 
 Production and the Sales Department 
 
 In order to manufacture economically it is necessary to 
 put the entire production of a factory on a schedule basis, 
 by first determining what the sales requirements will be for 
 a manufacturing year or season. It is also vi' illy essential 
 for economical manufacture that these schedules be made to 
 protect manufacturing conditions. 
 
 It is a common practice with many manufacturers today 
 to run the manufacturing end of their business to suit the 
 sales end ; so much so that when special features ar : desired 
 by the sales department, the factory immediately proceeds 
 to furnish them. What is needed above all else is to develop 
 and introduce ''parts common to all" practice, and, having 
 furnished the selling end with standard articles which the 
 trade requires, it is up to the 3ales force to sell these articles 
 
 PREPARATION FOR HANDLING PRODUCTION 
 
 119 
 
 and not make the factory its tool in catering to the whims 
 of individual customers. 
 
 In most scrap piles today there are many thousands of 
 dollars' worth of pieces and parts which have been scrapped 
 because they were made up as special features to suit indi- 
 vidual customers with apparent disregard of the amount to 
 be ultimately used. As a result, when the particular cus- 
 tomer's orders came to a stop, there was on hand a large 
 number of these special parts which the selling department 
 was unable to sell and which could therefore only be 
 scrapped. 
 
 In other instances, large amounts of scrap have been 
 produced by adopting new designs for certain pieces and 
 parts with absolute disregard of the quantity of old pieces 
 and parts on hand at the time of their adoption. Obviously, 
 this should be avoided. 
 
 Schedule of Production 
 
 While, of course, manufacturing schedules must be made 
 out in accordance with the sales requirements as a whole 
 and the ability of the sales department to dispose of the 
 product, these matters must be gone over in advance and the 
 production schedule made up in accordance and with regard 
 to factory capacity. Then, with this schedule at the maxi- 
 mum, all new features should be reserved for the following 
 season's models and special features eliminated to the great- 
 est extent possible. 
 
 It is obvious that before scheduling of production can 
 be carried out with any efficiency, it is necessary to know 
 exactly what there is with which to turn out production, and 
 to have proper methods laid out for performing the opera- 
 tions required. It has been found in many cases, by actual 
 observation, that one operation is often done in half a dozen 
 different ways, each one more or less extravagant in the 
 
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II i 
 
 120 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 method of handling the material and labor involved. It is, 
 therefore, essential that there should be established standard 
 methods for the manufacture of each article, and instruc- 
 tions be on record as to how and in what rotation the vari- 
 ous operations should be performed. The accuracy of the 
 work depends largely upon its being done in the proper rota- 
 tion. Theoretically this should not be so, but in practice 
 a considerable amount of scrap is accumulated in many 
 plants because of operations being put through in wrong 
 succession. 
 
 To meet this condition, the first consideration is the 
 tabulating of articles to be made, for which there have been 
 provided "Piece Key Cards,'' 'Tart Key Cards," and "Unit 
 Key Cards" (Forms 20-22). Too much care cannot be 
 given to this all-important starting work, for upon the cor- 
 rectness of the information on the piece, part, and unit 
 key cards depends the efficiency of the work of the purchas- 
 ing department, the stores keeper, the production depart- 
 ment, and the cost accounting department. The division of 
 any unit into pieces or parts by operations should be done in 
 the drafting »oom and shown on the drawings and bills of 
 material going therefrom, and each piece or part of any 
 unit to be manufactured must be given a number to dis- 
 tinguish it from all of the other parts and pieces. 
 
 System of Numbering 
 
 There are a number of short-cut methods of joining and 
 classifying the numbers of units, pieces, and parts, keying 
 all pieces and parts into their respective units. In most 
 factories, however, pieces and parts are already numbered, 
 and where drawings of these pieces and parts are correlated 
 it would not ahvays be practicable to change the numbers, 
 especially where repair parts have been catalogued by 
 number. 
 
 PREPARATION FOR HANDLING PRODUCTION 121 
 
 In the numbering of articles manufactured, an efYort 
 should be made to give group numbers ; for instance, pieces, 
 from 1 to 3000 ; parts, from 3000 to 5000 ; units, from 5000 
 up. Sufficient provision should be made for the various 
 sizes of standard screws, bolts, nuts, etc., and, so far as pos- 
 sible, all special features should also be numbered in a group 
 and filed separately from standard items so that a check 
 can be kept on them, and so that they can be gone over 
 frequently by the management. Any additions to these 
 special features should be reported to the management from 
 time to time. This is because of the danger of extending 
 special features into too great a variety, and also because of 
 the tendency on the part of the designing department and 
 factory management to develop new features and apply them 
 while the company has a large stock of designs on hand 
 which should not be changed until the stock is exhausted. 
 Each special feature, of course, will be a unit in itself and 
 will be registered on a unit key card (Form 22), showing 
 all the parts and pieces of which this particular unit is 
 composed. 
 
 Provision should also be made for numbering the draw- 
 ings and rough material for any finished part, so as to key 
 on to the finished part. For example, on a gasoline engine 
 the connecting rod may be No. 20, and is made from a drop 
 forging. As the connecting rod finished is a component 
 part, it goes into component stores as No. 20. The forg- 
 ing for this also requires a specification, and this forging 
 and its drawing number should be No. 20-A, the "A" sig- 
 nifying the rough material for the finished part. However, 
 should this connecting rod at any time be bought outside 
 in a finished condition, it would come into general stores 
 as No. 20, instead of No. 20-A which is its distinctive num- 
 ber when received as a rough forging. 
 
 As described in Chapter V, a unit is an assembly of 
 
I 
 
 122 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 two or more pieces or parts into a thing which has a func- 
 tioning power in itself or is in a condition for sale by itself 
 as a complete article. Thus, a motor is a unit because it 
 will deliver power. A transmission gear is a unit because 
 it is a sales item. Units vary greatly in their characteristics 
 according to the nature of the business and its sales require- 
 ments ; that is, what would be a unit in one business might 
 be only a part in another. 
 
 A part consists of an assembly of two or more pieces, 
 being in itself, as distinguished from a unit, devoid of any 
 functioning power or sales possibilities (except as repairs), 
 until connected or associated with some other parts and 
 pieces. 
 
 A piece is distinguished from a unit and a part as being 
 inactive and inoperative ; at the same time it is individual in 
 its character. 
 
 Thus, an automobile engine would be a unit; the fan, 
 water pump, etc., would be parts; while the fan blades, 
 screws, bolts, crank shaft, cam shaft, etc., etc., would be 
 pieces. 
 
 A part should be such an assembly of pieces as can and 
 will be made up and put into component stores ready to 
 be drawn out and assembled into a complete engine with 
 other parts and pieces. It should be noted that it is possible 
 for large and primary units to be composed of several 
 smaller or secondary units as well as parts and pieces. Thus, 
 a tractor, which would be a unit, would include a secondary 
 unit, the engine, besides the various parts, such as frames, 
 wheels, etc., and the separate pieces, such as screws, nuts, 
 bolts, etc. 
 
 Piece Key Card 
 
 This card is written up for each piece, and, as will be 
 noted in Form 20, shows the piece name and number, draw- 
 
 PREPARATION FOR HANDLING PRODUCTION 
 
 123 
 
 ing number, pattern number, the size of the lot to be put 
 through, dimensions of the stock from which it is to be cut, 
 kind of material used, and amount of material required for 
 one piece or one hundred, the average weight, rough or 
 finished, the average weight of scrap produced, and the 
 pieces for which waste cuts can be used. It also gives the 
 name and letter of the operation or operations, the machine 
 and department in which the work is to be done, and a list 
 of the parts and units using this piece. 
 
 If a piece is to be used only for an assembly into parts, 
 the number of pieces required for each part and the part 
 number will be shown in the column "Used on Sub-Assem- 
 bly"; and the total number used on each unit is extended 
 in the column, "Used on Units." For example, four of 
 piece 1000 may be required on part 3500, and then in turn, 
 four of part 3500 are required on unit 5000. Therefore, 
 the card will read: "4 used on part 3500"; "16 used on 
 unit 5000." If, however, these pieces are used exclusively 
 in the final assembly of a unit, without previously having 
 been assembled into a part, they will be entered in the 
 column, "Used on Final Assembly," thus meaning that they 
 are attached to certain pieces on the final assembly. That is, 
 piece 1550 may be used only for the final assembly ; one will 
 be attached to piece 1600, two to piece 1601, and three to 
 1602, all entered in this column; and then, in the column 
 "Total Used on Units" will be entered, "6 used on unit 
 5001." 
 
 It is possible that a piece may be attached to different 
 pieces on different units, in which case the pieces to which 
 it is attached will be bracketed, showing the unit to which 
 they apply. It may also occur that a certain piece may be 
 used on an assembly into a part and required also for use 
 on the final assembly of these parts into a unit. This should 
 then be entered on the card as follows : 
 
 5* 
 
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 124 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 "4 used on part 3000 (four parts used on the unit) ; 
 2 assembled to piece 50; 3 assembled to piece 65" 
 (making a total of 21, used on unit 5002). 
 
 The complete file of piece key cards must also contain 
 for each particular complete unit manufactured a separate 
 card for each piece bought, and these cards should be 
 stamped "Bought" with a rubber stamp, so that the stores- 
 keeper can immediately know that such a piece is bought 
 in the open market and not made in the factory. In case 
 certain pieces which are usually manufactured are occasion- 
 ally bought, the cards for these will not be marked in this 
 way, but they will be shown in the Stores account as "Pieces 
 Ready for Assembling" and not as "Raw Material" with 
 the letter "A" following. 
 
 These cards are, as the name implies, used to furnish a 
 key to the materials and operations required to produce 
 some piece or part of any given unit, together with informa- 
 tion as to the different units on which the piece or part 
 may be used, and the different parts on which the pieces are 
 required. 
 
 Part Key Card 
 
 This card (Form 21) furnishes a complete list of the 
 pieces which may be drawn from stores and assembled into 
 parts which in their turn may be used for the final assembly 
 of a unit. It gives the part name and number, as well as 
 drawing number, and size of lot best handled through all 
 operations, and it shows the various unit numbers on which 
 this part will be used, and the number of parts required on 
 each of these units. It also contains the number and name 
 of each of the operations of assembling. The operation 
 should be designated by a letter instead of a figure, as opera- 
 tions carry letters, and rotations on the operation, numbers ; 
 
 PREPARATION FOR HANDLING PRODUCTION 
 
 125 
 
 I 
 
 and as the operation letter serves also as a key on the work- 
 man's production ticket, the use of a figure would be 
 confusing. The card should show the department in which 
 each operation is done, and the piece numbers and the num- 
 ber of pieces required. 
 
 After the pieces going into the part have been ascer- 
 tained, they should be entered on the part key card on the 
 blank line following the name of the operation, as opera- 
 tion "A," that is, the first line should show the operation 
 number and name, and on the right half of the card should 
 be entered, on the same and following lines if necessary, the 
 pieces required in the work of this operation. Operation 
 "B" should then be entered on the left side of the card, on 
 the line following the entry of the last piece required for 
 operation "A." Then will come, on the right-hand side of 
 the card, any additional pieces required by the workman to 
 complete operation "B," "C," "D," etc., thus giving a his- 
 tory of all operations (which are taken from operation study 
 card, described in Chapter VIII). 
 
 Unit Key Card 
 
 The unit key card (Form 22) has been provided to give 
 a complete list of the pieces and parts required for the 
 assembly of each unit. The unit number and name are 
 given, as well as the drawing number of the unit, the num- 
 ber of cards comprising the list for this unit, and the number 
 of each card of the group. The operation number and 
 name, and the pieces and parts required, as well as the de- 
 partment in which each operation is performed, are entered 
 on the card, the same as on the part key cards, thus showing 
 a complete list of all parts and all separate pieces which 
 are required for the final assembly of the unit. The parts 
 should be grouped on the card and should be specified as 
 parts, and the pieces as pieces. 
 
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 126 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Preparation and Care of Cards 
 
 The piece, part, and unit key cards should be made out 
 by the chief draftsman, and one of his assistants should be 
 delegated to keep all sets of key cards up to date, making, 
 under the chief draftsman's instructions, any changes that 
 may become necessary. One set of these cards should be 
 held in the drafting room by the chief draftsman, filed in 
 rotation by the piece, part, or unit number. Two additional 
 sets should be made; one for the stores clerk and one for 
 the purchasing agent. Each of these sets should be written 
 in different colored ink, so that one set may be readily dis- 
 tinguished from another, and any transposition from one file 
 to another detected. The chief draftsman should approve 
 both the master set and the other sets as made out. None 
 of the entries on these cards should ever Le changed, or 
 substitutions made, except by the chief draftsman or his 
 clerk. 
 
 These additional sets of cards should be filed in rotation, 
 according to number, the same as the chief draftsman's set, 
 but in case at any future time a numbering system of pieces 
 and parts is introduced which will key these pieces into 
 parts and units by the numbers given them, then these addi- 
 tional sets of cards and an additional set for the chief drafts- 
 man also, should be filed with the part and unit cards as 
 guides to the piece cards. That is, a unit card will be placed 
 in the file, and behind that, the first part card which will be 
 required ; behind this part card will be all the pieces going 
 to make up this part; behind these will be the next part 
 card with all the pieces going to make up this part, and so 
 on. Behind the last of the part cards will be filed the in- 
 dividual pieces used on assembly for this unit. In this 
 same manner all the other unit key cards, together with their 
 various part and piece key cards, will be put into the 
 file. 
 
 PREPARATION FOR HANDLING PRODUCTION 127 
 
 Uses to Which Key Cards Are Applied 
 
 From key cards the following data are obtained in the 
 handling of production : 
 
 1. A list of pieces and parts to be manufactured, for 
 
 the information of the production department in 
 making its study of machine capacity, operations, 
 and time. 
 
 2. Information for the purchasing department in mak- 
 
 ing up a purchase schedule for the year, showing 
 quantities and date of delivery at intervals during 
 the year to anticipate the requirements of the 
 manufacturing schedule. 
 
 3. Information for the purchasing agent as to what 
 
 pattern is required to be sent to the foundry for 
 casting any specified piece or part. 
 
 4. Information to enable the stores keeper to make up 
 
 his purchase requisitions for material, as regards 
 kind, quantity, and quality, and to order in such 
 lengths and widths as will most economically cut 
 to the size required. 
 
 5. Information for the schedule department as to the 
 
 number and name of operations required to pro- 
 cess each specified piece, or to assemble each part 
 and unit ; the department in which the w^ork is to 
 be done; and the character of the machine on 
 which the work is to be performed, so that it can 
 fill in the tracing tag which goes to the plant with 
 the production order for the first operation. 
 
 6. Information for the schedule department as to the 
 
 amount and kind of material required, so that the 
 requisition for material can be made out and sent 
 to the department with the tracing tag and pro- 
 duction order for the first operation. 
 
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 128 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 Drawing and Tracing Card 
 
 Before a bill of material can be made up and a system 
 for handling work through the factory established, it is 
 necessary to have a proper method of classifying the hand- 
 ling of drawings, blue-prints, and also patterns ; otherwise 
 the piece and part key cards cannot contain the full informa- 
 tion called for. This need is met by a ''Drawing and Trac- 
 ing Card" (Form 23), which is used in the drafting room, 
 not only as an index to all drawings, but also as a record 
 of all costs of making the drawings, whether in pencil or 
 ink, as a sketch, or for final tracing. The cost of making 
 drawings should be obtained in the same way as the cost 
 of anything else, that is, by the use of the workman's time 
 ticket and requisition for material. 
 
 The chief draftsman should have a set of distribution 
 ledger sheets, as described in Chapter XII, and should give 
 an order number to each drawing or set of drawings made. 
 He should enter this number on the distribution ledger and 
 charge against it all of the labor and material used to com- 
 plete the drawing, the total of which should be placed on 
 the drawing and tracing card. In addition to this, the card 
 will show the disposition of the drawing after it is com- 
 pleted, that is, under what file or number in the cabinet it 
 is kept, or what use may be made of it otherwise. On the 
 back of the card will be entered from year to year, the value 
 of the drawing, this constituting a perpetual inventory of 
 the same. As soon as any drawing becomes obsolete or is 
 cancelled, the card must have "Cancelled" written across 
 its face, together with the date of cancellation, but the card 
 must not, under any circumstances, be removed from the 
 file. 
 
 The drawing and tracing card can also be used for 
 recording negatives from which photographs are made, in 
 exactly the same way as it is used for recording drawings, 
 
 PREPARATION FOR HANDLING PRODUCTION 
 
 129 
 
 but these records of negatives should be kept in a file by 
 themselves. 
 
 In making up a file for the drawing and tracing cards, 
 it is only necessary to file them serially ; that is, to give each 
 card a number, and file it according to that number. If 
 the number is known, it is easy to locate the drawing by this 
 number. In case it is different from the piece or part 
 number, the drawing number can easily be found on the 
 piece or part key card, so that there is no necessity for 
 filing the drawing and tracing cards both numerically and 
 alphabetically as is often done. 
 
 It can be readily seen that the drawing and tracing 
 cards can be easily located under such a file, whether they 
 pertain to drawings of an individual piece or part, or to 
 drawings of an assembly of parts, as each unit card also 
 contains the drawing number calling for the assembly 
 thereof. 
 
 Pattern Record Card 
 
 The pattern record card (Form 24) is used for making 
 a complete record of individual patterns, showing the cost 
 of making them, and the account to which they were charged 
 after being made. 
 
 As a general thing, patterns are an asset to a company, 
 except where they are made for some particular customer 
 and charged to him, or where they become a part of the 
 work in a contract covered by some sales order number. 
 Also, in ordering castings, making changes in designs, etc., 
 it is necessary to have a record of the patterns used and 
 available. Therefore, it is very necessary that correct 
 records of patterns be made. 
 
 If a new pattern, or a pattern covering a change in de- 
 sign, is made in the factory, it will be made over a better- 
 ment order number, the same as any other betterment item ; 
 
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 11 
 
 130 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 while, of course, if it is made by an outside pattern maker, 
 it goes into general stores and is issued and charged out as 
 a plant betterment. 
 
 Great care must be taken in making pattern charges, as 
 sometimes the pattern must be charged to some production 
 order which is a combination of several production orders ; 
 or again, to a repair order to cover some repair or replace- 
 ment, instead of a betterment order for a new pattern. If, 
 however, it is a pattern which is to be used regularly, the 
 record must always show the capital account number to 
 which it is charged, this information being furnished by the 
 accounting department. Further, the pattern record card 
 must always show the loft number, aisle number in loft, and 
 shelf number in aisle on which the pattern is regularly kept 
 in storage, so that, when taken out and sent to the foundry, 
 it will always be put in its proper place on its return. 
 
 In commencing a pattern record it is, of course, impos- 
 sible to obtain all the "Pattern Data and Costs" in items as 
 called for on the cards, the total cost only being given as 
 taken from the inventory ; but, in every instance, the draw- 
 ing number, flask number, flask size, and follow board 
 should be given, so that information concerning all these 
 items will always be immediately available. 
 
 Great care should be used in writing up the pattern 
 record at the start, if not taken from inventory, to see that 
 all patterns owned by a company in its own plant or in 
 other foundries are included on these cards. 
 
 In filing the pattern record cards, there must be, of 
 course, a set filed numerically, according to the number of 
 
 the pattern. 
 
 Separate cards should be made out for the patterns of 
 special tools and jigs, and these are also filed by the key 
 number, which identifies the pattern with the piece or part 
 for which it is to be used; the patterns being numbered 
 
 PREPARATION FOR HANDLING PRODUCTION 131 
 
 1, 2, 3, etc., when used on the same jig. As the jigs are 
 numbered according to the part number requiring same, 
 with a letter added—" A," "B," "C," etc.— the second 
 pattern number for the second tool for part No. 1500 will 
 be No. 1500-B2. 
 
 Pattern Location Card 
 
 In order to keep a record of the location of patterns 
 when they have been taken out of the regular place of stor- 
 age, it is necessary to provide "Pattern Location Cards" 
 (Form 25), on which will be placed the number of the pat- 
 tern, date on which it was sent out, and the concern to which 
 it was sent. This card must be placed immediately back of 
 the regular pattern record card. It can be used for a long 
 period of time, inasmuch as it is a running record. For 
 instance, the pattern may be sent on a certain date to a cer- 
 tain factory, and the date and name of factory are entered 
 on the card. When the pattern comes back, the date is put 
 on the card, and "Pattern Loft" is marked under "Loca- 
 tion," which means that the pattern is in its regular place 
 of storage. When it is sent out again, the information neces- 
 sary to locate it is placed on the same card, and so on until 
 the last line of the card is used up, so that at a glance it may 
 always be known where the particular pattern is located. 
 
CHAPTER VIII 
 
 ANALYZING AND GROUPING MACHINE 
 TOOL EQUIPMENT 
 
 A description of the methods employed in 
 
 measuring up plant capacity and in obtaining 
 
 a balance on equipment and men. 
 
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 CHAPTER VIII 
 
 ANALYZING AND GROUPING MACHINE 
 TOOL EQUIPMENT 
 
 Machine Study Card 
 
 In making a study and analysis of the machinery and 
 tools available for manufacturing a complete product, the 
 first step is to make up a list of all the machines in the plant, 
 group or chart them by size, capacities, and possibilities, 
 and, after this is done, make an analysis of the pieces and 
 parts and operations possible on these groups of machines. 
 For this purpose the "Machine Study Card" (Form 26), 
 has been provided. 
 
 On this card is to be entered an analysis of all the 
 machines available for manufacturing purposes. In the 
 first place, it will be necessary to number and classify all the 
 machines in the factory. They should be numbered from 1 
 up, thus avoiding duplication of numbers, but they should 
 also have as a prefix to this number, the initial or initials 
 of the particular kind of machine, for instance, "D. P." for 
 drill press, "P. P." for punch press, "S. M." for screw 
 machine, etc. 
 
 The machines having been numbered and lettered in this 
 manner, should be grouped as to kinds, capacities, sizes, 
 equipments, etc. ; machines of the same classification which 
 are capable of the same kind of work being put in a group, 
 so that drill presses of one size and kind will be in one group, 
 and those of other sizes or kinds will be in other groups by 
 themselves. Each group of machines should be lettered in 
 
 135 
 
■ffi 
 
 136 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 addition to the initials of the machine which forms the basis 
 of class.ficat,on ; thus, drill presses would be designated as 
 .. f,r/' . °- P- - b." "D- P. - c." etc. When giving 
 
 of the machme should also be given; but for handling pro- 
 duction, the ,n.tial and group letter will be aU that is 
 necessary. 
 
 After this grouping has been done, all the machines of 
 each group should be put on one machine study card, and 
 a separate card made out for each individual machine not 
 ma group. The machine study card will show the type 
 and numbers of the machines in the group, the make. Z 
 size, and serial numbers, as well as the horse power re- 
 quired; also the location in the plant, by buildinj. section 
 and department. The date and card number wS also be 
 shown and later the original cost can be inserted if desired, 
 so that in any consideration of the work which is done 
 on any machine, reference can be made to its earning 
 capacity as compared with the investment it represents 
 Machine study cards should be numbered in rotation 
 
 detrctL"'' '> ' *'' ''''"" °f ^"y ^^^^ ^^y be readily 
 detected, as it is imperative that the set be complete when 
 
 cTrd winV" '"''''? °' P'""' '^P=^"'y- ^' the top of the 
 card will be given the number of the chart on which the 
 machines are shown. 
 
 on II '^'"" u- '' ^^''''^ *° ^^^^ ^^^ information appearing 
 
 that thri^T ^'"'^ '"''' ^^'"'^^^^ '" ~""- form so 
 that the plant capacity can be read at a glance instead 
 
 of requiring the study of numerous statistical cards he 
 
 machines m each department may be illustrated by a graphic 
 
 chart showing their capacities, tools for same. etc. Thi 
 
 however, is something which can be done later just as we i 
 
 ^in ? ""^ "°' "^ '°"^ '' ^'^ '^^ ""less it i 
 needed at once. 
 
 GROUPING MACHINE TOOL EQUIPMENT 137 
 
 As additional machinery is installed in the plant from 
 time to time, machine study cards should be made out for 
 it, or, if these machines are additions to a group, the data 
 should be inserted on the cards already made out. 
 
 Tool and Fixture Key Cards 
 
 A set of tool key cards are as necessary for the control 
 of production as are key cards covering the products made: 
 first, because it is necessary to know what yield a tool or a 
 set of tools will give per grind and per life of the tool, so 
 that replacements can be taken care of; second, so that the 
 proper tools can be requisitioned from the tool cribs for 
 each set-up and for every tool required for various opera- 
 tions ; third and most important of all, so that a proper cut- 
 ting edge or point may be maintained on all tools by having 
 specifications for the amount of work each tool shall be 
 allowed to do per grind. 
 
 The condition of the cutting edge or point of tools has 
 more to do with both quantity and quality of work than is 
 usually realized, and both set-up men and machine adjusters 
 should be most carefully instructed and disciplined in the 
 maintenance of such tools in proper condition. If this is 
 not done, quantity and especially quality of work will be 
 greatly lowered, as what is wanted is to have the material 
 cleanly cut, not "pushed'' out of place. For this reason it 
 is a matter of great importance that all tools shall be 
 properly cared for. 
 
 Unless grinding specifications, together with the specifi- 
 cations for depth, width, and length of cut, are carefully 
 carried out, bad work and a failure to meet the schedule of 
 manufacture will occur on account of the fewer pieces made 
 and the greater rejection of those that are made, to say 
 nothing of the destructive effect on the tools and fixtures 
 themselves. 
 
 ?i r 
 
 1; 
 
It 
 
 138 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Tool Key Card 
 
 This card (Form 27) is designed to make a record of 
 what a tool will do, and the condition under which it must 
 be used, and it is highly important that all of its data be 
 faithfully filled in. The tool is given a symbol, and, if made 
 for any particular set-up, this must also be indicated. In 
 addition to this, the number of the component for which the 
 tool was designed is to be given, followed by a description 
 of the operation, not an operation symbol. 
 
 In many instances the average number of pieces that a 
 tool will make from one grind, or as a total, will have to 
 be estimated. Careful observation of the tool in actual use, 
 however, will provide any corrections that may be necessary 
 on the original estimate. Such corrections based on definite 
 information should be made in order to standardize the 
 exact work that the tool will do, and in making these 
 corrections the speed, feed, and cut should also be given due 
 consideration. 
 
 Tool Set-Up Key Card 
 
 In most factories, there are a certain number of opera- 
 tions on automatic screw machines, hand screw machines, 
 turret lathes, etc., that require a complement of several 
 tools, and several different complements for different opera- 
 tions. In order to register all this, the 'Tool Set-Up Key 
 Card" (Form 28) is provided. 
 
 The data filled in on this card will be obtained from the 
 tool key card (Form 27), and from the fixture and die 
 key card (Form 29), so that when it is necessary to set 
 up a job the tool set-up key card can be depended upon to 
 requisition from the tool crib or tool storage everything 
 that is required for processing the given operation. 
 
 Undoubtedly, the number of pieces per grind on differ- 
 ent tools in a set-up will vary; therefore, the time periods 
 
 GROUPING MACHINE TOOL EQUIPMENT 139 
 
 that will be allowed for changing tools must be based upon 
 the tool that has to be ground most frequently. 
 
 On the tool set-up key card, under the caption "Opera- 
 tion" must be given a description of what the operation is ; 
 not its s)mibol. 
 
 Fixture and Die Key Card 
 
 This card (Form 29) is used in connection with the two 
 foregoing cards, to record the necessary fixtures and dies 
 that may be required for an operation, either in conjunction 
 with the tool set-up, or on an independent piece for some 
 particular operation. 
 
 From the foregoing descriptions, the relation of the three 
 tool and fixture cards can be easily understood, as well as 
 their use. It is to be borne in mind that these cards are 
 not purposed to be used in connection with the manufacture 
 of tools, or for inventory purposes, but solely in connection 
 with the use of the tools. 
 
 Operation Studies 
 
 In organizing the work of a production department, the 
 operations required in producing the various pieces, parts, 
 and units must be filled in direct on the piece, part 
 and unit key cards (Forms 20-22) by the drafting or 
 engineering department. When this is done, the production 
 department should make a careful study of operation per- 
 formances in the factory. As a result of these studies, it is 
 frequently found that many operations, or the machines 
 and tools employed on them, can be rearranged or combined 
 in such a way that the work can be done more economically 
 
 and rapidly. 
 
 In analyzing an operation, there are two separate and 
 distinct considerations, the one relating to the method of 
 procedure, the other to the time required to do the work. 
 
140 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GROUPING MACHINE TOOL EQUIPMENT 141 
 
 >.;. 
 
 
 ■ 
 
 ii 
 
 I 
 
 ,t 
 
 : i|i|' 
 
 m 
 
 This necessitates a mechanical or operation study for estab- 
 lishing standards, and a time study for establishing costs. 
 Taking up the time study, there are two ways in which 
 such a study may be conducted: one which treats the 
 operation as a whole as illustrated on the "Operation Study 
 Card" (Form 30), including the total net time required 
 without considering the time needed for the rotations or 
 motions made on the operation, and another method which 
 takes up, in connection with the foregoing, the rotations 
 of the operation and also the motions made by the operator, 
 as shown on the "Motion Study Card** (Form 31). The 
 practicability of either method depends altogether upon the 
 nature of the work and the conditions under which it is 
 done. Short runs and a constant change of work make the 
 latter method impracticable, whereas long runs on individual 
 pieces and operations make it not only desirable but 
 necessary. 
 
 Operation Study Card 
 
 In order to determine the operating eflficiency of a plant, 
 it is necessary to make complete studies of all operations 
 required on pieces and parts, and for this purpose operation 
 study cards (Form 30) are provided. These cards, and 
 also the motion study cards discussed later in the present 
 chapter, are intended to be used on study boards made to 
 hold several cards, so that the man making observations 
 can carry them conveniently from machine to machine and 
 make his notations on them. After the operation study 
 has been taken on the card, the information obtained is 
 transferred to the operation key card (Form 33), which is 
 designed for constant use in the production department in 
 making out time tickets and routing the work through the 
 factory. 
 
 On the operation study card is given the piece number 
 
 and name, and when the card is finished and brought into 
 the production department, it should be given a study num- 
 ber, these numbers being given in rotation as the cards are 
 received. In case a study is taken to supersede a former 
 study, the study number that it supersedes is shown; and 
 when this card is superseded by another in its turn, the 
 number of the new card will be shown on the superseded 
 card so that any study card will show the number of any 
 preceding or subsequent study. 
 
 One of the objects in making the study of an operation is 
 to determine the size of the lot best handled in performing 
 that operation, so that when the study of all the operations 
 is completed, the size of the lot which can be put through 
 and handled to best advantage for any operation can be 
 known at once by reference to the study card. To illus- 
 trate, on a job started on an automatic machine, the pieces 
 on the first operation may be turned out at the rate of 1,000 
 a day, this being a convenient-sized lot for the automatic 
 machine ; however, when the next operation in the machine 
 department is reached, an average day's work on a hand 
 screw machine may be only 200. Again, it may happen 
 that for some of the following operations a still smaller lot 
 would be found advantageous. To avoid delay and to enable 
 the work to be pushed through with the proper rapidity, it 
 would perhaps be better to put through lots from the first 
 operation of, say, 100, instead of 1,000, as work upon such 
 a large quantity would hold up and delay subsequent 
 operations. 
 
 In order to handle production on schedule and with a 
 knowledge of just what is being made, and to facilitate 
 routing, costing, inspecting, etc., in the factory, these lots 
 should be maintained in their identity from the first opera- 
 tion imtil they are turned into stores as finished. There may 
 be some occasions when it will be necessary to split a lot. 
 

 H: 
 
 i : 
 
 I 
 
 142 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 but this should be done only in a very great emergency, and 
 when done, each split lot should be tagged as "Part of Lot 
 No , Production Order No " 
 
 Making the Operation Study 
 
 A special department may be devoted exclusively to 
 experimental time study and rate-setting, or this may be 
 one of the functions of the production department In 
 either case, when the headings of the operation study card 
 for the piece to be studied have been made out, the person 
 having the study in hand should begin in the department 
 of first operation and then observe each operation in the 
 manufacture of this piece in sequence, using one card for 
 each operation, and making such changes in the manner 
 in which the work is done as he finds necessary or econom- 
 ical. He enters upon the card the operation number and 
 the description of the operation. This description will be a 
 general term, as "Mill," "Drill," "Turn," but in addition 
 the rotations or steps of each operation must be given Thus 
 operation "A" might be "Turn," but this turning, to be 
 earned out to the best advantage, should be done on the 
 lathe in a certain order or rotation, rotation 1 being "Rough 
 Turn Outside"; rotation 2, "Finish Outside"; rotation 3. 
 Bore ; rotation 4, "Ream"; rotation 5, "Face Top"; rota- 
 tion 6, "Finish Inside"; rotation 7, "Face Bottom"; etc 
 The rotation of each operation should be carefully studied 
 and, when once decided, the workmen should follow these 
 rotations implicitly in the order given; for if in the case 
 above bormg and reaming were done first and the turning 
 and finishing of the outside afterwards, it might throw 
 the piece out of alignment and make the operation un- 
 satisfactory. 
 
 ..ci'l'"^"^ instances rejections have been reduced 50 to 
 65% by a careful study of the rotations of operations. The 
 
 GROUPING MACHINE TOOL EQUIPMENT 143 
 
 importance of a proper rotation of operations cannot be 
 overestimated. 
 
 For each operation the machine number and depart- 
 ment number should be inserted on the operation study 
 card; also the feed, speed, and cut of the machine best 
 suited, as well as the fixtures and tools required, thus 
 furnishing by operations a complete history for each piece 
 as it goes through the factory together with its routing from 
 machine to machine and department to department, from 
 the first operation to the last. 
 
 When the operation study on a piece is completed, the 
 operation study card should be signed by the person taking 
 the study and be turned in to the production department. 
 Here the data contained on it is transferred to the operation 
 key card (Form 33), and from this card entered on the 
 piece key card (Form 20), thus completing the information 
 on this latter card which is used chiefly by the planning 
 clerk. The entry of this information does not, however, 
 complete the data for the operation key card which is used 
 by the planning clerk, as the time allowance, time study 
 number, and wage rate are yet to be entered. 
 
 In a great many cases it will doubtless be found that 
 different workmen have different methods of doing the 
 same work, and while there is a general standard for the 
 operation, yet there is a great deal of variance from this 
 for no good reason. It is, therefore, a first essential to 
 standardize these operations as they are gone over. The 
 man delegated to this work may find that changes in tools, 
 fixtures, or speed of machine, or feed, will be desirable in 
 increasing the output of the piece, and he should be given 
 full authority to make such changes as seem to him advisable, 
 after going over the matter with the workmen, foreman, 
 and other persons interested. 
 
 The result of this careful study of each piece made, fre- 
 
BE S 8K » Bi1tBi aa ig'5 !jS~ 
 
 144 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 quently develops material economies in operations, together 
 with much greater general efficiency and a correspondingly 
 increased output. 
 
 When operations have thus been standardized, a com- 
 plete history is obtained of all work done in the factory, of 
 all machines available for this work, and of all tools with 
 which it may be done. 
 
 Motion Study Card 
 
 In order to take the detail of time required for opera- 
 tions, a "Motion Study Card" (Form 31) is provided, and 
 one of these cards is used for each operation on any given 
 piece which requires scientific analysis. A motion study 
 card should be made out in full detail in the factory from 
 simply observing the operation, but should get its first data 
 in the production department from the operation study card 
 (Form 30), so that the basis of the study and the motion 
 data shown on it will be exactly the same as the instructions 
 to the workmen for processing the piece, for which the 
 operation study card is the authority. 
 
 The piece number and name, operation number and 
 name, and operation study number are taken from the opera- 
 tion study card, together with the machine number and de- 
 partment number in which the study is made, and all this 
 is inserted at the top of the motion study card, and the 
 operator's number and name will be filled in after going 
 to the department. The speed and feed, as well as the 
 fixtures required, must be given for each operation. Then 
 the study man will watch the operator set up the job, taking 
 the time of same with his stop-watch, time him at least four 
 times on each rotation, and also time him on taking down 
 the job. The number of pieces made will then be inserted 
 in the column following, and the average time for each 
 piece in the next column. 
 
 GROUPING MACHINE TOOL EQUIPMENT 14- 
 
 The motion study as now completed is available for 
 several purposes : first, for the ascertaining of labor require- 
 ments ; second, for the scheduling of labor needed ; and third, 
 as a basis for piece or premium work. 
 
 The motion study card shown in Form 31 has been filled 
 in with data taken from an actual time study. The details 
 of this study as presented are practically self-explanatory, 
 it being understood that all figures of time made are shown 
 in tenths of an hour. These time studies cover all the rota- 
 tions of one operation. 
 
 In order to illustrate further the method of procedure in 
 taking time, the motions to these operations, showing the 
 use of both the left and right hand, are given in Form 32. 
 This illustrates what time and motion studies mean if gone 
 into in detail. In actual practice this data should appear on 
 the motion study card which should be printed on both 
 sides; one side for operation rotation data, the other for 
 motion study. 
 
 When the motion study is complete, and the results are 
 entered on the motion study card, the card will be signed 
 by the person taking the study and turned in to the produc- 
 tion department. Here the time allowance will be set, with 
 the high rate and low rate of earnings possible under it, 
 any further remarks being entered in the last colum.n, if 
 necessary. 
 
 In setting the time allowance, consideration should be 
 given to the fact that a motion study is usually taken under 
 conditions of high tension; that the employee is supposed to 
 be working at more than ordinary speed ; and that in most 
 cases it would not be possible for a man to average this 
 speed all day. Therefore, a time allowance should be made 
 for a longer period than that actually observed. This, of 
 course, will have to depend somewhat upon the nature of 
 the work, the manner in which it is handled with regard to 
 
146 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 tools, etc. In case the operator should be required to set 
 up the tools on his machine, or to leave the machine to 
 get tools or materials, the time consumed in this should not 
 be included in the time allowance. 
 
 Before leaving the subject of motion study, a word of 
 caution should be inserted here. Detailed procedure such as 
 that described is not adapted to every kind of business, or 
 to every article made. Good judgment is required to know 
 to what extent the methods suggested should be adopted in 
 actual practice. The fine detail illustrated here should be 
 applied only on work which is done on a large scale of 
 duplication ; for instance, if a man and machine are put on 
 one piece of work for days and weeks at a time, this nicety 
 of detail would be of great value; but if it is work that 
 changes from day to day, or has short runs, this detail is 
 nearly always expensive rather than economical. 
 
 Another caution in connection with work of this char- 
 acter relates to the character of the labor employed. Unless 
 there is reasonable stability among the operators, there is 
 not much profit in educating them to the motion studies 
 illustrated. If, for instance, in a factory operating 2,000 
 men, 4,000 or 5,000 men are hired annually, the educational 
 work required to carry out the detail of time and operation 
 studies would cost far more than the savings made. 
 
 Operation Key Card 
 
 This card (Form 33) will show the history of each 
 operation as required by its captions, its data being as taken 
 from actual observation, or as changed to correspond with 
 the operation and motion study cards. The operation key 
 card is for the use of the planning clerk in planning work 
 for the factory and in making out tracing tags and work- 
 men's production orders. He should have on his desk a 
 complete file of these operation key cards in the order of 
 
 GROUPING MACHINE TOOL EQUIPMENT 147 
 
 their piece number, and of the various operations required 
 for each piece. It is evident, from the purpose for which 
 these cards are used, that any changes made in the opera- 
 tions must also be noted on this card, so that it will cor- 
 respond with the operation study card by which the changes 
 were authorized. 
 
 Owing to defective material or for some other reason, 
 it will, from time to time, be necessary to make an extra 
 operation on some pieces; and in such a case, during the 
 time this extra operation is required, a pencil notation of 
 the extra operation should be made on the operation key 
 card between the others, as operation "A-j^," "B-J^," etc. 
 
 In explanation of the operation key card, it will be noted 
 that the data as to the tools and fixtures required are taken 
 from the tool key card and fixture key card, and that data 
 as to the speed, feed, cuts, and lubricants are taken from the 
 operation study card. The operation key card is thus made 
 to contain complete information for making out time tickets 
 and instructions to workmen not only for doing the pro- 
 cessing work, but for the rotation work as well. Further, 
 this card has full instructions thereon as to time allowed 
 and the wage rate paid. 
 
 Rate Memo 
 
 After all time study work is done, a rate memo (Form 
 34) should be made out by the experimental or time study 
 department in accordance with its findings, for each and 
 every operation. On this slip or card appears definite in- 
 formation as regards the conditions under which the opera- 
 tion was tested out, and adjustments must be made on fac- 
 tory equipment to meet the requirements as to speeds, feeds, 
 cuts, etc., of the rate memo. 
 
 The rate memo, as it comes from operation and time 
 study work, only shows at what rate work may be done 
 
 II 
 
148 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 per hour or per period of eight hours. The price for doing 
 the work must come from the superintendent or from a 
 wage board, and be based on the fact that piece-workers or 
 premium workers should earn anywhere from 20% to 30% 
 more than they would have earned on a day-work basis. 
 If milling machine hands, for instance, are demanding $3 
 a day, they should be allowed to earn about $4 per day on 
 piece-work or premium work. Therefore, the number of 
 pieces that can be done in eight hours, divided into $4, is 
 the approximate rate which should be set. 
 
 This form is made out in quadruplicate ; one copy of 
 which is sent to the accounting department to check time 
 and also to make the required postings from the rate memo 
 to the rate cards. The second copy is sent to the department 
 doing the work, as a notification to the foreman of the rate. 
 The third copy is for the files of the superintendent con- 
 trolling the department in which the work is done. The 
 fourth copy (white cardboard) is kept in the reference files 
 of the experimental or time study department. 
 
 . 
 
 CHAPTER IX 
 
 SCHEDULES 
 
 Manufacturing schedules, covering labor, ma- 
 terial, and finances, and a consideration of the 
 relation of these schedules to each other. 
 
CHAPTER IX 
 
 SCHEDULES 
 
 Purpose and Scope of Schedules 
 
 In order to standardize production in any plant and 
 handle it so as to give constant and full information as to 
 manufacturing conditions and results, and at the same time 
 yield a maximum output for the investment made, it is 
 necessary to put all work through the factory on a schedule 
 basis, planning it ahead and purchasing all materials accord- 
 ingly. It is thus, and thus only, that assembling depart- 
 ments can be assured regular and sufficient quantities of 
 material to maintain a constant delivery of finished product. 
 
 Of course, scheduling the production for a factory pre- 
 supposes definite knowledge concerning the equipment of 
 the various departments, together with standard data as to 
 the various pieces, parts, and units to be made, as set forth 
 in Chapters VII, VIII. It must, however, be understood 
 that scheduling means much more than the mere systematic 
 adjustment of all this to the items required for such manu- 
 facture. It means the scheduling of material to be purchased, 
 together with the delivery dates of same; a scheduling 
 of the labor required, and, finally, a scheduling of the 
 moneys required to finance these purchases of labor and 
 material. In other words, the superintendent or works 
 manager of the plant will make up, from the data supplied, 
 a schedule of labor requirements showing the number of 
 men needed based on the number of man-hours required 
 to do the work, without regard to cost. The purchasing 
 
 151 
 
152 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 SCHEDULES 
 
 153 
 
 
 agent will make up a schedule of material requirements by 
 kind, quantity, and deliveries, irrespective of money values; 
 while the treasurer will make up a schedule of financial 
 requirements for labor, material, and general expenses. 
 
 Manufacturing Order — Master Schedule 
 
 The first consideration in arranging the systematic 
 operation of a plant is the output of each model and unit 
 required for each manufacturing year, together with the 
 weekly or monthly requirements as to deliveries. Such a 
 specification constitutes a manufacturing order and this 
 order must necessarily be O K'd by the proper executive, 
 usually the general manager, before it becomes effective, 
 after which it is to be passed to the production engineer and 
 superintendents for scheduling and manufacturing the 
 pieces, parts, and assemblies required. 
 
 This primary manufacturing order will in reality be a 
 schedule of sales requirements; that is, it will indicate the 
 deliveries of the factory as required by the sales department, 
 divided into weeks, months, etc., for some definite time 
 period (usually a year). This information can be tabulated 
 on a schedule sheet similar to that illustrated by Form 35, 
 which therefore becomes a "Master Schedule." 
 
 These master schedule manufacturing orders should be 
 numbered in rotation, and one made for each different model 
 and unit required. When the production engineer receives 
 such a manufacturing order, he should issue production 
 schedules to show exactly what the factory must produce 
 each week and month of the year in order that this output 
 
 may be maintained. 
 
 In case of changes in the manufacturing or sales policy 
 of the company during the year, other manufacturing orders 
 must necessarily be issued to cover these changes. It should 
 be borne in mind, however, that not only deliveries but 
 
 / \ 
 
 also purchases must be made in accordance with the original 
 schedule, so that any change made in the manufacturing 
 schedule will affect the kind and quantity of material 
 purchased. 
 
 Production Schedule 
 
 The master schedule calls for the total output of each 
 model or unit; the production schedule (Form 36) provides 
 for the parts and pieces of the models or units called for 
 by the master schedule. As soon as a master schedule for 
 a completed unit or model has been issued, a separate pro- 
 duction schedule should be made out for each part and piece 
 required by the master schedule. The manufacturing order 
 number appearing at the top should be that of the master 
 schedule, and the total requirements for each and every 
 piece and part should be shown on the production schedules. 
 
 On the production schedule, the spaces marked "On 
 Hand" and "Balance to Schedule" should be filled out only 
 when a very excessive amount of parts and pieces is on 
 hand, as this information is really meant for use at an 
 inventory adjustment period. Under ordinary conditions, 
 the stock on hand should be relied upon for repairs, etc., 
 and does not enter into the making up of a schedule. 
 
 The rate per day or week at which each piece must be 
 manufactured should be shown on the production schedule, 
 together with the date that the schedule begins and ends, 
 and the number of days it has to run. 
 
 In making up the schedule sheet for each piece, "Total 
 Requirements" will be ascertained by reference to the piece, 
 part, and unit key cards (Forms 20-22). The piece key 
 cards should be gone over consecutively, as they will show 
 all the units and parts for which the piece is required, and 
 the total number of pieces needed for the units specified 
 in the master schedule can be readily determined and shown 
 
154 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 on the production schedule. For instance, if in September, 
 50 of model ''Roadster" are required, 40 of model "Road 
 Racer," 60 of model "Juvenile," and 30 of model "Jobbing" 
 (making a total of 180 models), on all of which three of a 
 certain piece are required, the schedule of this piece for 
 that month would be three times 180, or 540. This opera- 
 tion is repeated for each of the succeeding months, to cover 
 the requirements of all the units or models using this piece. 
 
 This again illustrates very clearly the desirability of the 
 "Parts Common to All" plan of manufacturing, in which 
 everything is done on a pieces and parts basis, all the 
 scheduling, planning, and costing work being shaped to this 
 end, rather than by the "Complete Unit" plan, and it need 
 hardly be said that a system of manufacturing upon a basis 
 of merely keeping machine equipment busy regardless of 
 delivery requirements is wholly undesirable. 
 
 To this end, the schedule of each piece should indicate 
 the total number required for all units and models before 
 the manufacturing orders and production schedules can 
 be converted into production orders (Form 40). When 
 this plan is followed, each piece will be manufactured as a 
 standard piece to be used on different units, and conse- 
 quently each piece can be used without regard to which 
 particular unit has the greatest sale, provided the number 
 of units in the aggregate is up to expectations. Therefore, 
 it is perfectly safe to manufacture such a piece in a dull 
 season and so give the factory a constant load factor; at 
 the same time there is an opportunity to manufacture 
 in quantities sufficiently large to obtain a low cost of 
 production. 
 
 One of the important considerations from a cost point 
 of view is the number of pieces and parts called for at one 
 time or in a given production order. With sales rapidly 
 increasing or decreasing, it may be a difficult matter to 
 
 SCHEDULES 
 
 155 
 
 handle the manufacture of certain pieces or parts in the 
 quantities called for and at the same time obtain the lowest 
 cost of production. In such cases it may be that such 
 quantities can be bought cheaper outside in a finished 
 
 condition. 
 
 For instance, in the manufacture of a certain piece the 
 total requirements for a season might be 2,000. Manu- 
 factured in this quantity the cost of production may be 
 greater than this piece could be bought for outside. On 
 the other hand, if 6,000 of these pieces were manufactured 
 at a time, the cost of production might be considerably less 
 than they could be purchased for outside. But 6,000 would 
 be a three years' supply and the interest on such an invest- 
 ment would probably be greater than the saving effected. 
 There is also the danger of obsolescence. The necessity is 
 therefore apparent of closely watching all of these factors, 
 particularly when pieces or parts are run in small batches 
 from time to time, or in a small quantity made up for a 
 whole season's requirements. 
 
 While, of course, the manufacturing order shows the 
 actual sales delivery requirements from month to month, 
 it is not often that the pieces or parts required are manu- 
 factured at exactly this monthly rate, as this would mean 
 anything but a constant load in the factory. On the con- 
 trary, a production schedule controlled by manufacturing 
 orders should be laid out for such quantities as can be 
 made most economically, and in some cases a year's supply 
 might be made up at one time, but in so doing machine 
 equipment is released during a subsequent period for the 
 manufacture of other pieces, which, if this practice was not 
 resorted to, might be far behind schedule, thereby holding 
 up the complete assembly of units and models. 
 
 The production schedule having been completely planned, 
 is then ready for processing operations in the factory, but 
 
156 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 before taking this up, the scheduling of labor, material, and 
 financial requirements must be considered. 
 
 Purchase Order Schedule 
 
 The scheduling of material requirements is just as im- 
 portant as is the schedule of manufacturing requirements, 
 for upon obtaining the right quantities of material at the 
 right time all factory operations depend. 
 
 The purchasing agent having been furnished with a 
 duplicate of the production schedules by months, will obtain 
 from his set of the piece, part, and unit key cards (Forms 
 20-22) the exact kinds and quantities of material required. 
 He will then make out a schedule sheet (Form 37) for each 
 kind of material, either by months or any other time periods 
 in accordance with the general purchasing policy. This 
 sheet also shows the requirements as to delivery dates and 
 
 payments. 
 
 When making out these schedules, the purchasing agent 
 should go over his piece and part key cards in much the 
 same manner as the production engineer does, and make a 
 list from these key cards of the quantity of material re- 
 quired each month for the number of pieces and parts shown 
 in the manufacturing schedule. When all pieces and parts 
 requiring any particular kind and size of material have 
 been gone over, the total quantity is entered on the pur- 
 chase order schedule (Form 37) as the total requirements 
 for that kind of material. This is then divided into time 
 periods, under the column headed "Schedule." The require- 
 ments for succeeding months or periods are figured out in 
 
 the same way. 
 
 As soon as purchase order schedules are made out, the 
 purchasing agent should issue his purchase orders for de- 
 liveries of material according to his schedules. (See Form 
 4.) The order number, date, and quantity ordered must 
 
 SCHEDULES 
 
 157 
 
 be entered in the "Purchase Orders Issued" column of the 
 purchase order schedule. 
 
 The purchase orders should require delivery of material 
 at the factory at least six weeks before the date required 
 by the production schedules. This is necessary because the 
 production schedule is for completed pieces and parts. The 
 manufacture of pieces and parts, in most cases, should begin 
 thirty days earlier, and beyond this some allowance must 
 be made for delays in delivery. An addition of at least 
 10% should be made to the material requirements of the 
 production schedules as an allowance for spoilage and 
 repair parts. 
 
 As soon as the purchasing agent receives a "Material 
 Receipt and Notice" (Form 6) from the receiving clerk, 
 he will turn to the purchase order schedule showing this 
 material and enter the quantity thus received under the 
 column "Received," carrying his cumulative totals forward 
 from time to time and showing the number of days ahead or 
 behind schedule. This enables the purchasing agent to keep 
 a full check on all materials coming in and on material which 
 is overdue, thus helping to bring about prompt delivery of 
 all materials and preventing delay in the work of the 
 factory. 
 
 When the purchasing agent issues purchase orders direct 
 from the purchase order schedule without a purchase 
 requisition, the stores clerk will enter the quantity ordered 
 on his stores record (Form 9), taking this from his copy of 
 the purchase order at the time the order is posted, just as 
 if a purchase requisition had been issued. His record will 
 thus show (when stores "Reserves" against production 
 orders issued are entered) the amount of material that can 
 be depended upon as available for further production orders 
 for any given period. 
 
158 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Scheduling Labor 
 
 The question of scheduling labor requirements may be 
 considered at this point. The superintendent, or works 
 manager, having been furnished with a copy of the manu- 
 facturing schedule of each piece and part, will be able to 
 estimate his labor requirements, by figuring out the man- 
 hours required to do the work. 
 
 From the analysis of plant capacity (Chapter VII) it 
 will be possible to lay out a general policy for employing 
 help and make provisions for securing it whenever it is 
 required. 
 
 If, according to the analysis of plant capacity, it is 
 found that the manufacturing schedule calls for more output 
 than the machine or possible m^an capacity warrants, the 
 superintendent should at once take the matter up with the 
 purchasing agent so that he may arrange to purchase out- 
 side such parts as cannot be made advantageously in the 
 factory under existing conditions. 
 
 Most manufacturing concerns have been in business 
 for a considerable period of time and have in their pos- 
 session data concerning costs and the time required for 
 the operations on each piece and part. With a definite 
 schedule of daily, weekly, and monthly requirements, it is 
 by no means a difficult task to figure out from the produc- 
 tive labor costs just what labor is required to process any 
 given schedule; and as operations are always confined 
 definitely to departments, the cost per department is also 
 easily obtained. For instance, if 50 men are employed in a 
 certain department to meet schedule requirements and the 
 pay-roll shows that the average wage is 35 cents per hour, 
 the hourly, daily, weekly, and monthly costs of productive 
 labor for the entire department can be quickly figured, as 
 well as the man-hours required to do the work. From this 
 data the number of men required for a given amount of 
 
 SCHEDULES 
 
 159 
 
 J 
 
 
 work to be done in a definite period of time can easily be 
 determined. 
 
 The amount of all non-productive labor employed in 
 the factory is shown on the ''Overhead Distribution Sheet" 
 (Form 77). From this can be obtained the non-productive 
 labor costs of each department, and the number of men re- 
 quired for non-productive work, by departments, and also 
 for the factory in general. 
 
 To aid in checking labor performance, a schedule of 
 labor requirements may be made out, or these data may be 
 plotted on a cross-section chart and then checked against 
 the actual performance from week to week and month to 
 month. 
 
 Since processing requires the combination of machines 
 and labor, the amount of labor to be employed depends 
 upon the machine capacity available. 
 
 The time that it will take to get out any schedule de- 
 pends, of course, upon the number of men utilized. If it is 
 desired to manufacture units or models requiring $50,000 
 worth of productive labor, and if the average wage is $3 
 per day and 100 men are employed in processing, the num- 
 ber of days required to produce the schedule is found by 
 dividing 50,000 by 300, or 166 J^. In other words, when- 
 ever productive costs are known on any item of manufac- 
 ture, time periods for the schedule depend upon the number 
 of men that can be employed on the w^ork. Hence, it is 
 imperative to know exactly what the plant capacity is, as 
 discussed in Chapters VII and VIII. 
 
 Scheduling Financial Requirements 
 
 It is the function of the treasurer to provide for the 
 financial requirements of both labor and material. Having 
 been furnished with copies of the master schedules and also 
 having the production schedules for pieces and parts, he 
 
 
;ii 
 
 l6o UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 will be able to estimate the amount of money required to 
 pay both for labor and material for the entire year, as 
 shown in the following illustration: 
 
 Supposing that a schedule calls for 10,000 of a certain 
 piece ; that according to the time study cards and operation 
 key cards, the total number of man hours allowed for each of 
 these pieces is five, and that the average wage as shown by 
 the time study and operation cards is 24 cents an hour ; the 
 approximate labor cost of each piece would then be $1.20, 
 or $12,000 for the total quantity of 10,000 pieces. 
 
 By going over each piece and part as specified on the 
 production schedule, the total money required for the pro- 
 ductive labor for the year can be easily computed ; and non- 
 productive labor by departments, as shown on the overhead 
 distribution sheet (Form 77), can then be anticipated and 
 added to these productive labor requirements. 
 
 These data should be transferred to a graphic chart that 
 will show separately the weekly and monthly pay-roll re- 
 quirements (both productive and non-productive), and then 
 the actual pay-roll should be checked against it from pay 
 period to pay period. 
 
 As soon as costs of all pieces and all departments have 
 been ascertained, the amount of labor required for any 
 schedule can be immediately determined and an absolute 
 check kept on the factory in regard to the use of labor. 
 
 A further check on factory labor as between productive 
 and non-productive, and as between the various kinds of 
 work done, is described in Chapter XII, "Distributions." 
 So complete is this check, that no matter what the variation 
 is from predetermined labor requirements, it is possible 
 immediately to discover the department, the foreman, and 
 the individual operator responsible for the variation, and 
 the particular order or piece, the cost of which is affected 
 by this variation. 
 
 SCHEDULES 
 
 i6i 
 
 When the material deliveries have been scheduled by 
 the purchasing agent (Form 37), their quantity, plus the 
 price, will enable the treasurer to lay out his schedule for 
 financing the purchase of this material according to the time 
 periods shown. 
 
 Importance of Schedules 
 
 The importance of these schedules relative to labor, 
 material, and financial requirements cannot be overesti- 
 mated Together with the other data of income and ex- 
 penditure as shown in the monthly balance sheets, they will 
 give the treasurer definite information as to financial re- 
 quirements for long periods in advance and often enable 
 him to secure decided advantages in placing contracts. 
 Then with these materials delivered according to schedule, 
 the factory, as already stated, is in a position to manufacture 
 on the most economical basis as regards both labor and 
 material, and the production department can be utilized to 
 
 its greatest efficiency. 
 
 To sum up, the schedule method puts into a manager s 
 hands a means for predetermining achievements^the 
 results which can be derived by certain combinations of 
 labor, material, equipment, and output. Then, as means 
 have been provided for checking up these results from day 
 to day, adjustments can be made as they are needed, either 
 by changing the schedule rates for men to be employed, or 
 the quantity of material required, or by an increased effort 
 in the sales department, so as to maintain an even factory 
 output with a corresponding uniformity in cost and conse- 
 quent profit to the company. 
 
 Graphic Charts 
 
 Charts are frequently used in connection with schedules, 
 and two of these are shown in Forms 38 and 39. Both of 
 
l62 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 SCHEDULES 
 
 163 
 
 these charts are of an entirely new type, inasmuch as they 
 are a combination of calendar time and numerical quantities. 
 In a chart such as Form 38, to the left of the sheet, space 
 is provided for a vertical column of figures and, at the top, 
 space is provided for a horizontal row of figures, while the 
 main body of the chart is divided up vertically in calendar 
 time by months, weeks, and days, and horizontally by work- 
 ing time of six days to the week. Each small square repre- 
 sents a day either vertically or horizontally, and it also 
 represents a number corresponding to whatever figure is 
 written in the left-hand column imder units, in the same 
 sense that it corresponds to the number at the head of the 
 columns from 600 to 31,200 inclusive. 
 
 The component schedule illustrated in Form 38 is plotted 
 from a production schedule. The number required cumula- 
 tively from week to week is shown by the numbers at the top 
 of the sheet. The figures shown there represent the number 
 of components or pieces that are to be processed and com- 
 pleted within the tln:c periods indicated in the month, week, 
 and day columns. On the left-hand side of the chart are 
 shown the names and numbers of the operations that are 
 to be performed on the component or pieces in question. 
 
 The straight oblique lines indicate the schedule time 
 periods for the complete processing of each component. In 
 other words, between the first operation and the last opera- 
 tion there is a uniform lime lag (including Sundays) of 
 sixty days; that is, it takes sixty calendar days to produce 
 this particular component. The finishing operations shown 
 on the chart in January cover work begun at an earlier date 
 and the first operations on this component would be shown 
 on the preceding chart commencing November 1. 
 
 The heavy black lines are plotted against the oblique 
 lines, and show to what extent the component in its progress 
 is ahead or behind schedule requirements. Beneath these 
 
 plotted lines is a line called "Component Stores," which 
 means the same thing as ''pieces and parts stores" or "semi- 
 finished stores," whereby is shown the number of days the 
 component stores are ahead of manufacture. Beneath the 
 component stores line is a base line which simply means 
 that, if this line is reached, assembling will have to be 
 stopped as there will be nothing in component stores from 
 which to draw. This, as shown by this chart, was actually 
 the case in the week ending February 5. 
 
 The purpose of this chart is to check up from week to 
 week or month to month, as the case may demand, the 
 various operations on each component, and to find out to 
 what extent the factory is maintaining a uniform balance or 
 flow of product. To illustrate this, the week beginning July 
 1 showed that there was a drop-off on operation No. 9. It 
 is at a point like this that attention should be centered in 
 order to move the operation up to balance. It should be 
 noted that all operations done in the drop-forging shops are 
 prefixed by the figure 10, thus running from 101 to 105 
 inclusive, as at this point the component goes into temporary 
 storage, and is from here given to the machine shops under 
 a new production order and lot number. 
 
 The chart illustrated in Form 39 shows the actual 
 unit requirement per week as plotted from a master 
 schedule ; the numbers in the spaces at the top of the sheet 
 indicating the quantities. Line A is the weekly schedule. 
 Line B shows at a glance how many days manufacturing is 
 ahead of this schedule. To illustrate, in week ending Jan- 
 uary 15, the schedule was exactly two weeks, or 12 days, 
 ahead of manufacture, while for week ending May 6, the 
 schedule was 2 days behind. Line C shows, as per vertical 
 numerical column, the number of complete units assembled 
 each week, while Line D shows the total units that were 
 good. In other words, the difference between C and D is 
 
 I.: 
 
l64 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the amount that was thrown out for various reasons. Line 
 E shows the percentage of good units obtained, as per the 
 percentage column at the right-hand side of the sheet. 
 
 The data represented by Hues F and G are of interest 
 and importance. Line F, in accordance with the column 
 numbered on the left of the sheet, shows the number of men 
 employed daily, while G shows the number of units output 
 obtained per man. A comparison of these lines may bring 
 out many interesting points. For instance, in the week 
 ending February 26 the number of men employed was 
 2,900 (line F), and of the 6,000 units produced, as shown 
 by line C, only 3,600 units were good (D). On the other 
 hand, in the week ending November 25, 2,500 men were 
 employed with a total production of 6,500 units, out of 
 which 5,800 units were good. 
 
 Turning to line G, it is seen that the output per man 
 was lowest during the period April 8 to 22, and highest 
 during the week ending August 12 and also from November 
 18 to 25. This chart then shows at a glance the efficiency 
 of the labor force employed during a long period of time 
 and will no doubt prove of value to the factory superin- 
 tendent or manager of works. 
 
 Similar charts can be plotted so as to show the schedule 
 for labor, material, and financial requirements, and the 
 actual performance can be checked against these. 
 
 CHAPTER X 
 
 CONVERTING LABOR, MATERIAL, AND 
 EXPENSE INTO FINISHED PRODUCT 
 
 A method for issuing production and other 
 orders to a factory as a whole, and to indi- 
 vidual workmen, together with various forms 
 of collecting the time of employees; also an 
 illustrated description of planning methods 
 and of planning or control boards. 
 
CHAPTER X 
 
 CONVERTING LABOR, MATERIAL, AND 
 EXPENSE INTO FINISHED PRODUCT 
 
 Classification of Orders 
 
 In the handling of production orders, it is usually neces- 
 sary to confine the work to one method of procedure. This 
 method is prescribed by a central planning station which 
 directly controls all the work throughout the factory, or 
 controls it through several sub-planning stations. In either 
 case the method of procedure would be uniform throughout 
 the factory, because the sub-planning stations are under the 
 general control of the central planning station. Also the 
 data employed on the forms to be used are identical. Which 
 method of handling production orders is the better, is a 
 question of organization and beyond the scope of the present 
 work. The consideration here is the actual putting of 
 work through the factory, and provision for all the detail 
 necessary thereto. 
 
 It is taken for granted that a stores system has been 
 established in such a way as to give a perpetual inventory 
 of all materials and supplies that the company may buy, and 
 that this inventory is held in a controlling account. Under 
 these conditions, in order to authorize the delivery of 
 material to the factory, it is absolutely necessary for costing 
 and accounting purposes to have an order of some kind to 
 which all material, labor, and expense can be charged, and 
 these orders must be known and controlled by consecutive 
 numbers. 
 
 167 
 
l68 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 To cover all labor, material, and expense used in the 
 operations of a factory, four different conditions must be 
 provided for, these requiring four different kinds of orders. 
 ( See also Chapter IV. ) 
 
 1. Production Orders. These orders relate exclusively 
 to goods made for sale, where the exact amount of labor 
 and material required for production can be charged. Such 
 orders are issued to cover whatever quantity, kind, or size 
 of unit, piece, or part it is desired to make at any particular 
 time; and all material drawn from stores, and the labor 
 used for processing it, must be charged to these production 
 orders as production costs. In addition to this, a prorated 
 amount of overhead must be charged as described in 
 Chapter XII, "Distributions." 
 
 2. Betterment Orders. These orders relate wholly to 
 such plant improvements as increase the capital investment 
 of the company. Whenever any work is to be done which 
 will effect a plant betterment, a betterment order must be 
 issued therefor by the proper authority, and to such order 
 must be charged all of the material drawn from stores for 
 use thereon, all of the direct labor employed in its 
 execution, and a prorated amount of overhead, the same 
 rate as applied to regular production orders. 
 
 3. Repair Orders. These are orders issued for the 
 replacement, repair, etc., of buildings and equipment, and 
 are designed to take care of all repair work done for, or by, 
 various departments. To each individual repair order 
 should be charged all of the material drawn from stores 
 and all of the labor employed; but repair. orders do not 
 bear any portion of the general overhead charge, as repairs 
 in themselves constitute a portion of such charges, which in 
 turn are distributed to production and betterment orders. 
 
 4. Prorating Orders. These orders are designed to 
 cover productive work that is done in bulk and prorated 
 
 I 
 
 i 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 169 
 
 over the product made, such as painting, enameling, plating 
 work, etc. 
 
 Production Orders 
 
 Production orders authorize work to be started in a 
 factory. A production schedule (Form 36) for all the 
 pieces and parts required having been prepared, the next 
 step is to prepare and issue production orders (Form 40). 
 This form is provided in quadruplicate, each copy of a 
 distinguishing color, as green for the original, blue for the 
 second copy, pink for the third, and buff or yellow for the 
 fourth. The back of this yellow card contains data taken 
 from the tracing tag (Form 43). 
 
 With a production schedule in front of him, a schedule 
 clerk can make out a production order for each of the pieces 
 and parts required to be made, the quantity specified on a 
 production order being ordinarily about a twenty-five or 
 thirty days' run. This is because it is desirable to have 
 production orders cover such quantities as can be costed 
 out within a month, if possible; that is, a complete produc- 
 tion order should be finished and turned into stores within 
 a month from the time of issuance. Of course, if a steady 
 run is being made on these parts, it would simply mean 
 operating from one production order on to another, and 
 each of these orders would be finished and costed out about 
 every thirty days, so as to leave the amount shown in "Work 
 in Progress" or "Unfinished Production Orders" at the 
 end of the month, as small as possible. 
 
 Production orders should be numbered consecutively, 
 and, if they are issued in supplement to some previous pro- 
 duction order, the number of this previous order should be 
 shown after the "Supplement Number"; also the date of 
 issuance and the account which is to be charged (whether 
 component or finished stores) should be given, and, if the 
 
I70 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 production order is issued for the filling of some particular 
 sales order, this sales order number should be shown. Then 
 the quantity called for. the piece or part number, the 
 specifications, and special features or instructions will be 
 entered. 
 
 The original copy of each production order should be 
 kept in the production department and filed consecutively 
 by order number. When the order is completed, if desired 
 the cost for labor, material, overhead, total cost, and unit 
 cost can be entered, and the order filed in the superin- 
 tendent s or production engineer's office. When issued, the 
 third or pink copy should be sent at once to the stores clerk 
 in charge of the particular stores room from which the 
 material for this order will be drawn. This will be his 
 authority for issuing the material called for by the order 
 and he should file the same by the order number 
 
 M t' r""^/] ^ P'^^"^^^^" ^^^^^ is completed, the stores 
 clerk should forward this copy, together with his sheet 
 showing material distribution on this order (Form 16), to 
 the distribution department for a proper distribution of 
 costs The second or blue copy should be filed by order 
 number in the distribution department, and when work on 
 the order is completed, it should be turned over to the 
 production department with the total labor by operations 
 shown. The fourth or yellow copy is kept in the production 
 department and filed by piece and part number and thus 
 becomes a working copy for the use of this department. 
 
 Tracing Tag 
 
 ^ A tracing tag form has been provided (Form 43) which 
 IS to be attached to each lot of material at the time it is 
 issued from stores and before the first operation. After 
 once being attached to any particular lot of material, the 
 tag must remain with it until the work on the lot it covers 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 171 
 
 is completed and is delivered either to component or to 
 finished stores. 
 
 The purpose and method of handling the tracing tag 
 are as follows: When the production department is ready 
 to issue a production order, it prepares from piece key cards 
 (Form 20) one tracing tag for each lot of each piece 
 covered by the production order, and, as provided for on 
 this tag, there should be shown the piece number, quantity 
 to be started, production order number, lot number, date 
 to be started, and date to be finished, together with such 
 other information relative to the departments in which the 
 various operations are to be performed on the work as may 
 be required. 
 
 As soon as these tags are made out they should be posted 
 to the reverse side of the fourth or yellow copy of the 
 production order, where provision has been made under 
 "Started" to show the lot number, date, quantity, etc, 
 together with the cumulative quantity as the work pro- 
 gresses. After these tags have been duly posted, they are 
 ready to be turned over to the planning and routing clerks 
 for the issuing of production tickets (Form 44-46) as 
 called for by the operations on these tags. As soon as the 
 routing clerk receives tags of this character, he will post on 
 to them from his piece key cards, the operations required 
 by number and name, and also enter on the tag in proper 
 order of arrangement, department number, machine num- 
 ber, etc., for each and every operation, going to the reverse 
 side of the tag with the operations if necessary. 
 
 As stated before, the tracing tag is to be retained with 
 the particular lot to which it is attached through all opera- 
 tions through which that lot goes, and it must show the 
 O K check of an inspector for each operation, also the 
 inspector's notation, as "Recovered from Repairs," "Re- 
 jected for Repairs," "Rejected for Scrap," together with 
 
172 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the date the inspection was made as indicated by the 
 inspector's initial or punch. 
 
 When each lot is completed and received in component 
 or finished stores, the pieces are counted by the stores- 
 keeper and this count entered on the tag, together with the 
 bin number in which they are placed. The tag is then 
 dated, signed, and turned over to the stores record clerk 
 for entry on the stores records, after which it is forwarded 
 to the production department where the routing clerk will 
 enter on the back of the production order the quantity 
 finished in this particular lot. Thus, on each production 
 order there will be a complete record of the work started 
 and completed, this record also serving to give the routing 
 clerk full information as to the balance of lots to be done 
 numbers of these lots, etc. Great care should be exercised 
 m making out these production cards accurately, as they 
 are the key to the proper handling of all work in the factory 
 Whenever work is completed, the tracing tags should be 
 filed consecutively by production order number and lot num- 
 ber, for future reference as to how work has been handled 
 regarding rejections for repairs, scrap, etc. 
 
 Issuing Material Requisitions 
 
 After the tracing tags are made out, general stores 
 requisitions for the material on the piece key cards must also 
 be made out (Form 10). The requisitions should be 
 numbered, this number being a combination of the produc- 
 tion order number, the letter of the operation for which the 
 material is used, and the highest lot number for which this 
 requisition will furnish material. Thus, if a requisition is 
 made out for material required for the first operation on 
 production order No. 1000 for five lots, the requisition 
 number would read "lOOO-A-5." When later five more 
 lots are started, the requisition for these second five lots 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 173 
 
 would read "1000-A-lO," as being enough material for 
 the completion of the tenth lot of this production order. 
 These requisitions may then be turned over to the plan- 
 ning clerks with the tags. 
 
 Production Tickets and Daily Time Slips 
 
 As a standard practice, labor is paid 6y any one of 
 three methods, viz., day-work, piece-work, or premium 
 work. No matter which of these methods is used, the 
 issuing of instructions for doing the work, would remain 
 unchanged, as well as the counting of the quantity done, 
 and the record of the time consumed. However, the method 
 employed for calculating the amount to be paid would be 
 different in each case. 
 
 The different methods of paying labor have been so 
 well covered by excellent literature and lectures as to make 
 unnecessary any description here. There is, however, a 
 production ticket (Forms 44-46) for each one of these 
 methods, each ticket being properly spaced and captioned 
 on the time-keeping side, so as to make possible correct 
 and rapid computations. These time tickets are in them- 
 selves explanatory. On the instruction side, the data called 
 for are identical for each one; therefore, in this respect a 
 description of one is a description of all. 
 
 These cards represent to a certain extent ideal arrange- 
 ment and captioning. However, the same information 
 could be presented in different shape and it is often neces- 
 sary to do so when designing time tickets to be used on 
 or by certain accounting machines and time or cost clocks. 
 It is recommended that, wherever possible, time be kept by 
 the unit system of tenths for which most efficient appliances 
 have been made by the manufacturers of time-keeping and 
 accounting machines. 
 
 As soon as the routing clerks have received a tracing 
 
174 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 175 
 
 I 
 
 tag and have entered the department numbers and machine 
 numbers on this tag for each of the operations to be done, 
 they should make out, from operation key cards, instructions 
 for the manufacture of the pieces and parts called for on 
 the tracing tag, these instructions being given on the day- 
 work production ticket (Form 44), or the piece-work pro- 
 duction ticket (Form 45), or the premium work production 
 ticket (Form 46). 
 
 The production ticket number, as will be noted on the 
 ticket, should be a combination of the production order 
 number, the operation letter, and the lot number, thus saving 
 the necessity of writing these numbers on another part of 
 the ticket. This greatly simplifies the work of keeping costs 
 of labor. To illustrate this system of numbering, ticket 
 No. 1500-A-l would signify that this ticket was made out 
 to cover work on production order 1500, operation A, and 
 lot 1. These tickets can be made out for all of the opera- 
 tions of one lot at a time, and would be numbered 1500-A-l, 
 150a-B-l, 1500-C-l, 1500-D-l, etc. 
 
 After tickets have been made out for each of the opera- 
 tions of any particular lot, the same process can be gone 
 through in making out tickets for each operation of lot 
 No. 2, and so on for each of the lots called for by tags. 
 The date of issue should be shown on the ticket, as well 
 as the date the operation is to be completed according to 
 schedule requirements. The department number and the 
 machine character number for doing the work will also be 
 entered, but the man's number should be left blank to be 
 filled in by the operating department where the work is to 
 be done. The quantity wanted, piece number, and piece 
 name can be given and the routing shown, that is, "Moved 
 from Department No ," and "Moved to Depart- 
 ment No ," etc. Below this will then be given 
 
 instructions for the work required, all of which is to be 
 
 copied from the operation key card (Form 33), or from 
 the assembly operation key card, for all assemblies of pieces 
 and parts. The speed and feed of the operation should 
 also be shown, together with the jigs, dies, or special tools 
 
 required. 
 
 The rotation of the operation given on the production 
 ticket should be followed exactly by the workman, as the 
 card constitutes his instructions for doing the work, and 
 these instructions should be made out exactly as shown 
 on the operation key card. 
 
 Each production ticket must be made in duplicate; a 
 thin, white original, with a cardboard duplicate underneath 
 on which is made a carbon copy. The cardboard copy is 
 used as the workman's instruction card. The original 
 white copy is posted on the control board (Form 60). When 
 work is given to a workman, he will be given the duplicate 
 cardboard production ticket showing his instructions, which 
 will be held by him until the operation it covers is com- 
 pleted. When the workman has completed an operation, 
 however, this instruction card will be returned to the plan- 
 ning board and the workman will receive a new one for 
 some other work. When the instruction card is turned in, 
 no matter whether it be on the date of issue or some subse- 
 quent date, it must be timed out for checking purposes and 
 must be immediately forwarded to the accounting depart- 
 ment. 
 
 Meanwhile, the white slip remains posted on the control 
 board (Form 60), i.e., is pasted on the envelope in the 
 pigeonhole, and if the work called for on any particular 
 ticket runs for more than one day, the cardboard copy will 
 remain in the workman's box or pigeonhole, but a daily 
 time slip (Forms 47-49) for that workman must be made 
 out and turned into the accounting department each day. 
 By working thus, it is possible to keep absolute control of 
 
176 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 177 
 
 4 ■ 
 
 all inventories, so that on the last of the month the tickets 
 of each and every workman will have been turned in and 
 will be closed out into Production Orders Finished or Un- 
 finished, as the case may be. 
 
 When all of the operations on a piece have been com- 
 pleted, as called for by the tracing tag, this will be O K'd 
 first by the stores-keeper, who will have received the 
 material into the stores, and then by the routing clerk, who 
 will close it and, together with all the tickets and slips, send 
 it to the planning department where it will be filed for future 
 reference. 
 
 This method of procedure means that the workmen will 
 not be responsible in any way for keeping time, as he simply 
 has an instruction card which he holds until he has com- 
 pleted the work, when he receives another instruction card. 
 Meantime, the planning station will do all the timing on 
 both the instruction cards and daily time slips and turn 
 them in to the accounting department. 
 
 After an operation is completed, the production ticket 
 and tracing tag will be turned over to the inspector, together 
 with the pieces which have been made, and as soon as these 
 have been inspected the inspector enters on this production 
 ticket at the bottom the date finished and the number re- 
 jected for repairs, rejected for scrap, and the number good, 
 either signing this ticket or punching it with his individual 
 punch. At the same time, he makes the same notations on 
 the tracing tag, showing the number "Rejected for Repairs" 
 at this operation and also those "Rejected for Scrap"; he 
 then enters on the line showing the next operation, the 
 quantity "Good" which are to be forwarded for the next 
 operation. He will then enter the date on the line above 
 with his inspector's punch or initials and pass it on to the 
 workman of the next operation. 
 
 The production ticket is now ready for the production 
 
 department and should be placed in the outgoing mail boxes 
 for the messenger's next trip. 
 
 The daily production time slips (Forms 47-49) should 
 be sent to the time-keeping department once a day; each 
 morning all slips should be placed in the out-going mail 
 box so that a messenger can take them to the time-keeping 
 department, where the total time for the day as shown by 
 the workmen's time slips, or non-productive, etc., time 
 tickets (Forms 50-55) will be checked against his total 
 
 clock time. 
 
 When a workman has completed a job and returned 
 his production ticket to be stamped "Finished," the planning 
 clerk should, at the same time, withdraw another production 
 ticket from his "Jobs Ahead" file for this workman to 
 operate on, and stamp it "Started" at the time the other is 
 stamped "Stopped," so that there will be no delay in waiting 
 for jobs. 
 
 The planning clerk in each department should have a 
 list of the piece and part numbers and the operations that 
 can be done on each of the machines in his department. 
 This table should be always in front of him so that he can 
 tell at a glance, when a workman comes for a production 
 ticket, just what pieces and parts can be done on any work- 
 man's machine, and, consequently, know what production 
 tickets to take out of his "Jobs Ahead" file. 
 
 Daily Defective Repairs Time Ticket 
 
 Defects in articles manufactured are continually occur- 
 ring, due either to poor workmanship or to poor materials. 
 In some instances these defects will make necessary the 
 scrapping of the items; in other instances they can be 
 recovered by applying certain repairs. These repairs, how- 
 ever, must be handled entirely separate from the regular 
 productive work; otherwise any increase in the cost of 
 
f: 
 
 I 
 
 II 
 
 lyg UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 manufacture due to such defective material or workman- 
 ship cannot be readily traced. 
 
 In order to handle this work, a special daily defective 
 repairs time ticket (Form 50) has been designed. Each 
 foreman should be provided with a pad of these tickets and 
 should use them for this work, and for nothing else, as 
 indicated by the captions thereon. The department and 
 the man's number should be entered, time started and 
 stopped stamped as on regular tickets with the time clock, 
 provision being made for two starts and stops on the same 
 job. The amount column is left blank to be filled in by the 
 timekeeper later. 
 
 Great pains must be taken by the foreman to get the 
 number of pieces repaired registered on this ticket, together 
 with the piece number and the production order number 
 from which the pieces originally came. Wherever possible, 
 the costs for such repairs should be charged to the original 
 production order under which the pieces were first started. 
 Like all other time tickets, these must be turned in daily 
 to the timekeeping department after being properly O K'd 
 by the foreman. 
 
 Daily Waiting Time Ticket 
 
 This ticket (Form 51) is of much more importance than 
 perhaps appears at first thought. It is, of course, necessary 
 to have time spent in the factory checked against the *Tn" 
 and "Out" clocks. It is also necessary to provide registra- 
 tion for the time lost by workmen waiting for jobs, 
 materials, tools, or for any other reasons. The daily wait- 
 ing time ticket is to be used whenever a workman has to 
 stop work and wait for any reason, as the time sheet (Form 
 73) is arranged to separate for each pay period all of this 
 waiting time, by men and by departments. This makes 
 gossible a splendid analysis of lost time of this character 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 179 
 
 which can be charged directly to bad forcmanship or a 
 laxity of some kind on the part of the planning department. 
 These tickets, after being O K'd by the foreman, must be 
 turned in daily to the time-keeping department. 
 
 Prorating Orders 
 
 Thus far, consideration has been given principally to 
 the manufacture of articles on a strictly production order 
 basis. There are often instances, however, where it is not 
 practicable to handle certain classes of work on a basis of 
 production orders, owing first to the irregularity with which 
 the work is put through a factory, and, second, to the nature 
 of the materials used which can only be costed out on some 
 
 prorating basis. 
 
 It becomes necessary, therefore, to make provision for 
 the establishment of certain prorating orders to which 
 certain definite kinds of work are to be charged, with the 
 understanding that these prorating orders are always for 
 productive work only. For these, no special form need be 
 provided, as they simply require typewritten instructions 
 from the proper authority for their installation. As all 
 have different numbers, they become known through use 
 from month to month and from year to year by their 
 constant number. Therefore, all that is necessary for 
 collecting the charges to them is to send a copy of these 
 numbers to the production engineer, time-keeping depart- 
 ment, and any other department which might be affected 
 by them. 
 
 The manufacture of almost any product involves more 
 or less work of this character. For instance, in the bicycle 
 business, enameling is one element of this kind, also nickel- 
 plating. Enameling should constitute one prorating order 
 under a given number, and nickel-plating should constitute 
 another prorating order under another number; the total 
 
l8o UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 expense for each one of these should be prorated over the 
 entire output made each month. Painting in many lines of 
 work should be handled in the same way. 
 
 Sometimes it is necessary to create prorating orders in 
 connection with automatic machine departments, as in such 
 work one man frequently attends several machines, and to 
 divide up the time of each man according to the particular 
 machine on which he may be working, is rather a difficult 
 and unsatisfactory process. Therefore, it often proves 
 advantageous to take all this work and charge it to a pro- 
 rating order, while at the end of the month the expense to 
 the total number of pieces made is prorated according to 
 the capacity of the various machines used in making these 
 pieces. 
 
 This question of shop practice is touched upon at this 
 point simply to illustrate the truth of the old saying, that 
 every rule has an exception ; prorating orders are the excep- 
 tion to standard production orders. 
 
 Daily Prorating Order Time Ticket 
 
 For the recording of time spent on prorating orders, a 
 daily prorating order time ticket has been designed (Form 
 54), which can be issued through the regular channels of 
 planning work or provided by the foreman of each depart- 
 ment according to the nature of the business and the neces- 
 sities of each case. This ticket is handled like all other 
 tickets, by stamping time "Started" and "Stopped" on it, 
 and filling in such information as is called for on the 
 form. 
 
 Daily Non-productive Labor Ticket 
 
 There still remain for consideration certain phases of 
 non-productive labor, i.e., labor spent on plant betterments, 
 and labor on plant repairs. Labor on plant repairs is, of 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 i8i 
 
 course, non-productive, but is in a class by itself and is 
 handled entirely apart from any and all labor that is 
 regarded as strictly non-productive labor such as clerks, 
 
 oilers, etc. 
 
 The ticket shown in Form 55 covers all non-productive 
 work and should include all labor used in the factory not 
 provided for by other tickets. Neither this nor any other 
 tickets need be used for distinguishing non-productive em- 
 ployees who are at all times doing the same class of work. 
 By this is meant such employees as clerks, foremen, stores- 
 keepers, oilers, window washers, etc., as the distribution of 
 their time can be made from the "In" and "Out" time 
 clock record. But this non-productive labor ticket should 
 be used by all employees whose time may be divided between 
 regular non-productive, productive, and betterment and re- 
 pair work, such as millwrights, electricians, and ordinary 
 productive employees who are occasionally engaged in non- 
 productive work. These tickets are used the same as any 
 other time tickets, by being properly stamped "Started" 
 and "Stopped" and by having the information called for 
 thereon filled in. 
 
 Plant Betterments and Repairs 
 
 In any factory there are from time to time plant better- 
 ments, that is, betterments made by the company itself. As 
 these betterments form an asset to the company, they are 
 just as much productive work as are the goods made for 
 sale, and consequently the labor and material used must be 
 costed up in exactly the same way. In order, however, 
 that there may be no mistake in making distributions to 
 such work, a separate order is provided, which, inasmuch 
 as an authorization must be granted for making each better- 
 ment, is handled a little differently from a production order 
 in issuing it to the factory. 
 
lg2 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Betterment Orders 
 
 These betterment orders are made out in quadruplicate, 
 and should be numbered consecutively, and dated ; in case a 
 betterment order is issued as a supplement to a previous 
 betterment order, the previous order number should be 
 given after the "Supplement Number/' The account to be 
 charged, such as "Machinery and Tools," "Shop Fixtures 
 and Fittings," etc., is to be given, and the authorization 
 number, if any, together with the bill of material or requisi- 
 tion number. The date to be completed should also be 
 shown. There should be given a complete description of 
 the work to be done, together with a general specification of 
 the materials required. (See Form 41.) 
 
 The original (green) copy of this form should be 
 delivered to the department which is to do the work, and, 
 when this work is finished, this copy should be sent to the 
 chief stores clerk, who will enter his material costs on it 
 and send it to the accounting department. The third 
 (pink) copy is to be delivered at once to the chief stores 
 clerk, who will deliver the material required for any better- 
 ment, upon presentation of proper requisition. The second 
 (blue) copy of the order must be delivered to the drafting 
 department for any drawings or other information which 
 may be required for the carrying out of this order. The 
 fourth copy (manila card) will be given to the accounting 
 department as authorization for labor charges. When the 
 work is completed, costs will be entered on this manila card, 
 which is then turned over to the production department for 
 recording purposes. 
 
 When work in the shape of a betterment is completed, 
 it does not pass into component stores or sales as does a 
 regular product made for sale, but "Work in Progress" is 
 credited, and the various investment asset accounts are 
 charged. If the betterment is for machinery bought and 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 183 
 
 installed in the plant, all the material, the machine itself, 
 fittings, etc., and the labor of installing it, are charged to 
 the betterment order, and the total cost in turn is charged to 
 the "Machinery and Tools" account. If a betterment is 
 for additions to a building, the betterment order will be 
 charged to "Buildings" account; thus, it is taken out of 
 "Work in Progress" and charged as an asset and is shown 
 in the balance sheet every month, as provided for in the 
 controlling accounts. 
 
 In order to get the monthly extensions for betterment 
 orders, they may be entered under a separate heading, on 
 the same sheet as is used for production orders, namely, 
 the "Record of Production and Betterment Orders," which 
 is described in Chapter XII. However, it is better to keep a 
 separate monthly sheet for betterment orders, so that they 
 will not be confused with production orders. 
 
 Daily Betterment Time Ticket 
 
 This form has been provided for the recording of all 
 time spent on betterment orders. (See Form 52.) Each 
 foreman whose workmen have occasion to do any better- 
 ment order work is provided with these tickets in pads, and, 
 as soon as a workman starts on any betterment work, the 
 "Time Started" will be stamped on this ticket, and the 
 man's number, department number, and betterment order 
 number are also entered thereon. Under "Description of 
 Work" will be shown the nature of the work and the depart- 
 ment for which the work is done. When the workman 
 stops on this work, the time will be stamped on the ticket. 
 These tickets must be turned in daily to the timekeeper after 
 being O K*d by the foreman. 
 
 Plant Repairs 
 
 Plant repairs are authorized and carried out in exactly 
 
 « * 
 
184 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the same way as plant betterments ; that is, an authorization 
 is obtained to do any extensive repair work and the repair 
 order is then issued; but as all work of this nature is a 
 general overhead expense, the material and labor used are 
 charged to the proper account as provided for in the inven- 
 tory classification of assets, and the total expense for work 
 of this kind is charged to the same account at the end of the 
 month. 
 
 A repair order form has been provided for making out 
 orders to the factory for plant repairs. These orders are 
 made out in quadruplicate and handled in exactly the same 
 way as are the betterment orders, described above. (See 
 Form 42. ) 
 
 It is often the case that for several months few repairs 
 will need to be made, and then in some one month a large 
 amount of repairs may become necessary ; therefore, instead 
 of charging up the actual repairs as they are made, reserves 
 for depreciation have been provided for all investment 
 assets, such reserves being figured out on the basis of the 
 estimated hfe of the investment covered. These reserves 
 are charged into the general overhead each month, thus 
 making for uniformity of costs. Then each month, as 
 repairs are made, they are charged against these deprecia- 
 tion reserves. To illustrate, a machine valued at, say, $3,000 
 gets into such a condition as to require a complete over- 
 hauling at an expense of, say, $500. Now, it is obvious 
 that it would not be fair to charge all of this expense to 
 one month's operation, as the benefits derived from such 
 repairs will continue for a long period. Therefore, the 
 necessity for such repairs, even to the extent of completely 
 replacing this $3,000 machine at a given time, must be 
 anticipated. A monthly amount for such depreciation is 
 credited each month into a "Reserve for Depreciation" ac- 
 count, and overheads charged. Whenever the actual repairs 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 185 
 
 i 
 
 arc made, they will be charged to this reserve account, and 
 labor and material credited accordingly. 
 
 The above method of handling repairs, for which pro- 
 vision has been made all the way through, cannot be too 
 carefully carried out. It must not be forgotten that aside 
 from the direct value of costs of operation, their compara- 
 tive value is of next importance, and, unless such expenses 
 are properly distributed, comparison of cost figures as be- 
 tween di liferent periods becomes practically impossible. 
 Extraordinary expenses for one month charged to the pro- 
 duction for that month would throw the costs out so badly 
 as to make them useless for comparative purposes. 
 
 Small Repairs 
 
 There are many small repairs throughout a plant that 
 must be made from time to time without delay and without 
 waiting for a repair order to be made out. The foremen 
 of the plant should be instructed to use their judgment in 
 such cases, but under no circumstances should they be al- 
 lowed to make such repairs without issuing the proper work- 
 men's time tickets and material requisitions, the same as 
 for any other work. After the work is done, a formal 
 order can be made out and issued, and the number of the 
 order placed on these various tickets, so that the time-keep- 
 ing and stores departments may properly handle them and 
 have due authority for making the necessary distributions. 
 This is something that must be very carefully watched, as 
 foremen are prone to do much small repair work in time 
 that is charged up to the regular product made for sale, 
 and if this goes on to any great extent it can readily be seen 
 how quickly comparative costs will be thrown out 
 
 Daily Repair Time Ticket 
 
 This ticket (Form 53) has been provided for the record- 
 

 I 
 
 1 86 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ing of time spent on repair orders. It is to be made out 
 and handled the same as the daily betterment time ticket, 
 and must be turned in daily to the timekeeper after being 
 O K'd by the foreman. 
 
 Importance of Accuracy and Promptness 
 
 A careful study and the proper and prompt performance 
 of the routine outlined in the foregoing instructions is, of 
 course, absolutely necessary to obtain satisfactory results. 
 Especially is this true because these matters are related to 
 many others and are merely part of a whole. In order to 
 have the whole organization properly co-ordinated and the 
 entire production of the factory worked up to the proper 
 standard, and also to secure the data necessary for main- 
 taining this standard, it will be necessary for each depart- 
 ment and every individual to carry out their part of the 
 work promptly, correctly, and to the last detail. Those in 
 charge should realize that if they allow any department to 
 become inefficient or to fall behind, the proper working of 
 the whole factory is affected, the final results in the con- 
 trolling accounts are delayed and unsatisfactory and entirely 
 lacking in those vital functions which are the reasons for 
 their existence. 
 
 Cost of Production 
 
 While all the foregoing methods have been planned with 
 the primary object of building up plant efficiency and 
 developing production, they have, at the same time, been 
 so laid out as always to obtain cost of production without 
 the necessity of separate reports and "red tape" and without 
 the installation of a highly specialized cost department. Yet, 
 even if the expense of obtaining these costs was ten times 
 as high as it usually is, it would be worth the price, for, 
 after the work has been standardized, efficiency increased, 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 187 
 
 
 and costs reduced, it is only by a thoroughly dependable 
 system that this general efficiency throughout the factory 
 can be maintained. 
 
 All labor costs are collected in connection with, and on 
 the same sheet as, the data for pay-roll purposes, as outlined 
 in Chapter XI, "Employment and Handling of Labor." The 
 material costs are collected and worked out in conjunction 
 with the stores-keeping records, as outlined in Chapter IV 
 under "Stores-Keeping," and with the record of production 
 and betterments described in Chapter XII, "Distributions" ; 
 thus making the collection of cost records as nearly auto- 
 matic as possible. 
 
 Supplementary Tag 
 
 It should be a rule that lots once started should never 
 be split, yet emergencies will arise where an exception be- 
 comes necessary in order to keep assembly going. When 
 such is the case, a red supplementary tag (Form 56) should 
 be used for the "Split-off" lot. This tag shows the piece 
 number, production order number, etc., under which work 
 is being done, and shows the original lot number to which 
 the quantity covered by this tag belongs, also at what 
 operation it was taken, the date, by whom, by what depart- 
 ment, and the reason for splitting. The balance of the 
 operations and routing must be transferred to this tag 
 from the original tracing tag (Form 43), thus carrying this 
 quantity through to completion as part of the original lot 
 and under its number. 
 
 Rejected for Scrap Tag 
 
 The "Rejected for Scrap" tag (Form 57) is to be filled 
 out and attached to all pieces and parts that are rejected 
 for scrap ; that is, all pieces or parts that cannot be recovered 
 by any subsequent treatment or operation. In every such 
 
if 
 
 l88 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 case it must be filled out in full with the data as captioned 
 thereon. 
 
 Rejected for Defective Repairs Tag 
 
 Whenever rejected work comes from inspection in such 
 shape that it can be recovered from rejection by applying 
 certain repairs, the "Rejected for Defective Repairs" tag 
 (Form 58) is to be used and the work is to be governed 
 exactly by the captions on it, which, in nearly every instance, 
 are self-explanatory. Both this tag and the tag "Rejected 
 for Scrap" can be made to slip into a holder on tote boxes, 
 or to be tied on material, as may be desired. 
 
 Symbolical Control Chart 
 
 A precise but simple method of giving instructions for 
 handling papers and transactions in connection with any 
 particular part of a business is very desirable. There is no 
 clearer way to describe anything than by a chart, whether 
 it pertains to general data covering some particular subject 
 or subjects; whether it relates to an organization and its 
 co-ordination or relationships, or whether it is in connec- 
 tion with the handling of papers, transactions, etc. 
 
 Graphic chronological charts which afford a very prac- 
 tical method of presenting data, have already been illus- 
 trated in Chapter IX (see Forms 38, 39), while in Chap- 
 ter XII an organization chart (Form 76) is presented. 
 There is still another type of chart which is of equal, if not 
 greater, importance than the charts mentioned above, which 
 can be called a symbolical chart. This, as illustrated in 
 Form 59, shows the manner in which certain items travel 
 from one point to another, together with any instructions 
 they convey. This chart is presented in connection with a 
 control board or planning system (Form 60) for handling 
 work in which there is, as here termed, a central order sta- 
 
 li 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 189 
 
 tion, together with one sub-order station. Any additional 
 sub-stations to be operated would, of course, be controlled 
 from the central order station in precisely the same way. 
 
 This chart (Form 59) offers a simple expression of the 
 routine work in connection with planning for order control 
 and clears up all of the mystery that so often seems to 
 surround this subject. The chart can be applied to the 
 handling of all kinds of papers in connection with orders, 
 mail, accounting, engineering work, etc. Any concern can 
 devise its own symbology for such a chart. The key to 
 this need be given to but few persons, thus insuring secrecy 
 where necessary. 
 
 All manufacturing orders are for units of some kind, and 
 these orders are broken up into production orders, ( 1 ) for 
 pieces, and operations on pieces, and (2) for assemblies 
 of pieces. The function of a central planning or order 
 station should be the distribution of all orders by pieces, 
 by operations on pieces, and by the assemblies thereof. 
 Where the work is over a wide range of shop location, sub- 
 order stations should be established according to geogra- 
 phical requirements, from which the work is to be timed 
 *Tn" and "Out" to the men, the idea of the sub-station being 
 to get a quicker distribution of the work by having the 
 timing and control close to the workmen and machines. In 
 other words, there is one general planning or order station 
 for the whole establishment, but in addition thereto there 
 are sub-order stations for the purpose of timing the work 
 "In" and "Out" and controlling its progress. These sub- 
 order stations will only control processing operations and 
 the inspection thereof; while the central order station will 
 control directly, or through another sub-order station, all 
 assembling, assembly, inspection, and tryout work. 
 
 The chart given in Form 59 represents this in detail, 
 together with a symbology which is almost self-explanatory; 
 
I 
 
 pf 
 
 0i 
 
 fl'l 
 
 11 ! 
 
 190 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 in practice, the explanation of these symbols would not 
 appear on the chart if secrecy was an object. 
 
 Briefly described, the central order station, shown near 
 the bottom of the chart, receives from the production en- 
 gineering department, as per "A," three blue-prints; one 
 set of tool key cards; one set of tool set-up key cards; one 
 set of fixture key cards ; one set of unit key cards ; one set 
 of part key cards; one set of piece key cards; one set of 
 operation key cards, and two copies of the production order. 
 One copy of the production order, "B," is sent to the stock 
 room as authority for the stores keeper to supply material, 
 and is held there permanently in the file, with which in due 
 time are placed duplicate requisitions. One copy of the 
 production order, "C," is filed in the central order station 
 and is held there as "work on order" until completed, when 
 it, together with the signed tracing tag and blue-print No. 2 
 is returned to the engineering department. Blue-print No. 
 1, usually having been cut up, is destroyed and thrown into 
 the waste basket, while the key cards as a general thing 
 supply data for the routing and issuing of instructions from 
 the central order station, and are consequently on permanent 
 file at this point, as indicated by "A-1." 
 
 At the routing desk in the central order station, the 
 order is broken up into pieces and operations on pieces, and 
 from there routed in envelope "E" to the various sub-sta- 
 tions where the work is to be done, each envelope containing 
 one blue-print, "E-1"; one instruction card (which is the 
 same as a production ticket) for each operation to be done 
 on the piece, "E-2" ; one duplicate instruction card, "E-3" ; 
 a requisition to the general stores for material, "E-4"; 
 a duplicate requisition, "E-5," and a tracing tag to be 
 attached to the material, "E-6." This envelope is received 
 at the control board of the sub-order station and from here 
 the papers are distributed. 
 
 LABOR, MATERIAL, AND EXPENSE 
 
 191 
 
 The original requisition for material, together with the 
 tracing tag is sent to the stock room, as per "F," while the 
 duplicate requisition is sent to the stock clerk of the sub- 
 order station, 'T-l"; the stores-keeper selects the material 
 and attaches the tracing tag to it, and forwards this to the 
 stock clerk of the sub-order station, "F-2." As soon as 
 this is checked up by the stock clerk, and signed by him, the 
 original requisition together with the duplicate is returned 
 to the stock room, 'T-3," and from thence the original 
 requisition is sent to the accounting department, "F-4," 
 and the duplicate filed in the stock room, while the rough 
 stock is sent directly to the workman as per "F~5." 
 
 In the meantime, the workman's instruction card (pro- 
 duction ticket), together with the blue-print, are sent to the 
 workman who is to perform the operation, through the con- 
 trol board and time clock as per "G," and if the work takes 
 longer than one day, a daily time ticket is made out and 
 sent to the accounting department as per "G-1.'* As soon 
 as the workman finishes a certain piece or quantity of pieces, 
 the work is forwarded directly to the inspector as per '*F-6," 
 and a new ticket and new instruction card, together with 
 a blue-print are forwarded to the inspector as per "G-2." 
 When the work is completed here, the envelope containing 
 the blue-print and instruction card is forwarded to the rout- 
 ing desk of the central order station, as per "E-7," where 
 the blue-print goes to the waste basket and blue-print No. 2 
 is drawn out and forwarded with an instruction card as 
 per "H" to the control board, through the time clock to 
 assembly, as per "H-l"; and thence to inspection, as per 
 "I," and thence to a try-out as per "J." After the work is 
 completed in "J," it is forwarded as per ''K" to the central 
 stores, checked, signed for and the tracing tag sent back, as 
 per "I," to the central order station. From here the copy 
 of the production order, together with the second blue- 
 
 f 
 
192 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 print and tracing tag, which came back from stores, are 
 put in an envelope, "E-8," and returned to the engineering 
 department, showing that the job has been completed for 
 each individual piece or for an assembly of pieces. 
 
 In the routing of material, as can be seen by the broken 
 line, it goes directly from the workman to the inspector, 
 then to the assembly, then to the inspector, and then to the 
 try-out, without physically being taken to the sub-order 
 station or central order station, as this is in accordance with 
 the routing of the tracing tag. 
 
 In connection with the central order station, at point 
 "N" a line is shown whereby, if work on any particular 
 job lasts for more than one day the daily time tickets are 
 sent directly to the accounting department in the same way 
 as they were at "G-1" in the sub-order station. 
 
 When the envelope "E" is sent to a sub-order station, 
 it contains the instruction cards, one for each operation to 
 be done on the piece called for; therefore, if there were 
 ten operations it might go to ten different men before it 
 was completed, being registered in and out at the sub-order 
 station for each transfer; these registrations being made 
 from the instruction card which is returned each time an 
 operation is completed. On the outside of the envelope 
 are printed a set of figures from 1 to 20, or more, as may 
 be necessary, which are simply used to check up the opera- 
 tions done. That is, each time an instruction card comes 
 back from the workmen, the operation number it represents, 
 or the letter covering the operation it represents, is checked 
 off on the outside of the envelope, so that at a glance the 
 order clerk can tell how far along any particular operation 
 has progressed. As soon as this check is made on the out- 
 side of the envelope, the instruction card is forwarded to 
 the accounting department, as shown at "N-1" and "G-3." 
 
 There are, of course, any number of variations that 
 
 LABOR. MATERIAL, AND EXPENSE 
 
 193 
 
 H 
 
 could be made in the foregoing chart; as, for instance, it 
 might be better, even necessary, in some plants to send the 
 tracing tags and requisition for material directly to the 
 stock room instead of the sub-order station stock clerk; in 
 which case the lines and the symbols covering these would 
 be drawn accordingly. Or, again, the duplicate requisition 
 for material might be destroyed, or might be sent to the 
 accounting department, according to other systems that 
 may be in use. In other words, the chart as shown is 
 not a fixed and fast diagram for doing a certain thing, but 
 rather an illustration of how systems and methods and 
 routine work can be expressed in the shape of a chart, which 
 in itself constitutes the instructions to the clerks and others 
 employed on the various operations. 
 
 Planning Board 
 
 This board (Form 60) is made up of vertical units, so 
 that it may be contracted and expanded from a minimum 
 of 24 men to a maximum of 120 men on one set of sup- 
 ports. Further, the entire board is not only portable, but 
 also adjustable, as it may be arranged at any angle desired 
 from a vertical position to a horizontal position. Each unit 
 has pigeonholes for 12 men. At the bottom of the unit are 
 12 spaces for men's names and numbers, and, in connection 
 with each space, a hook on which to hang a brass check, 
 which represents any machine the workman may be using, 
 as illustrated by C and D in the small drawing showing a 
 portion of a single unit. Each pigeonhole is numbered, the 
 number of a pigeonhole being given for each man, as shown 
 by E. 
 
 In order to know what machines are or are not being 
 used, a machine board — entirely separate and distinct from 
 the planning board— -is used. This board is provided with 
 hooks on which are placed brass checks for each and every 
 
194 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 machine controlled by any one station or planning board. 
 These checks should give not only the numbers of the 
 machines, but also, by a symbol of some kind, its type or 
 character. 
 
 Whenever a workman is given work and a machine is 
 assigned to him for doing the work, the brass tag repre- 
 senting that machine is taken from the machine board and 
 is placed on the pin under his name on the planning board, 
 there to remain until the job is completed. In this way all 
 brass tags hanging on the machine board will represent 
 machines that are available for work, and the empty spaces 
 will indicate machines which are in use. By proceeding in 
 this way, the machine and the man are always brought 
 together for each and every operation done, without hav- 
 ing to post on the machine board the jobs that are on each 
 machine, as is the case with most planning systems. 
 
 Round tags can be used for machines. If it is desired 
 to post on the machine board the man's number on his 
 being assigned a machine, a square tag should be used. In 
 this way information regarding the distribution of workmen 
 and machines will always be available by looking at the 
 control board and at the machine board, and without in 
 any way having to make a record in writing of just how 
 work is distributed. Also, as many men do not work on 
 machines, but are on bench work, this fact is shown by the 
 absence of a machine tag on the planning board. In this 
 way is ^.ecured a complete control of all men employed. 
 
 Whenever an order is made up for a piece or component, 
 a large envelope, made to fit the pigeonhole in the control 
 board, should be used in which to put blue-prints, material 
 requisitions, tracing tag, and workman's instruction cards 
 for all the operations required on the one piece. As these 
 are needed they are distributed by sequence of operations 
 to the workman in another envelope of the same size, and 
 
 LAIOR, MATERIAL, AND EXPENSE 
 
 I9S 
 
 a white slip containing a duplicate of the instructions given 
 the workmen is pasted to the top of the original envelope 
 so as to be visible in the workman's pigeonhole ; the control 
 board thus showing at a glance the entire distribution of 
 work that has been given out. The envelope can be used 
 several times by pasting one white slip over another. Con- 
 sequently, the stock of the envelope should be fairly heavy 
 and strong, without flap, and made permanently open at 
 the end. 
 
 In case the work to be done is of such a nature that 
 blue-prints or other bulky papers arc not used, and the 
 pigeonholes are simply wanted for instruction cards, ma- 
 terial requisitions, tracing tags, etc., for work ahead, the 
 pigeonholes would have to be proportioned accordingly, and 
 in this case the white slip would simply be held on top of 
 the pigeonhole by a small steel clip; any one of several 
 kinds which can be purchased answering this purpose. 
 These clips might also be used in connection with the 
 envelope, if for any reason they should be preferred. 
 
 What has been said in regard to the order control chart 
 also holds true here, as there are many ways of designing 
 a planning board. Form 60, as designed by the writer, has 
 been presented here because it seems to combine to an un- 
 usual degree certain points of adaptability, simplicity, and 
 labor economy in its use. 
 
CHAPTER XI 
 EMPLOYMENT AND HANDLING OF LABOR 
 
 In which the handling of labor is considered 
 from the time of starting to stopping, to- 
 gether with an approved method for paying 
 labor and distributing its time. 
 
 
CHAPTER XI 
 
 EMPLOYMENT AND HANDLING OF LABOR 
 
 Organization of Employment Department 
 
 It is the purpose of the present chapter to discuss the 
 subject of labor somewhat broadly, but at the same time to 
 give more particular attention to its relation to the account- 
 ing and statistical work. 
 
 Wherever possible, there should be an employment de- 
 partment or bureau which is to provide labor for all 
 branches and departments of the factory. Furthermore, 
 the responsibility of this department should be full and 
 complete, and it should be a general rule that no one may 
 be employed in the factory for any purpose whatsoever 
 except through the employment department. 
 
 The employment manager should keep on file all applica- 
 tions for employment, all references relative to employees, 
 and maintain a directory of these employees. In many 
 cases he will also find it necessary to compile and have avail- 
 able information in relation to rooms, board, dwelling 
 
 houses, etc. 
 
 In order to handle labor systematically from its first 
 application to its final dismissal, a card record will be found 
 convenient. A set of cards designed for the use of the 
 employment department is presented in Forms 61-75. A 
 detailed discussion of these cards follows. 
 
 Application for Employment Card 
 
 On this card (Form 61), designed to cover all general 
 labor in the factory, may be recorded the various necessary 
 
 199 
 
200 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 data in regard to the applicant. The cards should be filed 
 by trade or occupation, that is, under "Machinists," "Black- 
 smiths," "Clerks," etc., so that, whenever a requisition for 
 additional help is made, the applications of those capable of 
 doing the required work may be readily located. When 
 an employee is skilled in more than one kind of work, he 
 should be indexed under all the occupations in which he 
 claims to be competent, and the file number will be marked 
 on the card, that is, the file number for reference to any 
 letters of recommendation or correspondence that may be 
 received in connection with an employee. 
 
 Letter Application for Employment 
 
 In order to provide for the higher class of employees, 
 as for instance, high-grade office or engineering help, con- 
 cerning which a great deal more information is required 
 than for ordinary labor, a "Letter Application for Employ- 
 ment" (Form 62) may be employed. This letter application 
 is self-explanatory in its purpose and use. It is usually 
 double- folded to a 4 X 6 inch size, and filed as it is received, 
 under occupation indexing in an ordinary card index 
 drawer, the same as the application card. 
 
 As in the case of the employment card, the file number 
 of any other correspondence or material relating to the 
 particular application will be noted on the letter applica- 
 tion. 
 
 Reference Inquiry Letter 
 
 This is a form of letter (Form 63) used in all ordinary 
 cases for making inquiry of those given as references by 
 applicants for employment. It is self-explanatory. Both 
 this and the preceding letter form are made to double-fold 
 to a 4 X 6 size so that, if desirable, they can be folded and 
 filed in a card index drawer of this size. 
 
 EMPLOYMENT AND HANDLING OF LABOR 201 
 
 Requisition for Help Card 
 
 This card (Form 64) is for the use of all division heads 
 and foremen in making applications for labor. The face 
 of the card is filled out in accordance with its headings by 
 the party making the requisition. In each instance the card 
 is made out in duplicate, the original being sent to the 
 employment bureau, and the duplicate to the factory super- 
 intendent. On the back of the original requisition for help, 
 in the columns provided for the purpose, the employment 
 department records the names of men sent for, the date, 
 and any comment. After men have been supplied, these 
 cards may be temporarily filed in the employment depart- 
 ment, under the names of the departments from which they 
 come, as they show the authority for having hired the help 
 so requisitioned. 
 
 It should be understood, as before stated, that all labor 
 should be selected and hired by the employment department, 
 and that, with rare exceptions, all general labor in the 
 factory is to be hired and initial rate adjustments made 
 without in any way being interviewed by foremen or divi- 
 sion heads. Exceptions to this rule may be made in the 
 case of such labor as is employed by letter application for 
 employment. 
 
 Employee's Rate Card 
 
 As soon as the labor called for by a requisition is ob- 
 tained, the employment department should make out for 
 each employee an employee's rate card (Form 65). The 
 employment department will also furnish the workman with 
 an introduction card (Form 66) for presentation to the 
 foreman to whom he is to report for work. The foreman 
 will take up this introduction card, sign and return it 
 through his division head to the employment department. 
 
 The employee's rate card provides for a running record 
 
202 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 of any and all changes affecting an employee as regards 
 wages, department, and clock number. It is sent to the 
 factory superintendent or other division head for approval 
 of rate and then to the accounting department for filing. 
 In every instance a day rate must be set for each em- 
 ployee, whether he works at piece-work or not. The reason 
 for this is that— as is generally conceded— piece-workers 
 should earn from 20% to 30% more on piece-work than 
 they would on day-work; otherwise, there i<= no induce- 
 ment for piece-workers to speed up. Ultimately a running 
 chart on piece-work earnings, as compared to day-work 
 rates, should develop information of this character. If, 
 however, piece rates are so set that the piece-workers are 
 running from 30% to 50% more than their day rates, piece- 
 work rates have been wrongly set and the quantity of work 
 that could be turned out has been misjudged. One un- 
 fortunate result of such a mistake is that piece-workers are 
 likely to hold back so that excessive earnings shall not call 
 attention to the error in piece rates, and the maximum out- 
 put from equipment is not obtained. 
 
 Reductions of piece rates, when once these are estab- 
 lished, are intensely discouraging to employees, tend to 
 make them hold back, and have done more to bring the 
 premium system into disrepute among them than any other 
 thing. Because of this, piece rates should never be reduced 
 after being once set, unless operation changes make it 
 necessary. Day rates, however, may be changed to take 
 effect twenty-fours hours after the employee is notified of 
 the change. 
 
 To simplify the handling of the pay-roll, all employees, 
 including piece-workers, should be paid each pay day on 
 a day rate basis, and be paid on the first of each month the 
 difference between the day rate and what has been earned 
 on a premium or piece-work basis. 
 
 a 
 
 EMPLOYMENT AND HANDLING OF LABOR 203 
 
 The employee's rate card is to be posted from the follow- 
 ing cards in the order given: 
 
 1. "Change in Rate Card'* (Form 67), which is used by 
 division heads to notify the accounting department of a 
 change in rate, the reason for the same, and the party 
 authorizing it. These cards should be kept on file in alpha- 
 betical order in the accounting department, so that they 
 may be referred to at any time for authority for any change 
 and the amount in change of rate. 
 
 2. "Change of Department Card'* (Form 68), which 
 is used by division heads to notify the accounting depart- 
 ment of transfers. This card, however, need not be kept 
 after making entry on employee's rate card, as no purpose 
 is served by keeping it on file. 
 
 3. "Report of Absentees' Card" (Form 69), which is 
 used by the timekeeping department for keeping the foremen, 
 superintendent, and others advised as to absentees. This 
 information on these cards or slips is posted on the back 
 of the rate cards where a record of each individual em- 
 ployee's absence is kept. The timekeeping department 
 should be held strictly responsible for prompt notice of 
 absentees to all interested persons both in the factory and 
 
 in the oflBce. 
 
 It is important that a rule should be made and strictly 
 enforced, that if it is necessary for an employee to be absent, 
 such employee must send notice to the employment office by 
 telephone or otherwise, of his inability to report for work, 
 and that if an employee misses five musters without sending 
 such notice, he will be dropped from the pay-roll and not 
 reinstated except by re-employment in the regular way. 
 There are two reasons for this rule: if such notice is not 
 given, a great deal of trouble can be caused by delayed 
 work which the employee should have done, and, again, it 
 causes trouble in making up the pay-roll, etc. 
 
;204 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Quitting Card 
 
 The information contained on both sides of this card 
 (Form 70), while of great importance to the com- 
 pany as a whole, is of particular importance to the employ- 
 ment department, as enabling it to judge of the stability 
 of the labor employed and to recommend any changes neces- 
 sary to correct evils in the handling of labor. It is there- 
 fore of the utmost importance that the information of the 
 quitting card should be full and readily available. Not 
 only is the employee's own reason for leaving wanted, but 
 frequently, in addition, the opinion of some fellow em- 
 ployee as to why the employee left. An inspector's or fore- 
 man's opinion as to the reason for leaving is also provided 
 for on the back of the card. 
 
 When a man is discharged, or quits for any reason 
 whatsoever, one of these cards should be made out imme- 
 diately by the head of the department under which he is 
 employed, and all the information entered in detail as 
 called for on the card. It is then to be sent to the office 
 of the employment manager, where the man who is quitting 
 will go for any adjustment or action necessary in his case. 
 Instead of being allowed to leave, a desirable employee 
 should be transferred to some other department or held in 
 some other way, if this is possible. 
 
 As one of the most important questions in connection 
 with labor is its stability, an employee should never be 
 allowed to leave a company without full data as to the 
 reasons why he left. Oftentimes, the company may be at 
 fault, through its division head or foreman rather than 
 the man w^ho leaves; consequently, the causes that lead to 
 an employee's leaving are always a question for serious con- 
 sideration. Unfortunately, it is necessary to allow fore- 
 men or division heads to discharge men from their depart- 
 ments; otherwise they could not maintain discipline. The 
 
 EMPLOYMENT AND HANDLING OF LABOR 205 
 
 employment bureau must act as a clearing house for such 
 discharges. Foremen, knowing that under this method, in 
 case of a dismissal, they as well as the man discharged are 
 subject to investigation, are much more careful and just 
 in their attitude toward labor. 
 
 Records invariably show that labor is less stable under 
 some foremen than it is under others. Records will also 
 show that often men are put on work they are not fitted 
 to do ; whereas, if they were shifted to some other kind of 
 work, they would render satisfactory service. Therefore, 
 all the information called for on the quitting card should 
 be supplied, and before an employee can draw his money 
 and actually be let out, the information on this card should 
 be analyzed by the employment manager and the man 
 handled according to his findings. It may be possible to 
 put the man to work at some other point. It is always 
 understood, of course, that before the man is paid off, 
 information must have been received that all tool checks 
 and other charges against him have been turned in and taken 
 care of. 
 
 Employees Dismissed and Resigned 
 
 So much importance attaches to the record of employees 
 quitting, that it should be utilized to make out the "Monthly 
 Record of Employees Dismissed and Resigned" (Form 71). 
 These records give for each month, with reasons, the num- 
 ber of employees leaving. If employees are leaving because 
 they are dissatisfied, it is certainly a serious thing for the 
 management, and statistics are needed giving the causes of 
 dissatisfaction. On the other hand, if a large percentage 
 of employees leaving are undesirable employees, there is 
 something wrong in the method of the employment depart- 
 ment in the hiring of labor. Again, if employees leave for 
 other positions, it is quite evident that the other concerns 
 
I 
 
 206 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 are offering better inducements. In other words, this 
 record gives the data for analyzing all of the changes which 
 take place in the personnel of labor. 
 
 Pay Period 
 
 If possible, a four-times-a-month pay system should be 
 installed instead of a once-a-week system. The principal 
 reason for this is the saving of clerical labor that will be 
 effected in handling a pay-roll at the end of the month in 
 order to get a monthly statement of profit and loss. In 
 other words, when employees are paid once a week, it nearly 
 always brings the end of the month in the middle of a week, 
 which necessitates carrying an extra account in the ledger 
 and it also involves the figuring up of one week's work two 
 different times to get the distribution, thereby causing a 
 great amount of extra clerical labor. This applies both to 
 non-productive labor, which must be prorated over pro- 
 duction orders, and to the productive labor itself. 
 
 Under the four-times-a-month pay system proposed, 
 the pay days may be set somewhat as follows: 
 
 On the 4th, up to and including the 31st 
 
 12th, " " " " " 8th 
 
 20th, " " " " " 16th 
 
 28th, " *' " " " 24th 
 
 This arrangement allows four days after the close of each 
 pay period for making up and checking the pay-roll, 
 which is usually a sufficient time to do the work properly 
 and accurately. 
 
 All employees in a factory, except foremen and depart- 
 ment heads, should be put on an hourly basis, and paid for 
 the actual number of hours they work. All office employees, 
 foremen, and department heads should be paid on a monthly 
 basis, and paid in four equal payments each month. This 
 
 it 
 it 
 ti 
 
 ti 
 
 tf 
 
 it 
 
 EMPLOYMENT AND HANDLING OF LABOR 
 
 QQJ 
 
 very much simplifies the making up of a pay-roll and all 
 subsequent distributions. 
 
 Time Card 
 
 The time or clock card (Form 72) should be used for 
 keeping the daily time of all employees. They are required 
 to ring "In" in the morning and "Out" at noon; "In" at 
 noon and "Out" at night ; "In" for extra time and "Out" 
 for extra time. The record of all this is provided for on 
 the card, each card showing also the pay period and the 
 time it covers. 
 
 Each card should bear the name of the employee, and 
 all payments made by the company should be controlled by 
 the time registered thereon, except in the case of piece- 
 work or premium work. 
 
 A timekeeper should always be at the clocks when 
 employees are ringing "In" and "Out," and it should be 
 the timekeeper's duty to see that the clocks, card racks, etc., 
 are kept in order, and that the clocks are kept on time. 
 As soon as all employees are in in the morning, the head 
 timekeeper should have all time on clock cards sent to his 
 office and there enter them on a time sheet (Form 73) for 
 the time registered by the clock on the previous day. 
 
 At the end of each pay period these time cards are 
 used for making up the pay-roll. The total amount of 
 regular, overtime, piece-work, and premium work, shown 
 on the time sheets, is entered in the spaces provided for the 
 same, and the cards are then handed to the paymaster or 
 treasurer, who will have the pay-roll made up, deducting 
 any advances and entering these advances on the card, so 
 as to show the kind of pay which the employees receive, as 
 well as the total. Each time card should bear the number 
 of the time sheet from which the amount paid is taken. 
 (See also Form 73.) 
 
2o8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Pay Check 
 
 It will be noticed that a detachable pay check (Form 72) 
 is provided with the time card. When new cards are put 
 in the racks at the beginning of a pay period, the date the 
 pay period ends and the employee's number are inserted 
 upon each pay check, the same as on the main part of the 
 time card itself. When an employee takes the card out of 
 the rack for the first time, he tears off his pay check and 
 puts it in his pocket, thus having a means of identifying 
 himself at any time he is called upon to do so ; and it should 
 be a rule that any man in a shop who cannot produce his 
 pay check should be immediately challenged as to whether 
 or not he is an employee of the company. 
 
 On pay day each employee should have his pay check 
 ready, signed with his name and address, and when he re- 
 ceives his pay must pass it in as a receipt. If a premium 
 system of payment is adopted, the premium earnings may 
 be put in a red envelope, in which case the employee will 
 sign once for his regular envelope and again for the 
 premium. This red envelope is quite a feature as it calls 
 the attention of the other workmen to the fact that an 
 employee is earning a premium, and usually creates an 
 interest in premium work and an anxiety to have their 
 own work put on a premium basis. 
 
 After payment has been made, this pay check is pasted 
 on the back of the time card where the word "Instructions" 
 appears, with the signed side up and in front, and the entire 
 lot of time cards with these checks pasted to them is 
 fastened together and filed away for future reference in 
 auditing. 
 
 If an employee should lose one of these pay checks, it 
 will be almost impossible for anyone finding it to draw his 
 pay if it does not show the owner's signature and is not 
 identified by his foreman. Pay checks presented outside of 
 
 I 
 
 EMPLOYMENT AND HANDLING OF LABOR 209 
 
 pay day should be challenged for this information. Further, 
 a comparison of signatures with previous checks would 
 immediately indicate a forgery, if one was attempted. Em- 
 ployees should not sign their pay checks until the morning 
 of pay day, thus making it impossible, if one is lost, for a 
 chance finder to get it cashed. 
 
 Time Sheet (First Form) 
 
 The purpose of keeping a time sheet such as that shown 
 in Form 73 is much more than the mere collection of time 
 for pay-roll purposes. Primarily it does this, but, while 
 keeping it for pay-roll purposes, the information gathered 
 is also available for other purposes far more important. 
 First, it affords a check on the factory against the "In" 
 and "Out" time clocks; and second, a complete record of 
 each employee's time for each pay period is secured, show- 
 ing how this time has been disposed of; third, a record is 
 made that will act as a labor distribution sheet, and from it 
 can be compiled all statistics and costs relative to the amount 
 and the time expended on the different kinds of labor, 
 namely, day work, extra time, piece or premium work, non- 
 productive time, and waiting time ; and finally, it provides a 
 completely self -balancing and self-proving record, which 
 will immediately show any errors in turning in or in post- 
 ing time tickets, so that such errors can be checked up and 
 rectified before matters become "cold" and before it be- 
 comes impossible to locate discrepancies. As the figures 
 computed for pay-roll purposes are the same figures used 
 for distribution data, the time sheet proves itself, and at 
 the end of each month the total amount expended for labor 
 must balance out exactly with the total labor distribu- 
 tion. 
 
 The time sheets illustrated in Forms IZ, 74 are there- 
 fore capable of being used for: 
 
1 
 
 2IO UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 1. Checking workmen's daily time tickets and slips 
 
 (see Chapter X) against the clock time. 
 
 2. Providing a distribution of each workman's time 
 
 according to the department number in which he 
 is working, and the activity or kind of labor at 
 which he is employed in that department. 
 
 3. Furnishing a complete system of costing of labor on 
 
 all production at the same time that the time for 
 pay-roll is extended. 
 
 Two of these sheets, which are printed on both sides, 
 are to be used for each employee each month. One side 
 of the first sheet provides for keeping the time from the 
 1st to the 8th of the month, inclusive, and the reverse side, 
 from the 17th to the 24th inclusive, while the other sheet 
 provides for keeping the time from the 9th to the 16th 
 inclusive on one side, and from the 25th to the 31st inclusive 
 on the other. This arrangement enables the timekeeper to 
 enter the time from the time cards and workmen's daily 
 time tickets on the current time sheet, and leaves the sheet 
 for the previous pay-roll available for figuring extensions 
 and computing the pay-roll separately. At the same time, 
 it gives on each sheet the total pay for the period, and on 
 the last sheet of the month, monthly grand totals for each 
 employee, thus giving the fullest data which can possibly 
 be required without going to the expense of re-compiling 
 figures for statistical purposes, etc. 
 
 As stated under the description of the clock or time card 
 (page 207), each morning the time on the time card is to 
 be entered at the top of the time sheet, and against this 
 time will be checked workmen's time tickets coming in 
 from the factory each day. Provision has been made on 
 this time sheet for entering the hours and minutes only from 
 the workmen's daily time tickets. This requires an ex- 
 tension of the amount in money but once for the entire pay 
 
 EMPLOYMENT AND HANDLING OF LABOR 21I 
 
 period, thus saving a great deal of time, computation, and 
 extension work. 
 
 When the workmen's daily time tickets (Forms 44-55) 
 come in each morning for the previous day's work, the time- 
 keeper first sorts them by the employees' numbers and posts 
 to the time sheet. For all tickets showing operations on any 
 production, betterment, or repair orders, the "Order Let- 
 ter," ''Order Number," and "Operation Number" should be 
 entered in the first three left-hand columns of the sheet, and 
 the space in which they are entered between the heavy cross- 
 rulings is left for the same order for the entire pay period, 
 i.e., the information on the particular order for the pay 
 period is entered entirely across the sheet. 
 
 To illustrate, if a workman's first time for the period 
 comes in showing part of his time on production order No. 
 500, operation "A," then the order letter "C" ("C" for pro- 
 duction, "E" for betterment, and "F" for repairs) will be 
 entered on the first line of the sheet in the first column 
 headed "Order Letter"; under "Order Number" will be 
 entered "500," and under "Operation Number," "A." Then 
 will be extended under the proper date the number of hours 
 and minutes shown by the time ticket, which will be en- 
 tered on the line showing the kind of work, i.e., day work, 
 overtime, piece-work, and premium. If the same order is 
 worked on again in the period, it is entered on the same 
 horizontal lines but under the proper date as the first time. 
 If the remainder of the first day is spent on betterment order 
 No. 100, in the next space between the heavy horizontal 
 lines will be entered E Order No. 100, and the hours and 
 minutes entered in the column under the same day and on 
 the day-work line. 
 
 As the workman goes on working from one production 
 order to another, the order number will be entered in the 
 next vacant space between the heavy cross lines, and all of 
 
212 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the time for the pay period spent on such order number 
 will be entered between these same heavy lines, so that at 
 the end of the pay period, by adding across the page, the 
 total time spent on each production order is obtained, to- 
 gether with the total cost of each operation on each produc- 
 tion order. Space has been provided for posting the time 
 on twenty-one different order numbers in each pay period. 
 Usually there will be a less number than this, but, in case 
 there should be more, a separate sheet can be kept for the 
 additional orders and filed in a binder directly behind the 
 first sheet. 
 
 Under each date in the "Ticket Number" column of the 
 time sheet should be entered whatever additional number 
 there is to the time ticket other than the production order 
 and operation numbers; that is, all tickets on production 
 orders are to be numbered with a combination of the pro- 
 duction order number, operation number, and lot number. 
 Therefore, as the production order number and operation 
 number are given in the left-hand column on this sheet, the 
 only remaining figure to be put in under "Ticket Number" 
 will be the lot number. 
 
 When a workman turns in a time ticket for non-produc- 
 tive labor (Form 55), the ticket number and the hours and 
 minutes shown on the time ticket should be entered on the 
 lines provided for that purpose near the bottom of the time 
 sheet. This also applies to waiting time, provision having 
 been made for two waiting time tickets (Form 51) in any 
 one day. 
 
 It will be seen that, adding down the entire column 
 under each day, the footing obtained is the workman's total 
 number of hours and minutes for that day, and this total 
 must agree with the total clock time. If any discrepancy 
 occurs in this respect, the matter must be taken up by the 
 timekeeper with the foreman or superintendent, and he 
 
 EMPLOYMENT AND HANDLING OF LABOR 213 
 
 must see that tickets are turned in for the entire time shown 
 by the clock. 
 
 The hours and minutes on piece-work must be entered 
 on the time sheet daily, just as for day-work. When the 
 first ticket for certain operations on piece-work comes in, 
 the timekeeper will enter, in the "Order Number" column 
 directly underneath the number of the order, the piece rate 
 in red ink, and when he posts the hours and minutes he 
 should also post directly below this in red ink the number 
 of pieces processed at this operation. In this manner, at 
 the end of the pay period, the total number of pieces pro- 
 cessed can be extended in red ink in the same column with 
 "Total Hours," and the piece-work earnings can then be 
 entered on the proper line in the column "Amount Day- 
 Work." 
 
 Premium earnings should be handled in the same man- 
 ner as piece-work, entering them in red ink directly above 
 the premium hours. The "Bonus" column will be used, of 
 course, only in case of premium work, when the premium 
 bonus will be shown thereon. The "Total Pay" will be 
 entered in the last column. 
 
 At the end of a pay period this sheet is transferred from 
 the timekeeper's active binder, the other sheet being used 
 meanwhile, as it is then ready for figuring extensions. This 
 should be done on a calculating machine. When the sheets 
 are extended and the footings obtained, the amount of time 
 together with the money it represents, as shown on the 
 time sheets, should be carried to the laborer's time on clock 
 card (Form 72) for that pay period. 
 
 After extensions have been made for pay-roll purposes, 
 a recapitulation of the total hours and costs of each produc- 
 tion, betterment, and repair order, and of all non-productive 
 work and waiting time, are drawn off, and at the end of 
 the month the totals are turned over for distribution work. 
 
214 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 It will be seen that these time sheets afford a complete 
 and clear record of each employee individually, and of all 
 employees collectively, as well as giving complete cost data 
 for all labor employed on each order going through the 
 factory. 
 
 It should be noted, that at the top of the sheet, not only 
 are the employee's name and number given, but also the 
 department number and the activity, this activity meaning 
 the classification of labor, such as day-worker, piece-worker, 
 premium worker, clerk, non-productive day- worker, etc., 
 the timekeeper being given a classification number for each 
 of these by the distribution department. 
 
 In posting the daily time tickets, each should be checked 
 with the department number as shown at the top of the 
 employee's time sheet, and, if the time ticket shows that he 
 is working in another department, such time must be entered 
 in a space between the heavy cross-rulings, in the first 
 column of which will be entered "Charged to Department 
 
 " Thus, at the end of the month the total of 
 
 such time spent in other departments can be charged to the 
 proper department, and not be shown in such employee's 
 regular department, as would otherwise be the case. 
 
 Distribution of Labor Costs 
 
 When the timekeeper receives notice of the completion 
 of any production, betterment, or repair order during the 
 month, he will immediately obtain from his time sheets the 
 recapitulation of the labor cost of such order and turn it 
 over to the distribution department ; and at the end of each 
 month the totals of all unreported production orders, non- 
 productive labor, waiting time, and every other classification 
 of time, will be turned over to the distribution department, 
 thereby furnishing it with the complete distribution of the 
 entire pay-roll for the month. 
 
 EMPLOYMENT AND HANDLING OF LABOR 215 
 
 In turning over labor costs on orders completed during 
 the month, notation should be made on the time sheet, so 
 that the costs of these same orders will not be included in 
 this distribution report at the end of the month. 
 
 In addition to this, there will be drawn off at the end 
 of each month the total of labor charges to each department, 
 and to the classification of activity of such labor in each 
 department, as per the "Labor, Material, and Expense Dis- 
 tribution Sheet" (Form 11) ; that is, the total labor for 
 each department will be given according to the distribution 
 numbers, as set forth in Chapter XII, "Distributions." 
 
 Time Sheet (Second Form) 
 
 A second method of timekeeping is hereby offered for 
 consideration, which is somewhat simpler than the one 
 previously described, as, in so far as the time sheet is con- 
 cerned, it confines itself to pay-roll purposes only. The time 
 sheet illustrated (Form 74) provides for four pay periods 
 per month, as in the previous case, and also provides for the 
 registration of the time or clock cards (Form 72) and of 
 the internal tickets, whether for day-work, overtime, or 
 simply piece-work. In this system the clock cards are 
 gathered every morning, and the hours and minutes only 
 are posted to the proper column. Then, if an internal ticket 
 is provided for each and every employee, it is posted to the 
 column "Regular," "Overtime," or "Piece-Work," as the 
 case may be, space being allowed for three different piece- 
 work tickets each day. 
 
 Extensions on this sheet for day-work are made but 
 once a pay period, and can be made for piece-work once 
 a pay period or once a month, according to the policy 
 established for handling piece-work. That is, in some 
 factories it is found desirable to pay men on a day rate 
 basis for the entire month and then once a month pay them 
 
'I 
 
 1 > 
 
 2l6 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 any additional amount they may have earned on piece-work. 
 In other words, the difference between the "Total Piece- 
 Work" column and the "Total Day Wages" column, as 
 shown at the end of the month on this time sheet, gives in 
 such cases the additional amount earned by piece-work from 
 pay period to pay period during the entire month. 
 
 It should be borne in mind that this time sheet serves 
 no other purpose than pay-roll requirements and that all 
 distributions by departments and by production, betterment, 
 and repair orders must be made entirely independent of it. 
 
 For distribution, when this sheet is used, reference is 
 made to the departmental distribution sheet shown in Form 
 77, in which the account numbers run across the top of 
 the page and the department numbers vertically on the left- 
 hand side. A very simple method of distribution of time 
 tickets and clock cards can be made by sorting all tickets to 
 a set of pigeonholes made to correspond to each one of 
 these departmental distribution numbers; that is to say, 
 each department number, plus an account number, should 
 constitute a pigeonhole. During the month, all time tickets 
 and requisitions are extended and placed in these pigeon- 
 holes according to the department from which they come. 
 At the end of the month, by simply using an adding machine 
 and entering the totals on the distribution sheet, a depart- 
 mental distribution is obtained. After this, all tickets and 
 requisitions, covered by a production, betterment, or repair 
 order number, are sorted by these numbers, and the adding 
 machine is again brought into use and the total of each 
 order number is placed on the record of production, better- 
 ment, and repair order sheets (Form 78). This affords a 
 simple but complete method of obtaining the pay-roll, the 
 departmental distribution, and the production, betterment, 
 and repair order distribution. 
 
 This method can be simplified still further, if necessary. 
 
 EMPLOYMENT AND HANDLING OF LABOR 217 
 
 by reducing the time sheet illustrated in Form 74 to a record 
 of piece-work earnings only, paying off on the basis of the 
 clock cards each week at the day rate, and at the end of 
 the month paying the difference between day earnings and 
 piece-work earnings. 
 
 In order to explain better this last method of handling 
 the pay-roll, a time or clock card based on a weekly pay 
 period and somewhat different in its construction from the 
 one previously illustrated, is shown in Form 75 and dis- 
 cussed under the next heading. 
 
 Time Card (Second Form) 
 
 Every employee of the company, in the office as well as 
 in the factory, whether a division head, foreman, or other- 
 wise, should, without exception, use a clock card (Form 75) 
 for keeping his daily time. Time clocks should be installed 
 throughout the works, each one or more at the same point 
 being called a "Timekeeping Station" ; and, in assigning a 
 clock card to an employee, the station number should be 
 indicated on the time card, as should also the number of 
 the department in which he works. 
 
 It will be noted that these clock cards cover a period of 
 seven days, on the assumption that all payments are made 
 on a weekly basis, and the total time of each day is footed 
 up at the bottom of the card. 
 
 With all work throughout the factory that is to be 
 covered by a production, betterment, or repair order, a 
 time or cost ticket bearing the number of the order will be 
 used. On the clock card will be noted a checking line "Ck" 
 just below the "Total" line at the bottom of the card. In 
 this the time for any particular date as shown on the cost 
 cards in the factory, can be entered as a check on the total 
 time. For instance, if a man's clock time shows up for 
 eight hours, and his internal time on the cost card shows 
 
2l8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 up for only seven and a half hours, there is a difference of 
 thirty minutes to be accounted for, which may be charged up 
 to waiting time if necessary. If this is done, at the end of 
 any pay period or at the end of a month, if found desirable, 
 statistics can be made as to this waiting time. Or again, as 
 is done in some factories, if internal time tickets are issued 
 each day for each and every employee, this bottom space 
 on the clock card can be used to check up the man's time, 
 as between "In" and "Out" time, and internal time. 
 
 When the time for the week has been duly entered on 
 the clock card, the activity of the employee, whether he is 
 a foreman, laborer, or clerk, as shown on the distribution 
 sheet, is indicated on the clock card, and the entire distribu- 
 tion of labor can then be made from these clock cards so 
 far as departmental distributions are concerned. In other 
 words, much of the information that is compiled on the time 
 sheet in the method previously discussed, is here tabulated 
 on the clock card, this card having vertical columns for 
 registering time, instead of horizontal columns. 
 
 At the end of each pay period, the clock cards are to 
 be used in making up the pay-roll. The total amount of 
 regular, overtime, and piece-work earnings having been 
 entered in the spaces provided, the cards are sent to the 
 accounting department for the making up of the pay-roll. 
 The cashier will deduct any advances by entering them on 
 these cards so as to show the net amount of pay the employee 
 is to receive, as well as the total. 
 
 Regular time and extra time on day-work will be posted 
 direct from the clock card itself, while piece-work earnings 
 will always be posted from sheets, as before suggested. By 
 this process, it becomes absolutely unnecessary to make up 
 any pay-roll sheet, thereby doing away with a great amount 
 of clerical work and liability to error. 
 
 CHAPTER XII 
 
 DISTRIBUTIONS 
 
 Illustrating the relations between organiza- 
 tion and accounting work, and showing how 
 labor, material, and expense are distributed 
 to both departments and orders. 
 
CHAPTER XII 
 
 DISTRIBUTIONS 
 
 Organization 
 
 Ordinarily, the organization of a business is understood 
 to be the uniting of a body of individuals together by bring- 
 ing its personnel into systematic connection and co-opera- 
 tion as a whole, or, in other words, to prepare for the trans- 
 action of business by electing and appointing officers, com- 
 mittees, and others, who are to be vested with authority 
 over the various departments, so that each will properly 
 correlate and co-operate with all. 
 
 This conception of organization, while correct, is incom- 
 plete as it omits the prime consideration in designing an 
 organization. The things to be considered first in any 
 manufacturing business are its functions and activities, 
 irrespective of the individuals to be connected with it ; that 
 is, it is the designing of a machine which, after completion, 
 
 must be manned. 
 
 Fundamentally, the division of a manufacturing business 
 into departments is the basis for its organization, as the 
 different methods of procedure in the different departments 
 require widely varying experience on the part of depart- 
 mental heads, just as varying experience is necessary in the 
 processing of different kinds of material on the part of the 
 
 labor employed. 
 
 The primary organization of a manufacturing business, 
 therefore, is its division into such departments as are re- 
 quired by the different experience demanded for their opcra- 
 
 221 
 
II 
 
 il 
 
 il 
 
 I ? 
 
 I 
 
 222 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 tion, and then the appointment of a competent personnel to 
 operate these divisions. 
 
 Organization, like everything else, goes by assemblies 
 and sub-assemblies; in other words, in any organization 
 as a whole there are many units of organization. For 
 instance, all the purchasing work is a unit, as it takes a 
 kindred line of experience and knowledge in all of its 
 various branches; the same applies to accounting work, 
 selling, etc. Therefore, the first thing to do in forecasting 
 an organization is to determine what these prime divisions 
 or units should be — thus: 
 
 Administrative Work covers (1) finance, (2) invest- 
 ments, (3) insurance, etc. 
 
 Selling Work covers (1) advertising, (2) selling, (3) 
 collections, etc. 
 
 General Accounting Work covers (1) billing, (2) 
 general bookkeeping, (3) balance sheets, profit and 
 loss statements, etc. 
 
 General Office Work covers ( 1 ) correspondence and 
 typewriting, (2) mailing and filing, (3) general 
 supervision, etc. 
 
 The above relates more particularly to the commercial 
 end of a business. In the manufacturing end, under a 
 "Factory" or "Works Manager," there would be: 
 
 Purchasing Work, covering (1) buying, (2) receiv- 
 ing, (3) general stores, etc. 
 Engineering Work, covering ( 1 ) designing of product, 
 
 (2) designing of plant preparation, (3) planning 
 work, etc. 
 
 Plant Service Work, covering (1) power and power 
 appliances, (2) millwrights and installation work, 
 
 (3) water, steam, electric, and general plant service, 
 etc. 
 
 DISTRIBUTIONS 
 
 223 
 
 Processing Work, covering (1) tool-making, (2) 
 processing product, (3) equipment maintenance, 
 etc. 
 
 Factory Accounting Work, covering (1) time-keep- 
 ing and pay-roll, (2) costs and statistics relating 
 thereto, (3) inventories, etc. 
 
 Shipping Work, covering (1) shipping, (2) ware- 
 housing, (3) transportation, etc. 
 
 The foregoing, a rough classification of the functions 
 found in almost any manufacturing business, is given here 
 to bring out the basic principle of organization, i.e., the 
 fact that departmental creation is determined by the varied 
 abilities or experiences of labor required to operate and 
 control the factory activities. 
 
 For a manufacturing business, the classification given is 
 fairly representative, each prime function embracing only 
 such activities or experiences as are closely related and 
 similar. In other words, a clerk in the office would not be 
 expected to do tool-makers' work, or vice versa. 
 
 Organization Chart 
 
 While organization is no part of the present discussion 
 further than it affects the accounting or system of distribu- 
 tion, nevertheless a chart (Form 76) is given, illustrating 
 a fairly representative organization and grouping functional 
 activities, with an arrangement of authorities that is almost 
 self-explanatory. 
 
 In so far as the officers are concerned, their particular 
 functions are clearly shown on this chart, for the treasurer 
 should be, in fact, not in name or by in proxy, in charge of all 
 questions relating to finances and accounting, and the secre- 
 tary should be, if possible, in charge of all matters relating 
 to the general office work, etc., in addition to his legal 
 duties as secretary of the corporation. So also, the best 
 
 s 
 
 I 
 
ill' 
 
 224 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 iOrm of organization seems to be that which makes the vice- 
 president of the company its general manager, as it gives 
 him close working relationship with not only the activities 
 of the business, but the finances, policies, etc., that control 
 these activities. 
 
 It is not, however, so much the relationship of authori- 
 ties that is of interest at the present moment, as it is a 
 distribution of expense over an organization, made in such a 
 way that direct responsibility can be placed on each depart- 
 ment head for the expenditures of his department. For 
 example, either one of the commercial expense groups shown 
 on the chart (Groups 11 and 31) may be taken and it will 
 be quite possible to lay out a distribution sheet reflecting 
 the cost of this organization. 
 
 Factory Overhead Sheet for Distributions 
 
 The handling of production under engineering super- 
 vision has, during the past few years, made changes so 
 rapid and so radical in accounting methods as to have, in 
 large measure, completely transformed them. For example, 
 cost accounting has become so closely identified with produc- 
 tion engineering or planning department work that in many 
 lines of industry it must be considered a part of such work. 
 
 The keen competition of today will not permit of distri- 
 butions of labor, material, or expense, either individually or 
 collectively, being made promiscuously or without reference 
 to departments. An excellent illustration of what modern 
 business methods demand will be found in the factory over- 
 head sheet for distributions (Form 77), wherein are shown 
 three divisions of overhead expenditures, namely, labor, 
 material, and expense, each divided into a certain number 
 of captions. Labor shows four different kinds of activities; 
 and materials, five different kinds of commodities; while 
 under expense there are seven different classifications. More 
 
 DISTRIBUTIONS 
 
 225 
 
 
 I 
 
 subdivisions may be made if necessary. All of these are 
 governed by account numbers, the Dewey decimal system 
 being used in the present instance. All of these numbered 
 captions are used later at the time the monthly balance sheets 
 are drawn up. 
 
 On the left-hand of the sheet is a complete division of 
 the business into departments, numbered according to the 
 Dewey decimal system. Thus, each department is desig- 
 nated by name and number, a combination of the latter 
 with any account number constituting a symbol for distribu- 
 tion. To illustrate, 16-1.2 would be the clerical work in the 
 bookkeeping department, while 97-1.1 would be the fore- 
 men in the wheel department, or 97-1.3 would be general 
 non-productive labor in the wheel department. Or, again, 
 81-1.2 would be the general non-productive labor in the 
 experimental room, and so on for any and all other com- 
 binations of departments and accounts numbers, the symbol 
 always being the number of the department plus the account 
 number of either labor, material, or expense. 
 
 By this method a complete analysis of departmental over- 
 head is obtained for the entire plant in such a way that 
 comparisons can be made from month to month. What is 
 more important still, these can be made in such a way that 
 the personnel of an organization can be held directly re- 
 sponsible by departmental divisions for any variations due 
 to the excessive use of labor, material, or expense, in so far 
 as they may have any responsibility for it. 
 
 One great purpose of creating a combination symbol 
 composed of department and account numbers, is to make 
 possible the use of modern accounting machines, such as the 
 Hollerith or Powers machines, for distribution work. 
 
 It must be borne in mind that the important and real 
 purpose in connection with the ascertaining and distribution 
 of overheads, is to show their percentage or hourly basis 
 
226 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 relation to the amount of productive or direct labor 
 employed. 
 
 By this method of distribution, the total direct labor of a 
 plant can be checked against the total overhead and a com- 
 mon percentage or an hourly rate obtained. The latter is 
 much to be preferred when it can be worked out, as it fur- 
 nishes a fairly close cost on any unit manufactured where a 
 factory is operating on what is known as the continuous 
 manufacture basis. 
 
 It is highly desirable, however, in laying out any system, 
 to have it so flexible that, if found necessary, the same rela- 
 tion between direct and indirect expense obtained as a whole 
 may be had for each department. Provision has been made 
 for this on Form 77. On this the total amount of direct 
 labor for each department will be shown in Column 4.2 and 
 a means thereby afforded of ascertaining departmental over- 
 heads by amounts and percentages which will enable them 
 to be worked out ultimately on an hourly basis. 
 
 It would be quite possible to give a more detailed 
 analysis of overhead, but it seems hardly necessary. Labor 
 divided into foremen, clerks, manufacturing, and trucking 
 or general, would seem to be a sufficient division for the 
 control of labor conditions especially where it is segregated 
 by departments. The same may be said of the divisions 
 given for material which are sufficient for almost any 
 business. 
 
 Old methods of accounting employed a large list of 
 standing orders, some of which related to labor, some to 
 material, some to a combination of labor and material, and 
 most of which upon analysis lacked any possibility of placing 
 direct responsibility for their variation from month to month 
 and year to year. Modern accounting has entirely elim- 
 inated this system of standing orders. In the first place the 
 elements of manufacture have been reduced to three primes 
 
 DISTRIBUTIONS 
 
 227 
 
 i 
 
 — labor, material, and expense; therefore, all accounting 
 work is designed to deal directly with these three items for 
 whatever purposes it may be necessary to apply them. The 
 method of distribution as illustrated above takes full 
 cognizance of this condition in its separation of producing 
 from non-producing factors for purposes of administrative 
 control. 
 
 In Chapter XIII, "Commercial or Office Accounting/* 
 and Chapters XIV, XV, "Controlling Accounts," it will 
 be shown to what a great extent factory accounting has 
 been effected by a recognition of these three primes. For 
 instance, such things as labor, materials, and other distribu- 
 tions to standing orders, were formerly made by a voucher 
 record or cash book, and were a matter of bookkeeping. 
 Today, no such thing as distributions of this character are 
 recognized in connection with general bookkeeping, but 
 they are taken care of altogether by cost accounting, and 
 this cost accounting is always protected by the issuance of 
 some kind of an order for the work required, to which must 
 be charged the labor, material, and expense involved in its 
 execution. 
 
 The following is a brief discussion of the various head- 
 ings on the distribution sheet, classified in accordance with 
 the arrangement of the sheet: 
 
 Labor 
 
 Account 1.1 — Foremen. This should cover everything 
 requiring the attention of the general foreman, foreman and 
 assistant or sub-foreman, in every department. 
 
 Account 1.2 — Clerks. All clerical work of any kind, in- 
 cluding stenography, typewriting, and general office routine 
 in any individual department throughout the factory, should 
 be charged to this account. 
 
 Account 1.3 — Manufacturing. Under this caption should 
 
228 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 be entered any and all non-productive labor used throughout 
 the factory for any purpose whatsoever in any department 
 which is not registered under 1.2 or 1.4. 
 
 Account \A — Trucking. As the expense for trucking 
 in a large plant is usually a considerable item, it is advisable 
 to set this up as a separate account called 'Trucking,'* even 
 when the charges originate through an organized trans- 
 portation department. 
 
 The expense is then distributed over the various depart- 
 ments in accordance with the facts. 
 
 Column 1 — Total. This is the total of all indirect labor 
 for each and every department, by activities, and it is to be 
 checked against Column 4.2 — Direct Labor — ^between direct 
 and indirect labor. 
 
 Materials 
 
 Account 2.1 — Shipping Supplies. Supplies of this char- 
 acter are chargeable to very few departments, probably not 
 more than three or four for most businesses. The heading 
 covers nails, screws, lumber, excelsior, burlap, paper, crates, 
 etc., that are used exclusively for the purpose of shipping. 
 
 These are separated from other non-productive materials 
 because they are not consumed in factory operations, but 
 are necessary to transportation of goods after the factory 
 has got completely through with its processing or assembling 
 operations. These items, therefore, are not considered a 
 part of factory operations at all, simply a warehousing 
 expense which might well come under sales expense. 
 Usually, however, they are treated as a part of factory 
 overhead. 
 
 Account 2.2 — Operating Supplies. Charged to this ac- 
 count will be such items as are consumed in operating the 
 plant itself, and must necessarily embrace many small items. 
 In other words, it represents material that in no way enters 
 
 DISTRIBUTIONS 
 
 229 
 
 into a product manufactured for sale or a product resulting 
 from betterment orders; something that is consumed without 
 being in any way directly chargeable to an order of any 
 kind; such as waste, cutlery compounds, emory wheels, 
 polishing materials, etc., as shown in stores classification of 
 same. It should, therefore, be absorbed into the product 
 through overhead. 
 
 It is in view of these distributions of materials that the 
 classification under stores-keeping has been so specifically 
 itemized, enabling the accounting department to know just 
 what materials are to be distributed to such accounts as 
 this. In the development of stores-keeping no attention has 
 been paid to these necessities until quite recently. 
 
 Account 2.3 — Miscellaneous Equipment. A considerable 
 explanation is required in connection with this distribution 
 account. Miscellaneous equipment includes such items as 
 files, hammers, wrenches, drills, tanks, barrels, flasks, trucks, 
 fire buckets, brooms, mops, pails, etc., and in addition 
 thereto, a large proportion of small cutting tools of all kinds 
 which have been issued to the factory, all of which are items 
 carried in general stores for expense consumption. They 
 are not classed as fixed assets, being short-lived, but they 
 always have a residue value in them upon the taking of a 
 physical inventory. 
 
 For instance, an inventory might show five dozen half- 
 inch twist drills, partially used, and they would be put into 
 physical inventory at some valuation and carried into inven- 
 tory account as described in Chapter XIV, "Chart of Con- 
 trolling Accounts.'' During the year, however, there might 
 be ten dozen of the same sized drills issued to the factory 
 which would have been charged up to expense or overhead, 
 and yet at the end of the year practically five dozen half- 
 used drills of this size might be found. Therefore, it is 
 obvious that there is always a standing investment in items 
 
230 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 of the character described above, which have a recognized 
 inventory value for a going business. Beyond this, as 
 everything of this nature goes into expense, that is, the 
 amounts consumed from year to year during inventory 
 periods, it must be understood that all such items issued 
 from stores to the factory do not at once go to increase the 
 controlling accounts, but any increase or decrease in assets 
 of this character will have to be recovered upon the taking 
 of a physical inventory, and the figures shown by this 
 physical inventory will stand as the investment for the next 
 succeeding year. 
 
 Account 2A — Fuels and Lubricants. This account re- 
 lates to any and all kinds of manufacturing fuels, whether 
 gas, oil, or otherwise, that may be used by various depart- 
 ments and which cannot be charged directly to any produc- 
 tion or betterment order; also any and all lubricants used 
 for operating machinery of any kind. 
 
 Account 2.5 — General. This account covers any and 
 all items not otherwise chargeable to an order of any kind 
 or to the previous four captions, and naturally would in- 
 clude all office stationery, forms, etc., used throughout the 
 factory. 
 
 Column 2 — Total. This column is the total of all 
 materials used as classified by departments. 
 
 Expense 
 
 Account 3.1 — Monthly Depreciation. This account 
 covers the total depreciation shown under reserves (See 
 Chapter XV, "Chart of Controlling Accounts"). It can 
 be worked into a schedule for each department if it is 
 desirable or necessary to do so in order to obtain more 
 accurate departmental overheads. The basis for such a 
 schedule would be the square foot floor space occupied, plus 
 the investment of equipment contained thereon; otherwise, 
 
 DISTRIBUTIONS 
 
 231 
 
 the depreciations would simply be shown in this column as 
 total and be taken into overhead as such. 
 
 Account 3.2 — Monthly Insurance. This account should 
 show an aggregate of all insurance which is to be absorbed 
 into overhead on a monthly basis, and it should cover every 
 class of insurance as carried on the current ledger accounts. 
 In other words, the total insurance applied to the plant 
 should be prorated monthly, and the amount shown in this 
 column in total. 
 
 Account 3.3 — Monthly Rent. If any buildings or prop- 
 erty are rented for the use of the factory, this account pro- 
 vides a means for distributing the rental to the depart- 
 ments occupying such buildings or property; but if cost in 
 the form of rental is charged for the entire real estate and 
 buildings of the company, a means is obtained whereby the 
 square foot floor space occupied by each department can be 
 charged proportionately. 
 
 Account 3.^1 — Electric Current. The same opportunity 
 is offered here for arriving at the lighting expense of each 
 department if proper meter arrangements are provided to 
 do this. Provision is also made in this account to cover 
 any and all power used by the departments, either in- 
 dividually or collectively, provided proper meter arrange- 
 ments are introduced for obtaining the consumption of same. 
 To this end it is to be hoped that the power plant will be 
 run as an independent unit and that all current for light and 
 power will be metered to each and every department ; other- 
 wise the expense of the power house will have to stand as an 
 undistributed overhead to be prorated on some other 
 basis. 
 
 Account 3.5 — ^Taxes. This account covers the distribu- 
 tion of a monthly prorated amount of taxes and must cm- 
 brace not only the real estate and personal property taxes 
 of the company, but also any corporation or other taxes 
 
 i%i 
 
232 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 that shoxild properly be distributed over the product manu- 
 factured, by an absorption into overhead. 
 
 This distribution account is related to the controlling 
 account "Taxes Accrued," and consequently has a prorated 
 distribution table in accordance with the demands of this 
 
 account. 
 
 » 
 
 Account 3.6 — Freight and Express. This account relates 
 to the incoming freight and express on all goods of which 
 there would be very little departmental distribution, the 
 principal amounts being charged up to general stores, power 
 plant, etc. 
 
 Account Z.7 — Overhead Unclassified. This account is 
 for the collecting of such items as could not very well be 
 distributed to any of the foregoing accounts. It might 
 embrace contract work for window-washing, janitorship, or 
 cleaning of buildings. In other words, this provides a 
 special column for things that are not regularly applied to 
 overhead or could not be classified in any other way. 
 
 Column 3 — Total. This column is the total of all 
 expense which goes to create overhead for the month and 
 is shown by totals for each department. 
 
 Column 4.1 — Grand Total. This includes the grand 
 total overhead expense of each department together with the 
 grand total of all overhead for all departments. 
 
 Column 4.2 — Direct Labor. This column is provided 
 for statistical purposes only, to permit of ready comparisons 
 between direct and indirect labor, and is not to be treated 
 as an account in any way. 
 
 Redistribution 
 
 Bearing in mind the fact that there are two kinds of 
 overheads — those which belong to each individual produc- 
 tive department, and also the general overhead or expense 
 of all non-productive departments which must be prorated 
 
 DISTRIBUTIONS 
 
 233 
 
 over productive departments — it becomes necessary to make 
 a redistribution of the latter to the former. 
 
 Column 4.3 — Prorated Overhead. In this column will 
 be placed a redistribution of all general overhead, according 
 to the percentage of the direct labor for each department 
 as shown in Column 4.2. In some instances it is con- 
 sidered more conservative and more equitable to prorate 
 over the productive departments according to the overhead 
 of these departments than to just the productive labor, prin- 
 cipally for the reason that there are less variables for these 
 departments on overhead charges than there are for the 
 productive labor. Column 4.3 added to the overheads shown 
 in the productive departments, Column 4.1, will equal full 
 overhead, Column 4.4. 
 
 Record of Production, Betterment, and Repair Orders 
 
 This sheet (Form 7%) is in reality much more than a 
 record sheet ; it is a ledger sheet which, while debiting and 
 crediting labor, material, and overhead, at the same time 
 makes possible an analysis of the distribution of all produc- 
 tion, betterment, and repair orders, to labor, material, and 
 expense. Furthermore, it closes out all order costs into 
 unit costs, and gives absolute control of all inventory valua- 
 tions as regards production, betterment, and repair orders 
 (Forms 40-42). 
 
 It was in the development of this "Production Ledger," 
 or "Record of Production, Betterment, and Repair Orders," 
 that the real unification between cost and general accounting 
 took place, as it was absolutely the finding of the missing 
 link. 
 
 This is called a "Record for Production, Betterment, 
 and Repair Orders" principally as a matter of convenience. 
 It is recommended, however, that when a plant is sufficiently 
 large a set of sheets be provided for production orders. 
 
 J 
 
234 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 another set for betterment orders, and another for repair 
 orders. Under any circumstances, a separate set should be 
 kept for repair orders which are closed out into Column 11, 
 after which follow the account and number of the account 
 to which they will go, as per the classification of assets. 
 What this classification of assets is has been explained fully 
 in Chapter IV, under "Stores-Keeping." 
 
 There are two things to be considered in connection with 
 this distribution sheet: 
 
 First, that this classification of assets permits better- 
 ments to be distributed under the column of account 
 and number of account on this recording sheet. 
 
 Second, that all repair orders must be made according 
 to the same classification as betterment accounts. 
 
 In other words, the value of all assets remains under 
 assets at their original cost. From this inventory value, a 
 certain depreciation is written off into liabilities each month 
 in order to stabilize the cost of production. This percentage 
 of depreciation is sufficiently large to cover not only natural 
 depreciation, but also repairs that may be applied to recover 
 depreciation. Therefore, all repair orders should be made 
 out according to the inventory classification of assets, and 
 not to the individual tool, except in cases of very large, 
 expensive, and complicated machinery, such as printing 
 presses. In such cases it becomes necessary to keep track 
 of repairs on an individual machine so that obsolescence 
 may be decided upon before the cost of repairs becomes 
 greater than the interest on investment plus depreciation on 
 a new machine. 
 
 Each production order at the end of a month will occupy 
 but one line on this sheet, columns being provided to show 
 the order number, sales order number, quantity ordered, 
 and, when finished, the actual quantity made. Further 
 
 DISTRIBUTIONS 
 
 235 
 
 columns provide for the symbol or description of the item 
 covered by the production order, and other columns show 
 the "Date Started'* and the "Date Finished." Under 
 "Material" a column is shown for "General Stores" and for 
 "Semi-Finished Stores," either column being used according 
 to whether it is a processing order or an assembling order. 
 A column is provided for all the labor applied to any pro- 
 duction order, and three columns for overheads, one to show 
 "Productive Hours," one the "Overhead Rate" on either 
 an hourly or percentage basis, and one the total "Overhead 
 Amount" applied to production orders. 
 
 Thus is shown the application of labor, material, and 
 expense to orders, the total of which, of course, is the total 
 cost. This total cost divided by the quantity made would 
 give the cost of each. Therefore, for any and all purposes, 
 cost has been closed up on this sheet and it is only necessary 
 to transfer the goods at this cost price to the running inven- 
 tory or other record in which such goods should appear. 
 
 Column 7 of the record of production, betterment, and 
 repair orders shows the total of the unfinished production 
 orders at the end of the month, which are transferred to 
 Column 1 of the record for the following month. Then any 
 additional material, labor, and expense required to complete 
 the production order will be added. 
 
 Whenever an order is closed out into Column 6, it 
 creates a credit to labor, material, and expense, according 
 to the amount shown, and becomes chargeable either to 
 Column 8, "Semi-Finished" or "Component Stores," to 
 Column 9, "Finished Stores," or, if a betterment, to Column 
 10, "Betterments," in which case the asset account number 
 to which it is to be distributed will be shown in the column 
 headed "Account." What has been said of betterments will 
 also apply to Column 11, "Repairs." 
 
 In the discussion of "Controlling Accounts" (Chapters 
 
236 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 XIV and XV), it will be shown how the totals of these 
 several columns are taken directly into controlling accounts 
 as debits or credits, as the case may be. 
 
 This "Record of Production, Betterment, and Repair 
 Orders" offers the same possibilities for accounting machine 
 distribution work as departmental distribution sheet does. 
 Thus, any requisition bearing an order number plus 2 would 
 distribute a credit to general stores. Any order number 
 plus 3 would distribute a credit to all requisitions on com- 
 ponent stores. In the handling of labor, a labor ticket with 
 the order number plus 4 would distribute all labor to order 
 numbers and at the same time build up a total of productive 
 labor. Again, if on each productive labor ticket there is 
 also put the amount of overhead on whatever percentage or 
 hourly basis it calls for, 5 can be added to the order number 
 of that ticket, which will distribute all the overhead to 
 Column 5 and to all production or betterment orders 
 accordingly. 
 
 When this distribution has been filled in on the sheet, 
 it then becomes simply a question of using a comptometer 
 or adding machine to obtain credits to Column 6, and 
 charges to Columns 7, 8, 9, 10, and 11. 
 
 In other words, as before stated, the whole arrangement 
 of this distribution system is purposed, so far as possible, 
 for handling by office machinery instead of ordinary clerical 
 work, which not only insures much greater economy, but 
 also a much greater accuracy, and at the same time gives a 
 much wider range for temporary or specific statistical 
 systems. Furthermore, it enables costs to be compiled on a 
 cost card as shown below. 
 
 Production Cost Card 
 
 One of these cards (Form 79) can be made out for each 
 piece and part manufactured and filed in order of piece and 
 
 DISTRIBUTIONS 
 
 237 
 
 part number. A summary of the total costs of labor, 
 materials, and overhead on four production orders is pro- 
 vided for on each card, thus furnishing a comparison of the 
 resulting costs of the various production orders as they 
 come through. When a card has been filled up by the com- 
 pletion of four production orders, another card should be 
 made out for succeeding orders and filed directly behind 
 the first one, numbering the cards in rotation under each 
 piece number; thus, piece No. 1000 might have cards 1, 2, 
 3, and 4, etc., as they become filled up; and so on for each 
 piece, numbering from 1 up under each piece number. 
 
 When a production order is completed, the distribution 
 department should enter the summary of the costs on this 
 card. On the front of the card at the top will be given 
 the grand total of the cost summaries, and below will be 
 given the details. At the top of the card will be shown 
 the production order number, the date started and date 
 finished, labor and material costs, and overhead, making the 
 total cost; and then the unit cost, or cost of one, will be 
 shown. Following this will be the total cost of labor by 
 operation, this information being furnished by the time- 
 keeper to the distribution department. 
 
 On the line showing each operation has been provided 
 a small letter "d". If this operation was done by day-work, 
 this letter will remain, but if it is done as piece-work, the 
 "d" will be made into a "p" in black ink; and if done as 
 premium work, the "d" will be made into a "p" in red ink. 
 On the line of each operation will then be given the date 
 the operation was completed, the quantity passing the opera- 
 tion as good, the quantity rejected for scrap, the quantity 
 rejected for repairs, the total productive hours, and the 
 total labor cost for the operation. On the reverse side of 
 the card, on the last line for labor, will also be shown the 
 same information for any labor expended on defective 
 
238 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 repairs. At the bottom of the reverse side will then be 
 shown the quantity of each kind of material drawn and the 
 total cost of each kind. 
 
 As these cards show the exact cost of production of 
 various pieces, they should be available only to such execu- 
 tives as it is desired to have fully informed concerning costs, 
 and to the particular employees whose duty it is to keep 
 them. 
 
 If the distributing or accounting machines are not 
 employed (smaller concerns are perhaps not justified in 
 using such machines), the following method of procedure for 
 distribution work in connection with time tickets, requisi- 
 tions, etc., is recommended for consideration. 
 
 An organization chart (Form 76) and a distribution 
 sheet as per the factory overhead (Form 71^ having been 
 made up, it simply remains to make a set of pigeonholes to 
 correspond to each combination number, that is, the pigeon- 
 holes will be numbered by departments down the side and 
 by activities and commodities across the top ; this combina- 
 tion, of course, always forming a charge account. As the 
 time tickets and requisitions come in from day to day, they 
 are to be sorted into these pigeonholes, which sorts them to 
 exactly the classification shown on the factory overhead 
 distribution sheet. At the end of the month, the proposi- 
 tion is one simply for an adding machine. 
 
 First, the tickets can be totaled by departments and by 
 account numbers as per the overhead sheet, which will 
 give a complete departmental distribution of non-productive 
 labor, material, and direct labor. Second, the tickets and 
 requisitions may then be totaled on an adding machine 
 according to order numbers. These can then be posted 
 direct to the "Record of Production, Betterment, and Re- 
 pair Orders'' (Form 78), which method of procedure for 
 both departmental distributions and for order number distri- 
 
 DISTRIBUTIONS 
 
 239 
 
 butions is simple and accurate, and does away with a great 
 deal of clerical work in posting. 
 
 In Chapter XI, "Employment and Handling of Labor,** 
 a complete method of distribution was shown, which is 
 preferable, the whole proposition in such case practically 
 being an adding and calculating machine operation. 
 
 Whether a set of pigeonholes is used or whether account- 
 ing and distributing machines are used, depends somewhat 
 on the nature of the business, volume of work, and the 
 amount of detail that is required. 
 
 Sales Analysis Sheet 
 
 A tentative "Sales Analysis Sheet" is shown in Form 80, 
 which illustrates how a monthly distribution of sales and 
 costs can be arrived at by simply posting each day the total 
 sales and the total cost to this sheet, using an adding 
 machine at the end of the month to get the totals of all 
 sales, which are then transferred to the monthly balance 
 sheets. The method of procedure is to take the sales 
 directly off the shipping orders each day together with 
 costs, total them on an adding machine, and transfer them 
 to this sheet; the method of handling sales and shipping 
 orders nearly always being peculiar to each different kind 
 of business. 
 
 This analysis sheet, which is referred to in several 
 instances in Chapters XIV, XV, "Controlling Accounts," 
 is presented here in order to make the working of the 
 accounts involved perfectly clear. 
 
CHAPTER XIII 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 i 
 
 Explaining in detail the elements and work- 
 ings of a voucher system for handling cash; 
 the detail of controlling accounts; and a 
 commercial distribution of expense. 
 
CHAPTER XIII 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 The Function of Commercial Accounting 
 
 The discussion which follows is not intended to be an 
 explanation of bookkeeping in the ordinary sense of the 
 word, but rather of commercial accounting which is the 
 preparation for a distribution of summarized current re- 
 ceipts and disbursements to certain controlling accounts. 
 
 Further, it shows how and why these- distributions in 
 industrial enterprises are made by cost rather than by 
 ordinary bookkeeping methods, and how this cost account- 
 ing is then linked with controlling accounts through the 
 medium of commercial accounting. 
 
 The Voucher System 
 
 The best, and in fact the only scientific way of handling 
 general accounting work, is by the voucher system, in which 
 vouchers are used for entering all invoices, thus eliminating 
 the old-fashioned purchase ledgers and the distributions con- 
 tained therein. The voucher system herewith proposed 
 consists of a purchase voucher (Form 81), which, in con- 
 nection with a "Voucher Record" (Form 84), constitutes 
 a purchase creditor's ledger, or a statement of the account 
 with each purchase creditor. The voucher record, as its 
 name implies, is a record of all these accounts and at the 
 same time a distribution of all purchases to summarized or 
 prime accounts, as will be explained further on. 
 
 These vouchers are entered on the voucher record, which 
 
 243 
 
244 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 is closed monthly irrespective of whether any of the vouchers 
 may or may not have been paid. This is an important fact 
 to remember. The total amount of each column of the 
 voucher record shown is then carried over to the private 
 ledger or controlling accounts. 
 
 There is one thing in connection with the use of this 
 form of voucher record to which attention is called, and 
 concerning which reference has been made elsewhere; 
 namely, that the expenditures of any manufacturing busi- 
 ness always reduce themselves to three primary elements, 
 i.e., labor, material, and expense. This is one of the cardinal 
 principles of modern accounting, and advantage is taken of 
 this to simplify controlling accounts. 
 
 General Stores Under the Voucher System 
 
 In order that this may be thoroughly understood, it is 
 necessary to refer to general stores again, and to review 
 enough of the previous discussion to connect them with the 
 vouchering of materials. It will be recalled that general 
 stores, from an inventory point of view, embraces every- 
 thing that is purchased in the shape of materials, tools, 
 equipments, etc. General stores may be issued to the fac- 
 tory only upon a requisition which must always show two 
 things: first, the department which draws the material from 
 stores, and, second, the order number to which the material 
 is to be charged. If material is to be used for goods which 
 are to be manufactured for sale, it must be charged to a 
 production order. If for construction work or the installa- 
 tion of new machinery, it must be charged to plant better- 
 ments. 
 
 For instance, if a new^ machine of some kind is purchased, 
 it will be received into general stores, the same as anything 
 else that is bought, and on the voucher record the amount 
 will simply appear as a charge to "General Stores." When 
 
 It' 
 
 I. 
 
 COMMERCIAL OR OFFICE ACCOUNTING ^.^ 
 
 it is desired to install this machine, a betterment order is 
 issued which authorizes a'requisition drawing this machine 
 out of general stores. To this betterment order will be 
 charged any additional material which is required, the labor 
 costs of installing the machine, and also some proportionate 
 amount for overhead expense. Upon the completion of the 
 installation, the betterment order is closed up and the total 
 cost handed to the accounting department, there to be posted 
 to whatever classification of assets it may belong. 
 
 Similarly, if any construction work on the buildings or 
 any other work that would create a fixed asset, is to be done 
 a betterment order must be issued. In this way the accurate 
 cost of all betterments is secured and placed in the proper 
 asset account. 
 
 The same thing applies to repairs, and the repair order 
 must always show two things: first, the department of the 
 factory for which the repairs have been made, and, second 
 the classification of assets that they are made on, so that 
 the distribution of repair orders is made in the same manner 
 as betterment orders. 
 
 From this explanation it will readily be understood why 
 the old time voucher record distribution has given way 
 before modern accounting methods, and why no distribution 
 work IS done on the present voucher record or in the con- 
 trolling accounts other than that given under primary cap- 
 tions. Distributions are no longer a part of ordinary book- 
 keepmg; they belong to the cost system and are recapitu- 
 lated into controlling accounts. 
 
 Purchase Voucher 
 
 The purchase voucher (Form 81) is printed on sheets 
 5 X 8 mches and consists of an original and a duplicate. 
 When an invoice, properiy passed and O K'd for receipt, 
 quantity, price, etc., is received by the accounting depart- 
 
246 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ment, the extensions are first proved and then entered on 
 the purchase voucher. The purchase voucher must show 
 the name and the address of the purchase creditor, date of 
 invoice and amount. The invoice is entered on the voucher 
 as soon as it is received, the number of the voucher is placed 
 on the invoice, and the two forms are fastened together, 
 and are then filed in a temporary file, in alphabetical order, 
 until the voucher is entered in the voucher record. At the 
 end of the month, the voucher is closed and entered upon 
 the voucher record for distribution thereon, into the proper 
 account or accounts. 
 
 Where it is desired to discount or pay an invoice before 
 the end of the month, such invoice is entered on the voucher 
 which is thereupon closed out as complete, is O K'd by 
 the necessary authority, and the total posted into the voucher 
 record. In entering the amounts of these vouchers on the 
 voucher record in the accounts payable column, the gross 
 amount of the voucher is entered, that is, no discounts are 
 to be deducted at this time, provision being made for dis- 
 count earnings in the check register in the column **Dis- 
 counts on Purchases." 
 
 After vouchers have been closed out at the end of the 
 month and entered in the voucher record, they should be 
 filed in an ''Unpaid Voucher File" until paid. 
 
 In order to provide for the payment of vouchers at the 
 proper time, a monthly "one to thirty-one" card tickler 
 (Form 82) should be kept, and the name of the purchase 
 creditor together with the numbers of the vouchers which 
 are to be paid on any particular date should be entered on 
 the tickler card of that date. Several entries can be made 
 on one card. On the date of payment, the vouchers are 
 given to the cashier who passes them for payment and has 
 the necessary checks drawn. Each check must show the 
 number of the voucher paid, and its acceptance in payment 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 247 
 
 of the voucher thus indicated will make it a complete legal 
 receipt for the same. The duplicate voucher accompanies 
 the check as a remittance slip, and the original is filed 
 alphabetically in the paid voucher file. After a voucher 
 has been paid, all of the invoices covered by it are marked 
 "Paid" and filed alphabetically. 
 
 By making all payments by check in connection with a 
 voucher system as outlined above, a complete and proper 
 distribution of the payments is obtained, and, as the voucher 
 is not attached to the check and does not pass through the 
 bank but goes direct to the payee, it does not reveal, as 
 does the ordinary voucher check, what bills are being paid, 
 dates, etc., for the information of everyone through whose 
 hands the check passes. 
 
 Charge Vouchers 
 
 In order to provide for adjustments on purchase vouch- 
 ers after they have been closed, charge vouchers (Form 83) 
 are used. In order that the two types of vouchers may be 
 easily distinguished, it is suggested that the charge voucher 
 be printed in red, as indicated on form. 
 
 Charge vouchers should be numbered from 1 up, the 
 same as the purchase vouchers, and the back page of the 
 voucher record should be used to record all charge vouchers, 
 where they should be entered in the same manner as the 
 purchase vouchers. In paying a purchase voucher on which 
 a charge voucher is deducted from the full amount, the 
 number of the check should be placed in the proper column 
 on the charge voucher record in the same manner as on the 
 purchase voucher record. In the check record (Form 86) 
 will be shown in the "Accounts Payable" column the full 
 amount of the purchase voucher, and on the "following line, 
 in red ink, the amount of the charge voucher which, being 
 deducted, leaves the amount of the check (except for cash 
 
248 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 discount). This amount is entered in the "Net Cash" 
 column. 
 
 In case a claim is made after a purchase voucher has 
 been paid, and there are no other purchase vouchers from 
 the same concern awaiting payment, a charge voucher will 
 be used to adjust the claim, an invoice being sent to the 
 purchase creditor to notify him of this claim. If this invoice 
 be paid in cash, the amount should be entered on the incom- 
 ing cash sheet (Form 85), and extended in the sundry 
 column; the date of payment and "Cash Received" folio will 
 then be posted to the charge voucher record and to the 
 credit of the "Accounts Payable" column. "Deductions" 
 column on the purchase voucher should be used whenever 
 possible, to keep the number of charge vouchers within the 
 smallest possible limits. Charge vouchers should be ap- 
 proved by some authorized person, and filed directly behind 
 the purchase vouchers from which they are to be deducted. 
 
 Voucher Record 
 
 The voucher record (Form 84) provides for the date 
 of the voucher, the voucher number, and the name of the 
 creditor. These particulars must be entered in the voucher 
 record when making the first entry. The extensions into 
 the money columns on the voucher record should not be 
 made until the voucher is closed out, usually at the end of 
 the month. When closed, the total amount of the voucher 
 is entered in the "Accounts Payable" column and the total 
 of this column credited to this account in the private ledger. 
 Voucher record sheets should be numbered consecutively 
 and each sheet accounted for. 
 
 At the end of the month, as soon as the total amount of 
 any voucher is entered in the "Accounts Payable" column, 
 it is extended in the distribution columns to the accounts 
 to which it should be charged. As all bills received by the 
 
 COMMERCIAL OR OFFICE ACCOUNTING o^n 
 
 company are either for material or expense, and as all 
 material (with the possible exception of ofHce supplies) is 
 charged to "General Stores," the distribution columns pro- 
 vided in the form are sufficient. These, as will be seen by 
 the captions, correspond to the controlling accounts, to 
 which the total under each caption must be charged monthly 
 in the private ledger. 
 
 All material bought, with the exceptions noted above, is 
 charged direct to "General Stores," and expense divided 
 between "General Expense" and "Advanced Expense." 
 ^'General Expense" will be divided into "Commercial" and 
 "Overhead." Commercial expense is that which applies to 
 the commercial or office end of the business, and the items 
 from this column will be charged to the various subsidiary 
 accounts, as wiU be explained under "Commercial Expense 
 Distribution Sheet" (page 258). To the "Overhead" 
 column will be posted all items of expense which are 
 applicable to the manufacturing end of the business, for 
 distribution to subsidiary accounts, as explained in Chapter 
 XII, under "Factory Overhead Sheet for Distributions." 
 In the "Advanced Expense" column will be charged all 
 expei -es the full benefit of which does not accrue during 
 the current month, but which are prorated into actual ex- 
 pense charges for the period of time to which they properly 
 belong. In the sundry column will be entered the distribu- 
 tion of any items on a voucher which cannot be charged to 
 any of the previous accounts. 
 
 It is not necessary to post each individual check imme- 
 diately it is made out in payment of a voucher, as the check 
 record (Form 86) shows the voucher number covered by 
 the check. It is advisable, however, to post the check record 
 mto the voucher record daily, entering in the voucher record 
 the "Date Paid," the "Check Record Folio," and the 
 "Check Number." 
 
250 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 Incoming Cash Sheet 
 
 This sheet (Form 85) is designed for a record of cash 
 received by the company, and all cash received should be 
 entered thereon. It takes the place of the debit side of 
 what would otherwise be the ordinary cash book which, in 
 this system of accounting, is not used. For purposes of 
 auditing, these cash received sheets are numbered con- 
 secutively when printed, and every sheet is to be accounted 
 for, whether it is used or not. In case of error in making 
 an entry, it should not be erased but a red line should be 
 drawn through the entry. The purpose of the various 
 columns are explained below. 
 
 Net Cash. Each day the exact amount of cash received 
 from whatever source must be entered in the "Net Cash" 
 column and deposited in the bank ; the total of these items, 
 at the end of each month, is charged to the controlling ac- 
 count A-1, "Cash in Banks" (see Form 92), in the private 
 ledger. 
 
 Discount on Sales. In this column are entered all cash 
 discounts taken by and allowed to customers. If, for any 
 reason, a discount is taken but is not allowed, the check 
 should be returned to the customer for correction and no 
 entry made. At the end of the month, the total of this 
 column is charged to the subsidiary commercial or office 
 expense account, "Discounts Allowed." 
 
 Freight and Express—Commercial. In this column will 
 be entered all freight charges which have been deducted by 
 customers and allowed. In case freight deduction is not 
 allowed, the remittance should be returned and no entry 
 made. The total of this column at the end of the month is 
 charged to the subsidiary commercial or office expense ac- 
 count, "Freight and Express— Commercial." 
 
 Sundry. The "Sundry" column is for any other charge 
 items not specifically provided for on this sheet, such as 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 251 
 
 interest paid, special deductions allowed to customers, 
 etc. 
 
 All advanced expense interest should be prorated 
 monthly, the same as other advanced expenses, and dis- 
 tributed on an advanced expense prorating sheet, over the 
 months covered. 
 
 Accounts Receivable. In this column is entered the 
 total amount which should be credited to customers ; there- 
 fore, each amount in this column must include not only the 
 net cash received, but all discounts and deductions taken by 
 customers and allowed, as specified in the foregoing columns. 
 The total of this column at the end of the month is credited 
 to the controlling account A-3, "Accounts Receivable," in 
 the private ledger. 
 
 Notes Receivable. In this column is entered the face 
 value of any notes receivable paid, but not interest received 
 on these notes. The total of this column is credited monthly 
 to controlling account A-7, "Notes Receivable," in the 
 private ledger. 
 
 It is a much better plan to handle notes receivable on 
 the income cash sheet than by journal entry or by posting 
 direct from the notes book, if one is kept. In this way, 
 the face of the note, if discounted, is entered in the "Notes 
 Receivable" column on the credit side of the incoming cash 
 sheet, and the amount of discount in the "Advanced 
 Expense" column on the debit side. This also applies to 
 customers* notes discounted by the company, which are 
 entered to the credit of "Notes Receivable" on the incoming 
 cash sheet, and the interest charged in "Sundry" column to 
 "Advanced Expense Interest." 
 
 Notes Payable. In this column are entered the face 
 amounts of any of the company's notes which are discounted, 
 the discount being charged to Advanced Expense and pro- 
 rated aver the period covered. The total of this column 
 
252 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 at the end of the month is credited to the controlling account 
 D-3, "Notes Payable," in the private ledger. 
 
 Interest Received. In this column will be entered all 
 interest received. At the end of the month, the total of this 
 column is carried to the subsidiary commercial or office 
 expense credit account, "Interest Received." 
 
 Sundry Accounts. This column should contain the 
 name and amount of any item for which a check may have 
 been received and which would not come under any of the 
 previous captions. In the monthly posting of this column 
 to the controlling accounts of the private ledger, it must 
 be analyzed, hence the necessity of enumerating the items 
 by name. 
 
 Folio. In the folio column can be written the initial of 
 the bank in which each check is deposited, and, if desired, 
 the date of deposit, the total checks to one bank each day 
 checking with the amount of deposit on the check record. 
 The incoming cash sheets should be proved at the bottom 
 of each page to see that the charge side balances with the 
 credit. 
 
 Check Record 
 
 The check record (Form 86) is used for recording all 
 checks drawn, it being understood that all cash disburse- 
 ments are provided for by a petty cash system. In connec- 
 tion with this check record, checks must be used in pads, 
 each check being numbered consecutively. If a check is 
 spoiled or is not used after being made out, the space for 
 this check in the check record must be marked "Void," as 
 every check must be accounted for. 
 
 The voucher number is entered in the check record, 
 following the check number. No detail distribution, such 
 as labor, material, various kinds of expenses, etc., is pro- 
 vided for in the check record, as is common in the ordinarv 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 253 
 
 cash book, because the voucher record is used for all such 
 distributions, and there must be a voucher for all disburse- 
 ments. In this way distributions are all made at one place. 
 The columns of the check record are discussed below. 
 Net Cash. In this column are entered the exact amounts 
 of the checks drawn, the total of which, at the end of the 
 month, is carried to the credit of the controlling account 
 A-1, "Cash in Bank" (see Form 92), in the private ledger. 
 Discount Purchases. In this column is entered the 
 amount of any discount taken from purchases when paid, 
 as called for on the voucher for which the check is drawn. 
 The total of this column, at the end of the month, is carried 
 to the commercial expense credit account, "Cash Discount 
 Earned." 
 
 Accounts Payable. In this column is entered the total 
 amount which is to be charged to the voucher record, that 
 is, it covers the cash paid and also the discounts taken. The 
 total of this column at the end of the month is charged to 
 the controlling account D-1, "Accounts Payable," in the 
 private ledger. 
 
 Notes Payable. In this column are entered the amounts 
 of all notes paid by the company. At the end of the month 
 the total is charged to the controlling account D-3, "Notes 
 Payable," in the private ledger. 
 
 Sundry Accounts. The "Sundry Accounts" column pro- 
 vides a place for entering the name and amount of any 
 item for which a check may have been drawn, and which 
 would not come under any of the previous captions. A 
 monthly posting is made of this column to the controlling 
 accounts. It must be analyzed according to the items 
 enumerated, hence the necessity of entering the details in 
 this column. 
 
 Deposits. In the deposit column will be entered the 
 amount of each bank deposit. The total amount of this 
 
254 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 column, or columns in case more than one check record is 
 kept, should agree with the "Net Cash" column on the 
 cash received sheet. 
 
 Balance. The daily balances of "Cash in Bank" should 
 be shown in this column. A separate check record must be 
 kept for each bank in which an account is carried, and a 
 distinct series of numbers used for each check record sheet, 
 as well as for checks. 
 
 When checks are drawn upon one bank for the purpose 
 of transferring money to another bank, the amounts should 
 be entered in the sundry column of the check record sheet 
 of the bank from which the amount is withdrawn. Thev 
 should also be entered on the incoming cash sheet, and in 
 the "Deposits" column of the check record sheet of the 
 bank to which the amount is transferred. At the end of 
 each month, cash received and cash paid out will be re- 
 capitulated upon the final cash received sheets for the month, 
 and postings made from this recapitulation to the private 
 ledger accounts. 
 
 Petty Cash Record and Voucher 
 
 For the handling of petty cash, what is commonly known 
 as the "Imprest System" is recommended. In order to carry 
 this out, the cashier must be provided with some fixed fund, 
 anywhere from $200 to $500, or with an amount sufficient 
 to cover expenditures of this character for, say, one month. 
 This should be considered as a cash drawer fund, to be 
 accounted for by cash in drawer, plus amount of any petty 
 cash vouchers not yet turned in for refund. 
 
 The amount of this fixed fund appears as a standing 
 charge in Petty Cash account (A-2) in the private ledger, 
 and it can be affected only by an increase or decrease in 
 the original amount of petty cash. The checks issued to 
 reimburse petty cash fund for its expenditures are not 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 253 
 
 charged to the controlling account "Petty Cash," but are 
 simply entered in the "Receipts" column in the petty cash 
 book or petty cash disbursements sheet (Form 88). The 
 balancing charges for the outgoing cash are made monthly 
 from the petty cash book, as explained later. 
 
 In order to secure a complete record of all petty cash 
 expenditures, a petty cash voucher has been provided, to 
 be used in conjunction with the petty cash record. (See 
 Forms 87, 88.) These vouchers are to be numbered con- 
 secutively and each one must be accounted for. In case of 
 an error in making them out, they should not be destroyed, 
 but marked "Void," and filed with the paid vouchers. 
 
 One of these petty cash vouchers should be made out 
 for each item of cash expended, and must always be signed 
 by the person to whom the money is paid. It will then be 
 entered in the petty cash book, under the distribution ac- 
 count number to which it is to be charged. If the voucher 
 is in payment of an invoice, the invoice will be indorsed 
 with the date paid and the petty cash voucher number. This 
 invoice should be approved by the proper authority before 
 being paid. The voucher, together with the invoice, will 
 then be placed in the cash drawer in place of the cash 
 paid out. 
 
 Each night, the cash in the drawer must be counted 
 and the sum of this, plus the vouchers in the drawer, must 
 agree with the standing amount charged to petty cash. 
 
 When the cash in the drawer becomes low, or at stated 
 periods, say once a month or once a week as may be found 
 the more advantageous, a check is drawn to the order of 
 
 petty cash in payment of "Petty Cash Vouchers, No 
 
 to No "for the exact amount of these vouchers. This 
 
 check will be cashed and the money placed in the drawer, 
 bringing the funds back again to the original amount. A 
 check drawn to reimburse this fund will be entered in the 
 
256 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 check record in the sundry column, and will be a non-post- 
 ing item, the postings being the monthly totals of the 
 distribution columns in the petty cash book, which are 
 posted to the controlling or subsidiary accounts, as the case 
 may be. The redeemed vouchers must, of course, have 
 first been extended in the petty cash book, as explained 
 above. 
 
 It must, of course, be remembered that on the last day 
 of each month, all petty cash vouchers which have been 
 extended in the petty cash book must be reimbursed by 
 check. If this is not done, the distribution of these on the 
 petty cash book will throw the books out of balance. 
 
 It will also be understood that all cash received must 
 be deposited in the bank and never be diverted into petty 
 cash. In case stamps are received from customers in the 
 settlement of their accounts, the petty cash drawer should 
 purchase these stamps and the cash so received for them 
 be deposited. 
 
 The advantages derived from the use of the petty cash 
 vouchers and records are: 
 
 1. A voucher is secured for every petty expenditure. 
 
 2. The work of balancing the petty cash is minimized, 
 
 as there is always a definite amount against which 
 it is to balance. 
 
 3. The system provides a means for correctly making 
 
 a distribution of all petty cash expended and the 
 absorption of these expenditures into the proper 
 general accounts. 
 
 Journal Register 
 
 Modern accounting has almost done away with the 
 once much used general journal, by dividing it up into books 
 of special functions wherever the volume of similar items 
 has sufficiently increased to make it possible. All of the 
 
 COMMERCIAL OR OFFICE ACCOUNTING 257 
 
 foregoing forms are examples of this practice. There is, 
 however, some necessity for journalizing in a general way,' 
 and in connection with the foregoing it is recommended 
 that a journal register be used, somewhat similar to that 
 shown in Form 89. 
 
 It will be noted that columns have been provided for 
 the more frequently used accounts, i.e., accounts receivable, 
 accounts payable, notes receivable, notes payable, and a 
 sundry column, for any miscellaneous entries. In this 
 manner the monthly totals can be posted instead of each 
 individual item. 
 
 Journal Voucher 
 
 In connection with the journal register, a journal 
 voucher (Form 90) has been provided for making journal 
 entries of all kinds, thus affording a means for properly 
 authorizing these entries. These journal vouchers must 
 be numbered in sequence and filed in a binder provided for 
 them and every number must be accounted for. If, for 
 any reason, one is spoiled by accident or otherwise, it must 
 be marked "Void" and filed in the binder in its place of 
 sequence. 
 
 General Ledger 
 
 A general ledger should be provided, in loose-leaf form, 
 to be used as a subsidiary book to the private ledger. This 
 ledger should not be filled with the miscellaneous accounts 
 so frequently put into a general ledger, but should, on the 
 contrary, contain little else besides the accounts included in 
 the analysis of commercial or office expenses (see page 
 258), and those included in the analysis of factory over- 
 head (see under Chapter XII), all of which are a part of 
 the monthly balance sheet sets. 
 
 The accounts in the general ledger should be opened in 
 
2 eg UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the order given on the monthly balance sheet so that in 
 taking off the balances at the end of the month they will 
 conform to the same order of arrangement. 
 
 All of the accounts under analysis of commercial or 
 oflfice expense must be closed out each month into Com- 
 mercial Expense account, J-1 (see Form 92). The total 
 of each amount in the analysis of factory overhead must 
 be closed out each month into Overhead account, J-2. These 
 accounts do not need to be journalized by individual items; 
 they are to be simply balanced out each month into Com- 
 mercial Expense and to Overhead. In other words, these 
 accounts are simply the totals of the columns on the distri- 
 bution sheets, and cover in total the items entered in detail 
 in the corresponding columns. 
 
 Commercial Expense Distribution Sheet 
 
 The detail of -his analysis, by captions, is also illustrated 
 on the set of balance sheets in Form 1, the latter showing 
 the divisions as between ''General Commercial Expense" 
 and "Selling Expense." The commercial expense distribu- 
 tion sheet is in reality a general ledger sheet and contains 
 the general ledger entries for an analysis of commercial 
 expense which is to be carried in total monthly to Profit 
 
 and Loss. 
 
 Comparison is made in the summaries of these accounts 
 to show: first, the percentage of commercial expense as a 
 whole to sales, and, second, the percentage of selling expense 
 
 as such to sales. 
 
 Attention is again called here to the value of these 
 percentages as a guide in conducting a business. If balance 
 sheets similar to those illustrated in this work have been 
 used for a period of some months or years, a number of 
 definite percentage values will have been discovered. For 
 instance, if it is known that the commercial percentage 
 
 COMMERCIAL OR OFFICE ACCOUNTING 
 
 259 
 
 averages 12% a month, this indicates what the normal con- 
 dition of business should be, and the accounting methods 
 herein illustrated make possible an analysis to determine 
 the cause for any variations of this percentage. 
 
 What has been said of commercial percentages also 
 applies to selling expense. If it is known that the average 
 selling expense is 8% of the total sales, it is only natural to 
 look for a variation from this as a first point of interest 
 each month, and then to determine the cause for any such 
 variation. 
 
 The same conditions apply to overheads. If overheads 
 are running at an average of 80% and variation takes place, 
 these accounting methods provide an analytical means for 
 determining the cause therefor. With the assurances that 
 these percentages are reasonably correct, any executive may 
 always start a detail examination of his monthly balance 
 sheets with a comfortable feeling. 
 
 General Commercial Expense 
 
 It will be noted that each column on the commercial 
 expense sheet (Form 91 ) is numbered with its account num- 
 ber. The following is a brief description of the charges 
 which are made to each account: 
 
 Salaries — Officers. This account should include the 
 salaries of the general officers of the company, and all other 
 officers, such as works manager or superintendent, office 
 superintendent, purchasing agent, comptroller, industrial 
 secretary, publicity agent, etc. 
 
 Salaries — Clerical. This account should include all the 
 clerical labor of the office, including stenographers and 
 typewriters. 
 
 Labor — General. This account will include all labor in 
 the office which cannot be classified as clerks or officers, 
 such as messenger boys, janitors, watchmen, etc. 
 
26o UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Telegraph and Telephone. This account must be made 
 to cover all telegraph and telephone expense chargeable to 
 the office end of the business, but should not include any 
 items which are chargeable to the engineering or manufac- 
 turing departments. 
 
 Office Supplies. This account includes all supplies, such 
 as stationery, printed forms, books, pencils, etc., required 
 for use in the general office. 
 
 Taxes— Corporation. This account will include all cor- 
 poration taxes and whatever proportion of other taxes might 
 properly belong to the general office, but should not include 
 taxes on the factory buildings or personal property, such 
 as stock on hand. The general office taxes will appear on 
 the sheet as a monthly prorated account. 
 
 Legal Expenses. This account covers everything in con- 
 nection with legal work as differentiated from patent work; 
 that is, it is to cover all suits, litigations, collections, etc., 
 not in any way connected with patents. 
 
 Patent Expenses. This account relates to everything 
 in connection with the obtaining and the defense of patents. 
 It covers not only the patent fees to the government, but 
 also patent attorneys' fees, as well as the cost of all litiga- 
 tion of any character whatsoever in connection with patents. 
 
 Royalties. To this account will be charged any and all 
 royalties paid for a product and sold by virtue of such pay- 
 ment. They are treated as commercial expense lor the 
 reason that, while they may theoretically constitute an 
 additional cost to an article, they have nothing to do with 
 manufacturing operations, either as labor, material, or ex- 
 pense. In other words, royalties are never paid for the 
 privilege of manufacturing something, but for the privilege 
 of selling something on which a profit may be realized, and 
 for this reason they rightfully belong to selling expense. 
 
 Freight and Express — Commercial. To this account 
 
 COMMERCIAL OR OFFICE ACCOUNTING 261 
 
 should be charged freight and express chargeable to the 
 commercial or office end of the business. This should in- 
 clude freight, express, and parcel post charges on goods 
 delivered to customers, as the delivery of goods is a com- 
 mercial transaction and should not be charged to the manu- 
 facturing end of the business. 
 
 Insurance on Stock. This should be charged to the com- 
 mercial end of the business, inasmuch as it has nothing to 
 do with manufacturing, simply being a warehousing item 
 for the benefit of a sales or similar department. 
 
 Interest Paid. This account must be made to include 
 interest paid on notes, etc., shown in sundry column on the 
 voucher record, also as shown in the sundry column on the 
 check record. 
 
 Discount Allowed. This account is intended to cover 
 all cash discounts taken by customers in their remittances, 
 as entered on incoming cash sheet, and will be the total of 
 the ''Discount Sales" column on that sheet. 
 
 Rent. This account is to cover any and all rentals paid 
 for floor space for commercial or office purposes. 
 
 Commercial Reserves. This account consists of such 
 depreciation items as apply to office furniture, fixtures, 
 patents, bad debts, etc. 
 
 Expenses Unclassified. This account is meant to cover 
 any and all small items not chargeable to any of the above 
 accounts, but which belong to the general commercial end 
 of the business. 
 
 Selling Expense 
 
 In all businesses it is well to divide commercial expense 
 into two classifications, one covering general commercial 
 expense, and the other selling expense which will include 
 only such expense as is directly chargeable to the selling 
 end of the business as indicated below. 
 
262 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Salaries — Salesmen. This account should include the 
 total amount of salaries paid to salesmen, and must not be 
 confused with salaries in connection with clerical or other 
 work. 
 
 Labor — General. This account will cover any and all 
 labor employed by the sales departments in and around the 
 office, factory, warehouse, etc., which is directly under the 
 control of the sales department. 
 
 Commission on Sales. To this account should be 
 charged all payments to salesmen on commission for making 
 sales of goods, as distinguished from those salesmen em- 
 ployed on salary. Where a salesman is employed on a 
 salary and commission basis, the amount paid must be dis- 
 tributed accordingly. 
 
 Traveling. This account will show all expense incurred 
 by traveling salesmen, including hotel bills, railroad fares, 
 etc., and should be checked and audited from regular sales- 
 men's expense account books, or forms of some kind. 
 
 Entertainment. This account is intended to include 
 entertainment expense incurred for the purpose of making 
 sales, sales contracts, etc., either by the company's officers 
 or others. 
 
 Rebates and Allowances. To this account will be 
 charged all rebates or other allowances made to customers 
 as a matter of sales policy, but it should not include any 
 rebates to customers for claims made by them which are 
 chargeable to the manufacturing end of the business, such 
 as claims for defective material, workmanship, etc. 
 
 Shows and Demonstrations. To this account should be 
 charged any expense of shows or demonstrations for the 
 purpose of selling goods, provided they are not in any way 
 chargeable to regular routine business. This form of ex- 
 pense is generally covered by an appropriation of some kind 
 and should be checked up accordingly. 
 
 COMMERCIAL OR OFFICE ACCOUNTING 263 
 
 Postage. This account covers postage on mail leaving 
 the office relative to making sales, advertising matter, 
 catalogues, etc. 
 
 Office Supplies. To this account should be charged all 
 items covering general office material chargeable to the 
 selling department, such as stationery, forms, pencils, books, 
 etc., whether such items are used in the office or by men on 
 the road. 
 
 Advertising. Advertising is divided into three classes: 
 periodicals, circulars, and catalogues. For distribution pur- 
 poses, a charge account should be created for each one of 
 these items and the proper amount charged to each of them. 
 In connection with circulars and catalogues, it should be 
 borne in mind that, if say 100,000 catalogues are purchased 
 which might last for a year or more, the expense for them 
 should not all be charged up when they are received, but 
 they should be brought into an inventory of general stores 
 and prorated monthly for a period of one year at least, if 
 not two. Many claim that catalogue valuations should 
 extend for at least a year beyond the time of complete 
 delivery to the public. 
 
 Selling Expense Unclassified. This is simply an account 
 containing such small items as are not chargeable to other 
 accounts. 
 
 Commercial or Office Expense Credits 
 
 As it is desirable to keep the actual expense separate 
 each month from any credits obtained by the commercial 
 or office end, it is advisable to keep all interest received and 
 discounts earned entirely separate from interest paid and 
 discounts allowed. This is done in order that executives 
 may see the exact conditions in both respects; therefore, 
 separate accounts should be provided in the general ledger 
 for these credits, rather than combining them with the 
 
264 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 debits under general heads. The following accounts should 
 be provided for their entry: 
 
 Interest Received. This account represents the "Interest 
 Received" column of the incoming cash sheet, and should, 
 in addition to the usual interest credits, include all interest 
 received by the company for any delinquent sales or contract 
 accounts. 
 
 Cash Discount Earned. This account, representing the 
 discount on purchases as shown on the check record, covers 
 all discounts earned by the financial department due to 
 discounting accounts payable. 
 
 Credits Unclassified. This account should be carried 
 in the general ledger, to include any credit item not provided 
 for above or by accounts opened subsequently. 
 
 Analysis of Overhead 
 
 The sum-total of all the accounts in this division in the 
 general ledger will be posted to the general account J-2 in 
 the private ledger, and will be obtained from the factory 
 overhead distribution sheet discussed in Chapter XII. 
 
 Accounts Payable — Personal 
 
 Under this subdivision in the general ledger may appear 
 whatever personal accounts it is absolutely necessary to 
 carry, and they will go into the corresponding controlling 
 accounts in the private ledger if it is found necessary to 
 open such accounts. 
 
 Other accounts than those previously specified can be 
 opened in the general ledger from time to time as necessity 
 may require, but, as before said, the general ledger should 
 not be crowded with miscellaneous accounts ; all such items 
 should be classified in the voucher record or the journal 
 register, as otherwise the analysis of the monthly expendi- 
 tures could not be accurately made. 
 
 CHAPTER XIV 
 
 CONTROLLING ACCOUNTS 
 NATURE; ASSET ACCOUNTS 
 
 Illustrating and explaining a chart of con- 
 trolling accounts, and giving in detail the 
 source from which the debits and credits of 
 each asset account are obtained. 
 
i 
 
 CHAPTER XIV 
 
 CONTROLLING ACCOUNTS 
 
 NATURE; ASSET ACCOUNTS 
 
 Purpose of Controlling Accounts 
 
 This and the next chapter set forth in detail the com- 
 posifon of all accounts for a private ledger, as per chart 
 ^t'orm y^_). These accounts are commonly called "Con- 
 trollmg Accounts," meaning summary accounts that will 
 give the debit or credit balance of the values with which they 
 treat entirely independent of the corresponding subsidiary 
 current accounts as carried in current ledgers 
 
 For instance, account No. A-3, "Accounts Receiv- 
 able (see Form 92), is made up by taking from the sales 
 analysis the total sales for the month, and from the incom- 
 ing cash sheets the total amount of cash received on ac- 
 count from customers for the month, and the balance of the 
 account constitutes the amount of outstanding accounts re- 
 ceivable. This figure having been obtained, the bookkeeper 
 in charge of the customers ledger should draw off his bal- 
 ances for comparison. That is to say, he totals each cus- 
 tomer s account, adds up the debit balances of all accounts 
 any credit balances being deducted, and the figure thus 
 obtained must agree with the balance of the controlling 
 account. If it does not, there is a mistake somewhere 
 
 For further illustration, what has been said of "Ac- 
 counts Receivable," also applies to "General Stores" 
 (ti-1). The total of all purchases as taken from the 
 
 267 
 
268 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 voucher record, less the total of all materials which have 
 been used or sold as taken from the monthly distribution 
 and sales analysis sheets, represents the controlling account 
 inventory of general stores. To prove this, the stores 
 recorder may be asked to draw off the inventory values of 
 balances on hand, as shown on the stores records. Theo- 
 retically, these figures must agree, so that here again there 
 is absolute control of materials, as information is drawn 
 from two independent sources. 
 
 In other words, the balance of any controlling account 
 can be checked against a balance obtained from an entirely 
 separate source, and in this way an absolute check or con- 
 trol of the accounts in question is maintained. 
 
 These private ledger or controlling accounts are ar- 
 ranged, as shown on the chart, in such a way that a thirty- 
 day statement of the business in its entirety and, by certain 
 details, can be easily obtained. Furthermore, this informa- 
 tion is in statistical form, thus giving an opportunity to 
 read between the lines of figures and make time period com- 
 parison of individual items as well as totals, as illustrated 
 in Qiapter II. 
 
 In addition, these controlling accounts supply the uni- 
 fication required between cost accounting and general ac- 
 counting. This is so for the reason that many of these 
 accounts are controlling accounts for cost work, particu- 
 larly those pertaining to general stores, finished stores, 
 work in progress, plant betterments, reserves, deprecia- 
 tions, etc. 
 
 Again, these controlling accounts give the same infor- 
 mation monthly that older methods of accounting gave but 
 once a year; consequently, the adjustments in prices neces- 
 sary to keep the business profitable can be m^ade twelve 
 times as often as they could under the older methods. The 
 value of this is incomparably greater than its cost. 
 
 CONTROLLING ACCOUNTS-NATURE 269 
 
 It will be understood, of course, that the movement in 
 a set of controlling accounts is a series of debits and credits, 
 and that the charging of any one account with an item of 
 any kind, means that some other account must at the same 
 time have a credit given it, and this exchange of items by 
 debits and credits is so woven together as to form a con- 
 tinuous and complete history of the activities, progress, and 
 finances of the business. 
 
 Chart of Controlling Accounts 
 
 In order to show the classification required for con- 
 trolling accounts, the chart given in Form 92 has been pre- 
 pared. On this appear the headings and divisions, "Assets," 
 "Liabilities," and "Profit and Loss," and under them the 
 various controlling accounts required to distribute these 
 primes into the detail necessary for intelligent administra- 
 tion. The chart shows by its arrangement how each account 
 obtains its number. Each one of these accounts is de- 
 scribed in this and the following chapter. The charges and 
 credits given under any heading, such as "Accounts Re- 
 ceivable," "General Stores," or "Profit and Loss," always 
 signify with what that particular account is to be charged 
 or credited, indicating in each instance the other account 
 involved, which is to be credited or debited as the case 
 may be. 
 
 The general divisions for these accounts are indicated 
 by letters, each general division then being subdivided by 
 numbers. Also, as may be seen by the following illustra- 
 tion, this classification is identical with the order of ar- 
 rangement on the monthly balance sheet described in Chan- 
 ter IL* ^ 
 
 and the following chamerthUh^tr ^nl ?^^^^^^^ accounts discussed in this 
 
 which these forms were ri^S^fJ^^.V ^* J"^ ^-a*^*"- ^*^* *^^* ^^^ businesses from 
 being presenf^'lxISly as ' theT werf '^scd ^'' ^" '''^' ^''^'''' ^^^ *-° ^°'^' 
 
270 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 r 
 
 ! 
 
 I' 
 
 Assets 
 
 A. Current 
 
 B. Inventory 
 
 C. Investment 
 
 Liabilities 
 
 D. Current 
 
 E. Reserves 
 
 F. Capital, Bonds, and Mort- 
 
 gages 
 
 Profit and Loss 
 
 G. Revenues (by sales) 
 H. Costs (of sales) 
 J. Expenses 
 
 K. Profit and Loss (monthly 
 and general) 
 
 The accounts in a private ledger should be opened in 
 the order in which they appear upon the chart, so that a 
 trial balance taken from the private ledger can be trans- 
 ferred to the monthly balance sheet and profit and loss state- 
 ment with the least possible expenditure of time. Any 
 other necessary accounts can be placed in their appropriate 
 class on the chart. All entries into private ledger accounts 
 must be made by journalizing, and all such entries should 
 be properly authorized before they are made. 
 
 Classification of Asset Accounts 
 
 Primarily, assets always divide themselves into three 
 captions, as illustrated: 
 
 A. Current, which relates almost exclusively to cash 
 
 and accounts receivable. 
 
 B. Inventory, which relates almost exclusively to mov- 
 
 able or convertible assets. 
 
 C. Investments, which relate exclusively to assets that 
 
 are either permanent or are consumed in factory 
 operations, such as real estate, machinery, dies, 
 jigs, etc. 
 
 CONTROLLING ACCOUNTS-NATURE o*tt 
 
 2/1 
 
 Classification of Liability Accounts 
 
 There are three classes of liabilities, namely: D Cur- 
 rent; E. Reserves; and F, Capital, Bonds, and Mortgages 
 
 Current liabilities represent moneys payable in cash 
 Within a definite period of time, usually 10 to 90 days 
 
 Reserve accounts are created to protect capital invest- 
 ments by crediting these accounts periodically with an 
 amount from surplus or profits to provide for the wastage 
 shrinkage, or obsolescence of the assets to which they apply 
 and debiting them with the actual loss by repairs or replace- 
 ments on such assets. In this way the asset accounts always 
 show the original purchase or cost price, while the corre- 
 sponding reserve account indicates the amount of deprecia- 
 tion or wastage. 
 
 Capital, as its name implies, is the amount invested in 
 order that a business may be created and conducted, but as 
 It IS returnable to the investor under certain prescribed 
 condition, it is always a liability. 
 
 Classification of Profit and Loss Accounts 
 
 Monthly Profit and Loss is the final account into which 
 go the profits and losses resulting from all monthly trans- 
 actions. Its balance is at once transferred to Profit and 
 Loss General. Profit and Loss General account establishes 
 the dividing line between accounting work and executive 
 work. In other words, the Profit and Loss account is the 
 final expression of what has been accomplished and this is 
 as far as the accountant can go by routine methods. It now 
 remains for the executive to say how and by what means 
 the results shown by this account shall be disposed of, as 
 per the surplus and dividend accounts. 
 
 To arrive at the above, three factors are to be consid- 
 ered: VIZ.. revenues, costs, and expenses, as shown on the 
 chart. 
 
272 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Assets — A. Current 
 
 A-1. Cash in Bank 
 
 This account represents the total amount of cash on de- 
 posit in all banks. If an account is carried in more than 
 one bank, a separate register should be used for each bank. 
 All checks should be put up in pad form, and each one given 
 a separate number. When a check is spoiled it should be 
 marked "Void" and so indicated on the check register. Any 
 check so marked must be turned in and filed in its proper 
 serial place with other returned checks ; otherwise an audit 
 is always questionable. 
 
 Credit 
 
 From check record, with all 
 cash paid out in monthly 
 totals. 
 
 Charge 
 
 From incoming cash sheets, 
 with all cash received in 
 monthly totals. 
 
 Note: All cash received from any source whatsoever must 
 be deposited. 
 
 The balance of this account represents the total amount 
 of cash on deposit at the banks, subject to reconciliation 
 with the actual bank balances as shown by pass-books after 
 providing for the outstanding checks and undeposited items. 
 This balance should be proven at least once a month by the 
 use of a "Bank Reconciliation Sheet." 
 
 A- 2. Petty Cash 
 
 This account represents the amount of office cash with 
 which to pay petty expenses.* 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 273 
 
 Credit 
 
 From incoming cash sheets, 
 with the amount of cash re- 
 ceived back from the petty 
 cash fund to decrease the 
 account. 
 
 Charge 
 
 From check record, on open- 
 ing the account, with the 
 definite amount determined 
 upon to be carried as petty 
 cash. 
 
 From check record, with any 
 amount drawn to increase 
 permanently the account. 
 
 Note: Checks to reimburse the cashier for these expenditures 
 should never be charged to this account, as it always remains con- 
 stant unless the fund is purposely increased or decreased. 
 
 The amount of cash in the cash drawer, together with 
 any properly proven petty cash vouchers that have not yet 
 been redeemed by the general cashier, must at all times be 
 equal to the permanent balance of the Petty Cash account. 
 
 A-3. Accounts Receivable 
 
 This account is the controlling account of the customers 
 ledgers. Postings are made at the end of each month in 
 totals, as follows: 
 
 •S«c discussion of petty cash voucher and disbursements sheet in Chapter XIIL 
 
 Charge 
 
 From sales analysis, with the 
 total credit sales for the 
 month. 
 
 From journal vouchers, with 
 charges against customers, as 
 shown by the monthly re- 
 capitulations. 
 
 From check record, with any 
 amount paid to customers or 
 for their accounts. 
 
 From petty cash book with any 
 amounts paid to customers or 
 for their accounts. 
 
 Credit 
 
 From incoming cash sheets, 
 with the total amount of the 
 "Accounts Receivable" col- 
 umn. 
 
 From journal vouchers, with 
 monthly total, as per recapitu- 
 lation of notes receivable from 
 customers, and all other items 
 credited to customers' ac- 
 counts not mentioned above. 
 
274 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 The balance of this account is the outstanding accounts 
 receivable, and should be checked against the customers 
 ledgers once a month. 
 
 A-4. Accounts Receivable — Past Due 
 
 This account is of great importance as a matter of in- 
 formation. If accounts are past due to any great extent, it 
 shows either one or all of three things: that collections are 
 not being properly cared for, that bad sales are being made, 
 or that general financial troubles are affecting collections. 
 In some lines of business, accounts past due become interest- 
 bearing which is often an item of considerable importance. 
 
 Any concern can determine about what percentage of 
 accounts is always legitimately past due and any variations 
 from this percentage should be immediately looked into. 
 The account is handled as follows: 
 
 Charge 
 
 From journal voucher, with any 
 or all accounts which are ac- 
 tually past due. 
 
 Credit 
 
 From incoming cash sheets, 
 with all amounts received and 
 classified under accounts re- 
 ceivable past due, as shown 
 by the analysis of the sundry 
 column. 
 
 The balance of this account is the outstanding accounts 
 receivable past due. 
 
 A-^. Accounts Receivable — Consigned 
 
 This account represents the amount of outstanding 
 claims on goods which have been sent out on consignment. 
 In other words, B-5, Finished Stores (Branches), would 
 cover any and all goods sent out on consignment, while 
 account A-5 represents the sales which have been made on 
 these goods. This account is one that in many lines of busi- 
 
 CONTROLLING ACCOUNTS-ASSETS 275 
 
 ness must be watched very carefully as defalcation has 
 probably been made more often through it than in any 
 other phase of business. Accounts Receivable-Con- 
 signed should be carried as follows: 
 
 Charge 
 
 From journal voucher, with all 
 sales of consigned goods. 
 
 Credit 
 
 From incoming cash sheets, 
 with all amounts received in 
 cash for accounts receivable 
 (consigned) as shown by an- 
 alysis of the sundry column. 
 
 The balance of this account is the outstanding accounts 
 receivable on goods consigned, and the aggregate balance 
 of the consignment customers ledger must agree with this 
 balance and must be proven once a month. 
 
 A-6. Accounts Receivable— Suspense 
 
 This account should be carefully analyzed. Too often 
 unfortunately, it has been abused by carrying in it accounts 
 that have long been dead and past any possible collection. 
 1 his, of course, creates fictitious assets. 
 
 Accounts Receivable— Suspense should be charged, and 
 Accounts Receivable credited, with all accounts doubtful 
 enoiigh to justify the transfer. But it must be borne in 
 mind that, at the same time, the individual account in the 
 customers ledger must be transferred to a subsidiary sus- 
 pense account in that ledger, using a separate sheet for the 
 same. Each suspense account should be put on one line 
 and all these items should appear together on one or tv^ 
 pages. 
 
 Accounts which are finally found uncollectible should 
 be credited to this suspense account and charged to reserve 
 for bad debts; therefore, the construction for a balance is 
 as follows: 
 
2^6 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Charge 
 From journal voucher, with ac- 
 counts which are not actually 
 bad though of problematical 
 value. 
 
 Credit 
 From journal voucher, with all 
 accounts determined to be ab- 
 solutely uncollectible. 
 From incoming cash sheets, with 
 all amounts received in cash 
 for accounts receivable (sus- 
 pense), as shown by analysis 
 of the sundry column. 
 
 The balance of this account represents the actual amount 
 in suspense and should be proven at least once a month. 
 
 A-7. Notes Receivable 
 
 In handling this account, it should always be borne in 
 mind that if notes receivable are discounted, the full amount 
 of the note must be entered in the "Notes Receivable col- 
 umn on the incoming cash sheets and the discount on such 
 notes in the "Sundry" column on the charge side (see torm 
 85) If notes receivable are held for payment, however, 
 the amount of cash received in payment of the note must be 
 credited in "Notes Receivable" column, and mterest re- 
 ceived on these notes credited in the "Interest Received 
 column on the incoming cash sheet. This account always 
 represents the total amount of notes receivable and is con- 
 structed as follows: 
 
 Charge 
 From journal or notes receiv- 
 able book, with all notes re- 
 ceived from customers. 
 
 Credit 
 
 From incoming cash sheets, 
 with all notes receivable paid 
 during the month. 
 
 From journal voucher, with the 
 notes receivable not paid at 
 maturity. The amount of 
 such notes, plus interest ac- 
 crued, is then charged to the 
 persons from whom the notes 
 were originally received. 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 277 
 
 The balance of this account should agree with the 
 amount of notes on hand and should be proven once a 
 month. 
 
 A-8. Advanced Expense— Insurance 
 
 This is only another name for what is commonly termed 
 unexpired msurance. One account may cover all classes of 
 insurance paid, or it may be divided into different accounts 
 as fire msurance, liability insurance, compensation insur- 
 ant, foreign insurance, etc. It is shown here only as a 
 
 Advanced expense (insurance) is an expense which 
 cannot be charged into any one month. In other words 
 .f msurance is paid for twelve months in advance, it must 
 be prorated over the twelve months for which it is paid 
 Insurance accounts could, of course, be charged into a gen- 
 era advanced expense account, covering many expenses 
 that cannot be charged into any one month but must be pro- 
 rated oyer a considerable period of time. Where this is 
 done, all items should be carefully scheduled in an advanced 
 expense prorating book, thus showing the monthly amount 
 of each class. 
 
 follott^""*^ Expense-Insurance account is carried as 
 
 ^'""'i^ Credit 
 
 fori rane „ aTJce' T °"h°" °^ J"^"^ ^'^"^"-^ 
 
 in advance. for each month, as per sched- 
 
 ule of advanced expense pro- 
 rating sheets. 
 
 s«r,I?' ''^'^"? "! ^^'' ^''°""' '^'''^' *^ amount of in- 
 lyprorltbr "^^'^'^^^' '° subsequent periods by month- 
 
278 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 A-9. Advanced Expense — Advertising 
 
 There is probably no account under assets more debated 
 and perhaps more debatable than this, for the reason that 
 the time period value of advertising can never be anything 
 but an estimate. Expenditures of this kind come usually 
 in large pa)mients in some particular month. For instance, 
 invoices may be received and paid in some one month for 
 $10,000 worth of catalogues; this does not, however, meaii 
 that the expenses for these catalogues should be charged 
 up to that particular month. On the contrary, they may 
 constitute a year's supply and should be prorated, by months, 
 as with insurance. This principle can properly be applied, 
 to certain forms of trade journal and periodical advertising, 
 the cost of which should be spread over a certain period. 
 
 Advanced Expense — Advertising account is handled as 
 follows: 
 
 Charge 
 
 From voucher record, with the 
 total amount of money paid 
 out for advertising of any- 
 kind, as per analysis of sundry 
 column. 
 
 Credit 
 
 From journal voucher, with the 
 monthly proportion of these 
 expenses, as per schedule of 
 advanced expense prorating 
 sheets. 
 
 The balance of this account shows the amount of ad- 
 vanced expense (advertising) properly chargeable to sub- 
 sequent periods by monthly proratings and should frequently 
 be checked against the balance shown on the prorating 
 sheets. 
 
 A-10. Advanced Expense — Salesmen 
 
 This account is practically of the same nature as account 
 A-9, ,and represents an amount of money charged out 
 which is as yet undistributed and which must come back 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 279 
 
 on vouchers for traveling expenses. When these vouchers 
 come in, their amounts will be distributed to commercial 
 expense, as shown under commercial expense analysis 
 (Chapter XIII). 
 
 This account is to be handled as follows: 
 
 Charge 
 
 From voucher record, with the 
 total amount chargeable to 
 this account as per analysis of 
 sundry column. 
 
 Credit 
 
 From journal voucher, with the 
 monthly charge to expense or 
 to the salary account of 
 salesmen. 
 
 The balance of this account shows the amount of money 
 advanced for expenses and still in the hands of salesmen. 
 
 A— 11. Treasury Bonds 
 
 In connection with this account, it must be distinctly 
 understood that treasury bonds are those that have once 
 been issued but later taken back into the company's 
 possession, either for cash or for liquidation of a debt, 
 and that the term does not, in any way, designate unissued 
 bonds. The account is to be handled as follows: 
 
 Charge 
 
 From journal voucher, with any 
 bonds received in payment of 
 goods or other indebtedness. 
 
 From voucher record, with any 
 money paid for bonds as per 
 sundry column analysis. 
 
 Credit 
 
 From incoming cash sheets, 
 with any cash received from 
 the sale of treasury bonds. 
 
 The balance of this account represents the value of the 
 treasury bonds on hand. 
 
 A-12. Treasury Stock—Preferred 
 
 As in the case of bonds, treasury stock is that which has 
 
28o UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 been issued and then taken back into the company's pos- 
 session. The term does not, in any way, refer to unissued 
 stock. The Treasury Stock — Preferred account is to be 
 handled as follows: 
 
 Credit 
 
 From incoming cash sheets, 
 with any cash received for 
 the sale of treasury preferred 
 stock. 
 
 Charge 
 
 From journal voucher, with any- 
 preferred stock received in 
 payment of goods or in- 
 debtedness. 
 
 From voucher record, with any 
 amount paid for preferred 
 stock as per sundry column 
 analysis. 
 
 The balance of this account represents the value of pre- 
 ferred treasury stock remaining unsold. 
 
 A— 13. Treasury Stock — Common 
 
 As already stated, treasury stock is that which has once 
 been issued and then taken back into the company's posses- 
 sion, either as a donation, or for cash, or for liquidation of 
 some debt. The account is to be handled in the same man- 
 ner as A-12, "Treasury Stock — Preferred," discussed 
 above. 
 
 The balance of this accotmt represents the value of each 
 treasury stock remaining unsold. 
 
 A— 14. Labor 
 
 This account represents the total amount of any and all 
 labor employed by the company and must include all wages 
 and salaries. The total of this account is to be obtained from 
 two different sources, as indicated below, and can at any 
 time be checked against the time sheets, thus affording a 
 method for making a monthly audit of all money paid out 
 for labor. 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 281 
 
 Charge 
 
 From voucher record, sundry 
 
 column, with monthly total of 
 
 all labor paid for. 
 From petty cash disbursements 
 
 sheet, with monthly total of 
 
 the labor column. 
 
 Credit 
 
 From record of production, bet- 
 terment, and repair orders, 
 with total of column 4 (Form 
 78). 
 
 From factory overhead sheet, 
 with total of labor column 
 (Form 77). 
 
 From commercial expense dis- 
 tribution sheet, with totals of 
 columns 1, 2, 3, 17, and 18 
 (Form 91). 
 
 Note: The above method requires that a voucher be drawn 
 for each pay-roll made up, thus showing the authorization and 
 approval of the same. 
 
 All salaries paid by check should be handled in the same way, 
 as full authorization for the payment of labor can be obtained in 
 no other way. 
 
 If a company pays its employees two or four times a 
 month, this account must naturally balance out ; if, on the 
 other hand, it pays weekly, an "Accounts Payable Pay-roll" 
 must be opened under "Liabilities" in order to show a bal- 
 ance on unpaid labor at the end of the month. 
 
 Assets — B. Inventory 
 
 As stated in connection with stores-keeping, no matter 
 what the nature of a purchase is, it must first pass into 
 general stores and be issued from general stores to some 
 order number by means of a requisition. 
 
 It is only by taking everything into general stores and 
 by the use of a production, betterment, repair, or distribu- 
 tion order, to transfer the item to some other form of in- 
 ventory, that valuations are maintained through all the uses 
 to which materials, tools, etc., may be put. 
 
282 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 B— 1. General Stores 
 
 General stores is a controlling account for such items 
 as go to general stores, the balance of which is obtained 
 as follows: 
 
 Charge 
 
 On opening the account with 
 the value of general stores, as 
 shown on the general stores 
 record. 
 
 From voucher record, with 
 monthly total of "General 
 Stores" column. 
 
 From production, betterment, 
 and repair order record, with 
 monthly total of items made 
 for general stores, as per 
 sundry column. 
 
 Credit 
 
 From production, betterment, 
 and repair order distribution 
 sheet, with monthly total of 
 column 2 (Form 78). 
 
 From commercial expense dis- 
 tribution sheet, with monthly 
 total of columns 5 and 25 
 (Form 91). 
 
 From factory overhead sheet, 
 with monthly total of column 
 2 (Form 77). 
 
 From sales analysis sheets, with 
 total of general stores sold. 
 
 Note: An invoice or a sales slip must be obtained for each 
 and every item of material purchased. 
 
 The balance of this account represents the inventory 
 of general stores and must be made to agree with any 
 physical inventory when it is taken, the difference, if any, 
 being carried to the Profit and Loss account. The balance 
 of this account can also be reconciled monthly with the 
 inventory values of ''Balances on Hand" as shown on the 
 stores record kept by the stores recorder. 
 
 B— 2. Work in Progress 
 
 It is a well-recognized fact that, to obtain a thirty days' 
 statement in any business on a perpetual inventory basis, 
 it is absolutely necessary to create a controlling account 
 called "Work in Progress" which shall be the holding 
 account for all work being done of a productive or asset 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 283 
 
 increasing nature. This has been described very fully in 
 Chapter IV under ''Stores-Keeping" and need not be dis- 
 cussed in detail here other than to say that, to cover this 
 account completely is one of the principal functions of the 
 record of production, betterment, and repair orders (Form 
 78), On this record are gathered all orders covering work 
 relative to production and betterments for the month, and 
 these orders are recapitulated under proper columns by 
 production orders horizontally and by totals vertically. 
 
 The composition of the Work in Progress account 
 should be as follows: 
 
 Charge 
 
 On opening the account, with 
 the present value of produc- 
 tion and betterment orders. 
 
 From production, betterment, 
 and repair order sheet, with 
 total of columns 2, 3, 4, and 
 5, by items (Form 78). 
 
 Credit 
 From production, betterment, 
 and repair order sheet, with 
 total of columns 8, 9, and 
 10, by items. 
 
 Note: While the production, betterment, and repair order 
 sheet is used for collecting repair orders, so as to classify them in 
 totals for accounting purposes in connection with depreciation, 
 it should be understood that repair work does not form a part of 
 "Work in Progress." These orders are taken care of through 
 Depreciation" and ultimately become a part of the overhead. 
 For this reason they should not be totalled into the "Work in 
 Progress" account. 
 
 The balance of this account represents the inventory 
 of work in progress, and should be shown in the total of 
 column 7 on the production, betterment, and repair order 
 sheet. It should be borne in mind that, in handling this 
 sheet, all uncompleted production and betterment orders, 
 closed into "Unfinished Work in Progress," column 7, are 
 transferred to column 1 of the sheet for the next month. 
 
284 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 These orders constitute the previous value of work in 
 progress, hence overhead expense must be prorated to 
 them, the same as though they were completed orders; 
 otherwise a correct inventory could not be obtained and 
 the overhead expense for the month could not be absorbed 
 into inventories as it should be. 
 
 B— 3. Component Stores 
 
 This account is a controlling account, as described in 
 Chapter IV, under "Stores-Keeping," the debits and 
 credits for which are as follows: 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 Credit 
 
 From monthly production, bet- 
 terment, and repair order 
 sheet, with the total disburse- 
 ments of component stores to 
 production orders, as shown 
 imder column 3. 
 
 Charge 
 
 On opening the account, with 
 the present value of com- 
 ponent stores. 
 
 From monthly record sheet of 
 production and betterment or- 
 ders, with all completed com- 
 ponent stores as credited to 
 monthly work in progress and 
 shown under column 8 (Form 
 78). 
 
 The balance of this account represents the book in- 
 ventory of component stores. 
 
 B— 4. Finished Stores 
 
 This is a controlling account of all such stores as are 
 available for merchandising under whatever classification 
 they may exist, by models, etc. It should be handled as 
 follows: 
 
 Charge 
 On opening the account, with 
 the inventory value of pres- 
 ent finished stores. 
 
 Credit 
 
 From sales analysis sheet, with 
 
 total sales of finished stores. 
 
 From monthly distribution of 
 
 285 
 
 From production, betterment, 
 and repair order sheet, with 
 all finished stores completed 
 as credited to "Work in 
 Progress" and chargeable to 
 "Finished Stores," as shown 
 under column 9 (Form 78). 
 
 From sales analysis sheets, with 
 all finished stores returned by 
 customers and placed in stock. 
 
 production, betterment, and 
 repair orders, with any fin- 
 ished stores used in produc- 
 tion. (This seldom occurs, 
 but when it does, the finished 
 stores item must be placed in 
 the same column as com- 
 ponent stores and the entry 
 made in red ink to distinguish 
 it from component stores.) 
 
 The balance of this account represents the book in- 
 ventory of finished stores. 
 
 B-5. Finished Stores (Branches) 
 
 There are very few concerns which have branch stores 
 in which they carry stock. However, where this is done, 
 the amount of finished stores on hand in branches is 
 obtained by crediting finished stores at the factory and 
 charging branches. 
 
 B-6. Shop Stores 
 
 This is a holding account to prevent any discrepancy 
 m inventory valuations when taking a physical inventory. 
 In other words, these are supplies issued from general 
 stores and charged up to expense but held in sub-stores 
 stations for the convenience of the factory. Unless a 
 holding account of this kind is provided, on taking a 
 physical inventory, a considerable sum that had already 
 been charged up to expense, might be recorded, whereas 
 by keeping this account for shop stores at some fixed sum, 
 subject to adjustment under Profit and Loss, such an error 
 will be avoided, and at the same time opportunity will be 
 given to find to what extent these stores are being used. 
 Therefore, an adjustment from shop stores bin cards (used 
 simply to show "Received," "Given out,'' and "Balance") 
 
286 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 should be made on this account at least once every three 
 months. 
 
 The account will be opened as a stores account, and 
 debited with the value as shown by the quantity on the bin 
 cards of shop stores. This account will be increased or 
 decreased by an adjustment in profit and loss from time 
 to time. 
 
 The balance of this account represents a certain 
 fixed investment in stores that have been issued but not 
 used. 
 
 Assets — C. Investments 
 
 Attention is called to the fact that the following ac- 
 counts have to do with money which is absolutely tied up 
 in the business, that is, fixed investments, the nature of 
 which is such that no "turnover" can be applied to them; 
 whereas all of the preceding accounts under A and B deal 
 with assets which are subject to contraction and expansion 
 according to trade conditions. In other words, all of the 
 assets under A and B are readily convertible and are so 
 considered by banks and other financial institutions, while 
 those under C are assets that are of a peculiar value to the 
 individual business, but are not readily convertible, and 
 are subject to a heavy shrinkage in case of a forced sale. 
 Therefore, in order to protect money tied up in invest- 
 ments, there has to be established a reserve or depreciation 
 fund which by some method of accounting must be worked 
 into costs of production. To arrive at this, two ways are 
 open: 
 
 1. A rent charge which shall become a part of the 
 overhead expense and out of which deprecia- 
 tions on the buildings and real estate invest- 
 ments are taken care of; or 
 
 2. 
 
 CONTROLLING ACCOUNTS-ASSETS 287 
 
 A method of depreciation, on a percentage basis 
 the amount of which shall be charged directly 
 mto overhead. 
 
 Generally speaking, the second plan is preferable. 
 It IS, however, to be borne in mind, that the original in- 
 vestments m buildings, building equipment, and machinery 
 should never be lessened in the controlling accounts, as 
 decreases are entirely taken care of by depreciation ac- 
 counts. Real estate does not come under this rule as 
 appreciation might take place and is then entered directly 
 on the controlling account, as shown under the next head- 
 ing. Further, this method of procedure is quite necessary 
 m connection with replacement and insurance values In 
 other words, the balance of this account should always be 
 equal to the original inventory or purchase values, and be 
 protected by a reserve for depreciation; otherwise invested 
 capital would be consumed by dividends not earned 
 
 Another point to which very careful consideration 
 should be given, is that, whatever the total expense of the 
 business may be, it must always come out of the profits- 
 therefore, the cost system, or system of distribution must 
 provide for the absorption of the expenses into its cost of 
 production. Hence, in connection with all accounts under 
 Investment," wasting of invested capital must be pro- 
 tected by reserves which must be prorated into costs each 
 month. In other words, depreciations on original fixed 
 investments must be taken into account before legitimate 
 profits are available in dividends to the stockholders of the 
 company. 
 
 C— 1. Real Estate 
 
 The treatment of this account under "Investment" is 
 as follows: 
 
 'I 
 
 ill 
 
 lii.M 
 
288 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Credit 
 
 In case of any sale, the account 
 is credited with the book value 
 of the real estate sold, while 
 the excess of selling price 
 over book value is credited to 
 Profit and Loss. 
 
 Charge 
 
 On opening the account, with 
 the present book or appraised 
 value of all real estate. If 
 appreciations on surrounding 
 real estate have been very- 
 pronounced within a recent 
 period, the company's prop- 
 erty should be re-appraised 
 and adjusted accordingly. 
 This is very necessary when 
 property is to be covered by 
 a mortgage. 
 
 From check register, with the 
 amount of any check in pay- 
 ment for real estate. 
 
 From journal voucher, with all 
 notes or mortgages given in 
 payment for real estate. 
 
 The balance of this account is the cost or appraised 
 value, as the case may be, of real estate owned. 
 
 It is held by many authorities that an increase in land 
 value should not be shown as such on the books. How- 
 ever, there would seem to be no good reason why land 
 should not be treated in the same manner as any other 
 commodity. In all of the other transactions of a business 
 inventory valuations fluctuate according to given condi- 
 tions. For instance, by using the last purchase price on 
 materials, which is the exact replacement value of 
 the material, we change the valuations up or down of 
 all the materials on hand. The same applies to the price 
 on finished parts; the last regular production order cost 
 being used for all inventory and cost valuations made, thus 
 increasing or decreasing the valuation of all such assets 
 on hand. These things are all arrived at from practical 
 experience in trying to operate a business on a reasonable 
 
 CONTROLLING ACCOUNTS— ASSETS 
 
 289 
 
 and efficient basis, conserving in all instances valuations 
 on assets. As stated before, changes in land value, if based 
 on bona fide appraisals, should be treated in an identical 
 manner. 
 
 C-2. Buildings 
 
 In the case of buildings it is necessary to consider a 
 fixed depreciation; therefore, the treatment of the Builds 
 ings account would be as follows: 
 
 Charge 
 
 On opening the account, with 
 present book value of build- 
 ings. If there is any question 
 about their value, they should 
 be appraised by a committee 
 or appraisal company. 
 
 From record of production and 
 betterment orders, with the 
 amount of any betterments to 
 buildings. (This does not in- 
 clude repairs.) 
 
 Credit 
 From incoming cash sheet 
 (Form 85), with any amount 
 received in payment or build- 
 ings sold, as per analysis of 
 sundry column. 
 From journal voucher, with the 
 difference between the selling 
 price and the original cost of 
 any betterments to buildings 
 when these are sold, this dif- 
 ference naturally representing 
 a loss. 
 
 Note: Whenever contract work is done on buildings, cither 
 new or old, the cost should be charged to General Stores and then 
 be drawn out on a betterment order and charged to Buildings 
 account. 
 
 The balance of this account shows the original cost 
 of buildings together with any subsequent increase in 
 value from betterments. The current estimated value is 
 the difference between the balance of this account and the 
 balance of E-2, ^'Reserve for Buildings." 
 
 C— 3. Building Equipment 
 
 This account should consist of such items as are in 
 reality a part of the buildings, and are not used directly 
 
 I II 
 
290 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 for manufacturing or processing purposes, such as eleva- 
 tors, plumbing, steam fittings, electric light and power 
 wiring, gas fittings, sprinkler system, etc. These are dis- 
 tinguished from the building proper, largely because they 
 are subject to a much more rapid depreciation than is the 
 building itself; for instance, it might not be necessary to 
 write off more than 2% on the buildings, while on the 
 items above mentioned, 5% to 10% per annum might be 
 required. 
 
 The handling of Building Equipment account is as 
 follows : 
 
 Credit 
 
 From incoming cash sheets, 
 with any amount received in 
 payment for building equip- 
 ment sold. 
 
 From journal voucher, v^^ith the 
 difference between selling 
 price when sold and the origi- 
 nal cost. 
 
 Charge 
 
 On opening the account, with 
 the present book values of this 
 equipment. If this value is 
 not available, an appraisal 
 should be made. 
 
 From monthly betterment order 
 record, with all completed 
 plant betterments chargeable 
 to building equipment. This 
 must include all contract 
 work which should be passed 
 through stores and requisi- 
 tioned out as betterment ma- 
 terial, so that all betterments 
 to building equipment will 
 make themselves manifest on 
 the monthly betterment order 
 record. 
 
 The balance of this* account shows the original cost of 
 building equipment, together with any subsequent in- 
 crease from betterments; the current value being the dif- 
 ference between the balance of this account and the bal- 
 ance of E-3, "Reserve fon Building Equipment." 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 291 
 
 C-4. Office Furniture and Equipment 
 
 .oul^llnrT '°'"' '""''"'■^ °' ^" '^■"<^^' ^"d office 
 uZsoiVr T '^P^""'^--^' adding machines, etc. As 
 Items of this nature must pass into general stores when 
 purchased, no distribution of any kinf will be charged o 
 
 tem'nrL T'k ^'^ ™"^''" ^^^°^^'- *herefore'thes: 
 taTnst 1 I " "-^q^'^itioned out and distributed 
 
 against some betterment order number. The account 
 must be handled as follows: account 
 
 
 Charge 
 
 On opening the account, with 
 the present book value of of- 
 fice furniture and equipment. 
 If this is not available, they 
 must be inventoried. 
 
 From monthly betterment order 
 record, with all completed 
 plant betterments chargeable 
 to office furniture and equip- 
 ment. 
 
 Credit 
 
 From incoming cash sheets, with 
 all cash received in payment 
 for office furniture and equip- 
 ment sold, as per analysis of 
 sundry column. 
 From journal voucher, with the 
 difference between the selling 
 price and the original cost of 
 any office furniture and equip- 
 ment plus any betterments 
 when sold. 
 
 The balance of this account shows the original cost of 
 office furn,ture and equipment together with any subst 
 quen mcrease in value for betterments. The current e^t 
 
 for Offi ^fthis account and the balance of E-4, "Reserve 
 tor Office Furniture and Equipment." 
 
 C-5. Machinery and Tools 
 
 This account represents the value of all the machinery 
 and shop equipment in the plant, except the power and 
 
 are parts of, a machine, but does not include dies lies 
 fixtures, and gages, or any items that go into miscelllne: 
 
 |!. 
 
 'Ill 
 
292 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ous equipment, as these are provided for in separate ac- 
 counts. All items covered by this account must be 
 purchased and passed into general stores and then drawn 
 into the factory by a proper betterment order; therefore, 
 no direct charges from the voucher record are permissible. 
 This account will be handled as follows: 
 
 Charge 
 
 On opening the account, with 
 the present book value of ma- 
 chinery and tools. If not 
 available, then appraisal must 
 be made. 
 
 From monthly betterment order 
 record, with all completed 
 plant betterments chargeable 
 to machinery. 
 
 Credit 
 
 From incoming cash sheets, 
 with any amount received in 
 payment for machinery sold 
 as per analysis of sundry 
 column. 
 
 From journal voucher, with the 
 difference between selling 
 price and the original cost of 
 any machinery or tools plus 
 any betterments added thereto 
 when sold. 
 
 r- 
 
 The balance of this account is the original cost of 
 machinery and tools together with subsequent increase in 
 value from betterments. The current estimated value at 
 any time is the difference between the balance of this 
 account and the balance of E-5, "Reserve for Machinery 
 and Tools." 
 
 Special Account— Power and Light Equipment 
 
 While no special account is showm on the chart or bal- 
 ance sheet, it is quite necessary sometimes to separate the 
 investments in a power and Hght plant from the invest- 
 ment in the rest of the plant, inasmuch as it is a special 
 service feature which may be utilized by more than one 
 plant. In other words, it is a producing factor which, if 
 properly handled, would have costs computed on an inde- 
 pendent basis and its product sold to the parent plant, and 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 to others if it furnished service to them. Therefore, it may 
 be desirable to have an account controlling the investment 
 in all such items of power and light equipment, as engines, 
 boilers, pumps, tanks, generators, air compressors, etc. 
 
 Like all other things, items of this nature must be pur- 
 chased and put in general stores and not be distributed 
 from any voucher record. It is suggested that this ac- 
 count always be handled in total and in the following 
 manner; 
 
 Charge 
 
 On opening the account, with 
 the present book value of 
 power and light equipment. 
 If not available, an appraisal 
 must be made. 
 
 From monthly betterment order 
 record, with all completed bet- 
 terments chargeable to power 
 and light equipment. 
 
 Credit 
 
 From incoming cash sheets, 
 with any amount received in 
 payment for power and light 
 equipment sold. 
 
 From journal voucher, with the 
 difference between the selling 
 price and the original cost of 
 power and light equipment 
 plus any betterments when 
 sold. 
 
 The balance of this account shows the original cost of 
 power and light equipment together with any increase in 
 value from betterments. The current estimated value at 
 any time will be the difference between the balance of this 
 account and the balance of ''Reserve for Power and Light 
 Equipment." 
 
 C— 6. Dies, Jigs and Fixtures 
 
 Particular consideration should be given to this ac- 
 count, as it often represents values of a temporary nature. 
 In other words, it represents an investment in many tools, 
 which should not be written off to expense immediately 
 upon their purchase, or completion, but which must be 
 retired by what is known as a rapid depreciation fund 
 
 I'l 
 
 m 
 
294 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 amounting to anywhere from 20% to 100% per annum. 
 This sort of equipment must be sharply distinguished from 
 small tools, such as drills, reamers, and cutting tools (ex- 
 cepting perhaps large milling cutters), which are bought 
 and put into general stores and are immediately written 
 into expense as soon as issued to the factory. 
 This account should be handled as follows: 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 295 
 
 Charge 
 
 On opening the account, with 
 present book value of all dies, 
 jigs, and fixtures in use. 
 
 From monthly betterment order 
 record, with all completed bet- 
 terments, in the form of jigs, 
 fixtures, etc. 
 
 Credit 
 
 From journal voucher, with the 
 initial cost of these items 
 when they become absolutely 
 worthless or are discarded. 
 
 From incoming cash sheets, 
 with any sales made of the 
 same. 
 
 Note: This investment account will always be increased from 
 B-2, "Work in Progress"; therefore, it calls for a betterment order 
 or some special form of betterment requisition. 
 
 The balance of this account should show the original 
 cost of these items together with any subsequent increase 
 in value from betterments. The current value at any time 
 is the difference between the balance of this account and 
 the balance of account E-6, "Reserve for Dies, Jigs, and 
 Fixtures." 
 
 C— 7. Shop Fixtures and Fittings 
 
 This account will represent the value of all shop fix- 
 tures and fittings, such as benches, cupboards, chairs, 
 desks, together with all containing racks for stores-keep- 
 ing, for tool cribs, etc. All items of this nature which are 
 bought for the factory must first pass through general 
 stores, being issued to the factory by betterment orders. 
 The account will be handled as follows: 
 
 Charge 
 On opening the account, with 
 
 the present book value of shop 
 
 fixtures and fittings. 
 From monthly betterment order 
 
 record, with all monthly plant 
 
 betterment orders chargeable 
 
 to these items. 
 
 Credit 
 
 From incoming cash sheets, 
 with any amount received in 
 payment for shop fixtures and 
 fittings as per analysis of 
 sundry column. 
 From journal voucher, with the 
 difiference between the selling 
 price and the original cost of 
 any shop fixtures and fittings 
 plus any betterments when 
 sold. 
 
 From journal voucher, with the 
 initial cost of any item when 
 it becomes obsolete. 
 
 The balance of this account shows original cost of shop 
 fixtures and fittings together with any subsequent increase 
 in value from betterments. The current estimated value 
 at any time is the difference between the balance of this 
 account and the balance of E-7, ^'Reserve for Shop Fix- 
 tures and Fittings.*' 
 
 C— 8. Miscellaneous Equipment 
 
 This is an investment account of a peculiar nature and 
 one not subject to depreciation; therefore, no reserves 
 are set up for it. It takes so much water to fill a siphon 
 before it will operate and deliver water at the discharge 
 end. With a given output and a given number of people 
 employed, it takes just so much miscellaneous equipment 
 to operate a plant. This miscellaneous equipment consists 
 of such things as hammers, wrenches, twist drills, reamers, 
 dies, taps, etc., and also brooms, pails, buckets, small 
 trucks, tote boxes, etc. Assets of this nature are always re- 
 covered by the taking of a physical inventory; therefore, 
 a holding account of this inventory must be maintained in 
 order to preserve an equilibrium on inventory valuations 
 
 
 £• I J 
 
 lis 
 
296 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 at the termination of the fiscal year. This account repre- 
 sents a standing inventory and is not affected during the 
 year by any increase or decrease of items. 
 
 Charge 
 
 On opening the account, with 
 the present book value of 
 miscellaneous equipment. 
 
 From journal voucher, with any 
 increase in this equipment as 
 shown by physical inventory 
 from year to year. 
 
 Credit 
 
 From incoming cash received 
 sheets, with any amount re- 
 ceived in payment for miscel- 
 laneous equipment as per 
 analysis of sundry column. 
 
 From journal voucher, with any 
 decrease in the amount of this 
 equipment at subsequent in- 
 ventory periods. 
 
 The balance of this account gives the cost of miscel- 
 laneous equipment as affected by any increases or de- 
 creases shown by subsequent inventories or sales. 
 
 C-9. Patterns 
 
 This account represents the value of patterns on hand 
 at any time and should be handled conservatively, for it is 
 a well-known fact that changes made in patterns are so 
 rapid in most instances as to cause them to become worth- 
 less. These items must be handled through a controlling 
 account, and written off on a fixed basis rather than to 
 charge them up to expense at the time they are created. 
 In other words, these items are distributed over some time 
 period or on some fixed basis for the purpose of stabilizing 
 costs. The account will be handled as follows: 
 
 Charge 
 
 On opening the account, with 
 
 the present book value of 
 
 patterns. 
 From monthly betterment order 
 
 record, with all completed 
 
 betterments for same. 
 
 Credit 
 
 From journal voucher, with ini- 
 tial cost of discarded patterns. 
 
 From incoming cash sheets, 
 with any amount received in 
 payment for patterns as per 
 analysis of sundry column. 
 
 CONTROLLING ACCOUNTS-ASSETS 
 
 297 
 
 The balance of this account shows total initial cost of 
 patterns, the current estimated value at any time being 
 the difference between the balance of this account and the 
 balance of E-8, "Reserve for Patterns." 
 
 C— 10. Drawings 
 
 This account represents the value of drawings on hand 
 at any time. All that was stated above in regard to pat- 
 terns applies with equal or greater force to drawings 
 and the account is handled in the same way as Patterns 
 account. 
 
 The balance of this account shows total initial cost of 
 drawings, the current estimated value at any time being 
 the diflference between the balance of this account and the 
 balance of E-9, "Reserve for Drawings." 
 
 C-11. Patents 
 
 There is perhaps no account on the general books of 
 any company that is more questionable than that of 
 patents. Their true worth is an absolutely unknown 
 quantity, and tremendously fictitious values are often 
 placed upon them to the ultimate detriment of the com- 
 pany s affairs. This account is handled as follows- 
 
 Charge 
 
 From voucher record, with 
 actual cost to obtain patent as 
 per sundry column which 
 should include all legal ex- 
 penses as well as patent fees. 
 
 From journal voucher, with the 
 actual cost or estimated value 
 of a patent which is pur- 
 chased. 
 
 Credit 
 
 From journal voucher, with the 
 original book value of any 
 patent which has expired or 
 has been abandoned. 
 
 From incoming cash sheet, with 
 any amount received in pay- 
 ment for patents which are 
 sold instead of being aban- 
 doned, as per sundry column. 
 
 nf J?' ^^^u"^ ""^ ^^'' ^""^""^ '^^^' ^^^ t^tal initial cost 
 01 patents, the current estimated value at any time being 
 
 ;i| 
 
H 
 
 298 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 the difference between the balance of this account and the 
 balance of E-10, "Reserve for Patents." 
 
 C-12. Advanced Expenses — Development and Experi- 
 mental Work 
 
 In many lines of business a controlling account is 
 necessary to cover what may be termed ''Advanced Ex- 
 penses" for development and experimental work. This 
 account, when required, is purely an arbitrary one, dictated 
 by conservatism for the purpose of stabilizing costs. In 
 other words, the cost of development and experimental 
 work for a product is held in this controlling account and 
 spread over the life, or a portion of the life, of the product. 
 This account oftentimes includes research work, especially 
 of a laboratory nature. 
 
 By having an account of this character, it is possible 
 to prorate monthly a certain amount for this kind of work, 
 thereby putting it on the same basis as unexpired insur- 
 ance, advertising, etc. 
 
 The account is handled as follows: 
 
 Charge 
 
 On opening the account, with 
 any undistributed expense of 
 this character. 
 
 From monthly betterment order 
 record or a prorating sheet, 
 with all expense chargeable to 
 this kind of work. 
 
 Credit 
 
 From journal voucher, with the 
 proper monthly distribution 
 which should be charged 
 directly into overhead or 
 commercial expense as shown 
 on the monthly prorating 
 sheets. 
 
 The balance of this account is the amount to be pro- 
 rated to subsequent time periods. The time period and 
 the amount absorbed into expense for each period may be 
 changed from time to time as necessary, but only by au- 
 thority of the board of directors or executive committee. 
 
 f : 
 
 CHAPTER XV 
 
 CONTROLLING ACCOUNTS 
 
 LIABILITY AND 
 
 PROFIT AND LOSS ACCOUNTS 
 
 Continuing the illustration and explanation 
 of the chart of controlling accounts, and 
 giving in detail the source from which the 
 debits and credits of each liability account 
 and each profit and loss account are obtained. 
 
« i 
 
 CHAPTER XV 
 
 CONTROLLING ACCOUNTS 
 
 LIABILITY AND 
 
 PROFIT AND LOSS ACCOUNTS 
 
 Liabilities — D. Current 
 
 D-l. Accounts Payable 
 
 This is the controlling account of the purchase ledger 
 or purchase vouchers. In other words, it represents the 
 total amount of money which the company owes its 
 creditors. Postings are made to this account at the end 
 of each month as follows: 
 
 Charge 
 
 From check record, with month- 
 ly total of the "Accounts 
 Payable" column. 
 
 From journal voucher, with any 
 other items charged to pur- 
 chase creditors, such as notes 
 issued in payment, etc. 
 
 Credit 
 
 From voucher record, with 
 monthly total of all purchases, 
 as per "Accounts Payable" 
 column. 
 
 From journal voucher, with any 
 other items credited to pur- 
 chase creditors. 
 
 From incoming cash sheet, with 
 all cash received from pur- 
 chase creditors, as per analy- 
 sis of sundry column. 
 
 The balance of this account is the amount due pur- 
 chase creditors. The aggregate balance of the purchase 
 vouchers must agree with this balance which should be 
 proven once a month by drawing off the balance from the 
 unpaid vouchers. 
 
 301 
 
302 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ..■J I 
 
 I'l 
 
 D-2. Accounts Payable Datings 
 
 This is a very unusual account with most concerns and 
 for this reason is not given on the chart (Form 92). It 
 represents purchases under special agreements, where the 
 invoice does not mature in thirty or sixty days as custom- 
 ary, but at a later date specifically indicated in the pur- 
 chase contract. 
 
 D-3. Notes Payable 
 
 This account s'hows the company's liability for notes 
 payable, and should be handled as follows: 
 
 Charge 
 
 From check record, with all 
 payments on account of notes 
 payable, as per "Notes Pay- 
 able" column. 
 
 From journal voucher, with any 
 adjustments chargeable to 
 notes payable by other than 
 cash, as per monthly total of 
 the "Notes Payable" column. 
 
 Credit 
 
 From incoming cash sheets, 
 with monthly total of the 
 "Notes Payable" column, rep- 
 resenting all notes payable 
 issued, discounted, and re- 
 newed. 
 
 From journal voucher, with all 
 renewals of notes by other 
 than cash transactions, as per 
 the monthly total of "Notes 
 Payable" column. 
 
 Note: Upon the renewal of a note, a journal voucher must be 
 made on which will be recorded the cancellation of the unpaid note 
 or any portion thereof by the issue of a new note in its place. The 
 amount of the old and new note will be charged and credited to this 
 account, respectively. In the event of the new note being in excess 
 of the old one, the excess, representing interest or a further pay- 
 ment to a purchase creditor, must be charged and credited to the 
 proper account 
 
 The balance of this account represents the amount of 
 the company's liabilities for notes payable, and must agree 
 with the total of unpaid notes still outstanding. It should 
 be proven at least once a month against the unpaid notes. 
 
 CONTROLLING ACCOUNTS-LIABILITIES 303 
 
 D-4. Taxes Accrued 
 
 In the handling of this account, it must be remembered 
 that taxes are usually paid at the end of the year. As it 
 is not desirable to have all of this expense charged to the 
 month in which it is paid, it should be prorated monthly. 
 The account may be handled as follows: 
 
 Charge 
 From voucher record, with the 
 amount of tax bills when re- 
 ceived as £er sundry column. 
 
 Credit 
 On opening the account, with 
 accrued taxes to date, if any. 
 From journal voucher, with 
 monthly taxes as per tax 
 schedule on monthly prorating 
 sheet--i/i2 each month. 
 
 Note: By handling the account in this way, it is not necessary 
 to credit any reserve for taxes, as the account itself is practically 
 a reserve. ^ 
 
 The credit balance of this account represents the com- 
 pany's liability for taxes accrued but not due. 
 
 D-5. Interest Accrued— General 
 
 This account shows the liability for interest accrued 
 on notes, etc., and should be handled as follows: 
 
 Charge 
 From check record, with the 
 amount of cash paid for in- 
 terest which has accrued, as 
 per sundry column. 
 
 Credit 
 From journal voucher, with the 
 monthly proportion of interest 
 accrued on notes payable, as 
 per interest schedule on the 
 monthly prorating sheet. 
 
 Note : No interest which is paid in advance should go into this 
 account, but it should be charged to "Advanced Expense—General " 
 and through that account prorated into monthly expense. 
 
 The balance of this account represents the company's 
 liability for interest accrued on notes payable. 
 
 
 
304 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 D-^. Interest Accrued on Bonds 
 
 This account and the next account, D-7, "Interest 
 Accrued on Mortgages," are handled in the same manner 
 as D-5, "Interest Accrued — General." 
 
 Liabilities — E. Reserves 
 
 Theoretically and practically, reserves are established 
 to separate from surplus a certain amount with which to 
 cover losses such as expenditures for repairs, depreciations, 
 and the renewal of various kinds of equipment. This is done 
 as a conservative measure, as otherwise the available surplus 
 would appear larger than it really is, and create a tendency 
 to declare dividends not warranted, especially during dull 
 times. 
 
 Monthly charges should be made against each reserve, 
 and credited to overhead, so that no one particular time 
 period will be unduly burdened for such expenditures. These 
 expenditures can then be handled in whole or distributed 
 over the different departments, so as to become a part of 
 the departmental overheads. 
 
 It must be remembered that these reserves are legit- 
 imately withheld from profits, because the amounts they 
 protect have been prorated over the product manufactured 
 and thus charged into costs of production. In other words, 
 the cost of goods has been increased by the amount charged 
 to depreciation, for replacements, repairs, etc. Any com- 
 mercial profit derived from sales, over and above this cost, 
 is therefore true profit and not, as would otherwise be the 
 case, a portion of the stockholder's investment which, hidden 
 in profits, might be returned to him in the form of 
 dividends. 
 
 As the name of each reserve account relating to 
 tangible assets indicates its purpose and also the sources 
 of debit and credit for the same, it will not be necessary to 
 
 CONTROLLING ACCOUNTS-LIABILITIES 30- 
 
 describe every account. The following will serve to illus- 
 trate them all : 
 
 £-2, Reserve for Depreciation of Buildings 
 
 This account is typical of all reserve accounts for 
 tangible assets, and is handled as follows: 
 
 Credit 
 From journal voucher, with 
 monthly amounts of estimated 
 depreciation on buildings, 
 chargeable to overhead or 
 commercial expense. 
 
 Charge 
 
 From journal voucher, with 
 
 monthly amount of repairs 
 
 expended on buildings. 
 From journal voucher, with the 
 
 difference, if a loss, between 
 
 the initial cost and the selling 
 
 price of buildings sold. 
 
 ^ The credit balance of this account is the unused por- 
 tion of the reserve. 
 
 In connection with the above, it may be said, that the 
 titles of E-1, Real Estate; E-2, Buildings; E-3, Building 
 Equipment; E-4, Office Furniture and Equipment- E-5 
 Machinery and Tools; E-6, Dies, Jigs and Fixtures! E-/ 
 Shop Fixtures and Fittings; E-^, Patterns; and E-P,' 
 Drawings, are in each case clearly descriptive of the char- 
 acter of the accounts. 
 
 E-10. Reserve for Depreciation of Patents 
 
 Patents are not a tangible asset; therefore, this ac- 
 count must be treated differently from the foregoing. It 
 shows the amount of depreciation set aside for patents, 
 based on the life a patent has to run. 
 
 Charge 
 From journal voucher, with the 
 difference, if a loss, between 
 the initial cost and the selling 
 price of any patent sold. 
 
 Credit 
 From journal voucher, with the 
 monthly prorated amount of 
 depreciation for patents, 
 chargeable to overhead or 
 commercial expense. 
 
3o6 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Note : In connection with this account, it should be borne in 
 mind that the full life of a patent is seventeen years, and that, 
 whatever the valuation of a patent is, it must be depreciated at least 
 pro rata according to the time it has to run, so that at the end of 
 its life the book valuation will be wiped out. 
 
 The credit balance of this account is the unused por- 
 tion of the reserve. 
 
 E— 11. Reserve for Bad Accounts 
 
 This account is handled as follows: 
 
 CONTROLLING ACCOUNTS-LIABILITIES 
 
 Charge 
 
 From journal voucher, with all 
 accounts which are deter- 
 mined to be uncollectible. 
 
 Credit 
 
 From journal voucher, each 
 month with one-twelfth of the 
 estimated annual loss from 
 uncollectible accounts. 
 
 From incoming cash sheet, with 
 any moneys collected on items 
 shown on the debit side of 
 this account. 
 
 The balance of this account shows the difference between 
 the amounts set aside monthly to cover losses from bad 
 debts and the actual losses sustained. At the end of the 
 year the balance should be closed into profit and loss. 
 
 If anv collections are made on accounts which had been 
 written ofif in a preceding year, such collections should not 
 be credited to this reserve account but to profit and loss. 
 
 E— 12. Bond Redemption Fund 
 
 This account is credited monthly or quarterly, at the 
 discretion of the board of directors, with an amount sufifi 
 cient to provide for the redemption of the bonds at thei • 
 maturity. 
 
 E— 13. Obsolete Stock 
 
 This account should be handled as follows: 
 
 Charge 
 From journal voucher, with the 
 inventory value of stock writ- 
 ten off to obsolescence. 
 
 307 
 
 Credit 
 From journal voucher, with the 
 estimated monthly amount re- 
 quired to cover the writing off 
 of losses due to obsolescence 
 of stock. 
 
 E-14. Obsolete Equipment 
 
 obso";';: z:t '' '^"''^^ '- ^^^^^^'^ ^^^ -- ~ « 
 
 LiABiLiT,Es-F. Capital. Bonds, and Mortgages 
 Capital Stock Accounts 
 
 Authorized or some similar title, in order to brins on 
 
 nanv 1; v""""' ^'^ '''''' capitalization of the com- 
 pany. Speaking generally, however, any account renre 
 senting capital stock should show only the stock tha 1 as" 
 actually been issued; that is to say, if the authorized capita 
 stock of a company is $500,000 divided into $100 000 ore- 
 ferred and $400,000 common, and if all of the pS d 
 but only $300,000 of the common, is issued, thT pi ',' 
 tock accounts should show the issue of $400,000 ai d no 
 the entire capitalization of $500,000. In other word, he 
 
 ot the authorized capital stock as has been issued -,nH 
 IS actually outstanding. . "^''' ^"'^ 
 
 Furthermore, when stock has been issued and paid for 
 by a subscriber and is either donated to, or bought back 
 by. the company, such stock becomes tr asurv to k "5 
 does not m anv way affect the capital stock acco mts I^^J 
 
3o8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 or F-2, but must be carried in a separate account as 
 treasury stock as an asset (A-12 and A-13). 
 
 When stock has been issued but has not been paid for 
 in full; it should be treated in the same manner as any 
 other account sale, that is, it should be credited to Capital 
 Stock and be charged to Accounts Receivable in the per- 
 sonal accounts ledger. 
 
 F-1. Capital Stock— Preferred 
 
 This account should be handled as follows: 
 
 Credit 
 From stock record book, the 
 total preferred stock which 
 has been issued. 
 
 Charge 
 From journal voucher, with any 
 reduction in preferred stock, 
 or any preferred stock for- 
 feited for non-payment of 
 purchase price. 
 
 The balance of this account represents the company's 
 outstanding preferred stock. 
 
 F-2. Capital Stock— Common 
 
 This account would be handled in the same manner 
 as F-1, and the balance represents the company's liability 
 for outstanding common stock. 
 
 F-3. Bonds 
 
 Bonds will be carried in a holding account the same as 
 F-1 and F-2, until redeemed by the company, when the 
 account will be charged and cash credited. The balance of 
 this account always shows the amount of outstandmg 
 bonds for which the company is liable. 
 
 F-4. Mortgages 
 
 Mortgages will be held in account F-4 until retired, at 
 
 CONTROLLING ACCOUNTS-LIABILITIES 309 
 
 which time this account should be charged from the 
 voucher record and cash credited. The balance of this 
 account always shows the amount of outstanding mort- 
 gages for which the company is liable. 
 
 F— 13. Surplus 
 
 This account is a reservoir for holding all moneys made 
 over and above actual costs of doing business, and also for 
 holdmg certain amounts to cover contingencies, improve- 
 ments, etc., not taken care of by reserve accounts. 
 
 Charge 
 From journal voucher, with 
 
 amount of dividends declared 
 
 by board of directors. 
 From journal voucher, with the 
 
 disposition of any other 
 
 amounts of surplus. 
 
 Credit 
 From journal voucher, with the 
 balance of Profit and Loss — 
 General to be carried to this 
 account. 
 
 Note : Under no circumstances can any entry be made to this 
 account except by authorization of the board of directors. 
 
 The balance of this account is the undivided profits 
 subject to the board of directors' disposal. 
 
 F-.14. Dividends Declared 
 
 This account is a record of the dividends declared and 
 paid, which should always be taken from surplus and not 
 directly from profit and loss. 
 
 Charge 
 
 From check record, with all 
 dividends paid in cash, as per 
 sundry column. 
 
 From journal voucher, all divi- 
 dends paid in some other way 
 than by cash. 
 
 Credit 
 From journal voucher, with the 
 amount of dividends declared 
 by the board of directors, as 
 shown by the minute book, 
 charging the same to surplus. 
 
^lO 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 The balance of this account consists of dividends de- 
 clared but not yet paid. As a general rule, dividends 
 should never be declared unless means are available to pay 
 them; therefore, there should never be a balance to this 
 account save for the interval between the declaration and 
 payment of dividends. 
 
 Profit and Loss — G. Revenues 
 
 G. Total Revenues 
 
 If a controlling account of all sales is desired, this ac- 
 count will be set up and represents the revenues from all 
 sales, as shown by the sales analysis sheet and by the chart 
 covering the various models made, and by any other record 
 showing items sold. The account will be handled as 
 follows: 
 
 Credit 
 
 From sales analysis sheet, with 
 monthly totals of all sales. 
 
 Charge 
 
 From returned goods analysis 
 sheet, with monthly totals at 
 sales prices, of all sales re- 
 turned. 
 
 From sales analysis sheet, with 
 the monthly totals of the 
 various adjustments named 
 thereon. 
 
 The account is balanced out each month into Monthly 
 Profit and Loss (K-1). 
 
 G— 1. Road Racer Model 
 
 If it were thought better to have a running controlling 
 account for each item in the classification of the sales 
 analysis sheet, or the chart, any account from G-1 to G-14 
 inclusive would be handled according to the following 
 method : 
 
 CONTROLLING ACCOUNTS-PROFIT AND LOSS 311 
 
 Credit 
 From sales analysis sheet, with 
 monthly total of all sales of 
 road racer model. 
 
 Charge 
 
 From returned goods analysis 
 sheet, with monthly total of 
 all sales returned at sales 
 prices for road racer model. 
 
 From sales analysis sheet, with 
 monthly totals of the adjust- 
 ments named thereon for road 
 racer model. 
 
 The account is balanced out each month into the 
 Monthly Profit and Loss account. 
 
 Profit and Loss — H. Costs 
 H. Cost of Sales 
 
 This is the analysis of costs for the sales items, and 
 consequently, whatever method is used, the classifica- 
 tion under "H" must be exactly the same as illustrated 
 under "G." 
 
 If the costs of sales are handled in one master account, 
 the debits and credits will be as follows: 
 
 Charge 
 From the cost columns of the 
 sales analysis sheet, with 
 monthly cost totals of all 
 goods sold. 
 
 Credit 
 
 From the cost columns of the 
 
 returned goods sales analysis 
 
 sheet, with monthly cost totals 
 
 of all goods sold and returned. 
 
 The balance of this account represents the cost of 
 goods sold, and is closed out each month to the debit of 
 Monthly Profit and Loss (K-1). 
 
 If each item in the classification were treated sepa- 
 rately, any account from H-1 to H-14 would be handled 
 the same as above.* 
 
 ♦1,. 1 connection with the "G" and "H" accounts, reference is arain made to 
 the sales analysis ^eet which gives the ckssification shown on tLSknTfcom 
 trolUng accounts. This sales analysis sheet is used, not only for the r^S ^f ^)Z 
 Joi^^^'V^l *^'^'' l"^ *^^ ^I""^ *«t °f «b«t« i« "'«d for recordinHll retuSe" 
 lofngout.''^ ""'' ^^ '^^^^'^^'^ °" '^'^' '^'""'^ i^t « they IrcTn llL wh^ 
 
i 
 
 312 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Profit and Loss — ^J. Expenses 
 
 J— 1. Commercial or Office Expense 
 
 This account will include all expenses chargeable to the 
 commercial end of the business, such as commercial labor, 
 commercial material, and commercial general expense, as 
 outlined in Chapter XIII, "Commercial or Office Account- 
 ing." This account, in total, is handled as follows: 
 
 Charge 
 
 From voucher record, with the 
 total amount of commercial 
 expense as shown by the 
 "Commercial Expense" col- 
 umn. 
 
 From journal voucher, with any- 
 commercial expense prorated 
 over the business not shown 
 on voucher record. 
 
 Credit 
 
 From monthly distribution sheet, 
 with monthly total of com- 
 mercial expense as shown on 
 the same, this being the grand 
 total of the subsidiary ledger 
 commercial accounts which 
 are chargeable to Profit and 
 Loss. 
 
 This account is balanced out into Monthly Profit and 
 Loss. 
 
 J— 2. Overhead 
 
 The one great object of this account is to stabilize fac- 
 tory costs, by the equitable distribution of overheads on an 
 hourly rate basis or on a percentage basis. It is highly 
 undesirable to change these rates more often than is abso- 
 lutely necessary, as the change of an overhead rate in a 
 business means a change in the inventory valuation of all 
 "Work in Progress," ''Component Stores," and ''Finished 
 Stores." For instance, if the actual overheads for any 
 particular month as shown on the overhead distribution 
 sheet were $100,000, and if the amount on a percentage or 
 other basis, actually absorbed into production, as shown 
 on the production sheets, were $97,000, there would be 
 
 CONTROLLING ACCOUNTS-PROFIT AND LOSS 313 
 
 $3,000 to be disposed of in either one of two ways- first 
 It can be taken from this account and wiped out through 
 Profit and Loss, or second, a holding account can be 
 created under B, ^'Assets-Inventory," in order to allow 
 time for showing whether or not the percentage basis or 
 the hourly rate basis should be changed. In this way the 
 amount spent for overhead would be undistributed ex- 
 pense that remained as an asset, the same as "Advanced 
 iixpenses— Insurance," "Salesmen," etc. 
 
 This account will embrace all non-productive labor 
 non-productive material, and manufacturing general ex- 
 pense, and will control the subsidiary ledger factory over- 
 head accounts. Its purpose is to wipe out any difference 
 through Profit and Loss that may exist between the over- 
 head actually applied during the month and that actually 
 created by expenditures. The account should be handled as 
 
 Credit 
 
 From production and betterment 
 order record, with the total 
 amount of factory overhead 
 prorated to production and 
 betterment orders during the 
 month. 
 
 Charge 
 
 From voucher record, with the 
 total monthly amount as 
 shown by "Overhead" column. 
 
 From journal voucher, with all 
 other charges or distributions 
 of overhead expenditure not 
 included in the voucher rec- 
 ord. These charges will be 
 the same as shown on the sub- 
 sidiary ledger overhead ac- 
 counts, and will agree with 
 the total general expense 
 shown on monthly distribu- 
 tion sheet. 
 
 The balance of this account is any unused or excess over- 
 head which .s necessarily carried, together with commercial 
 expense, mto Monthly Profit and Loss. 
 
314 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 K — Profit and Loss 
 
 K— 1. Monthly Profit and Loss 
 
 This account will represent the monthly profit or loss 
 in the business, and will be closed out monthly into Profit 
 and Loss — General. It should be handled as follows: 
 
 Credit 
 From journal voucher, with 
 revenue of sales, charging the 
 same to Revenues. 
 
 Charge 
 
 From journal voucher, with cost 
 of sales, crediting the same to 
 cost accounts. 
 
 From journal voucher, with ex- 
 penses, both commercial and 
 unused or excess overhead. 
 
 The balance of this account is the net monthly profit 
 or loss, and will be carried into Profit and Loss — General. 
 
 K— 2. Profit and Loss — General 
 
 This account is provided for the accumulation of the 
 entries of monthly profit and loss. The account should 
 be handled as follows: 
 
 Charge 
 
 From journal voucher, with the 
 monthly balance of Profit and 
 Loss, if a loss. 
 
 Credit 
 
 From journal voucher, with the 
 monthly balance of Profit and 
 Loss, if a profit. 
 
 CONTROLLING ACCOUNTS-PROFIT AND LOSS 315 
 
 No transfer from the accumulated Profit and Loss- 
 General to ''Surplus," should be made unless by the au- 
 thorization of the board of directors or executive commit- 
 tee; nor should any authorization to transfer amounts 
 from "Surplus" to ''Dividends" he given except by the 
 board of directors or executive committee. 
 
 It must also be borne in mind that reserves for depre- 
 ciations, etc., are really undivided profits, and therefore, 
 the percentages employed for the various assets must also 
 be authorized by the board of directors or executive com- 
 mittee and duly recorded. 
 
 The balance of this account is carried to surplus quar- 
 terly, semiannually, or annually, according to the discre- 
 tion of the board of directors. 
 
 This is as far as the comptroller or general accountant 
 should handle the accounts shown on the chart of con- 
 trolling accounts. 
 
CHAPTER XVI 
 
 TAKING THE INVENTORY 
 
 Showing the development of a dupHcate ta^ 
 
 method, together with complete specifications 
 
 tor actually taking an inventory. 
 
CHAPTER XVI 
 
 TAKING THE INVENTORY 
 
 Preliminary Steps 
 
 To take an inventory for valuations only is one thing, 
 but to take an inventory for the purpose of perpetuating it 
 by count as well as by valuations, at the same time establish- 
 ing a definite control of investments and production, is an 
 entirely different proposition, and one that requires definite 
 plans carefully worked out in advance. These plans must 
 embrace not only the methods to be employed in the actual 
 taking of the inventory, but also a temporary organization 
 for doing the work, a complete classification for production 
 and accounting purposes, and a previously prepared pricing 
 system as well. Further, the plant itself should be physically 
 prepared for the taking of an inventory by issuing explicit 
 instructions, sufficiently in advance of the inventory period, 
 to the superintendent and foremen to clean up the various 
 departments and finish as far as possible all production and 
 betterment orders standing as work in progress. 
 
 Too often inventory taking is considered as a sort of 
 necessary evil to be disposed of along the lines of least 
 resistance, usually by turning this work over to foremen 
 and clerks with little or no instruction or preparation from 
 cither an accounting or oroduction point of view. 
 
 When inventories are taken in this way, the work of 
 counting, sorting, and classifying is usually done in such a 
 careless manner as to make the results inaccurate and mis- 
 leading, thus necessitating many subsequent adjustments. 
 
 319 
 
 41 
 
 \\ 
 
 1 
 
i 
 
 i 
 
 320 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 It is Strange why to so many people a dollar in cash appears 
 so differently from a dollar represented by material for 
 which cash has been paid. It is even more strange that 
 very often executives in the taking of an inventory will 
 not consider the fact that their material and property values 
 are just as important, just as real, just as necessary to the 
 profit and loss statement as is cash in bank or accounts 
 receivable, and it is difficult to understand the laxity with 
 which such property values are frequently handled as com- 
 pared with the careful methods used for the protection of 
 actual cash in the drawer and of cash values in the shape of 
 
 book accounts. 
 
 The first work in connection with inventory taking is 
 to taper off on production orders during the two or three 
 weeks previous to the inventory date, and delay the starting 
 of new orders as much as practicable so there will be as 
 little material and as little work in progress in the factory 
 as is consistent with reasonable factory practice and sales 
 conditions. The works or chief engineer should also be 
 conservative in putting new betterment orders into the 
 factory just previous to an inventory period. 
 
 More important perhaps than this is the work of getting 
 all condemned components out of work in process, and all 
 obsolete equipment out of the factory. This should cover 
 not only materials and components manufactured, but also 
 gages, fixtures, all kinds of tools, and in addition, all 
 machinery, belting, etc., together with the thousand and one 
 small items usually found under benches, in cupboards, etc., 
 that will never be used again, but for disposing of which no 
 one ever seems willing to take the responsibility. These 
 things should all be gotten together and gone over by the 
 engineers and management jointly, if necessary, in order to 
 arrive at a decision for their disposition and thus make 
 possible the cleaning up of the factory. 
 
 ,-i:;-v,:^-.;;'r:rr.:r:aas:«': 
 
 TAKING THE INVENTORY 
 
 321 
 
 Formal Announcement 
 
 It is best to make a formal announcement of the taking 
 of inventory, stating when, by whom, and how it is to be 
 taken. The following form is given as an example: 
 
 Inventory Specifications 
 November 1, 1916 
 
 1. The Rogers Motor Works will be closed from Fri- 
 day night, December 29, 1916 until Tuesday morning, 
 January 2, 1917, for the purpose of taking inventory. 
 
 2. The following Inventory Committee has been ap- 
 pointed: 
 
 William Blake, Engineering Department 
 James F. Porter, Production Department 
 Eben Williams, Superintendent 
 John D. Ropes, Works Engineer 
 Harvey Adams, Chief Inspector 
 Enoch Delmer, Accounting Department 
 Wallace James, Purchasing Department 
 
 Allen Turner, Chairman 
 
 3. The inventory of the Rogers Motor Works will be 
 taken as of December 31, 1916 by the duplicate tag system; 
 i.e., each and every lot and kind of material will be taken 
 by a count under instructions given hereafter, and as soon 
 as counted, weighed, or otherwise classified, the data and 
 information concerning each particular lot, piece, or kind of 
 material, zvill be written with indelible pencil upon an in- 
 ventory tag in duplicate. The tag will be wired or other- 
 wise attached to the material so counted, weighed, or other- 
 wise classified, and the duplicate will be sent to the head- 
 quarters of the Inventory Committee as soon as the taking 
 of any particular lot of material or section is completed. 
 
 \$ ' 
 
II 
 
 322 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 4. Each superintendent, foreman, and assistant foreman 
 will have charge of that section of the plant or office which 
 comes under his daily supervision. Each of these will be 
 fully assisted by the Inventory Committee in organizing for 
 the taking of inventory. It is desired that as many groups 
 of men as can be used be put on this work. 
 
 5. The importance of a correct inventory of the Rogers 
 Motor Works cannot be overestimated, and these instruc- 
 tions are given out at this time in order that every superin- 
 tendent, foreman, and department head may have ample 
 time to study out and prepare for his particular duties. 
 
 6. All machines and fixed equipment throughout the 
 plant, including furniture and fittings, etc., will be numbered 
 individually by a brass tag or by having numbers painted 
 upon them, so that all equipment of this character, including 
 engines, boilers, dynamos, motors, pumps, transmission 
 machinery, etc., can be inventoried without shutting down 
 
 the plant. 
 
 7. Tags must not in any instance he destroyed. All 
 tags that are given out will he charged hy their numbers 
 to the parties receiving them so that any tag number that 
 becomes lost or misplaced may be located. If a tag is spoiled 
 mark it ''void'' and then turn it in. 
 
 8. As soon as any superintendent, foreman, sub-foreman, 
 or assistant, has gone over all of the space allotted to him 
 and made sure that every item has been covered by a tag, 
 he will immediately report to the Inventory Committee so 
 that other inventory work may be assigned if necessary. 
 
 9. No tags may be pulled at any point in the plant until 
 the signal for release has gone out to the factory from the 
 Inventory Committee. As soon as tags are pulled it con- 
 stitutes a release of the items covered, and preparation may 
 be at once made to return such items to regular operation. 
 Upon the pulling of tags, they are to be at once sent to the 
 
 TAKING THE INVENTORY 
 
 323 
 
 Inventory Committee in the main office where they will 
 immediately be matched up by numbers with the duplicate 
 to see that no numbers have been lost or destroyed. 
 
 10. All equipment, tools, or material, of any kind in- 
 voiced to the company prior to January 1, 1917 and not 
 received until after this date, must be included in the inven- 
 tory, and all such invoices must be plainly stamped "season 
 of 1916 included in inventory." 
 
 11. All equipment, tools, or material invoiced prior to 
 January 1, 1917 but not unloaded until after January 1, 
 1917, must be inventoried from the invoice and every pre- 
 caution must be taken to keep such goods entirely separate 
 from other inventoried items until after the inventory tags 
 have been checked up. 
 
 12. Items received prior to January 1, 1917 but not 
 bearing an invoice date until on or after January 1, must 
 not be included in the inventory. 
 
 13. Superintendents, foremen, and assistant foremen are 
 hereby instructed to clean up on the work in their depart- 
 ments in every way possible prior to the taking of the inven- 
 tory and to have ready Saturday morning, December 30, 
 1916, all materials, works, etc., sorted by kinds and 
 arranged, piled or stacked ready for counting or weighing. 
 
 14. The chief inspector is hereby instructed to have 
 the inspection work cleaned up by Saturday morning, De- 
 cember 30, 1916, working a special inspection force all night 
 on Friday, the 29th of December, if necessary, to accomplish 
 this. All finished components must be in component stores 
 for the taking of inventory. 
 
 15. The production department is hereby instructed to 
 issue from general stores the minimum amount of material 
 possible on Thursday, December 28, and Friday, December 
 
 29 
 
 
 16. The production engineer is hereby instructed U 
 
■ 
 
 324 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 transfer on the 28th and 29th of December, all surplus tools, 
 fixtures, etc., from crib or shop stores to general tool stores, 
 so that work in taking inventory and classifying it may be 
 minimized in every possible way ; also to transfer from crib 
 or shop stores to general stores before December 29, 1916 
 any and all supplies that are a surplus, and to have all crib 
 cards show ''Balance on Hand" in each crib and have 
 maximum and minimum amounts established. 
 
 17. All superintendents, engineers, foremen, assistant 
 foremen, and factory clerks must give their undivided time 
 and attention to the taking of this inventory as between 
 Saturday morning, December 30, 1916, and Tuesday morn- 
 ing, January 2, 1917. Special instructions for organization, 
 and a chart covering same, will be issued by the Inventory 
 Committee as a guide in taking the inventory. 
 
 18. The foremen and assistant foremen of each depart- 
 ment will supervise the weighing, counting, and recording 
 of all items inventoried in their department, and will be held 
 strictly accountable for correct numbering, naming, location, 
 etc. In preparation for inventory, they must collect all small 
 tools, cutters, fixtures, etc., and get them into the tool cribs 
 or on benches properly arranged by "kinds" for counting. 
 
 19. Each department will be provided with an engineer 
 or engineers to assist foremen and assistant foremen in giv- 
 ing a complete description of each part and the next opera- 
 tion to be done and any change in sequence. This is of the 
 utmost importance in connection with production after 
 January 1, 1911, as upon the correctness of the inventory, 
 showing the number of pieces done up to any given opera- 
 tion, schedules for the work throughout the factory must 
 
 be adjusted. 
 
 20. The inspection department, the production depart- 
 ment, and the salvage department, are hereby instructed 
 to work as closely together during the entire month of De- 
 
 TAKING THE INVENTORY 
 
 325 
 
 cember as possible in order to sift out from "Work in 
 Progress" each and every component that is completely 
 condemned and beyond repair. 
 
 21. The inspection department is hereby instructed to 
 take a complete inventory in detail of all components that 
 are imperfect but subject to repairs, separating each com- 
 ponent in a class by itself and showing on each component 
 the operation next to be done. In others words, all rejected 
 work that is subject to repairs must be totaled into a separate 
 inventory figure. The responsibility for this will rest 
 entirely upon the inspection department. 
 
 22. Should any foreman find in his department any 
 materials, tools, or fixtures, etc., the value of which is ques- 
 tionable, he, in conjunction with the engineer appointed to 
 his division, is hereby authorized to give an estimated value. 
 This must be written on the tag in indelible pencil at 
 the time the estimate is made, together with the word 
 ''Estimate" to precede the amount. 
 
 2Z. Special instructions are hereby given and authoriza- 
 tion made to place all obsolete components and scrap in the 
 salvage department on or before inventory, and it is 
 reiterated here that the inspection department is instructed 
 to see that all obsolete stock and condemned components are 
 put in the salvage department as rapidly as possible during 
 the entire month of December. If, however, any condemned 
 items are found that have not been disposed of, full par- 
 ticulars as to the condition of such items must be specially 
 written on the tag and marked "Special" so as to call 
 attention to it. 
 
 24. The general stores keeper and the tool stores keeper 
 are hereby instructed to make a complete classification of all 
 materials and tools on hand which for any reasons have 
 become obsolete in order that the purchasing department 
 may dispose of them. 
 
326 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 25. On the night of December 29, 1916, the superin- 
 tendent of assembly must return to component stores all 
 finished components that have not been assembled. 
 
 26. After the inventory of any section allotted to a 
 superintendent or his foreman has been completed, the 
 superintendent or foreman must sign a statement to the 
 effect that the inventory has been completed to the best of 
 his knowledge and belief, and immediately send it to the 
 Inventory Committee. This statement is necessary so 
 that a record may be on file for insurance and accounting 
 purposes. 
 
 27 . If stock cannot be weighed or counted, a careful 
 estimate must be made by the superintendent of the depart- 
 ment in which the estimate is required and the tag marked 
 ''Estimate" and signed by him as an approval of it. 
 
 2^. The following assignments have been made: (De- 
 tailed assignments to each floor of each building should 
 follow. ) 
 
 Organizing the Force 
 
 Each building should be designated by a letter and each 
 floor by a number. Then, opposite the building letters, 
 plus the number, should be written the name of the man 
 who is to be in charge of that particular section for the 
 taking of the inventory, followed by the names of all special 
 assistants that may be required, together with the number 
 of regular employees that will be necessary to count, weigh, 
 and handle the materials to be inventoried — all of which is 
 merely preparatory work on the part of the engineers, 
 superintendents, and processing department heads. It is 
 also highly desirable that foremen or department heads 
 should be made responsible for this work in their respec- 
 tive departments — supplemented, where necessary, by en- 
 gineers and draftsmen to act as assistants. 
 
 TAKING THE INVENTORY 
 Classification of Assets 
 
 The next thing of importance is the classification of 
 assets which the inventory will include, which must be the 
 same classification used on the balance sheet under "Assets " 
 details of which can be found in Chapter XIV, "Controlling 
 Accounts," as follows: 
 
 A. General Stores 
 
 B. Work in Progress-— Production Orders 
 
 C. Work in Progress— Betterment Orders 
 
 D. Work in Progress— Components Rejected for 
 
 Repairs 
 
 E. Component Stores 
 
 F. Finished Stores 
 
 G. Shop Stores 
 
 H. Miscellaneous Equipment (See controlling ac- 
 count C-8; show per cent used.) 
 
 I. Real Estate (by plots) 
 
 J. Buildings 
 
 K. Building Equipment 
 
 L. Office Furniture and Equipment 
 
 M. Machinery and Tools 
 
 N. Dies, Jigs, Fixtures, and Gages 
 
 O. Power Plant 
 
 P. Shop Fixtures and Fittings 
 
 Q. Patterns 
 
 R. Drawings 
 
 S. Railroad 
 
 T. Railroad Equipment 
 
 Each and every item in the factory which constitutes a 
 fixed or permanent asset as shown by the balance sheet 
 S' ' 'fi?'' ''''^^' ''Investments," consisting of items from 
 1 to T inclusive, must have for its identification wher- 
 ever possible, a number attached to it, this number serving 
 
 ki ;") 
 
 i 
 
 J.* 
 
 ;i t- 
 
328 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 two purposes — one for identification in case of transfer from 
 one geographical point to another, and one as identification 
 for valuations from year to year. By this method, means 
 are provided for obtaining a proof of loss in case of fire, and 
 for establishing and maintaining a perpetual inventory on 
 permanent investment assets. Once the assets of the plant 
 have been inventoried and numbered in this manner, it will 
 never be necessary to retake the inventory physically, the 
 entire scheme being protected by betterment orders as they 
 are completed from time to time and added to these items, 
 each item being numbered at the time it is completed and 
 put to use in the plant and the fact being shown by a proper 
 record. 
 
 Therefore, as this classification — which is the general 
 classification of controlling accounts — represents the in- 
 ventory values on the balance sheet, the entire inventory 
 must be taken and classified accordingly, and the letter 
 symbolizing the classification to which the item inven- 
 toried belongs, . must be shown on the inventory tags 
 illustrated in Form 93. 
 
 In connection with the material kept in general stores, 
 a supplementary classification can be used. For instance, if 
 general stores is represented by "A," after this could be 
 written either the name of the items according to the 
 classified index of general stores, shown in Qiapter IV, or a 
 Dewey decimal number may be used, as in Form 95. In the 
 latter case, "A" would mean general stores, 7 could mean 
 *'steel," and .1 "high speed steel." In other words, A-7.1 
 would indicate a high speed steel in general stores. Any 
 one of several arrangements of this kind can be cieated to 
 meet particular requirements. 
 
 In the classification tmder "Work in Progress" a split 
 is made; i.e., it is divided into "Work in Progress — Pro- 
 duction Orders"; "Work in Progress — Betterment 
 
 TAKING THE INVENTORY 
 
 329 
 
 Orders"; and "Work in Progress— Components Rejected 
 for Repairs." It is better at an inventory period to divide 
 "Work in Progress" into this classification rather than to 
 take it as one account, for the reason that it gives oppor- 
 tunity for a check-up on production and production sched- 
 ules and also on the tools required for same. Hence, this 
 classification can be used by the production and tools de- 
 partments for inventory purposes. 
 
 Pricing the Inventory 
 
 In order to make sure that valuations are as nearly 
 correct as possible, the following departments should be 
 called upon to assist the inventory committee in the matter 
 of pricing. 
 
 The pricing of all raw materials, general supplies, etc., 
 bought outside and located in general stores, should be 
 obtained from the purchasing department in conjunction 
 with the general stores records. 
 
 The pricing of tools, fixtures, cutters, and gages, made 
 in the factory, should be obtained from the accounting 
 department; except where estimating is required, in which 
 case the valuation is obtained from the engineering depart- 
 ment. 
 
 The pricing of all machine tools, transmission ma- 
 chinery, transportation equipment, etc., covered by identi- 
 fication or inventory numbers, should be obtained from 
 the accounting department and the works engineer. 
 
 The inventory committee should be given access to 
 the different departments, and the latter should be author- 
 ized and instructed to assist the inventory committee in 
 every way possible in obtaining a correct pricing of all 
 inventoried items. 
 
 The price to be used on all raw materials should be the 
 last purchase price from any regular source of supply, 
 
 F» 
 
 :f i \ 
 
330 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 irrespective of what may have been paid for the actual 
 material on hand. 
 
 The price of all work in progress should be the labor 
 cost plus the material cost, plus regular overhead. 
 
 The price of all components and finished stores should 
 be the cost price of the last regular production order for 
 same. 
 
 The price of all equipment should be the betterment or 
 purchase order price and must include any regular equip- 
 ment, freight, and installation expense. 
 
 No depreciations should be applied in placing valua- 
 tions upon fixed assets. Assets are valued as they stand, 
 i.e., at the original purchase price. 
 
 Inventory Tag 
 
 The design of the inventory tag is such that when the 
 stub is removed at the perforated Hne it leaves a standard 
 4x6 card, in duplicate, thus permitting the inventory tags 
 to be filed in a regular 4x6 filing cabinet. If this is handled 
 properly it will greatly facilitate pricing and extension 
 work, and will leave the inventory in a perfectly classified 
 condition on the original tags. By using a tag of this 
 character all t'le help available can be used to advantage 
 as it gives opportunity to create a much bigger organiza- 
 tion for the taking of inventory than is usually employed. 
 
 The tag has two prime divisions (Form 93), arranged 
 in such a manner that either one or the other side of the 
 tag can be used for any and all kinds of items to be in- 
 ventoried. Under the heading "Processed Work to Be 
 Entered Here" must be written up all work in progress 
 an'di all component stores, while the labor cost, material 
 cost and overhead cost are entered on the lines provided 
 for this purpose. 
 
 On the other side of the tag, under the heading "Write 
 
 TAKING THE INVENTORY 
 
 331 
 
 All General Stores and Equipment Here," are provided 
 captions to take care of any and all items in the plant, 
 their description and serial number, and also whether the 
 Item is -In" or "Out of Use." In taking supplies, ma- 
 terials, etc., the "Unit of Measure" must be shown without 
 exception as well as the price per unit of measure. 
 
 These tags are all numbered and attached to the partic- 
 ular items covered. When the tag is pulled, the stub with 
 the number on it will be left on the item inventoried; 
 therefore, it is very essential that the location be carefully 
 defined as provided for on the tag, so that any item re- 
 garding which a dispute arises, may be readily located. Each 
 tag must show by the word "Classification" the exact alpha- 
 betical division to which the item inventoried belongs. 
 
 As soon as the inventory is completed and all tags are 
 pulled, they will immediately be sorted according to this 
 classification, and divided among several groups of pricers, 
 each group possessing the necessary data or experience to 
 do this work correctly. 
 
 Disposition of Tags 
 
 As soon as the inventory has been classified and in- 
 dexed, one set of priced cards should be arranged in a 
 filing cabinet in 4 x 6 drawers and kept as a permanent 
 record for the accounting department to use either as 
 reference matter regarding valuations or as reference 
 matter in case of fire, as by this inventorv proof of loss 
 can always be obtained in so far as all fixed investments, 
 etc., are concerned. 
 
 The duplicate set of tags should be divided up. All 
 those relating to production should be sent to the pro- 
 duction department, to check up their production records. 
 Those for betterment orders should be sent to the chief 
 engineer or works engineer, and those for stores to the 
 
 ItPI 
 
332 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Stores recorder. After being checked, the duplicate sets can 
 be destroyed, but the original set of tags should be kept in a 
 vault for safety. 
 
 Equipment Record 
 
 It is necessary either for the works manager or the 
 accounting department to have a complete record of all 
 the equipment in the plant. Form 94 has been provided, 
 to show any item of equipment covered by an inven- 
 tory number. It is a 5 x 8 card printed on both sides ; the 
 front being for data relative to a description of the item 
 together with the various numbers belonging to it, its 
 location, and also the date of installation, etc., where new 
 equipment is provided. Several lines are given for this 
 information, so that entries may be made on the same card 
 whenever equipment is changed geographically from one 
 location to another, thus providing a running record for 
 such transfers. The back of the card is reserved for values. 
 For purchases outside, the data come under "Purchase 
 Cost" section; when manufactured, under the "Manufac- 
 tured Cost" section; between these two sections columns 
 are provided to register any additional values together 
 with their date and order number. 
 
 On the right of the card, space is arranged for keeping 
 a record of the repairs showing the date repairs were made, 
 and the amount. 
 
 With this record completed, classified, and indexed, a 
 perpetual inventory may be checked off and made up. 
 
 As a general thing, this record would be practically 
 the only one that is required for any ordinary plant. 
 Should, however, a different captioning be needed to cover 
 any particular item or items, it can easily be arranged 
 provided that the method of keeping running costs, ad- 
 ditional values, and repair costs remains the same. This 
 
 i 
 
 TAKING THE INVENTORY 
 
 333 
 
 IS important for the reason that under certain classes of 
 machinery an annual depreciation is written oflf on a per- 
 centage basis. The repair costs shown on these records 
 either as against an individual machine or against a group 
 of machines, will indicate whether the percentage used to 
 cover depreciations and repairs is too large or too small, by 
 simply taking the total amount of repair costs for any 
 penod of time and checking it against the amount that 
 IS set aside as a reserve for depreciation. 
 
 f 
 
CHAPTER XVII 
 
 THE WORK OF THE SYSTEMATIZER 
 
 Showing the difference between systematiz- 
 ing and accounting, and outlining the sphere 
 of the systematizer's work. 
 
 I =■ 
 
 ' 
 
iii 
 
 I 
 
 i 
 fHf 
 
 CHAPTER XVII 
 
 THE WORK OF THE SYSTEMATIZER 
 
 Relation Between Standardized Accounting and 
 Systematizing 
 
 As stated in the preface, this volume was planned and 
 developed as a work on accountancy rather than on sys- 
 tematization; but in discussing the various phases of ac- 
 countancy, due consideration has been given to the fact 
 that a certain amount of work is to be done from a purely 
 systematizing point of view so that the operations of the 
 business may properly co-ordinate with its accounting. 
 
 In other words, the standardized methods of account- 
 ing set forth herein do not interfere in any way with the 
 work of the systematizer. On the contrary, there is ample 
 opportunity for the latter to develop systems that will 
 meet the requirements of a specific business and will also 
 fit into the methods of accounting outlined in this volume. 
 This is so because the accounting methods presented in the 
 foregoing chapters can be applied to almost any manu- 
 facturing business, not only in principle but in much of the 
 detail offered; while in the things that concern the sys- 
 tematizer, there is much less opportunity for standardiza- 
 tion, and it is practically impossible to devise a detailed 
 system that will apply to any considerable number of 
 manufacturing businesses in different lines. 
 
 Special Features of the Systematizer's Work 
 
 To illustrate the possibilities for the systematizer, a few 
 
 337 
 
338 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 special features that properly belong to his field may be 
 mentioned. The subject of "organization," for instance, 
 is not treated in this book further than to show the rela- 
 tion of the accounting department to the general organi- 
 zation, as illustrated by a chart of departmental divisions. 
 A systematizer would take this chart and from it draw up 
 specifications detailing the duties of each department head 
 and the interdepartmental relations, especially in connec- 
 tion with office work. 
 
 Again, this volume has not given a detailed method for 
 making the sales analysis required for a monthly summary, 
 or for the routing and handling of sales orders, nor has it 
 gone into the details incident to shipping. All of these are 
 responsibilities of the sales department and worthy of 
 special consideration in connection with system work. 
 
 A matter of no small importance is the compilation of 
 standard data concerning drawings, blue-prints, etc., espe- 
 cially in laboratory and experimental work. None of this 
 is gone into in this work; it belongs to the field of systema- 
 tization and is entirely foreign to the accounting discussed 
 in the foregoing chapters. 
 
 A wonderful opportunity is offered the office man, or 
 systematizer, in connection with the mailing and filing de- 
 partment. Here it is his function to design and develop 
 such methods and systems as will facilitate the opening 
 and distribution of mail, and the handling and filing of 
 correspondence, etc., to meet the particular requirements 
 of each individual business. 
 
 In nearly all manufacturing establishments, and espe- 
 cially in the larger concerns, a vast amount of statistics is 
 often handled entirely outside of the accounting depart- 
 ment. The figures used in these statistics are frequently 
 derived from the regular books of account, and sometimes 
 they are combinations of these figures with those obtained 
 
 THE WORK OF THE SYSTEMATIZER 
 
 339 
 
 from other sources. In some institutions, a statistical 
 bureau is considered of almost as much value as the ac- 
 counting department. This is another type of work that 
 must be designed with particular reference to the business 
 it is to cover, and which lies beyond the functions of the 
 accountant. 
 
 Office Appliances 
 
 The suggestions of the foregoing paragraphs offer a 
 worid of opportunity for the ingenuity of the systema- 
 tizer. Furthermore, many kinds of appliances have been 
 invented to facilitate the routine work of the office. Some 
 of these are most meritorious; most of them are good; but 
 they cannot all be used in each and every business, and it 
 remains for the systematizer to prescribe such appliances 
 as are best fitted to the particular business under con- 
 sideration. 
 
 As examples of such labor-saving devices, particular 
 reference may be made to the dictaphone ; to the various 
 kinds of adding and computing machines; to the very 
 intricate calculating and accounting machines, such as the 
 Powers and Hollerith; and to the various devices employed 
 for the opening and sealing of letters, registering of the 
 same, etc., to say nothing of the various kinds of type- 
 writers, filing cases, etc., that have been gotten up to take 
 care of individual and special requirements. The specifica- 
 tion and installation of all such equipment come under the 
 head of systematizing rather than accounting, although 
 the accounting work should be so designed as to take 
 advantage of any and all mechanical means for compiling, 
 sorting, and distributing figures. 
 
 Finally, it is a very special kind of system work to de- 
 sign the forms, headings, etc., under which tabulations 
 shall be made on such accounting machines as the Powers 
 
 t: f- 
 
340 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 and Hollerith. These machines not only cover the regular 
 accounting work, as indicated in the foregoing chapters, 
 but also a large amount of statistical data. None of these 
 forms, headings, etc., could be standardized, but must be 
 prepared to meet special requirements. 
 
 The author, in concluding his work, is especially de- 
 sirous of calling attention to these facts in order that there 
 may be no misunderstanding as to the character and scope 
 of the work. Also, he wishes to emphasize the fact that 
 this book does not aim to be and cannot be a panacea for 
 all manufacturing ills, but rather confines itself to specific 
 lines of accountancy, diverging from these only in so far 
 as certain shop practices in connection with industrial en- 
 gineering are necessary to make clear the accounting 
 principles and practices set forth, and the dependence of the 
 one on the other. 
 
 i 
 
 "i 
 
 FORMS 
 
 FINANCIAL STATEMENTS AND REPORTS 
 
 (Forms referred to in Qiapter II) 
 
 I 
 
 if ^! 
 

 342 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Balance Sheet 
 
 Assets 
 
 Amounts 
 
 From Last Month 
 
 From Last Year 
 
 Increase 
 
 Decrease \ 
 
 Increase 
 
 Decrease 
 
 Current: (■ 
 
 Cash in Banks 
 
 Petty Cash 
 
 Accounts Receivable 
 
 Accounts Receivable Past 
 Due 
 
 $25,070.20 
 
 200.00 
 
 120,172.80 
 
 14,280.70 
 
 3,280.00 
 
 1,090.20 
 6,602.00 
 
 3,192.00 
 
 2,166.20 
 
 870.00 
 
 * *7,bbo.66 
 
 14,000.00 
 
 $26,6lb'.66 
 7,314.00 
 
 $6,526.98 
 
 7,270.00 
 
 798.00 
 484.00 
 350.00 
 
 
 
 Accounts Receivable Con-^ 
 signed 
 
 Accounts Receivable Sus- 
 pense 
 
 Notes Receivable 
 
 Advanced Expenses In- 
 
 
 212.58 
 512.25 
 
 
 Advanced Expenses Ad- 
 
 
 
 venising ............ 
 
 Advanced Expenses 
 
 
 
 Treasury Bonds 
 
 Treasury Stock Preferred 
 Treasury Stock Common. 
 
 
 
 j 
 Total 
 
 it97.9H.10 
 
 Net 
 
 f28,6i8.S.J 1 
 13,219.85 ' 
 
 1 
 
 $l5,m-98 
 
 
 
 1 
 
 
 Inventory: ; 
 General Stores 
 
 $112,490.00 
 47,153.15 
 67,510.00 
 56,410.55 
 
 1 
 $23,516.99 
 
 $'1*7,1 27.'55 
 
 13,021.25 
 
 1,814.38 
 
 • •••••••• 
 
 
 Work in Progress 
 
 Semi-Finished Stores 
 
 Finished Stores 1 
 
 Finished Stores (Branches) 
 
 
 
 
 
 
 Total 
 
 Si8S,56S.70 
 
 Net 
 
 $23,516.99 
 
 $31,963.18 
 8M6.19 
 
 
 
 
 
 
 
 
 Invbsticbnt: 
 
 Real Estate 
 
 Buildings 
 
 Buildings Equipment. . . . 
 OflBce Furniture and 
 
 $40,000.00 
 
 118.600.00 
 
 26,700.00 
 
 8,970.60 
 
 138,677.72 
 
 9,426.10 
 
 11,286.50 
 
 15,297.65 
 
 4.200.79 
 
 2,100.00 
 
 1,000.00 
 
 1,896.00 
 
 ■ "$324.6 i 
 
 1,100.00 
 1,890.15 
 1,538.74 
 
 320.00 
 270.66 
 
 
 
 
 £.auipment 
 
 Machinery and Tools... 
 T)i^« and Titrs 
 
 
 Shop Fixtures and 
 
 Fittings 
 
 Miscellaneous Eqmpment 
 Patterns 
 
 
 Drawings 
 
 
 Patents 
 
 Experimental and Devel- 
 opment 
 
 
 
 
 
 Good-Will and Agencies. 
 
 t 
 
 
 Total 
 
 1^8,155.36 
 
 $5,Ut.90 
 
 1 
 
 1 ; 
 
 i 
 
 Tntal Assets. • • • « 
 
 $859.6^3.16 
 Net 
 
 S57.m.72, $',7.r.92.lG 
 
 
 
 10,216.56 
 
 •******'* 
 
 \ 
 
 
 Form I. 
 
 FORMS— FINANCIAL STATEMENTS AND REPORTS 343 
 Month of January, 31 days, 1917 
 
 Liabilities 
 
 Amounts 
 
 From Last Month 1 
 
 From Last Year 
 
 Increase 
 
 Decrease 
 
 Increase 
 
 Decrease 
 
 Current: 
 
 Accounts Payable Cur- 
 rent 
 
 $109,627.68 
 
 20,180.00 
 
 40,000.00 
 
 560.00 
 
 318.10 
 
 $12,776.55 
 
 1 
 
 3,100.00 
 
 $22,*600'.66 
 1 
 
 
 
 Accounts Payable Dat- 
 ings 
 
 
 Notes Payable 
 
 
 Taxes Accrued 
 
 Interest Accrued Gen- 
 eral 
 
 87.45 
 47.37 
 
 
 Interest Accrued on 
 Bonds 
 
 Interest Accrued on 
 Mortgages 
 
 
 Total 
 
 1/70,685.78 
 
 Net 
 
 $16,011.37 
 
 $22,600.00 
 6.588.63 
 
 
 
 
 
 Reserves: 
 
 Reserve for Real Estate 
 Reserve for Buildings. . 
 Reserve for Building 
 Eauioment 
 
 $266.66 
 1,550.66 
 
 620.60 
 
 346.89 
 
 5,150.48 
 182.60 
 
 939.22 
 199.41 
 179.20 
 
 6,666.66 
 
 1 
 
 ! 
 
 $33.33 
 177.08 
 
 45.75 
 
 20.01 
 
 550.33 
 46.82 
 
 108.11 
 20.05 
 14.75 
 
 833.33 
 
 
 
 
 Reserve for Office Fur. 
 
 & Equipment 
 
 Reserve tor Machy. & 
 
 Tools 
 
 
 Reserve for Dies & Tigs 
 
 Reserve for Shop Fix. 
 
 ii Fittinsrs 
 
 
 Reserve for Patterns, . . 
 Reserve for Drawings. . 
 Reserve for Patents. . . . 
 Reserve for Bad Ac- 
 counts 
 
 
 
 Bond Redemption Fund 
 
 
 Total 
 
 $16,102.38 
 
 $1,8^9.56 
 
 
 
 
 Capital, Bonds & 
 
 Mortgages: 
 Capital Stock Preferred 
 Capital Stock Common. 
 
 Bonds 
 
 MortBaires 
 
 $200,000.00 
 400,000.00 
 
 
 
 
 
 
 
 
 
 1 
 
 
 Total 
 
 $600,000.00 
 
 
 
 
 
 
 Total Liabilities 
 
 $7S6,788.t6 i 
 
 Net 
 
 1 $17,860.93 
 
 $22,600.00 \ 
 h739.07 1 
 
 
 
 Surplus and Dividends 
 Profit and Loss General 
 Surplus 
 
 $63,532.72 
 
 ! 
 
 9,322.28 
 
 $13,714.04 
 1 
 
 ! 1,241.59 
 
 1 
 
 1 
 
 ) 
 
 • ' * ! 
 
 1 
 
 
 Dividends (Accrued) 
 Preferred 
 
 
 Dividends Common 
 
 ': i 
 
 Total 
 
 $72,835.00 
 
 1 $l.i,955.6S 
 
 
 . 
 
 
 
 Net Liabilities j 
 
 i 
 
 $859,6^3.16 
 
 $10,216.56 
 
 i 
 1 
 
 
 II 
 
 (a) Balance Sheet 
 
344 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 Profit and Loss Month of January, 31 days, 1917 
 
 Analysis 
 
 Revenue: 
 
 Road Racer Model. . . 
 
 Roadster Model 
 
 Special Model 
 
 Jobbing Model 
 
 Ladies Model 
 
 Juvenile's Model 
 
 Racer Model 
 
 Motorcycle 4 H. P. 
 
 Service 
 
 Motorcycle 4 H. P. 
 
 Tourist 
 
 Motorcycle 6 H. P 
 
 Twin 
 
 Repairs 
 
 Parts, Semi-Finished 
 
 Stores 
 
 General Stores 
 
 Unclassified 
 
 Month of 
 Jan. 1917 
 
 From Last Month 
 
 Increase Decrease 
 
 Total 
 
 $2,814.15 
 
 15,319.80 
 
 7,420.00 
 
 9,905.25 
 
 1,179.90 
 
 480.00 
 
 420.90 
 
 43,443.25 
 
 33,326-45 
 
 16,690.30 
 3,411.90 
 
 7,927.15 
 454.95 
 
 $li2,79i.OO 
 
 Net 
 
 $7,680.60 
 4,090.75 
 
 190.66 
 
 34,762.08 
 
 $285.00 
 
 1,770.26 
 66.66 
 
 11,949.00 
 1,320.78 
 
 5,050.10 
 
 
 Costs of Revenue: 
 Road Racer Model. .. 
 
 Roadster Model 
 
 Special Model 
 
 Jobbing Model 
 
 Ladies Model 
 
 Juvenile's Model 
 
 Pacer Model 
 
 Motorcycle 4 H. P. 
 
 Service 
 
 Motorcjrcle 4 H. P. 
 
 Tourist 
 
 Motorcycle 6 H. P. 
 
 Twin 
 
 Repairs 
 
 Parts, Semi-Finished 
 
 Stores 
 
 General Stores 
 
 Unclassified 
 
 Total 
 
 Gross Profit. 
 
 Profit and Loss: 
 >Jet Commercial Ex- 
 pense 
 
 Overhead I U-'ff 
 
 Replacements & Guar- 
 antees 
 
 Net Total Expense . . . 
 
 NetMonthlyJPj;f|- 
 
 Profit and Loss Gen- 
 eral 
 
 $2,082.47 
 
 12,04944 
 
 5,727.52 
 
 7,825.14 
 
 896.72 
 
 367.60 
 
 311.46 
 
 34,325.85 
 
 26,250.80 
 
 13,262.00 
 2,217.23 
 
 4,782.77 
 397.25 
 
 $110,^96.25 
 
 Net 
 
 $6,130.80 
 3,149.30 
 
 144.40 
 
 27,666.79 
 
 20,106.97 
 
 70.00 
 
 122,298.17 
 
 Eight 
 Months 
 To Date 
 
 $210.00 
 
 > ••••••• 
 
 1,398.46 
 50.82 
 
 9,559.20 
 858.00 
 
 2,259.04 
 
 $Ji9.767.5S 
 S1,96S.18 
 
 W2.297.75 
 
 $17,285.30 
 56.82 
 
 $n,S42.1* 
 
 Net 
 
 $852.50 
 
 $852.50 
 592.65 
 
 16,085.57 
 
 59.50 
 
 $17,80^.30 
 
 $7,180.75 
 
 44,780.00 
 
 21,090.70 
 
 40,275.15 
 
 4,170.00 
 
 3,280.00 
 
 1,110.00 
 
 216,210.90 
 
 377,950.00 
 
 42,675.85 
 9,256.00 
 
 15,816.25 
 2,009.15 
 
 To Date 
 
 Same 
 
 Period 
 
 Last Year 
 
 $785,80i.75 
 
 $259.85 
 
 $259.85 
 
 $5,313.20 
 
 30,002.60 
 
 15,184.80 
 
 35,039.20 
 
 2,780.00 
 
 1,870.00 
 
 810.30 
 
 170,113.80 
 
 287,111,13 
 
 30,736.00 
 5,224.00 
 
 9,115.12 
 1,709.10 
 
 $595,009.25 
 
 $112,260.25 
 5,680.25 
 
 $n7,9iO.S0 
 
 tU,9S5.6S 
 
 $U,956.6S 
 
 $72,855.00 
 72,855.00 
 
 Form I. (h) Profit and Loss 
 
 FORMS-FINANCIAL STATEMENTS AND REPORTS 345 
 Commercial Expense Month of January, 31 days, 1917 
 
 Analysis 
 
 General Commercial 
 Expense; 
 
 Salaries — Officers 
 
 Salaries— Clerical ... 
 
 Labor — General 
 
 Telegraph and Tele- 
 phone 
 
 Office Supplies 
 
 Taxes, Corporation..*. 
 
 Legal Expenses 
 
 Patent Expenses 
 
 Bicycle Royalties 
 
 Frt. and Express 
 Commercial 
 
 Insurance on Stock. . 
 
 Interest Paid 
 
 Discount Allowed.... 
 
 Rent 
 
 Commercial Reserve's*. 
 Expenses Unclassified 
 Total 
 
 Month of 
 Jan. 1917 
 
 Selling Expense: 
 
 Salaries — Salesmen .. 
 
 Labor — General 
 
 Commission on Sales 
 
 Traveling 
 
 Entertainment ..!..! 
 
 Rebates and Allow- 
 ances 
 
 Shows and Demon- 
 strations 
 
 Postage 
 
 Umce Supplies 
 
 Adv. Periodicals 
 
 Adv. Circulars 
 
 Adv. Catalogues 
 
 Selling Expense Un-' 
 classified 
 
 $3,083.30 
 
 2,82500 
 
 525.00 
 
 270.50 
 285.90 
 
 300.00 
 
 60.00 
 
 140.70 
 
 136.75 
 210.00 
 
 762.dd 
 
 75.00 
 
 853.34 
 
 178.66 
 
 From Last Month 
 
 Incr 
 
 ease 
 
 $150.00 
 75.30 
 
 62.25 
 
 Decrease 
 
 $9,706.15 
 
 Net 
 
 60.00 
 
 Eight 
 Months 
 To Date 
 
 $37.00 
 250.00 
 
 115.56 
 
 31.00 
 
 • ••••• I 
 
 Total 
 
 Grand Total Com- 
 mercial Exp 
 
 $1,250.00 
 
 350.00 
 
 1,478.60 
 
 903.50 
 
 110.70 
 
 578.00 
 
 379.40 
 
 275.00 
 
 2,168.90 
 
 2,000.00 
 
 $m.ii 
 
 63.93 
 
 $300.00 
 
 81.18 
 
 $399.18 
 
 500.00 
 210.00 
 
 Credit: 
 
 Interest Received 
 
 Cash Discount Earned 
 Credits Unclassified.. 
 
 309.00 
 
 $9,803.10 
 
 Net 
 
 Total. 
 
 Net Commercial Ex- 
 pense 
 
 $19,509.25 
 
 Net 
 
 61.50 
 
 30.00 
 
 100.00 
 
 33.08 
 
 $20,666.40 
 
 17,250.00 
 
 3,848.63 
 
 2,003.76 
 2,025.20 
 
 ••••••••a 
 
 1,935.00 
 
 486.49 
 
 1,013.60 
 
 957.00 
 1,512.00 
 
 ' *4,590'.56 
 
 600.00 
 
 4,462.00 
 
 2,825.82 
 
 To Date 
 
 Same 
 
 Period 
 
 Last Year 
 
 • •••••• 
 
 i 
 
 '•••••• 
 
 $6Jk,176.1,6 
 
 47.38 
 
 $650.00 
 
 1,500.00 
 
 73.95 
 
 $1,281.96 
 1,193.57 
 
 $88.39 
 
 $l,7i5.07 
 1.257.50 
 
 $88.39 
 
 $7,500.00 
 
 2,800.00 
 
 7,647.80 
 
 6,698.00 
 
 797.60 
 
 4,217.50 
 
 2,652.81 
 
 2,207.00 
 
 15,297.20 
 
 10,200.10 
 
 $487.57 
 
 $2,223.95 
 
 Net 
 
 $17,285.30 
 
 Sales for Month. . . 
 Com. Percentage for 
 
 Month 
 
 Sales Percentage 
 
 for month* 
 
 $H2,79100 
 12.1% 
 6.9% 
 
 $85.00 
 360.00 
 
 $U5.00 
 405.00 
 
 $8.52.50 
 
 2,262.38 
 
 $62,280.39 
 
 I ' ' 
 
 $40.00 
 
 $126,456.85 
 
 i i 
 
 $40.00 
 
 • • • • ■ 
 
 $42,745.14 
 
 *-S7o 
 
 $4,285.00 
 
 9,360.00 
 
 551.60 
 
 $14,196.60 
 $112,260.25 
 
 $785,804.75 
 
 
 ^Ratio between Selling Expense and Total Sales for the month. 
 Form I. (c) Commercial Expense 
 
 Ml 
 
346 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 Factory Overhead Month of January, 31 days, 1917 
 
 Analysis 
 
 Month of 
 i Jan. 1917 
 
 Fronj Last Month 
 
 Eight 
 Months 
 To Date 
 
 To Date 
 
 Same 
 
 Period 
 
 Lait Year 
 
 
 Increase 
 
 Decrease 
 
 NoN-PaoDUCTivE Labor: 
 Foremen 
 
 1 
 
 $1,515.45 
 
 950.64 
 
 4,840.35 
 
 $100.00 
 
 50.00 
 
 1,460.00 
 
 
 $11,200.00 
 
 5,900.00 
 
 40,277.06 
 
 157,377.06 
 
 
 Clerks 
 
 
 
 Manufacturing 
 
 
 
 General 
 
 
 
 Total 
 
 $7,m.u 
 
 $1,610.00 
 
 
 
 
 
 
 Non-Productive Mate- 
 rial: 
 Shipping Supplies 
 
 $1,560.75 
 470.20 
 
 915.00 
 1,172.65 
 
 $175.80 
 90.00 
 
 116.05 
 110.00 
 
 
 $9,875.62 
 3,369.21 
 
 6,211.85 
 10,239.20 
 
 
 Operating Supplies 
 
 Miscellaneous Equip- 
 ment 
 
 
 
 
 
 Fuels 
 
 General 
 
 
 
 Total 
 
 $4,118.60 
 
 $m.85 
 
 
 $29,695.88 
 
 
 
 
 
 Non-Productivk Ex- 
 pense: 
 Monthly Depreciation.. 
 
 $2,139.32 1 
 798.00 
 70.00 
 
 * "l',896.d6 
 
 250.00 
 
 165.00 
 
 35.40 
 
 ' $1 65 !66 
 
 28.95 
 18.75 
 
 
 $23,942.08 
 
 5,598.20 
 
 560.00 
 
 * 'i2,2'60.28 
 
 1,625.90 
 
 815.25 
 
 212.55 
 
 
 Monthly Insurance 
 
 
 Monthly Taxes 
 
 
 Monthly Rent 
 
 Frt. and Express Mfg. . 
 Current for Lighting. .. 
 
 
 
 
 Gas for Lighting 
 
 
 
 
 •.•.••••« 
 
 
 Overhead Unclassified.. 
 
 
 Total 
 
 *5,555.78 
 
 $21t.70 
 
 1 
 
 Ii5,014.t6 
 
 
 
 
 
 Grand Total Overhead 
 
 $16,778.82 
 
 $2,SU-55 
 
 i 
 
 1 
 
 $132,087.20 
 
 
 ^1 1 
 
 1 
 
 1 
 
 
 '1 1 
 Overhead Used (cb 80% ! $16,722.00 
 
 
 I 
 
 • ■••••••a 1 
 
 $259.85 1 
 
 1 
 
 $m.m.9s 
 
 5,680.25 
 
 
 Overhead {g""«^^r 56.8t 
 
 
 { excess j 
 
 
 — : ^1 
 
 Productive Labor for 1 
 Month $20,902.50 
 
 Overhead Percentage 
 
 for month 80.27% 
 
 1 
 $3,218.00 
 
 1.52% 
 
 1 
 
 
 Form I. (d) Factory Overhead 
 
 FORMS-FINANCIAL STATEMENTS AND REPORTS 347 
 Factory Production Month of January, 31 days, 1917 
 
 Analysis 
 
 Production: 
 Productive Labor. . . . 
 Overhead Used @ 80% 
 
 General Stores 
 
 Semi-Finished Stores. 
 
 Total Monthly Pro- 
 duction 
 
 Month of 
 Jan. 1917 
 
 $20,902.50 
 16,722.00 
 45,954.22 
 27,221.85 
 
 From Last Month 
 
 Increase Decrease 
 
 $3,218.00 
 2,574.40 
 
 $110,800.57 
 
 Net 
 
 Plus Previous Work 
 in Progress 
 
 Total Work in 
 Progress 
 
 $64,280.70 
 
 Finished Production: 
 
 Charged to Semi-Fin- 
 ished Stores 
 
 Charged to Finished 
 Stores 
 
 Charged to Better- 
 ments 
 
 Total Production 
 Finished 
 
 $175,081.27 
 
 $290.00 
 6,441.77 
 
 Eight 
 Months 
 To Date 
 
 To Date 
 
 Same 
 
 Period 
 
 Last Year 
 
 $5,792.40 
 
 $6,731.77 
 9S9.S7 
 
 $21,200.60 
 
 101,284.62 
 
 5,44290 
 
 Net Work in Prog- 
 ress 
 
 Depreciation Repairs: 
 
 Labor 
 
 Material 
 
 $27,091.26 
 5,442.90 
 
 $16,345.98 
 
 118,564.96 
 
 118,564.96 
 
 220,199.89 
 
 89,273.12 
 
 $576,248.09 
 
 $22,780.00 
 
 Total 
 
 Charged to Reserves: 
 
 Reserve for Real Es- 
 tate 
 
 Reserve for Buildings 
 
 Reserve for Building 
 Equipment 
 
 Reserve for Office, 
 Fur. & Equipment 
 
 Reserve for Machy. 
 & Tools .'. 
 
 Reserve for Dies & 
 
 „ Jigs 
 
 Reserve for Shop 
 Fix. & Fittings. . . . 
 
 Reserve for Patterns. 
 
 Reserve for Drawings 
 
 Total 
 
 Total Reserve Charge 
 
 Prog^?s's%T80.7r''" ^°'^ '" ^''"^'■^^^ ^^^•'53.15 and Previous Work im 
 
 Form I. (e) Factory Production 
 
I 
 
 348 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 GENERAL MANAGER'S 
 
 
 SALES 
 
 
 ITEMS 
 
 QUANTITY 
 
 VALUE 
 
 MOTORCYCLES 
 
 TD-DftY 
 
 CUM. 
 
 TO-DAY 
 
 CUM 1 
 
 OLD MODELS 
 
 
 
 
 
 
 
 NEW 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 TOTAL 
 
 
 
 
 
 
 
 
 BICYCLES 
 
 
 
 
 
 
 
 
 BACEQ 
 
 
 
 
 
 
 
 
 BOAD PACERS 
 
 
 
 
 
 
 
 
 BOAOSTEB 
 
 
 
 
 
 
 
 
 LADIES 
 
 
 
 
 
 
 
 
 SPECIAL 
 
 
 
 
 
 
 1 
 
 JOB 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 rCTTAL 
 
 
 
 
 
 
 
 
 PACTS OCDCCED 
 
 
 
 
 
 
 
 
 kc:pairs 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 GRAND TOTAL 
 
 
 
 
 
 
 1 
 
 SHIPMEN 
 
 TS 1 
 
 
 ITEMS 
 
 QUANTITY 
 
 VALUE 1 
 
 
 MOTORCYCLES 
 
 
 
 
 
 
 
 
 OLD MODELS 
 
 
 
 
 
 
 
 
 NtW 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL 
 
 
 
 
 
 
 
 
 BICYCLES 
 
 
 
 
 
 
 
 RACEB 
 
 
 
 
 
 
 
 
 ROAD RACERS 
 
 
 
 
 
 
 
 
 ROADSTER. 
 
 
 
 
 
 
 
 
 LADIES 
 
 
 
 
 
 
 
 
 SPECIAL 
 
 
 
 
 
 
 
 
 JOB 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 TCTTAL 
 
 
 
 
 
 
 
 
 RftRTS ORDERED 
 
 
 
 
 
 
 
 
 REPAIRS 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 GRAND TOTAL 
 
 
 
 
 
 
 •- 1 
 
 
 Form 2, General 
 
 FINANCIAL STATEMENTS AND REPORTS 
 
 349 
 
 DAILY REPORT 
 
 DATE, 
 
 FINANCES 
 
 ITEMS 
 
 SANK BALANCE 
 
 REGULAR {TRUST FUNDS 
 
 DCPosrrs 
 
 TOTAL 
 
 WTTHDRAWALS 
 
 BALANCE TO-DAY 
 
 GRAND TOTAL 
 
 ACCOUNTS RECEIVABLE 
 
 NOTES 
 
 TOTAL 
 
 ACCOUNTS PAYABLE 
 
 NOTES 
 
 TOTAL 
 
 ■ DIFFERENCE 
 
 NEW AGENQES 
 
 BICYCLES 
 
 MOTORCYCLES 
 
 TOTAL 
 
 TO-DAY 
 
 NO. OF EMPLOYES 
 
 CUMULATE. 
 
 OTFICE 
 
 TACTORY N.P. 
 
 PROa 
 
 TOTAL 
 
 REMARKS: 
 
 HIRED 
 
 DISCHARGED 
 
 ONF*\YROLL 
 
 Si?e of Complete fc?rme^)<9i inches | 
 
 = 
 
 Manager's Daily Report 
 
FORMS 
 
 PURCHASING AND RECEIVING 
 (Forms referred to in Chapter III) 
 
 1 . 
 
 
352 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ROGERS MOTOR WORKS 
 
 BRIOGEPOBT, CONN. 
 TO THE PURCHASING AGENT 
 
 PURCHASE REQUISITION 
 
 NO. 1266 
 
 WTE. 
 
 .OCPT.Na. 
 
 fOR P.O. NO. 
 
 6.0. NO. 
 
 R.aNQ. 
 
 .REQ.NCL 
 
 tWOLY ORDER 60005 LISTtD BEUM vyTTM StWMDnS 
 
 soASTOBcigceivePW- 
 
 .ASfOXOWS: 
 
 xuvSr 
 
 QKTt 
 
 QUMtrmr 
 
 WHTlPf 
 WMTED 
 
 QUAMTITY 
 WHM10 
 
 owmTY 
 
 ONOTOER 
 
 giwrnn 
 
 TO BUY 
 
 NOTE; IN MAKiNQ oirr this requbtion, 
 
 •CVCR PUT rmo B0U6m r»>OM OFFtREIfT 
 CDMCtRNS ON ■(>« S«MC SKtET. If IM BOUBT, fyiTr 
 
 MMrt OUT stflWMTt wauismoH. '^"- 
 
 PUR. OROCR Na. 
 fROM 
 
 ttscRiPTiON or rrtM 
 
 OR SYMBOL 
 
 Dwtor 
 
 DELIVERY 
 REQUIRQ) 
 
 5i3e of form 6 « 6 inches 
 Original whrhe. Duplicate ^How,Trtplicafe p»nk. 
 
 CAT. NO. 
 AND SIZE 
 
 LAST 
 PRICE 
 
 NOnCC: EVERT RCQUISmON, NO MAHER BV WHOM 
 MADC (ATT, MUST BE CHECKED BV T>C STORK RE- 
 CORDER, AS TO QUANTmr ON HAND," ON ORDER, ETC, 
 BEFORE PURCHASE 15 MADE. 
 
 (SAME NOnCE AS ABOVE)^-^^ 
 
 THIS COPY TOR PURCHASING AGENT 
 
 (SAME NCmCE AS ABOVE )...^0) 
 
 APPROVED. 
 
 CHECKED BY 
 
 tm COW ID Be RCTAINro W stores RECORCtR UWTL 60005 (gCEIva) 5TCPES RECORDER 
 
 Form J. Purchase Requisition 
 
 FORMS-PURCHASING AND RECEIVING 
 
 353 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 MESSRS 
 
 PURCHASE ORDER 
 
 P-NQ 
 
 /C^ ^* The abav9 na mast be on 
 ""^^ evgry inmice and package 
 
 DATE 
 
 STORED RtQNQ 
 Please ship fbrar account 10 the above address FO.B. ihefclbwtna 
 
 tions given below •■ Ship via. 
 
 QUANTITY 
 
 DESCRIPTION OF GOODS 
 
 Sije of Form 8i » JOl inches. 
 Original white, Cbplicate yellow, 
 Trijrficate pinK aOuodpuplrcatcblue. 
 
 DATE OF 
 DELIVER/ 
 REQUIRED 
 
 DISCOUNT 
 
 NET 
 PRICE 
 
 ^^'CE All goods «« held subject te>ourorxJer 
 
 until we receive an invoice. No allow- BV_ 
 
 IhADnOTASr^ "*'" ^ "^^^ ^ ^°*'"^ "^ Cartage. PLANT PURCHASING AGENT 
 
 iMfvRTANT Acknowledge receipt of order and iFarw 
 
 /ifr?7?.5 backondered advise by return mail. 
 
 123456769 10 it 
 
 12 n> lA 16 16_n_Jg_J9 20 21 K23 24Z52677?««»,« 
 
 F 
 
 NOTICE TVHS COPY TO BE ALWAV5 
 
 KEPT IN PURCHASING HLE ^^ BY. 
 
 PLANT PURCHASING AGENT 
 APPROVED 
 
 l23456789K )1ll2i3tASifenie ITWTy 
 
 VWORKS MANAGER 
 
 22 2324252627282930^ 
 
 NOTICE This Copy fer stores Recorder lobe held 
 
 hrhim until all checking is done and ^- 
 
 «Tcn sent to accounting deparTmenh,.,.*^ 
 
 _^ ^^ ^ 
 
 >23456789ioui2r3Uffii6r7 ts 19 2o 21 
 
 PLANT PURCHASING AGENT 
 
 22 23 24 S 26 27 7X 7Q 30 S 
 
 NOTICE THIS COPY FOR RCCEMNS 
 
 CLERK. QUANTITY AND PRICE 
 MUST NOT BE SHOWN 
 
 PLANT PURCHASING AGENT 
 
 1 2 3 4 5 . 7 e 9 K) n .. .~u ,5 « r; « ,. ^ ,, ;, a ,, ^ ^ n-^lTiSTi 
 
 Form 4, Purchase Order 
 
 m 
 
354 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 TICKLER CARD 
 
 Wanted by Mr. 
 
 Date 
 
 19 
 
 Subject 
 
 RIc Ncxs. 
 
 -1 5ije of form 3 «5 Inches 
 "M-irrfed on Manilla Card 
 
 FORMS-PURCHASING AND RECEIVING 
 
 355 
 
 PURCHASE ORDER N05. 
 
 NAMt 
 
 Sije of fbrm 3«5 inches 
 
 Printed on white card, 
 
 bcAh sides alike. 
 
 Form 5. Purchase Order Tickler Card 
 
 MATERIAL RECEIPT AND NOTICE 
 
 ROGERS MOTOR WORKS 
 
 BRlOaEPORT, CONN. 
 
 STOREKEEPER AiSD PURCHASING AGENT CATE 
 
 WE HAVE RECEIVED FROM . 
 
 V»A 
 
 TWE FOLLOWING MATERIA! 
 
 ON ACCOUNT OF OUR PURCHASE ORDER NQ 
 
 Iexp. bllno. 
 
 TRANSPORTATION CHARGES 
 
 AND PURCHASE REQX. NO. 
 
 Form 7. Purchase Order Numbers 
 
 Sijc of form 6 « ©i inches 
 Original whiTc, Dupliccr*cycllw, Triplicate pink and 
 Oue<)rup!icate Wue psoer. The last- line 00 -fbrm 
 5.^iould read, onlXj^-'icuV^.: "This copy fbr Purchasing^ 
 Agent.' On Triplicate: 'This copy for Stons* Recorder 
 On QuadruplJCHTr ■ ' This copy Vied by Stones Keeper* 
 
 T 
 
 I 
 
 NOrC : IN EVtRY INSTANCE QCXX)5 MUST Bt COUNTEOL 
 WEIGHED OR N«ASUREO BCFQRC LISTING AeOVC. 
 NCVCR PUT rrCMS FROM TVJO PURCHASE 
 ORDERS ON ONE RCCEIVINQ TICKET 
 
 RECEIVING CLERK 
 
 THIS COPY HELD BY RECEIVING CLERK 
 
 DATE. 
 
 CLAIM VOUCHER 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 NCL 
 
 WE MAKE CLAIM AGAINST^ 
 
 ON ACCOUNT 0F_ 
 
 5i3e of form 5i « Si inches 
 Originai white &Puplic3te_yellow paper 
 
 JCDSJL 
 
 CONSIGNOR . 
 
 PURCHASE ORDER NO . 
 SHIPPER. 
 
 *, r 
 
 INVOICE NOl 
 
 RCCEIVINQ TICKCT NQ. 
 
 DATE OF SHIPMCfCT, 
 
 ENTERED- 
 
 RMD 
 
 .VIA. 
 
 CAR NO. 
 
 PURCHASING AGENT. 
 
 Form 8. Claim Voucher 
 
 Form 6. Maferial Receipt and Notice 
 
FORMS 
 
 GENERAL STORES 
 (Forms referred to in Chapter IV) 
 
358 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 FORMS^GENERAL STORES 
 
 359 
 
 GENERAL STORES REQUISITION 
 
 YEAR 
 
 MQ 
 
 DAY 
 
 TMia amce fon STOoes mulkji i 
 
 quAmrry 
 
 UNIT 
 
 PRICE 
 
 AMOUNT 
 
 BLOG 
 
 LOCATION 
 
 FLOOR 
 
 AISLE 
 
 BIN 
 
 Co 
 
 5 
 
 QUAffnTY 
 
 A B c o c r Q 
 
 ORDER Na 
 
 SYMBOL 
 
 STOCK 
 BALANCE 
 
 ARTICLE 
 
 Sije of Fbrm 4*6 inches 
 Origina! white. Duplicate .yellow. 
 
 DELIVER TD DEPT. 
 
 BEFORE 
 
 C Si9 ^ 
 
 RECEIVED THE ABOVE 
 
 CHARGED IN STORES DEPT. 
 
 J^aL 
 
 CHARGED IN COST DEPT. 
 
 Form JO. General Stores Requisition 
 
 STORES CREDIT MEMORANDUM 
 
 YEAP 
 
 MQ 
 
 twr 
 
 TMi* aF»c« »<3« •noMcs Ktena omit 
 
 QUANTITY 
 
 UNIT 
 
 PRICE 
 
 AMOUNT 
 
 BLD<j. 
 
 LOCATION 
 
 FLOOR 
 
 AISLE 
 
 A B C D C P G 
 ORDER NO. 
 
 BIN 
 
 SYMBOL 
 
 QUANTITY 
 
 ARTICLE 
 
 Si3e of fbrm 4*6 inches. 
 Original white. Duplicate .yellow. 
 
 OBTAIN rROM DEPT. 
 
 BEFORE 
 
 S^M. 
 
 RECEIVED THE ABOVE 
 
 CREDITED IN STORES DEFT. 
 
 JM. 
 
 CREPm ED INCOST DEPT. 
 
 Form II. Stores Credit Memorandum 
 
36o UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 SHOP STORES REQUISITION 
 
 TO K PStSeNTtO TO SOB-STORCS KtCPCR. W OtM 
 IS NOT ON HAND FORWARD TO STORES RCCOROCR. 
 
 DCLIVER TD 
 
 ON 
 
 5t3e of" fbrm 4x6 inches 
 Original whfhe. Dupticatgyllow 
 
 QU^NTrTY DetlVtRED 
 
 Pirr (XLY ONE tTEM ON THIS TICKET 
 
 TAG 
 
 RECEIVED TWE ABOVE, 
 
 III 
 
 CHARGE TD 
 
 ORDER NQ 
 
 FORMS 
 
 COMPONENT AND FINISHED STORES 
 XForms referred to in Chapter V) 
 
 IN CHARGE 
 
 Form 12, Shop Stores Requisition 
 
362 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 
 ■f 
 
 FORMS- COMPONENT AND FINISHED STORES 
 
 '2 
 
 Ci 
 
 ro 
 
 It, 
 
 363 
 
1. 
 
 I 
 
 FORMS 
 
 STORES— SPECIAL FORMS 
 (Forms referred to in Chapter VI) 
 
 
366 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Acrt No 
 
 ASSEMBLY REQUISITION 
 
 TOR PRODUCTION OQOER NO 
 
 HATF 
 
 
 Required 
 
 Piece 
 
 Pan 
 
 No 
 
 DELIVERY 1 
 
 Date 
 
 Quarrt-i-t>/ 
 
 Unit 
 Price 
 
 Amount 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 5t3c of fbrm 4 « 9i inches 
 Original blue & DuolicaV onk carvr 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 1 ' 
 
 
 L ^ 
 
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 I 
 
 STORES-SPECIAL FORMS 
 
 367 
 
 i I 
 
368 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 STORES— SPECIAL FORMS 
 
 369 
 
 Date. 
 
 ROGERS MOTOR WORKS 
 
 BRI^DGEPORT, CONN. N° .63» 
 
 STORE CLERK'S ORDER 
 
 To the Superintendent: Please order made ttie fdbwing a^dca 
 
 called for on Shipping Order No. 
 
 for Stock. Maximum On Hand Minimum. 
 
 QUA^fTlTY 
 
 ARTICLE 
 
 Sijc c^ Torm 5t«Si inches 
 Original blue, Duplica-te pinK. 
 
 Chief Stores Oerk 
 
 Form 18. Stores Clerk's Order 
 
 GOODS RETURNED TO US -, 
 lEMQRANDlJM 
 WE HAVE RECEIVED THE FOLLOWING. RETURNED fWM 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 ^Mu 
 
 OWTE 
 SHIPPED 
 
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 RETURNED 
 
 SHIPPED 
 ON 
 
 ORDER NQ 
 
 DESCRIPTION 
 
 PRIME 
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 HANDLING 
 
 5i3e of rorm 6 « St inches 
 
 Original white. Duplicate pink 
 
 and Triplicstg blue paper. 
 
 RETURN 
 VALUE 
 
 LOSS 
 
 - ij 
 
 RECEIVIN6 CLERK 
 
 CREDIT MESSRS. 
 
 FOLIO 
 
 ADDRESS 
 
 CHARGE LOSS TD 
 
 SIGNED 
 
 Form IQ. Goods Returned to Us Memorandum 
 
FORMS 
 
 PREPARATION FOR PRODUCTION 
 (Forms referred to in Chapter VII) 
 
 I r| ■ 
 
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 DRAWING AND 1 RACING CARD 
 
 DPAWINrt Nn 
 
 CARD NO 
 
 
 NEGAT 
 
 IVF NO 
 
 TITl F 
 
 
 
 PIECE NO. PAFTT NO. UNIT NO. MODEL NO. 
 
 PENCIL SKETCH 
 
 
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 COST 
 
 DISPOSITION 1 
 
 M 
 
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 Sije of Form 4x6 inches | 
 
 TOTAL 
 
 
 
 
 
 
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 FIRST COST 
 
 
 
 
 
 
 
 
 
 
 
 
 ALTERATIONS 
 
 
 
 
 
 
 
 
 
 
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 REMARKS •• 
 
 
 
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 YEAR 
 
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 ' 1 ' 1 ' 
 
 
 
 
 
 
 
 
 
 
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 Form 23. Drawing and Tracing Card 
 
n 
 
 
 376 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 
 
 
 
 
 1 
 
 CAPn NO 
 
 PATTERN RECORD 
 
 ► CARD 
 
 PATTERN NO 
 
 NAME & DESCRIPTION 
 
 MADE FOR PIECE NQ PARTS NO '""'^ '^ 
 
 PATTERN DATA 
 
 COSTS 
 
 CHARGED TO 
 
 DATE MADE 
 
 
 COST or MATERIAL 
 
 
 
 PRO. ORDER NO 
 
 BETTERMENT 
 ORDER NO 
 
 
 COST OF LABOR 
 
 
 
 SALES ORDER NQ 
 
 DRAWING NO. 
 
 
 COST OF TOOL TIME 
 
 
 
 JOBNQ 
 
 FLASK NO. 
 
 
 OVERHEAD 
 
 
 
 INVEN. ACCT. NQ 
 
 PLA5K SIZE 
 
 
 lUTAL COST 
 
 
 
 
 FOLLOW BOARD 
 
 
 MADE BY 
 
 KIND OF MATERIAL 
 
 
 BOUGHT FROM 
 
 Sije of Tbrm 4'«fe inches | 
 
 NO. OF RECES 
 
 
 LOFT NO AISLE NO. SHELF NO 
 
 Form 24. Pattern Record Card 
 
 PAI ItkN LOCATION CARD 
 
 PAIltRNNO 
 
 DATE 
 
 LOCATION 
 
 DATE 
 
 LOCATION 
 
 date: 
 
 LOCATION 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 5i^e of fbrm 4 »6 inch(-«ri 
 
 
 
 
 
 |j 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Form 25. Pattern Location Card 
 
 I' 
 
 FORMS 
 
 MACHINE AND TOOL STUDIES 
 
 (Forms referred to in Chapter VIII) 
 
2,yS UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 FORMS— MACHINE AND TOOL STUDIES 
 
 379 
 
 CnMPnWFNT NO 
 
 ENGINEERING DIVISION 
 
 
 FDD «^FT-l ID NO 
 
 nPFDATlDN 
 
 TOOL KEY CARD 
 ROGERS MOTOR WORKS 
 
 BRlDGEPOkl, CONN. 
 HATF 
 
 
 nOAWllMrt NO 
 
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 DATA 1 
 
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 5L 
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 AVG. NO. OF r,piNns 
 
 
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 PIECES PER HOUR FROM TOOl 
 
 ■MAPK.S 
 
 .•^ALVAHFn m 
 
 
 
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 SUPERSEDES SI JPFPSEDFD RY APPPnVEH 
 
 5t3© of fbrm 4«6 inches | 
 
 Form 27. Tool Key Card 
 
 COMPONENT 1 
 OPERATION 
 
 sin 
 
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 ^fT-l p NO 1 
 
 
 TOa SET-UP KEY CARD 
 
 
 
 
 
 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 OATF 
 
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 KIND OF MACHINE USED 
 
 ISSUE N0._ 
 
 
 SURFACE FEET PER MINUTE 
 
 RECee COMPLETED 
 
 
 STOCK 
 
 THREAD 
 
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 PER HOUR 
 
 PER 8 HOURS 
 
 
 
 
 
 
 
 
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 Form 28. Tool Set-Up Key Card 
 
38o UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 COMPONENT NO. 
 OPERATION 
 
 DRAWING NO. 
 ISSUE NO 
 
 CNGlNtCRING D<VlSION 
 
 FIXTURE & DIE KEY CARD 
 ROGERS MOTOR WORKS 
 
 BCtDGEPORT. CONN. 
 DATE. 
 
 PATTERN NO. 
 
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 FLASK NO. 
 
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 GENERAL DESCRIPTION. 
 
 Si3e of fbrm 4 ȣ inches j 
 
 SUPERSEDES. 
 
 .SUPERSEDED BC 
 
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 fli 
 
 FORMS— MACHINE AND TOOL STUDIES 
 
 381 
 
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 fc - s 
 I §■? 
 
 y o ^ iLi 
 
 *-> — u 
 
 E r P 2: 
 
 . a. y a 
 
 y y D 
 
 a u. 5^ 
 
 UJ . . 
 HO 
 
 go 
 
 <n 
 
 1 • 
 
 y y 
 
 y 
 
 F 
 
 z 
 
 X 
 
 u 
 < 
 
 a. 
 
 i 5 ' 
 
 of y 
 
 a. - 
 
 y b 
 
 S^ 
 
 y 
 o 
 z 
 < 
 
 5 
 
 D 
 Z 
 
 a 
 
 V3 
 
 If: 
 
 
 
 
 FORMS 
 
 SCHEDULES AND CHARTS 
 (Forms referred to in Chapter IX) 
 
 k 
 
388 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 
 
 
 
 
 
 
 
 
 ISSUE 
 CHEDULE B 
 
 :heoulc El 
 
 Kin 
 
 MPrj noDPO NO 
 
 MANUfACTURlNG ORDER 
 
 RATF PFOnivY fV 
 
 rr^mc. 
 
 QUANTITY TO 5rHC:CM.» f" 
 
 _ NO. oe^ys RUN , . 
 
 » 
 
 "JDS 
 
 
 
 1 
 
 WEEK ENDING 
 
 NO. DAYS 
 
 SCHEDULE 
 
 MADE 
 
 DAYS 1 
 
 MONTH 
 
 DAY 
 
 IN 
 WEEK 
 
 CUM. 
 
 QftlLY 
 
 foft' 
 
 WEEK 
 
 CUM. TOTAL 
 
 FOR 
 WEEK 
 
 CUM-TOTAL 
 
 AHCAO 
 
 iSEHIND 
 
 MAY 
 
 6 
 
 6 
 
 § 
 
 
 
 
 
 
 
 
 JUNE 
 
 13 
 
 6 
 
 T2 
 
 
 
 
 
 
 
 
 20 
 
 e 
 
 18 
 
 
 
 
 
 
 
 
 27 
 
 ? 
 
 M 
 
 
 
 
 
 
 
 
 3 
 
 5 
 
 29 
 
 
 
 
 
 
 
 
 JULY 
 
 10 
 
 6 
 
 » 
 
 
 
 
 
 
 
 
 17 
 
 $ 
 
 41 
 
 
 
 
 
 
 
 
 24 
 
 e 
 
 47 
 
 
 
 
 
 
 
 
 1 
 
 6 
 
 S3 
 
 
 
 
 
 
 
 
 AUGUST 
 
 8 
 
 5 
 
 58 
 
 
 
 
 
 
 
 
 15 
 
 6 
 
 64 
 
 
 
 
 
 
 
 
 22 
 
 6 
 
 •re 
 
 
 
 
 
 
 
 
 n 
 
 ^ 
 
 T6 
 
 
 
 
 
 
 
 
 5 
 
 6 
 
 8Z 
 
 
 
 
 
 
 
 
 SC^ntMBER 
 
 12 
 
 6 
 
 88 
 
 
 
 
 
 
 
 
 19 
 
 6 
 
 9A 
 
 
 
 
 
 
 
 
 ?6 
 
 6 
 
 IC» 
 
 
 
 
 
 
 
 
 2 
 
 6 
 
 106 
 
 
 
 
 
 
 
 
 OCTOBEC 
 
 9 
 
 5 
 
 111 
 
 
 
 
 
 
 
 
 16 
 
 & 
 
 117 
 
 
 
 
 
 
 
 
 23 
 
 6 
 
 123 
 
 
 
 
 
 
 
 
 30 
 
 6 
 
 129 
 
 
 
 
 
 
 
 
 7 
 
 6 
 
 135 
 
 
 
 
 
 
 
 
 NOVEMBER 
 
 U 
 
 6 
 
 1A1 
 
 
 
 Sixc of fbrm- Ti «» inches L 
 
 
 
 
 21 
 
 6 
 
 147 
 
 •—I 
 
 
 
 
 
 
 
 28 
 
 6 
 
 1S3 
 
 
 
 
 
 
 
 
 4 
 
 6 
 
 159 
 
 
 
 
 
 
 
 
 OCCEVIBER 
 
 11 
 
 6 
 
 165 
 
 
 
 
 
 
 
 
 i6 
 
 1 
 
 171 
 
 
 
 
 
 
 
 
 25 
 
 5 
 
 176 
 
 
 
 
 
 
 
 
 2 
 
 ^ 
 
 182 
 
 
 
 
 
 
 
 
 1 - ■_ _ . ___1 
 
 9 
 
 G 
 
 188 
 
 
 
 
 
 
 
 
 1C 
 
 6 
 
 m 
 
 
 
 
 
 
 
 
 23 
 
 6 
 
 too 
 
 
 
 
 
 
 
 
 30 
 
 ^ 
 
 2C6 
 
 
 
 
 
 
 
 
 
 SCHEDULES AND CHARTS 
 
 389 
 
 NO- 
 
 ENGINEERING DIVISION 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 PRODUCTION SCHEDULE 
 
 DATE. . 
 
 SYMBOL. 
 
 TYPE 
 
 COMPONENT NO. 
 
 TOTAL REQUIREMENTS. 
 ON HAND 
 
 ON ORDER. 
 
 BASED ON MANUFACTURING ORDER NQ 
 
 RATE PER SCHEDULE BEQINS. 
 
 BALANCE TO SCHEDULE. 
 
 NO. DAYS RUN. 
 
 SCHEDULE ENDS. 
 
 TIME PERIODS 
 
 Week Ending 
 
 MONTH 
 
 StPTCMBER 
 
 OCTOBER 
 
 D<kTt 
 
 16 
 
 23 
 30 
 
 NaPays 
 
 MIKCCK CUM 
 
 13 
 
 25 
 
 31 
 
 SCHEDULES 
 
 Schedule 
 
 ran«HK 
 
 Produc+ion Orders Issued 
 
 No. 
 
 OCTt OUAWriTV 
 
 Sije of Tbrm - 7^ "I? inches [ 
 
 Made 
 
 CUH.TOTV 
 
 "C^ 
 
 KHIND 
 
 ^~ ^ 
 
 [— rt-] 
 
 1 — " — 1 
 
 -Tsr 
 
 r~ — 1 
 
 
 r 
 
 _— 
 
 
 
 ^ 
 
 ■ ^ 
 
 
 
 21 
 
 6 
 
 273 
 
 
 
 
 
 
 
 
 
 
 
 2S 
 
 6 
 
 279 
 
 
 
 
 
 
 
 
 
 
 
 August 
 
 4 
 
 6 
 
 285 
 
 
 
 
 
 
 
 
 
 
 
 II 
 
 6 
 
 291 
 
 
 
 
 
 
 
 
 
 
 
 18 
 
 6 
 
 297 
 
 
 
 
 
 
 
 
 
 
 
 25 
 
 
 
 303 
 
 
 
 
 
 
 
 
 
 
 
 SCPTCMBCB 
 
 1 
 
 6 
 
 309 
 
 
 
 
 
 
 
 
 
 
 
 Form 36. Production Schedule 
 
 » 
 
 ini' 
 
 Form 35. Manufacturing Order 
 
390 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 NCL 
 
 CNGINEECINC CTV1SK3N 
 
 ROGERS MCrroC WOCKS 
 
 BCiOGEPOCT, CONN. 
 
 PURCHASE ORDER SCHEDULE 
 
 CATC. 
 
 SrtMieou 
 
 TYPE. 
 
 MATERIAL 
 
 TOTAU RCQUIREMCNTS. 
 ON MAND__ 
 
 Ail fxxchase cnder schedules must prwidc for de- 
 livery days ahead of manufacturing schedule. 
 
 ON PURCHASE OROCR. 
 
 BALANCE -fO PURCHASE. 
 
 BASED ON MANUFACTUPING SCHEDULE NCL 
 
 RATE PER SCHEDULE BEGINS- 
 
 Na OAXS RUN. 
 
 SCHEDULE ENDS- 
 
 TIME PtRtOOa 
 
 VXteek tndinq 
 
 SCPTeMBCR 
 
 OCTOBER 
 
 g 
 
 30 
 
 Ha Days 
 
 AinusT 
 
 SCPTEMegg 
 
 13 
 
 19 
 
 25 
 
 IL 
 
 M 
 
 21 
 
 28 
 
 J5_ 
 
 25 
 
 SCHEDULES 
 
 Schedule 
 
 oai-nTM. 
 
 f\jrchaae Ortlers Issued 
 
 0*T« 
 
 QUdirrrrv 
 
 5i3e of Tbmn -7J «t2 inches 
 E3 
 
 Received 
 
 PSRtllCZX 
 
 Days 
 
 RHINO 
 
 »L 
 
 273 
 
 2TB 
 
 ^sr 
 
 291 
 
 297 
 
 
 Form J/. Purchase Order Schedule 
 
rrcM Component 
 
 Operations 
 
 TIMC {J\G€0 DAYS 
 
 SCHCOULC MO. S 
 
 CHRONOLOGICAL CHART 
 
 Rate Per OAf loo order ho.- 278 
 
 SEASON 1916 
 
 JAN '^ AMY 
 
 e li i2 t* 
 
 » u i» a* 
 
 portent Schedule 
 
INTENTIONAL SECOND EXPOSURE 
 
 rrcM Component 
 
 TiMC LAO 60 DAYS 
 
 SCHCDULC NO. 1 
 
 CHRONOLOGICAL CHART 
 
 Rate Per Day loo order no.> 278 
 
 SEASON 1916 
 
 OPERATIONS 
 
 « IS 22 n 
 
 JAM'JkNV 
 
 i ti n M 
 
 APRIL 
 
 :HijfpiiMfetmi;i 
 
 Form sS. Graphic Chart— Component Schedule 
 
rrcM 
 
 tinr A - WBKLY SCMIEDUUE 
 
 • 8 - Vf*r9 ahkad c^ behind scheoule 
 
 , r - TOTAL UNITS AeSBMBLEO 
 SCHEOULC NO. 
 
 CHRONOLOGICAL CHART 
 
 UNE D- TOTAL ^OOO UNITS 
 
 pate: Per PftY IQOO 
 
 ORDER NO 
 
 U»ie E - PERCENTftSC C SOOO UNITS 
 , p _ flvERASE NO. OF EM PUOreCS DAILY 
 • G - NO. or UNITS, OUTPUT PER MAN. 
 
 SEASON 
 
 Form 39. Graphic Chart— Unit Schedule 
 
INTENTIONAL SECOND EXPOSURE 
 
 ITCM 
 
 tiNC A - WEEKLY Schedule 
 
 • B - D«V5 Ahead o«r BEHIND SCHeOULE 
 
 • C - TOTAL UNITS A6SBM0LEO 
 
 SCHEDULE NO. 
 
 CHRONOLOGICAL CHART 
 
 DNE D-TCTTAL^OOO UNtTS 
 
 RpaB Fen pay looo 
 
 ORDER NO 
 
 Uwe £ - PERCENTftSE C SOOO UNITS 
 
 , p - AvERASE NO. or EMPuoreES Daily 
 
 • G - NO. or UNITS, OUTPUT PER MAN. 
 
 SEASON 
 
 :ii Hl aji ti: ^a ^^^^i''^^^^j^^^^ 
 
 
 
 ;:^;;i:n:;;n:-r:hr:-i^;:""-|;;'::-ii|:-":^- 1'--: -^p; 
 
 
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 u'j-*;-: 
 
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 mmm 
 
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 -ti^-n.i.^nrnHHi- 
 
 
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 tMSiaH?fe^i^^^^i^^ii^lM^2^..3i^^^ 
 
 iiii^iii;n ui ;: i; ; ; li-ii-; ; : J : "" : Liiii 
 
 illi^ *!g*#!!!!ill ' '!>',J^ ;-: :• -r:!--r'- -* rr:-^ 
 
 F ' iJiliiiilui!!! iniji 
 
 iSii 
 
 -:-hu~ 
 
 
 
 
 wSC7C<S"»J •3^-'?rT' *it: i ! ■ .'i*|!'.Tr^ 
 
 irf;^^|ri||pp^ri:lT:;^^ 
 
 rr.tr 
 
 ■>**'"*♦ I---':-. :r-t-t-- -. (■•-■• 
 
 
 
 1 1 1 1 ^ ■ ■ ■ - - • 
 
 -lH^;i^ 
 
 Trrrrr 
 
 trrr wi'tWKWrf trrrr T 
 
 
 
 
 
 .uu-u 
 
 iBii 
 
 rrr_ 
 
 rrrtxt 
 
 
 
 
 n 
 
 JH 
 
 J& 
 
 w$-mmm 
 
 ISiiii 
 
 
 I::. 
 
 
 ; :::; ::::■:. ::::r: ji 
 
 
 ■.|::;:u4!t:;j 
 
 ;.* 
 
 :-:::) 
 
 rrn-rr: 
 
 frrHf^jn:iJTrT|3:;|:r::: 
 
 
 ;-:4Tr!:;:hHh! Iffii; ;;:-;:ii:-::: 
 
 M»Mj 
 
 li::a--Mr-ifi 
 
 
 fe 
 
 ililii 
 
 M:.:r:;r 
 
 fiiU 
 
 .iiiiii 
 
 
 
 
 iniilijirii illli 
 
 ;;t;i: 
 
 tttrtr 
 
 
 Form 39. Graphic Chart— Unit Schedule 
 
r i T iiiii m-TT lii T 'lTi 1 
 
 JW ■ 
 
 FORMS 
 
 RELATING TO PRODUCTION 
 
 (Forms referred to in Chapter X) 
 
392 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 il 
 
 IM 
 
 if 
 
 If 1 
 
 DM1E. 
 
 .SURNQ. 
 
 CHARGE TO. 
 
 TO BE CXIMPLCTCD NOT LATER T>1AN 
 
 LABOR MATCRIAI OVERHEAD 
 
 . PPODUCTION ORDER NO. 
 
 SALES ORDER NQ 
 
 BlU OF MATERIAL NO . 
 
 TOTAL COST. 
 
 -COOT or ONE . 
 
 ThiaG ayymuatbedriiygredat-oncgloChief Slorga Clerk. No 
 moterial can be dflivered Id this order ewrpt by pfwentation 
 of proper nex^tsrt-Bn If in excess of quontity nequined. nxist 
 be O.Ktt. by proper authtsrrty j ^ - 
 
 APPROVtO- 
 
 xr= 
 
 m 
 
 This Copy mujrt- be rrtained in PRODUCTION DcparhDenf 
 and filed ty Hem Number 
 
 TOTAL RfQUIREO 
 
 CU\TE PEQUlftCD 
 
 STARTED 
 
 lotNft 
 
 Mt 
 
 Quan. Cumutetiw 
 
 FINISHED 
 
 CMb 
 
 Quan 
 
 Cumulative 
 
 STARTED 
 
 LotNa 
 
 DMe 
 
 Hjarv 
 
 Cunnilativie 
 
 8h«rse aide of quadruplicate of aboM; fbrvn. 
 Iffanilla cand. Stre of rprm 5 x S" inchea 
 
 FINISHED 
 
 Dat« 
 
 Quan. 
 
 Cumilati^T 
 
 Form 40. Production Order 
 
 FORMS RELATING TO PRODUCTION 
 
 393 
 
 Oflcrc. 
 
 _ SUP NO. 
 
 OlARGETO. 
 
 BETTERMENT OROtR' NQ 
 
 AUTH0RrZAnC3N NQ BILL OF MATERIAL NOl_ 
 
 TO BE COMPLETED NOT LATER THAN 
 LABOR MATERIAL 
 
 OVERHEAD. 
 
 _,TOTAL cost. 
 
 APPRC3VED' 
 
 51:^6 of" fbrTn-5'8 inches Y 
 
 T>ii5 Copy must be delivered at once to ttie Department 
 wtiich is 1d do the work, and v^tien finished, nchmncd 
 to COST Oepar+menf . 
 
 Form 41. Betterment Order 
 
394 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Ij 
 
 FORMS RELATING TO PRODUCTION 
 
 395 
 
 
 OATt. 
 
 .REPAIR ORDER NO. 
 
 CHARGE TO_ 
 
 DONE BY DEPT. NOL. 
 
 f=ORDEPT.NQ_ 
 
 Si^e of rorm- S'8 inches h 
 
 This Copy musf be delivered at once to the Department 
 which is to do the worK. and when finished, sent to 
 COST Dcpartmenh 
 
 This Ccipy must be delivered at cxice to COST Department, 
 which will immediafely cjpen up Distribution Accountai 
 
 This Gjpy !nu^^ be deSvered at once to Drafting Department, 
 which will immediate^ make Drawing*. 
 
 This Copy must be dcfivered at once to the Axounting 
 
 Department. 
 
 Form 42. Repair Order 
 
 i 
 
 /tracing 
 
 TAQ 
 
 Rere Nn 
 
 ( 
 
 r\\ "fobem! 
 Vy y with! 
 ._^ PQNc 
 
 Date to be 
 Finished 
 
 >d< 
 nl< 
 
 :ou 
 
 I. 
 
 •^ 
 
 Quan.StorheH 
 
 r> 
 
 Date 
 Started 
 
 
 
 Tbslag mus* bt altsched to W «♦ <irst opfration and rem«in wttti 'Hi 
 aeitK«l lot through A\ operations till mived in storw as floished. 
 This lot mvist not be split up nor nmbined with another k*. 
 
 NO 
 
 MACM 
 
 M«CM 
 NO 
 
 oepT. 
 
 NO. 
 
 OUAN- RECOV 
 IITY FROM 
 EtCa ttPWiS 
 
 RfJCCTED 
 
 0«tt 
 
 iwrec- 
 
 100 
 
 FWRCr. 
 
 x>v 
 
 A 
 
 
 
 
 
 
 
 
 
 
 6 
 
 
 
 
 
 
 
 
 
 
 t 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 T 
 
 
 
 5i3e of form 3? »6«inche5 
 
 Printed ori Manilla Tag card. 
 
 
 
 Fj 
 
 
 
 
 
 T 
 
 
 
 
 
 
 
 
 
 
 A 
 
 
 
 
 
 
 
 
 
 
 J 
 
 
 
 
 
 
 
 
 
 
 K 
 
 
 
 
 
 
 
 
 
 
 L 
 
 
 
 
 
 
 
 
 
 
 M 
 
 
 
 
 
 
 
 
 
 
 \i 
 
 
 
 
 
 
 
 
 
 
 P 
 
 
 
 
 
 
 
 
 
 
 Stock 
 
 Upon completion, mettrial used must be dtlHWtd to StDttj-ketper and 
 Ihd lag signed and deli^red It once to Stores ReoTd Oerti,1hen tc Soutinj CbV 
 
 No. of Pieces Rer^ivrrl 
 
 BinNn 
 
 rtav 
 
 
 
 
 3tono-l<Eeper VeaarAOcA^ Routing Clerk | 
 
 II 
 
 / 
 
 / 
 
 
 
 
 ( 
 
 0^ 
 
 ) 
 
 
 
 \ 
 
 OP 
 NO. 
 
 MAOt 
 
 MACK 
 NO. 
 
 ocn. 
 
 NO. 
 
 QUAN- WCOV. 
 IITY fROM 
 RECT) REfAKK 
 
 BEJECTtD 
 
 DATE 
 
 mstc- 
 
 TOR 
 
 fORBEf. 
 
 SCRAP 
 
 T 
 
 
 
 
 
 
 
 
 
 
 R 
 
 
 
 
 
 
 
 
 
 
 s 
 
 
 
 
 
 
 
 
 
 
 T 
 
 
 
 
 
 
 
 
 
 
 u 
 
 
 
 
 
 
 
 
 
 
 V 
 
 
 
 
 
 
 
 
 
 
 yy 
 
 
 
 
 
 
 
 
 
 
 X 
 
 
 
 
 
 
 
 
 
 
 V 
 
 
 
 
 
 
 
 
 
 
 z 
 
 
 
 
 
 
 
 
 
 
 AA 
 
 
 
 
 
 
 
 
 
 
 nt^ 
 
 
 
 
 
 
 
 
 
 
 a 
 
 
 
 
 
 DO 
 
 
 
 
 
 
 
 
 
 
 EE 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Q^ 
 
 
 
 
 
 
 
 
 
 
 HH 
 
 
 
 
 
 
 
 
 
 
 Sttock 
 
 Remarks 
 
 
 
 
 
 hi 
 
 V. 
 
 hi 
 
 ^ 
 
 ^ 
 
 I 
 
396 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 DAY-WORK PRODUCTION TICKET NO 
 
 OflTE 
 ttSUCO 
 
 tWTETOBC 
 COMPLTTED 
 
 OCPT. 
 NQ 
 
 PROO. 
 ORDER NO 
 
 MACH. 
 NO. 
 
 MAN'S 
 NQ 
 
 QUANTITY 
 WANTED 
 
 PIECE 
 NO. 
 
 PIECE 
 NAME 
 
 TIME 
 ALLOWftNCE K 
 
 U 
 
 MOVED rpOM 
 DEPT Na 
 
 MOVED FROM 
 MACH. NO. 
 
 MOVED TO 
 DEPt NO. 
 
 MOVED TO 
 MACH. NO. 
 
 Rcrr.NO. 
 
 INSTRUaiONS 
 
 SPEED FEED 
 
 f>ijc cjf Tbrm 4«6 inches 
 Original - w^ii+c paper. 
 Duplicate- manilla card. 
 
 NO. OF PIECES 
 RECEIVED rOR THIS 
 OPERATION BY 
 WORKMAN 
 
 THESE SPACES TO BE FILLED IN BY INSPECTOR 
 REJECTED 
 
 OfiTC FINISHED 
 
 FOR REPAIRS 
 
 FOR SCRAP 
 
 GOOD 
 
 TOOLS REQUIRED 
 
 INSPECTOR 
 
 ThijTictet mu3^ be retained until Lot spedfied is completed and then turned in at once to PVrxJuctlon Departmert 
 
 Last (tej rf each month si TiOkfS must be turned in and if Lot e uncoriplettd must be so sbmptd and 8^ 
 
 l\ 
 
 TIME ON DAY- WORK TICKET NQ 
 
 STOPPED 
 
 STARTED 
 
 TIME 1 
 
 REMARKS 
 
 WQULAR 
 
 OVER 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 hr 1 
 
 
 Tbrm shown above. | 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 -^ 
 
 
 
 
 
 
 
 
 TIME USED 
 
 
 
 
 
 
 HOURLY RATT 
 
 
 COST REG. TIME 
 
 
 
 
 
 
 CVBTTIME HOURS 
 
 
 BONUS EARNED 
 
 
 
 
 
 
 
 TOTAL COST 
 
 
 
 
 
 
 1 
 
 I 
 
 Form 44. Day-Work Production Ticket, including Time on 
 
 Day-Work Ticket 
 
 FORMS RELATING TO PRODUCTION 
 
 397 
 
 RECE-WORK PRODUaiON TICKET NO. 
 
 ISSUED 
 
 DATE TO BE 
 COMPLETED 
 
 DEPT. 
 NO. 
 
 MACH 
 NO. 
 
 MAN'S 
 NQ 
 
 QUAtVTITY 
 WANTED 
 
 PIECE 
 NO. 
 
 PIECE 
 NAME 
 
 MOVED 
 
 FROM DEPT. NO. 
 
 MOVED 
 
 FROM MACH. NO. 
 
 ^m^. 
 
 NO. 
 
 MOVED TD 
 MACH. NQ 
 
 ROT. NO. 
 
 INSTRUCTIONS 
 
 SPEED FEED 
 
 Sije of fbrm -4«€ inches 
 Original-white paper- ailing red 
 Puplicgte-buffcard- ruling red 
 
 NO. OF PIECES 
 RECEIVED FOR THIS 
 OPERATION BY 
 WORKMAN 
 
 THESE SPACES TO BE FILLED IN BiC INSPECTOR 
 REJECTED 
 
 DSTE FINISHED {fOR REPAIRS 
 
 FOR SCRAP 
 
 GOOQ 
 
 TOOLS REQUIRED 
 
 INSPECTOR 
 
 TIME ON PIECE-WORK TICKET NQ 
 
 STOPPED 
 
 STARTED 
 
 TIME 1 
 
 REMARKS 
 
 RBJULAR 
 
 0*'CR 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Brverse oide of Duplicate of the _ 
 
 
 Fbrm shown 8bov« 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 SCHEDULE 
 TIME ALLOWED 
 
 
 • 
 TIME USED 
 
 
 
 
 
 
 MACH. HATE 
 
 
 AMOUNT EARNED 
 
 
 
 
 
 
 PIECE RATt 
 
 
 .0^ 
 
 
 
 
 
 
 MANb HOURLY R*TE 
 
 
 
 
 
 
 
 
 
 1 
 
 Form 43, Piece-Work Production Ticket, including Time on 
 
 Piece-Work Ticket 
 
} i 
 
 II 
 
 398 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 PREMIUM PRODUCTION TICKET NO 
 
 PROD. 
 ORDER NQ 
 
 0«TC 
 ISSUED 
 
 CATtTOBt 
 COMPLETED 
 
 OCPT. 
 NO 
 
 MACK 
 NQ 
 
 MA^45 
 
 QUANTTTY 
 WANTED 
 
 PIECE NQ 
 
 PIECE NAME 
 
 STANDARD 
 TIMEEA 
 
 TIME 
 K ALLOWANCE H. 
 
 M. 
 
 MOVED rPOM 
 DCPT. NO 
 
 MOVED fROM 
 MACH NQ 
 
 MOVED TD 
 DtPT. NO. 
 
 MOVED TD 
 MACH. m. 
 
 HOT. NQ 
 
 INSTRUaiONS 
 
 SPEED fKD 
 
 TOOLS REQUIRED 
 
 Sije of rbrm -4*6 inches 
 Original - whrte paper- red ruling 
 Duplicerte - buff card - " 
 
 NQ OF PIECES 
 RECEIVED TOR THIS 
 OPERATION 
 W yKJRKMAN 
 
 THESE SPACES TD BE FILLED IN BY INSPECTOR 
 REJECTED 
 
 DWt DNISHEO 
 
 rOR REPAIRS 
 
 rOR SCRAP 
 
 GOOD 
 
 INSPCCTDB 
 
 TIME ON PREMIUM TICKET NQ, 
 
 STOPPED 
 
 STAJ3TCD 
 
 TIME 1 
 
 REMARKS 
 
 KGULAR 
 
 <?^ 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 UBversc side of Duplicaie of i\ 
 form ahov/nfibovfe 
 
 yc - 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TIME ALLOWED 
 
 
 TIME USED 
 
 
 
 
 
 
 LESS 3P0ILAQC TIME 
 
 
 COST RCa TIME 
 
 
 
 
 
 
 TIME 5AVCD 
 
 
 PREMIUM EARNED 
 
 
 
 — < — 
 
 
 
 HOURLY RATE 
 
 
 TOTAL COST 
 
 
 
 
 
 
 — » 
 
 Form 46. Premium Production Ticket, including Time on 
 
 Premium Ticket 
 
 FORMS RELATING TO PRODUCTION 
 
 399 
 
 DAILY DAY-WORK PRODUCTION TIME SLIP 
 
 rod TIME ON DAILY DAY-WORK PROD TICKET NQ 
 
 
 PROD OPEPATION 
 ORDER NO, NO. 
 
 LOT 
 NO. 
 
 PIECES 
 
 MADE VIACH.NO. UtWI'. NO. 
 
 
 MAN'S NQ 
 
 STOPPED 
 
 STARTED 
 
 ELAPSED 
 TIME 
 
 
 
 
 
 
 REGULAR 
 TIME 
 
 
 
 
 
 
 
 S13C of rbrm- 2 J «6 inches 
 Printed and ruled in black 
 
 
 
 
 
 OVER- 
 TIME 
 
 
 
 
 
 
 
 THESE SUPS MUST 0-*<- 
 BE TURNED IN DAILY 
 
 FOREMAN 
 CLERK 
 
 Form 47. Daily Day-Work Production Time Slip 
 
 DAILY RECE-WORK PRODUCTION TIME SLIP 
 
 FUR TIME ON DAILY PlECE-VyORK PROD. TICKET NQ 
 
 PROD. 
 CRDCRNQ 
 
 OPERATION 
 NO. 
 
 LOT 
 NQ 
 
 PIECES 
 
 MADE MACH. NO. OEPT. NO. 
 
 MAN'S NO. 
 
 STOWED 
 
 STARTED 
 
 EIAP5ED 
 TIME 
 
 
 
 
 
 
 REGULAR 
 TIME 
 
 
 
 
 
 ^3? of Torm - 2^ "6 inches . 
 
 
 Printed and ruled in green 
 
 
 
 CVCR- 
 TIMC 
 
 
 
 
 
 
 THESE SLIPS MUST OK. 
 
 BE TURNED IN OMLY HDRCMAN 
 
 CLERK 
 
 Form 48. Daily Piece-Work Production Time Slip 
 
400 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 1.1 
 
 DAILY PREMIUM PRODUCTION TIME SLIP 
 
 FOR TIME ON DAILY PREMIUM PROD. TICKET NO 
 MAOe MACH.NO. oepT.Na 
 
 PPOO. 
 
 OPoeoNO. 
 
 OPtWATtON 
 NO. 
 
 LOT 
 NO. 
 
 MAN'S NO. 
 
 STOPPCD 
 
 STARTED 
 
 ELAPSED 
 
 time: 
 
 
 
 
 
 
 REGULAR 
 TIME 
 
 
 
 
 
 5i je d( form - 2 J »6 inches 
 
 
 ~ Printed and ruled in red 
 
 
 
 CVCR- 
 TIME 
 
 
 
 
 
 
 THESE SLIPS MUST OX- i..^^^*.. 
 BE TURNED IN DAILY 'V*^'^ 
 
 — CLEW'S 
 
 Form 49. Daily Premium Production Time Slip 
 
 DAILY DEFECTIVE REPAIRS TIME TICKET 
 
 RATE DCPT NO. ^^N'S NQ 
 
 5TOPPCO 
 
 TIME 
 
 AMOUrfT 
 
 NO, OF 
 PIECES 
 
 PIECE 
 NO. 
 
 PROD. 
 ORO. NO. 
 
 STARTED 
 
 
 
 
 [_— 
 
 
 
 
 STOPPED 
 
 
 
 
 
 
 
 
 STARTED 
 
 
 
 
 
 
 
 
 TOTAL 
 
 
 
 
 
 
 
 DESCRIPTION OF WORK AND REASON FOR REPAIRS 
 
 1 : : — r- — : r 
 
 
 
 
 S13C of form - 4 • t) incncs r 
 Prin+cd on blue card | 
 
 
 Form 50. Daily Defective Repairs Time Ticket 
 
 ] 
 
 FORMS RELATING TO PRODUCTION 
 
 401 
 
 .DAILY WAITING TIME TICKET 
 
 MAN*^ NO 
 
 
 PFPT N*^ 
 
 
 REGULAR TIME 
 
 DESCBIFTIC»N OF 
 
 WORK 
 
 STOPPED 
 
 STACTTEO 
 
 
 TIME 
 USED 
 
 
 0^fll^TIME ■ 
 
 STOPPtD 
 
 
 STARTED 
 
 
 TIME 
 USED 
 
 
 
 PF(31 n AD TIMP ♦ 
 
 
 (VTRTlMr ^ 
 
 
 
 •^rjr^y, cr^T * 
 
 THESE TICKETS MUSI 
 
 5i3e of Form - 4 « 6 inches 
 Printed on manilla cord. 
 
 FOREMAN 
 
 BE. TUKNtD IN DAILY. — | 
 
 Form 51. Daily Waiting Time Ticket 
 
 DAILY BETTERMENT TIME TICKET 
 
 MAN'S NO.. 
 
 BETTERMENT ORCCR NQ. 
 
 OEPT. NO.. 
 
 REGULAR TIME 
 
 STOPPED 
 
 DESCRIPTION OF WORK 
 
 STARTED 
 
 O^i^RTlME 
 
 TIME 
 USED 
 
 STOPPED 
 
 STARTED 
 
 TIME 
 USED 
 
 NO. HOURS REGULAR TIME. 
 NO. HOURS OVERTIME 
 
 .HOURLY RATE. 
 .HOURLY RATE 
 
 .REGULAR TIME »_ 
 OVERTIME *_ 
 
 THESE TICKETS MUST 
 BE TURNED IN DAILY 
 
 5136 cf form - 4 « 6 inches 
 Pri ntp.d on manilla card 
 
 TOTAL COST *. 
 
 FOREMAN 
 
 Form 52. Daily Betterment Time Ticket 
 
402 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ' i 
 
 DAILY REPAIR TIME TICKET 
 
 REPAIR CJROCRNO. 
 
 VlA^45Na. 
 
 OCPT. Na_ 
 
 REGULAR TIME 
 
 STOPPED 
 
 STARTED 
 
 Cfi/EKrTlME 
 
 TIME 
 USED 
 
 STOPPED 
 
 STARTED 
 
 TIME 
 USED 
 
 DESCRIPTION or WORK 
 
 NO. HOURS REGULAR TIME. 
 NO. HOURS OVERTlMe 
 
 HOURLY RATE. 
 HOURLY RATE. 
 
 .RtQULAR TIME*. 
 
 OVERTIME 
 
 "THESE TICKETS MUST 
 BE TURNED IN DAILV. 
 
 Sise of Eorm - 4 » 6 inchca 
 Pnnted on manilla card. 
 
 TOTAL COST ♦. 
 
 -fDRCMAN 
 
 Form 52. Daily Repair Time Ticket 
 
 DAILY PRORATING ORDER TIME TICKET 
 
 »w1an!5 no.. 
 
 PRORATING OROCR r«L. 
 
 OEPT. NQ. 
 
 REGULAfe TIME 
 
 STOPPED 
 
 STARTED 
 
 CNCRTIMC 
 
 TIME 
 USED 
 
 STOPPED 
 
 STARTED 
 
 TIME 
 USED 
 
 DESCRIPTION OF WORK 
 
 vex HCXJRS RCaULARTIMC 
 Na HOURS CVCRTTMC-^. 
 
 .HCXJRLY RATt- 
 .HOURLY RATE . 
 
 .REGULAR TIME*. 
 
 OVERTIME.*- 
 
 Tx^orrs MUST 
 
 TURNED IN OMLY 
 
 ■Pri 
 
 nted on manlllo cand. 
 
 TOTAL OOSTI. 
 
 .TOREMAN 
 
 Form 54. Daily Prorating Order Time Ticket 
 
 FORMS RELATING TO PRODUCTION 
 
 DAILY NON-PRODUCTIVE LABOR TICKET 
 
 MAN'S NQ. 
 DEPT. Na_ 
 
 REGULAR TIME 
 
 STOPPED 
 
 STARTED 
 
 OVERTIME 
 
 TIME 
 USED 
 
 STOPPED 
 
 STARTED 
 
 TIME 
 USED 
 
 DESCRIPTION OF WORK 
 
 NO. HOURS REGULAR TJME- 
 NO. HOURS OVERTIME , , .. 
 
 HOURLY RATE. 
 HOURLY RATE. 
 
 -REGULAR TIME*. 
 
 OVERTIME *_ 
 
 THESE TICKETS MUST 
 BE TURNED IN DWLY 
 
 Si3e of Form - 4 « 6 inches 
 Prin-ted on manilla cond. 
 
 TOTAL COST 1. 
 
 403 
 
 -fOREMAN 
 
 Form 35. Daily N on-Productive Labor Ticket 
 
 4 
 
 I 
 
 SUPPLEMENTARY TAG 
 
 lots mus» not be ap'''^ ficept on emcraency, and 
 must not be combined with another Br 
 
 piece No ^PQ 
 
 fert of Lot- No 
 
 Taken from Lot for Operation Nol 
 
 Op Name 
 
 Date By wtlon^ 
 
 Taken from Oept No 
 
 Reason 
 
 Balance of operations and routing must be 
 copied below noTi original Tag 
 
 MACH 
 
 MACM 
 HO. 
 
 Dtfn 
 
 NO 
 
 QUAN 
 
 Rtrti 
 
 fORdO' SCRAP 
 
 RtJECrt.0 
 
 OATC 
 
 IN5«C- 
 TOR 
 
 5136 of rorm- ;^ I fei inchea 
 Printed on Red Tog cord 
 
 Upon completion, material must be delivered to 
 Stonts-keeper and thu tag signed and delivered a* once 
 te Stores Record CierK.men to Schedule Clerk. 
 
 No. of Pieces received 
 
 Bin No Date 
 
 Stores- keeper . 
 Record Qcrk 
 
 Indicares a 
 gneenbond 
 across tog 
 
 Form 56. Supplementary 
 Tag 
 
 RCJECTtOPOft^ 
 SCRAP 
 
 Dote Rejected 
 
 Lot No 
 
 l!t)tct«l 
 
 Piect 
 Na 
 
 
 Pejeded ot Qperohon 
 
 No. 
 
 Nome 
 
 Different pieces or ttie some pieces naquinng 
 diffcrmt repairs or mode on differoTt production 
 orders musf not be put on ttiis tog. 
 REASON FOR RCJECrriON 
 
 Sijc of Form - 3g « 64 inctlCS 
 
 tVinted on Manilla Tog Card 
 
 Rfecetvcdabowe, 
 fbr5crop 
 
 .Kecea 
 
 Date. 
 
 EntCnedifProd. 
 Onl Record _ 
 
 Stores- keeper 
 
 fntChg.to 
 Scrap Actft . 
 
 Oerk 
 
 aerk 
 
 Form 57. Rejected for 
 Scrap Tag 
 
404 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 © 
 
 Repair Tag 
 
 REJECTED 
 
 fective: repai 
 
 ected 
 
 ^1^3 
 
 LotNQ 
 
 No of 
 Pieces 
 
 Rece 
 
 Bcjtcted i No 
 
 Mode on 
 
 tonJerNa 
 
 BjjediKJ 3t Opera+ion 
 
 No 
 
 Name 
 
 REPAIRS RCQUlBtO 
 
 5<3e of fbrm - 34 » 6i inches 
 Pnnted on Manilla Tag Card 
 
 fitfeirs ° tele 
 parted 
 
 Oept. 
 
 Inapedw 
 
 Aftff- nepsirs hare ben made, *c pifcn cowrfd ty *is 1s9 mjy b( 
 cntined a^ a trguiar lot of amc Anj Art Na Id oK^ oprahcnj If so 
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 r coMBiNeo wrm pcgulab lot 
 
 <r SAME P»?00UCTlON CCOCR NO 
 
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 Combtncd 
 with lot Wo 
 
 fix Optratipn 
 
 Ho; 
 
 Hame 
 
 ^jrpMwi 
 
 Bepatrs 
 ttoedOK. 
 
 Date 
 
 Inspector 
 
 If operstions an * be f niihnJ without combining with rtg- 
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 icstesa 
 band 
 across tag 
 
 ' 
 
 RouVing if not corttined with Rfegular lot | 
 
 OP. 
 
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 WSPtC 
 
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 Fwaw 
 
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 — Re«r5e Side of Rxm at the Left. \~ 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 RemerKs- 
 
 6jgV'«dand(»««d*ot«lB5iim8K5rdOtrV.»hrntB5(ttijJfCkrii 
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 RinHv 
 
 _Da1P 1 
 
 
 1 
 
 5tDn=rkeeper Reconl Cterk | 
 
 i^orm 5(?. Rejected for Defective Repairs Tag 
 
Sub- Order Station 
 
 STOCK T?OOM 
 
 p • PlNl5HeD WORK 
 ROOCM MAT'L 
 SlCNCO POKM 
 
 J • I>All.V T1M£ CARO 
 
 Form 50. Order Control Chart 
 
 Form 60. Order Control or Planning Board 
 
ii 
 
 FORMS 
 
 RELATING TO LABOR 
 (Forms referred to in Chapter XI) 
 
 
 
4o6 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ROGERS MOTOR W0RK5 
 
 BRIDQePORT, CONK 
 
 APPLICATION fOR EMPLOYMtNT. 
 
 Nanieinfull 
 
 .Dote 
 
 .19. 
 
 Add»T5S 
 
 Trade. 
 
 Nationality -»Place oF Birth _ 
 
 If of fcreign Birth, how long have you been in United States _ 
 Natural i3«cl Harried or Single 
 
 Prtviously in our employ 1 
 
 Experience ______«______^_____ 
 
 Age 
 
 . No. of Children _^ 
 
 Date. 
 
 .Dept. 
 
 fefcTtnce. 
 
 513* of rcirm - 4. » 6 inches 
 Printed 00 Manilla cond 
 
 Name of Relatives employed by Rbgers Mdor Works . 
 
 DO fJOT WOTE BELOW THI5 LINE. 
 
 Pafe Employed 
 
 Date Rc-€mployed_ 
 
 .Dept. No. 
 _Depr.No.. 
 
 -Application No. 
 
 .Rlc Na . 
 
 Dale Be-emplo^. 
 
 .Dept. No._ 
 
 INDICATE BELOW THE POSITIONS YOU HAVE HELD. 
 GIVING IN THE TOP SPACE YOUR LAST EMPLOYER. 
 
 
 CMPLCfYCR 
 
 WSITIONS 
 YOU HAVE HtLD 
 
 APPROXIMATE 
 
 DATE OF EMPU)YME^rr 
 
 WAfiCS 
 
 FPOM 
 
 TO 
 
 NAME 
 
 
 
 
 
 ADoerss 
 
 NAMC 
 
 
 
 
 
 
 
 
 
 Reverse side of form shovm above 
 
 
 ADDRESS 
 
 
 
 
 
 NAME 
 
 
 
 
 
 A0ORt55 
 
 NAMt 
 
 
 
 
 
 
 At30etSS 
 
 Are you ^ 
 How soon 
 
 (Orkino o^ crescnt' 
 
 
 canyx) report fix* 
 
 «-irW7 
 
 
 
 
 ^ov«J_J 
 
 Form 61. Application for Employment 
 
 FORMS RELATING TO LABOR 
 
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4o8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 
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 CJ r- 
 
 FORMS RELATING TO LABOR 
 
 409 
 
 Reference Inquiry Letter 
 Rogers Motor Works 
 
 File No 
 
 Bridgeport, Conn., 191. , 
 
 Application No. 
 
 * *.* • ' "'V h^s filed an application 
 
 with us for employment and gives your name as one of h.... past 
 
 employers, working under 
 
 We shall very much appreciate an early reply to the questions on' the 
 back fold of this sheet, and thank you in advance for your attention 
 to the matter, which will be treated confidentially. 
 
 Very truly yours, 
 
 Rogers Motor Works, 
 
 By 
 
 Form 63. (a) Reference Inquiry Letter (first page of fold). 
 Size of folded page, 6X8 inches 
 
 Rogers Motor Works 
 
 Bridgeport, Conn. 
 
 Reply Form 
 
 Name 
 
 Application No. 
 
 191.. 
 
 Period of employment 
 
 Date of termination 
 
 Cause of termination [[[ 
 
 Salary $ per 
 
 In what capacity was he 
 
 Was he competent ? 
 
 Was he reliable? , /........,.., 
 
 Was he honest? 
 
 Was he in the habit of using intoxicating liquors to excess^ 
 
 Would you consider h.... worthy of confidence and so' recommend 
 
 n for a similar position 
 
 Remarks 
 
 Name of employer. 
 
 By. 
 
 Form 63. (h) Reference Inquiry Letter (fourth page of fold- 
 inside pages blank) 
 
4IO UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ROGERS MO lOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 WTE REQUISITION FOR HELP 
 
 BUILDING NO FLOOQ NO DEPt NQ TIME STATION NQ 
 
 NUWeCR 
 WAN 1 to 
 
 KIND OF MEN WANTED 
 
 DATE 
 WANTED 
 
 APPROXIMATE RATE 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 SijC of Form - 4 "G inches 
 FVinted on Manilla Card 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 STATE ABOVE, NATURE 
 OF WORKMEN WAN I ED 
 
 As--^ fn«?rMAN 
 
 mPFMAN 
 
 MAKE OUT SEPARATE 
 REQUlSmON FDR EACH 
 KIND OF MEN WANTED 
 
 
 APUWOVFD SllPT 
 APPPOVFD M/ODK*; MPiV 
 
 FORMS RELATING TO LABOR 
 
 NAME 
 
 ADDRESS 
 
 FOR DEPT. NO. 
 
 TIME CLOCK NO. 
 
 TRADE 
 
 NATIONALITY 
 
 CHANGE 
 
 OF 
 WAGES 
 
 DATE 
 
 RATE 
 
 CHANGE 
 
 OF 
 DEPT 
 
 DATE 
 
 DEPT. NO. 
 
 CLOCK NC 
 
 O.K. 
 
 DATE QUIT 
 
 411 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 EMPLOYEE'S RATE' CARD^ 
 
 DATE EMPLOYED 
 
 A.M. 
 
 RM. 
 
 BUILDING Na 
 
 FLOOR Na 
 
 TIME STATION NQ 
 
 RATE PER WEI 
 
 HOLBJ 
 
 NATURALIZED MARRIED CHILDREN 
 
 5i3c of rbrm - 4 
 •intcd on Mani: 
 
 frir 
 
 «6 Inches. \ 
 llacand. I 
 
 DIVISION HEAD 
 
 5UPT 
 
 CAUSE 
 
 ALL CHANGES IN RATES MUST TAKET PLACE AT COMMENCEMENT OF A FttY PEWOO. 
 
 NAMES OF MEN SENT FDR 
 
 DATE 
 
 REMARKS 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .. j feverse side of Form alxvcl 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Form 64. Requisition for Help 
 
 ABSENT RECORD 
 
 
 HOURS 
 
 
 HOURS 
 
 
 HCXJCS 
 
 
 HCXJB3 
 
 
 HOJCS 1 
 
 DATE 
 
 AM 
 
 P.M 
 
 DATE 
 
 AM 
 
 RM. 
 
 DATE 
 
 AM 
 
 PM 
 
 DATE 
 
 AM 
 
 RM. 
 
 DATE 
 
 AM 
 
 RM 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 ' " 1 J- u _^ 
 
 . 02%crse side of farm shown abo\e. L 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^^— 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 _^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 : 
 
 h 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 j 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 — _ 
 
 
 f 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 ABSENCE MUST BE SHOWN FROM EVEEY HALT HOUR (JR 
 
 Form 65. Employee's Rate Card, including Absent Record 
 
i^ 
 
 412 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONM 
 
 INTRODUCTION CARD 
 
 BUILWNG NO. 
 
 FLOOR NO, 
 
 DePT»>0. 
 
 TtMC STATION NO 
 
 To. 
 
 . in Dept. Na 
 
 The bearer. 
 
 is sent Id you in response to yjur order. 
 
 for 
 
 .^. 
 
 YraQCS- 
 
 .per Hour 
 
 5ije of TbrTn-4»c. inches 
 frirr+ed on Manilla card 
 
 tjTjplcymerTi' Dept: 
 
 7b be filled out and returned immediaie/v to Gvphywenf Ikpk 
 Started wcrk af o'clock. Morrf-h toy 
 
 No^. 
 
 -Suptv 
 
 By. 
 
 Assf. Tbreman. 
 
 Form 66. Introduction Card 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 CHANGE IN rate: 
 
 namc 
 
 CLOCK NO. 
 
 OCCUPATION 
 
 DEPT. NO. 
 
 COMMENC1NQ 
 
 CATC 
 
 FORMER CHANGE (to BCnwaneD w Accounrwe t»T) 
 
 FROM 
 
 FROM 
 
 TO 
 
 TO 
 
 REASON 
 
 StTC of fbrm - 4 » & inches 
 ■'Printed 00 Manilla cand 
 
 .fOREMAN 
 
 CHANGES or RATE WILL TAKE . 
 
 PLACE ONLY AT THE BEGINNING 
 
 OPA WVY PERIOD. APPO^/ED. 
 
 .DTVISJON HtAO 
 
 .SUPt 
 
 APPROVEU. 
 
 .WORKS MANAGER 
 
 Form 67. Change in Rate Card 
 
 FORMS RELATING TO LABOR 
 
 413 
 
 ROGERS MOTOR WORKS 
 
 .BRIDGEPORT. CONN. 
 
 CHANGE OF DEPARTMENT 
 
 NAME • CLOCK NO. 
 
 OCCUPATION DEPT. 
 
 
 COMMENCING 
 
 FROM DEPT 
 
 TD DEPT 
 
 DATE 
 
 
 
 
 
 
 FORMER WORK 
 
 CHANGE or EMPLOYEE'S NO. 
 
 
 FROM NO 
 
 TO NO. 
 
 NEW WORK 
 
 
 
 
 
 
 REASON 
 
 1 
 
 
 5i:e of Form - 4>'6 inches 
 "Printed on Manilla cand 
 
 
 FnOFMANI 
 ANY CHANGE or RATF WILL NCfT A«^CT RnDFMAM 
 
 TAKE PLACt UNTIL COMMENCE- 
 
 MENT OF A F^Y PERIOD. f aPPROVEH^ ^ ror 
 
 (APWOVED^ NAWDKS MANAGER 
 
 Form 68. Change of Department Card 
 
 DATF 
 
 
 
 ROGERS MOTOR WORKS 
 
 BRIDGEPORT, CONN. 
 
 REPORT Of ABSl 
 TiMF i^ATinN Nin nt 
 
 iNTEE 
 
 iPT. NO. . 
 
 :s 
 
 
 
 
 CLOCK NO. 
 
 ABSENT 
 
 CLOCK NO. 
 
 ABSENT 
 
 CLOCK NO. 
 
 ABSENT 1 
 
 A.M. 
 
 RM. 
 
 AM. 
 
 RM. 
 
 A.M. 
 
 RM. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ■ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 SijeofPorm- 4«6 inches. 
 Printed on white paper. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NUMBER PRESENT 
 
 
 SinNFD 
 
 NUMBER ABSENT 
 
 
 TIMEKEEPER. 
 
 
 
 
 
 
 
 
 
 
 Form 69. Report of Absentees 
 
Ai^ UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ROGERS MOTOR W0RK5 
 
 BRIOQtPOCT, CONN. 
 
 QUITTING CARD 
 
 NAME 
 
 _ DATe 
 
 ADOCJESS 
 
 . OCCUPATION . 
 
 CATC. 
 
 . LENGTH OF SERVICE 
 
 EMPLCrrEE*5 REASON 
 
 FELLOW EMPLOYEE'S REASON 
 
 INSPECTORS OPINION . 
 
 R>CEMAN"5 RECOMMENDATION. 
 
 Sije of fbrm - 4 » 6 Inches. 
 Printed on Manilla card 
 
 ACTION TAKEN 
 
 IN EFFECT 
 
 A.M.. 
 
 .P.M. 
 
 SGNED. 
 
 .INDUSTRIAL SECY. 
 
 ALWAYS ENCLOSE THESE CARDS IN A SEALED ENVELOPE 
 TO BE FILED WITH ODlGlNAL APPUCATION CARD 
 
 RECORD OP employee: 
 
 FOREMEN WILL FILL OUT THIS CARD. 
 
 WOBK 
 
 FAST 
 
 AVERAGE 
 
 SLOW 
 
 ABILITY 
 
 tXCEUCMT 
 
 GOOD 
 
 FAIR 
 
 POOR 
 
 CONDUCT 
 
 GOOD 
 
 FAIR 
 
 POOR 
 
 INDICATE ABOVE BY PUTTlNCi X JN SQUARES 
 
 WAS HE ABSENT FROM WORK FREQUENTLY ? 
 
 HONEST ? . — — LCJYAL ^ 
 
 IS THERE ANY REASON WHY HE SHOULD NOT BE RE-EMPLDYEDJ_ 
 
 Reverse side of fbrm shown abcwcj 
 
 TO CASHIER ' 
 
 F»Y THE ABOVE-NAMED PERSON FOR 
 
 -PER HOUR. ] NO P'ECES © PCQ 
 
 HBS 
 
 .MIN. 
 
 , AMOUNT. 
 
 aK_ 
 
 FOREMAN 
 
 HEAD OF DIVISION 
 
 Form 70. Quitting Card, including Record of Employee 
 
 FORMS RELATING TO LABOR 
 
 41S 
 
 ROGERS MOTOR W0CK5 
 
 BRIDGEPORT, CONN. 
 
 MONTHLY RECORD OF EMPLOYEES DISMISSED Oi^ RESIGNED 
 ^^•^- Year 19 
 
 MONTH 
 
 REASONS 
 
 JAN 
 
 Nay. 
 
 Unsatisfectefy work 
 
 Emplqyee dissatisfied 
 
 Undesirable employee 
 
 Another position 
 
 111 health 
 
 Sickness in family 
 
 FtB. 
 
 NQ 
 
 g 
 
 MAR 
 
 Account- injury 
 
 Death 
 
 References unsatisfedory 
 
 Attend schcxsl 
 
 Matrimony 
 
 Remain at home 
 
 Ijeavinq city 
 
 Non-attendance 
 
 Tardiness 
 
 NO 
 
 Never ngported 
 
 No reason 
 
 Ownaccom 
 
 rirm moving 
 
 Lack of work 
 
 Refuse to acknowledge errpr 
 
 Jio advance in pay 
 
 Reduction m pay 
 
 Stealing 
 
 No advance 
 
 Dishonesty 
 
 Special 
 
 APR 
 
 NO. 
 
 MAY 
 
 NQ 
 
 JUNE 
 
 NO 
 
 ^LY 
 
 NQ 
 
 ^ 
 
 AUG 
 
 NQ 
 
 SCPT 
 
 NQ 
 
 OCT. 
 
 NO. 
 
 530 of Form - 8i X n inches 
 Printed on white paper 
 
 ■fotal 
 
 Dept.% 
 
 NCV. 
 
 NO. 
 
 DEC 
 
 NO.% 
 
 TOTAL 
 
 NO 
 
 % 
 
 COMPARISONS AND PERCENTAaES 
 
 Total negjgned 
 
 "fatal dismissed 
 Total out 
 
 Average No-emploved dail y 
 
 %l?esiqned-bava.ED. 
 
 % Dismissed to p t/q. ED. 
 'X>Total out to sNOi. LpL 
 
 No. employees hired daily 
 
 % Hired tp daily avq. E.D 
 
 No. advanced in pay 
 
 No. pnamoted 
 
 No. transfemsd 
 
 immi 
 
 form 71. Monthly Record of Employees Dismissed or Resigned 
 
 I 
 
4i6 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 PAY. CHECK 
 Received ftil I payment of all demands to and including 
 (DATE)_-_ 19— 
 
 REGULAR AND EXTRA TlMt 
 
 tegular Time . 
 
 Extra "Hmc 
 
 Piece- voH< 
 
 Total 
 
 JLc3sAdv.acxrtln& . 
 
 Less other Advances 
 NET PAY 
 
 AMOUNT 
 
 Sign name hens 
 
 Address here 
 
 HOTE- Hb money frill be delivered until this stub ispreaenlxd, 
 ■ properb/ si^ed. if lost, rqxrtatonceiDRjylkpsrtTnent. 
 
 No. ^—m—. / f^rfbrahon 
 
 Na 
 
 TIME CARD 
 
 DtPT.. 
 
 NAME. 
 
 pfti PCRiOO CNDtNq 
 
 .19 
 
 Na 
 
 Expense Charge 
 
 DAY 
 
 AJvl. 
 
 IN 
 
 Regular Time 
 Extra Time _ 
 Piece-work _ 
 Total 
 
 Less Advances Acc't Ins.. 
 Less other Advances 
 
 NET PAY 
 
 NOON 
 
 oirr 
 
 IN 
 
 RM. 
 
 OUT 
 
 AMOUNT 
 
 EXTRA TIME 
 
 IN 
 
 OUT 
 
 Sje of rorm- 4 « 9i inches 
 Printed on Manilla card. 
 
 HOURS 
 
 O.K. 
 
 JTlMEKCtPCR 
 
 APPROVED ©«'. 
 
 PAYMASTER. 
 
 Form 72. Pay Check and Time or Clock Card 
 
 FORMS RELATING TO LABOR 
 
 417 
 
 
 J2 
 
 
 ^ 
 
 
4i8 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 FORAIS RELATING TO LABOR 
 
 419 
 
 PAY CHECK 
 
 Received full payment of all demands to and including the da+c bdow. 
 5JGNC0 
 
 n 
 
 ADDRESS. 
 
 NOTE= No'^^^nitl''^i^?^^-^I^^*='^^^^^<^"«^85k«J for. 
 
 NO. 
 
 _ date: 
 
 CARD NO. 
 
 NO. 
 
 NAME 
 
 CARD NO. 
 -DATE 
 
 CLOCK CARD 
 
 5TA. NO. 
 CHARGE 
 
 DtPT 
 
 OK. 
 
 TiMtKEEPEC 
 
 APPROVED. 
 
 CASHIER 
 
 DEQULAR TIME 
 
 EXTRA TIME. 
 
 Piece-work 
 
 TOTAL 
 
 AMOUNT 
 
 LESS ADVANCES 
 
 IN 
 
 MON. 
 
 TUE. 
 
 OUT 
 IN 
 
 OUT 
 
 NET PAY 
 
 WED 
 
 < 
 
 THUR. 
 
 fRi. 
 
 SAT. 
 
 SUN 
 
 TOTAL 
 
 CK 
 
 
 Form 75. Pay Check and Time Card (Second Method) 
 
FORMS 
 
 ORGANIZATION CHART; DISTRIBUTION 
 AND ANALYSIS SHEETS 
 
 (Forms referred to in Chapter XII) 
 
 i 
 
 W. 1 '< 
 
422 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 
 
 
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 DISTRIBUTION AND ANALYSIS SHEETS 
 
 423 
 
424 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 DISTRIBUTION AND ANALYSIS SHEETS 
 
 425 
 
 B 
 
 1 
 
 — 1 '' 1 
 
 DEPARTMENT 
 
 LABOC-1 
 
 = 
 
 EXPENSE Dtp 
 
 CLASsincAnoN nc 
 
 tJCPT HEAD5 
 
 aroecMEN 
 
 CLERKS 
 
 MPa 
 
 TPUCKING 
 
 , 
 
 1.1 
 
 1.2 
 
 13 
 
 1.4 
 
 J 
 
 A 
 
 BMINlSTRATIVt Q ■ 
 
 31 Cxecuti/e 
 
 
 
 
 
 
 
 
 
 J 
 
 D2 General Manager 
 
 
 
 
 
 
 
 
 
 J 
 
 }3 Suoerin+erdent | 
 
 
 
 
 
 
 
 
 
 J 
 
 ^^^^ Total II 
 
 
 
 
 
 
 
 
 
 J 
 
 ^1 
 
 u ■ 
 
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 11 Treaaurer 
 
 
 
 
 
 
 
 
 
 J 
 
 
 r2 Distribution 
 
 
 
 
 
 
 
 
 
 _J 
 
 1 
 
 ^ ArrnuNTiNi] 
 
 t 
 
 SI 
 
 13 Collections 
 
 
 
 
 
 
 
 
 
 J 
 
 U Billing. 
 
 
 
 
 
 
 
 
 
 j 
 
 15 Rov-roll 
 
 
 
 
 
 
 
 
 
 ' 
 
 16 Bookkcepino 
 
 
 
 
 
 
 
 
 
 
 <. Total 1 
 
 
 
 
 
 
 
 
 
 
 
 
 5 
 
 ^ 2 
 J STENOGRAPHIC 
 
 21 TypewrttinQ 
 
 
 
 
 
 
 
 
 
 _ 
 
 2? Filinq 
 
 
 
 
 
 
 
 
 
 
 23 Moilinq 
 
 
 
 
 
 
 
 
 
 
 }^ Total 1 
 
 
 
 
 
 
 
 
 
 
 
 3 
 Z 
 
 * 3 
 
 U 5CU.INQ 
 
 31 Secretary 
 
 
 
 
 
 
 
 
 
 
 32 Advertisina 
 
 
 
 
 
 
 
 
 
 
 33 Sale* 
 
 
 
 
 
 
 
 
 
 
 34 Branch Offices 
 
 
 
 
 
 
 
 
 
 
 t Tc 
 
 rtal 
 
 
 
 
 
 
 
 
 
 __ 
 
 ORDERS "^ 
 
 41 Uni+Onjcrs 
 
 
 
 
 
 
 
 
 
 
 42 F^rts tRtpairs 
 
 
 
 
 
 
 
 
 
 _ 
 
 total 
 
 
 
 
 
 
 
 , 
 
 E= 
 
 
 
 
 Grand Total 
 
 
 
 
 
 
 
 
 r- 
 
 
 
 •J 
 
 5 
 
 z 
 
 Ha 
 1- 
 
 PURCHASING c 
 AND -' 
 
 51 Purchesinq 
 
 
 
 
 
 
 
 
 
 
 52 Receiving 
 
 
 
 
 
 
 
 
 
 _| 
 
 53 (general Stores 
 
 
 
 
 
 
 
 
 
 _J 
 
 Tc 
 
 Ttal 
 
 
 
 
 
 
 
 
 
 J 
 
 yj RACKING c 
 > ANO ° 
 
 1^ ^"^ Sijeof Full page- 17' lOiinchea 
 
 62 Finished Strprt' . i. . » / . r^ l 
 
 
 
 
 
 3 
 
 ^ St>ippinq —m 
 
 etrnair or i^rr-nana 
 
 Jagt 
 
 -J 
 
 
 
 
 
 ~i 
 
 r SHIPHNq 1—; 
 
 atal 
 
 1 
 
 
 
 
 
 
 
 
 11 
 
 g PRODUCTION Y 
 Z OtPT. 
 
 71 Orders 8. Schedules 
 
 
 
 
 
 
 
 
 
 ~i 
 
 7Z P^rminq 
 
 
 
 
 
 
 
 
 
 J 
 
 73 Tlmekeepnq 
 
 
 
 
 
 
 
 
 
 ii 
 
 Ti- Semi-rinished Sftonss 
 
 
 
 
 
 
 
 
 
 J 
 
 Z 1< 
 
 >tal 
 
 
 
 
 
 
 
 
 
 J 
 
 ENQINCEWNG g 
 AND 
 
 81 Experimental 
 
 
 
 
 
 
 
 
 
 J 
 
 62 Tool Room 
 
 
 
 
 
 
 
 
 
 "A 
 
 &3 Plant Service 
 
 
 
 
 
 
 
 
 
 j 
 
 »\ANI JtKVK.L' — '^— ' ■ 
 
 Total 
 
 
 
 
 
 
 
 
 
 _ 
 
 Grand Total 
 
 
 
 
 
 
 
 
 
 
 
 
 2 
 
 PROOUCnVE 9 
 OtPARTMErfTS 
 
 91 Tirame 
 
 
 
 
 
 
 
 
 
 , 
 
 92 CnemehnQ 
 
 
 
 
 
 
 
 
 
 _ 
 
 93 Automatic 
 
 
 
 
 
 
 
 
 
 _ 
 
 94 k/lachine 
 
 
 
 
 
 
 
 
 
 
 96 Platinq&Mrshinq 
 
 
 
 
 
 
 
 
 
 
 ^_ 
 
 96 Hordeninq 
 
 
 
 
 
 
 
 
 
 -1 
 
 97 Wheel 
 
 
 
 
 
 
 
 
 
 If 
 
 qg AssemWinq Bicycles 
 
 
 
 
 
 
 
 
 
 4 
 
 99 AssemblinaliMonrycled 
 
 
 
 
 
 
 
 
 
 ^ 
 
 T 
 
 otal 
 
 
 
 
 
 
 
 
 
 
 
 Grand Total Manufactunnq 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 g Qrand Total NonProdoctivc 
 
 
 
 II 
 
 
 
 
 
 
 
 
 _, 
 
 1 1 Summary "fotel Oxrimercial & M^. 
 
 1 
 
 h- 
 
 .T— 
 
 r=^ 
 
 
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 E 
 
 
 
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 For Form 78, see page 423. 
 
 1 
 
 FAaORY 
 
 
 1 MATERIALS - 2 
 
 II 
 
 TOTAL 
 
 y.. 
 
 SHIPPING 
 SUPPLIES 
 
 OPERATING 
 SUPPLIES 
 
 MBCEL 
 EQUIPMENT 
 
 FUELS & 
 LUBWCANtS 
 
 GENERAL 
 
 TOTAL 
 
 
 1 1 
 
 2S 
 
 2.2 
 
 23 
 
 ZA 
 
 2.5 
 
 2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Form 77. (a) Factory Overhead Sheet 
 
 for Distribution (left-hand page) 
 
^26 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 f 
 
 OVERHEAD 
 
 , r^ r-i 1 
 
 
 
 EXPENSE - 3 
 
 
 
 MOKTMLY 
 OEPRtOATlON 
 
 MOTHTHLY 
 INSURANCE 
 
 MONTHLY 
 RENT 
 
 CUECTPIC 
 CURRENT 
 
 TAXES 
 
 fREIGKTAND 
 EXPRESS 
 
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 Form 77. (b) Factory Overhead Sheet 
 
 I 1 
 
 DISTRIBUTION AND ANALYSIS SHEETS 
 
 427 
 
 
 Month Ending 
 
 _ 
 
 
 
 
 GRAND 
 
 1 DIRECT 
 LABOR 
 
 % 
 
 REDISTRIBUTIONS llH 
 
 i 
 
 J TOTAL 
 
 TOTAL 
 
 PRORATED 
 OVERHEAD 
 
 FULL 
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 428 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
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430 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
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 COMMERCIAL ACCOUNTING 
 
 (Forms referred to in Chapter XIII) 
 
432 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 FORMS— COMMERCIAL ACCOUNTING 
 
 433 
 
 PURCHASE VOUCHER 
 
 NOL 
 
 NAME 
 
 AOORCSS 
 
 OATTS 
 
 AMOUKT) 
 
 otDucnoNs 
 
 owts 
 
 AMOUNTS 
 
 OCTucnoNS 
 
 5i3C of form- 5«8 inches I 
 ORIGINAL- Printed on white paper f 
 
 ACCOUNT NQ 
 
 OKTC ISSUED 
 
 ACCCXJNT 0»5rWBimON 
 
 AcNoi AccountTitles Amounts 
 
 I certHy that the above occounf is comcct, end that the amount is wuched 
 
 far by invoices regularly appn^ed ty the outtiorijed persons 
 
 nPPBwEO 
 
 DoteF^id 
 
 Check No, 
 
 ACOOIKTAWT 
 
 CONTTiOU-Cg 
 
 B0GEP5 MOTOR W0RK5 
 
 BRIDGEPORT. CONN. 
 
 Remittance Slip of 
 PurchoscVbudTer 
 
 Na 
 
 NAME 
 
 ADDRESS 
 
 O&TES 
 
 AMC3UNTS 
 
 DEDUCTIONS 
 
 WTCS 
 
 AMOUNTS 
 
 DdXCTXJNS 
 
 DUR.ICATE of fbnn shofwn abac 
 FVinted on yelkxv paper 
 
 CKcl 
 
 Dear5«-: 
 
 WeendooecxjrdieckinpBymentofabo^titems. No receipt c*tier ttian 
 
 ttie endorsement of chock is required. ^^ 
 
 K" fbr any reason ^fouarrx^saJe^(iifdxaiiipeaf<€d^t^^i^nMwm 
 
 fuHgplar«^ioaDbtwti«cl»ck>»faacoT>»lr>gg<lanBwrth*^ 
 
 DeltRiid 
 
 OwckNa 
 
 ROGERS MOTOR WORK^ 
 
 eRtOGCPORT. CONN. 
 
 MONTH OF 
 
 VOUCHER TICKLER 
 
 OKte 1 
 
 VOUCHCR Na 
 
 AMOUNT 
 
 txiAWN IN rAvaa or 
 
 CHECK NCX 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 5i»c of fbnnn-4«6 incheA 
 
 
 
 
 Printed on white card. | 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Form 82. Voucher Tickler 
 
 Form 81. Purchase Voucher 
 
434 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 FORMS-COMMERCIAL ACCOUNTING 
 
 435 
 
 I 
 
 CHARGE VOUCHER 
 
 NO. 
 
 Name 
 Address 
 
 CATC 
 
 EXPtANA"nON 
 
 AMOUKT 
 
 AccoufrtNa 
 Date Issued 
 
 oismnBunoN 
 
 HCtfTNO AaOUKT TnUES AMOUNT 
 
 Sije of rbrm - 5 » 8 Inches I 
 
 Ori^nal-PHnted in red -wfilte paper] 
 
 OEDUCTtO raOM WRCHASt 
 VOUCHER Na 
 
 DATE or AOJUSTMtNT 
 
 APPROVED 
 
 COMPTBOLLtR 
 
 CHARGE VOUCHER 
 
 NQ 
 
 Name 
 Address 
 
 DATE. 
 
 EXPLANATION 
 
 AMOUMT 
 
 Oup^lcs^c of rbrm shown ab 
 Printed in rrd on yellow paper 
 
 Dear 5ir.- 
 
 Vfe beg Id advise ttiat we have changed jour account as above 
 and have deducted same m settlement (f 
 Very truly yours. 
 ROGERS MOTOR WORKSi 
 
 CRiOQCPORT, CXJNH 
 
 Form 83, Charge Voucher 
 
 1 — r 
 
 I M " 
 
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 1 r 
 
436 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Co 
 
 
 It, 
 
 
 FORMS-COMMERCIAL ACCOUNTING 
 
 437 
 
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438 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 N? 
 
 Petty Cosh Voucher 
 
 Ledger Account Date 
 
 fbidtD 
 
 On Account <^ 
 
 Amount 
 
 « •» 
 
 •» V 
 
 n 1* n 
 
 n n 
 
 Postage 
 
 Signed 
 
 Approved 
 
 Form 87. Petty Cash Voucher 
 
 i 
 
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 FORMS-COMMERCIAL ACCOUNTING 
 
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 441 
 
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 DATE 
 
 J.V. 
 Na 
 
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 ACCOUNT 
 
 DCDJT 
 CRtDiT 
 
 LEDGER 
 
 DEBIT 
 
 CREDIT 
 
 Journal fotio 
 
 Tofals 
 
 J 
 
 Form go. Journal Voucher 
 
442 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Co 
 
 s 
 
 H 
 
 
 
 
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 CHART OF CONTROLLING ACCOUNTS 
 (Form referred to in Chapters XIV and XV) 
 
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 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
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 INVENTORY RECORDS 
 
 (Forms referred to in Chapter XVI) 
 
446 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
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 INVENTORY RECORDS 
 
 447 
 
 EQUIPMENT RECORD 
 
 Description of Item. 
 
 Made&y 
 
 Inventory Tag No — 
 
 Marif V-i Serial No _ 
 
 ^.^_ Fbrchase Orrkr fio. 
 
 . Date of Invoice Date Rec'd. - 
 
 floor Space- 
 trection Date . 
 
 . VfeigW lbs Speed Chart No.. 
 
 .HP. 
 
 LXATION 
 
 OROCRNO 
 
 DftTt 
 WSTAUfD 
 
 njROPER, 
 
 M.L.PUlirY 
 
 5PEE00fM.l 
 
 STANDARD EQUIPMENT 
 
 ■ 5i jc of fbrtn - 5 " 8 inches 
 Printed on White Card. 
 
 REMARKS: 
 
 PURCHASE COST 
 
 
 REPAIR COST 
 
 
 
 
 - 
 
 DATE 
 
 AMOUNT 
 
 DATE 
 
 AMOUNT 
 
 Invoice rncc - 
 
 
 
 
 
 
 
 
 rreignrLriargfei7_ — 
 
 
 
 
 
 
 
 Total Cost 
 
 
 
 
 
 
 1,1 
 
 ADDITIONAL VALUES 
 
 
 
 
 
 
 
 
 OCOO? 
 
 OVTE 
 
 COST 
 
 ORoec 
 
 CATC 
 
 COST 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 »»verse side of abcrv«e form. | 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 MANUFACTURING COST 
 
 Remarks •• 
 
 
 
 
 
 
 
 
 
 
 4 
 
 
 
 
 
 
 nvrriifMl 
 
 
 
 
 
 '""""B*""* — ■ ■" 
 
 Tf*^) 
 
 
 
 
 
 Form 94- Equipment Record 
 
Form 95 
 STORES LEDGER 
 
 With ready reference stores classifi- 
 cation, indexed, tabulated, and contain- 
 ing a short description of the various 
 classes. 
 
 Note : Nothing is more necessary in the revamping or systematizing 
 of a business than a complete classification of general stores; to open 
 up a "Stores Ledger" only partially classified means a continual an- 
 noyance, delay, and rearranging of ledger sheets to introduce new 
 classifications from time to time. The usual stores classification, as 
 given in Chapter IV, is simply indicative, leaving it for the stores 
 recorder or stores keeper to work out the full classification to suit 
 himself. 
 
 The stores ledger presented herewith gives a complete classifica- 
 tion of stores for factories, alphabetically arranged and captioned. 
 Each class is numbered with a Dewey decimal number and is ready 
 for accounting and statistical work, and from this classification the 
 manufacturer can select such names as fit his particular business and 
 thus have his ledgers properly opened at the very start. 
 
 I 
 
 \ 
 
450 UNIFIED ACCOUNTIxNG FOR INDUSTRIALS 
 
 Tabulation Showing Stores Classification and 
 
 Class Number 
 
 (Key number not shown here, is placed before the dash.) 
 
 ■1.0 Abrasives 
 
 -1.1 Books 
 
 -1.2 Chemicals — Drugs 
 
 -1.3 Compounds 
 
 -1.4 Cordage 
 
 -1.5 Equipment 
 
 -1.6 Fabric 
 
 -1.7 Fibre 
 
 4.8 Fittings 
 
 -1.9 Fuel 
 
 -2.0 Leather 
 
 -2.1 Lubricants 
 
 -2.2 Lumber 
 
 -2.3 Machinery 
 
 -2.4 Metals 
 
 -2.5 Paint 
 
 -2.6 Paper 
 
 -2.7 Stationery 
 
 -2.8 Tools — Hand, Small 
 
 -2.9 
 
 STORES CLASSIFICATION 
 
 -1.0 
 Abrasives 
 
 In this classification arc to be included all cutting or 
 grinding supplies and wheels used for this purpose. 
 
 Carborundum 
 
 paper 
 
 powder 
 
 stone 
 
 wheels 
 Crocus cloth 
 Emery 
 
 cloth 
 
 paper 
 
 powder 
 
 wheels 
 Garnet, paper 
 Glass, ground 
 Paper, sand 
 
 Pumice 
 
 powder 
 
 stone 
 Sand, sandblast 
 Soap, grit 
 Stone, sand 
 Wheels, grinding 
 
 STORES LEDGER 
 
 -1.1 
 
 45 1 
 
 Books 
 
 In this classification are included all books of any kind, 
 whether catalogues, periodicals, accounting or other books. 
 
 Accounting books 
 Atlases 
 Blank books 
 Copy books 
 
 Directories 
 Guide books 
 Memorandum books 
 Order books 
 
 Scrap books 
 Stenographers' books 
 
 -1.2 
 Chemicals — Drugs 
 
 In this classification are included all chemicals for labo- 
 ratory and shop use, and also all drugs, instruments, etc., for 
 the hospital. 
 
 Arnica, tincture 
 Aspirin 
 Bags, ice 
 Bandages 
 
 gauze 
 
 muslin 
 
 roller 
 
 rubber 
 Basins, dressing 
 Belladonna 
 Benzene, purified 
 Benzoin, tincture 
 Bismuth 
 Bottles 
 
 acid 
 
 magnesia 
 Brimstone 
 Calcium chloride 
 Calomel 
 Catgut ligature 
 Caustic 
 
 Chemicals— fire extin- 
 guisher 
 Chloral hydrate 
 Chloroform 
 Cocaine 
 
 Condensers, laboratory 
 Cotton 
 
 Cotton, absorbent 
 Creosote 
 Digitalis 
 Droppers 
 Ether 
 
 Ethyl morphine 
 Exterminator 
 Funnels, glass 
 Gauze, 
 
 absorbent 
 
 antiseptic 
 
 Iodoform 
 Gloves, rubber 
 Graduates 
 
 Instruments 
 
 Iodide 
 
 Lime 
 
 Linaments 
 
 Needles, hyperdermic 
 
 Nitrate 
 
 Oils 
 
 ammonia 
 
 castor 
 
 linseed 
 Ointments 
 Plaster, adhesive 
 Plungers, syringe 
 Potash 
 Saltpeter 
 Salts, soldering 
 Sheeting, rubber 
 Soda 
 Spatulas 
 
 \i 
 
45 
 
 . UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 -1.3 
 
 Compounds 
 
 In this classification are included all boiler, cement, wash- 
 ing and other compounds (also the composition used for 
 printing rollers), whether used in the shops or by the office. 
 
 Cement 
 
 belt 
 
 furnace 
 
 high temperature 
 
 liquid 
 
 pipe covering 
 
 Portland 
 
 roofing 
 
 rubber 
 
 steam pipe 
 
 water pipe 
 Cleaner 
 
 boiler 
 
 floor 
 
 hand 
 
 squeegee 
 
 tube 
 Composition, roller 
 Compounds 
 
 acid proof 
 
 alkali proof 
 
 flexible 
 
 molasses 
 
 polishing 
 
 scouring 
 
 welding 
 
 Gelatin, photo 
 Glue 
 
 Hectograph 
 Polish 
 
 furniture 
 
 metal 
 
 stone, rotten 
 
 Soap 
 
 compound 
 
 scouring 
 
 soft 
 
 -1.4 
 Cordage 
 
 In this classification are included all 
 
 cordage. 
 
 oakum, jute, waste, etc., etc 
 
 Caulking 
 
 tarred 
 
 jute 
 
 window 
 
 oakum 
 
 Lacing 
 
 Cord 
 
 cord 
 
 bell 
 
 twine 
 
 cotton 
 
 Oakum 
 
 flax 
 
 caulking 
 
 flexible 
 
 navy 
 
 halyard 
 
 picked 
 
 hemp 
 
 Rope 
 
 jute 
 
 cotton 
 
 lacing 
 
 flax 
 
 marlin 
 
 hemp 
 
 picture 
 
 manila 
 
 •^ash 
 
 Twine 
 
 twines, cords and 
 
 broom 
 
 cotton 
 
 flax 
 
 gray 
 
 hemp 
 
 jute 
 
 lacing 
 
 linen 
 
 sail 
 
 seine 
 
 tag strings 
 
 unoiled 
 Waste 
 
 cotton 
 
 wool 
 
 
 STORES LEDGER 453 
 
 -1.5 
 Equipment — Factory, Office 
 
 In this classification are included all supplies and materials 
 such as furniture and articles of daily use which are not tools 
 or fittings. 
 
 Baseboards, typewriter 
 
 Cots 
 
 change making 
 
 Baskets 
 
 Cups 
 
 comptometer 
 
 desk 
 
 Cushions 
 
 computing 
 
 office 
 
 chair 
 
 computing and 
 
 rattan 
 
 rubber 
 
 typewriter 
 
 waste 
 
 typewriter 
 
 duplicating 
 
 Bedsteads 
 
 Cuspidors 
 
 envelope opening 
 
 Bookcases 
 
 Desks 
 
 envelope closing 
 
 revolving 
 
 flat top 
 
 eyelet 
 
 sectional 
 
 flat (extra large) 
 
 mimeograph 
 
 Bottles, water 
 
 roll-top 
 
 neostyle 
 
 Boxes 
 
 table 
 
 numbering 
 
 storage 
 
 typewriter 
 
 paper fastening 
 
 transfer 
 
 Dippers 
 
 pencil sharpening 
 
 Brushes, hair 
 
 Dusters 
 
 perforating 
 
 Cabinets 
 
 feather 
 
 roller copying 
 
 book 
 
 wall 
 
 stamping (postage) 
 
 file 
 
 Files, document 
 
 typewriters 
 
 sample 
 
 Filters, water 
 
 watches, stop 
 
 stationery 
 
 Glasses 
 
 Matches 
 
 steel 
 
 drinking 
 
 Microscope 
 
 Cameras 
 
 magnifying 
 
 Racks 
 
 Carts, push 
 
 microscopic 
 
 hat 
 
 Chairs 
 
 Hangers 
 
 towel 
 
 bent wood 
 
 Holders, telephone 
 
 umbrella 
 
 revolving, cushion 
 
 Ice 
 
 Rests, arm 
 
 saddle seat 
 
 Ladders 
 
 Rollers 
 
 step-ladder 
 
 Machines 
 
 chart 
 
 typewriter 
 
 adding 
 
 map 
 
 Clocks (not time) 
 
 addressograph 
 
 window-shade 
 
 Containers 
 
 billing 
 
 Sweepers, carpet 
 
 \l 
 
454 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 -1.6 
 
 Fabric 
 
 In this classification are included all woven and other 
 fabrics such as bagging, netting, canvas, rubber, leatherette, 
 etc., etc. 
 
 Aprons 
 
 round 
 
 fabric 
 
 laboratory 
 
 Blankets 
 
 rubber 
 
 rubber 
 
 Bunting 
 
 Mats 
 
 shop 
 
 Burlap 
 
 cocoa 
 
 storm (auto) 
 
 Carpet 
 
 rubber 
 
 Bagging 
 
 Cloth 
 
 Matting 
 
 Bagging, jute 
 
 awning 
 
 cocoa 
 
 Bags 
 
 copying 
 
 rubber 
 
 burlap 
 
 scrub 
 
 Roofing 
 
 canvas 
 
 wiping 
 
 paper 
 
 coffee 
 
 Counterpanes 
 
 rubberoid 
 
 coin 
 
 Covers 
 
 Rubber 
 
 duck 
 
 desk 
 
 Sacks 
 
 Baskets, leatheroid 
 
 typewriter 
 
 Shades, window 
 
 Bedspreads 
 
 Felt 
 
 Strips, weather 
 
 Belting 
 
 Flags 
 
 Towels, cloth 
 
 cotton 
 
 Hose 
 
 
 -1.7 
 
 Fibre 
 
 In this classification are included everything in the nature 
 of fire-resisting materials and supplies, such as asbestos, steam 
 packing, boiler packing, etc. 
 
 Asbestos 
 
 paper 
 
 wick-packing 
 
 fireboard 
 
 pipe-covering 
 
 wood 
 
 insulating 
 
 sheet-packing 
 
 wool 
 
 millboard 
 
 tape 
 
 
 STORES LEDGER 
 
 -L8 
 
 455 
 
 Fittings 
 
 In this classification are included all fittings, such as auto- 
 mobile, plumbing, steam, electrical; unions, couplings, nails, 
 brads, pots, etc.; that is to say, anything and everything used 
 in the plant which does not properly come under tools or 
 equipment. 
 
 Annunciators 
 
 bronze 
 
 Clamps 
 
 Arrestors, lightning 
 
 composition 
 
 basin 
 
 Basins, wash 
 
 porcelain 
 
 beaker 
 
 Baskets, toting 
 
 steel 
 
 beam 
 
 Bells 
 
 Buttons 
 
 bolt 
 
 Blades, fan 
 
 door 
 
 cabinet 
 
 Bolts 
 
 push 
 
 condenser 
 
 expansion 
 
 Cable 
 
 iron 
 
 machine 
 
 electric 
 
 laboratory 
 
 track 
 
 elevator 
 
 pinchcock 
 
 Bone, black 
 
 iron 
 
 steel 
 
 Bowls 
 
 steel 
 
 wood 
 
 closet 
 
 Cans 
 
 Clay, fire 
 
 urinal 
 
 ash 
 
 Clips, shade roller 
 
 Boxes 
 
 garbage 
 
 Clusters, electric 
 
 conduit 
 
 G I 
 
 Coils 
 
 tote 
 
 oil 
 
 fan 
 
 Braces 
 
 paint 
 
 resistance 
 
 Brackets 
 
 sprinkling 
 
 Condensers 
 
 Brick, fire 
 
 steel 
 
 glass 
 
 Buckets 
 
 tin 
 
 metal 
 
 fire 
 
 Carbon 
 
 Conduit 
 
 galvanized 
 
 electric 
 
 flexible 
 
 paint 
 
 filament 
 
 rigid 
 
 Bulbs 
 
 Card holders 
 
 underground 
 
 atomizer 
 
 brass 
 
 Connectors, hood 
 
 electric 
 
 iron 
 
 Coolers, water 
 
 horn 
 
 Catches 
 
 Copper 
 
 Burners 
 
 Centers, push button 
 
 bronze 
 
 gas 
 
 Chains 
 
 cups 
 
 incandescent 
 
 jack 
 
 funnels 
 
 Burnishers, metal 
 
 sash 
 
 gauze 
 
 Bushings 
 
 transom 
 
 gutter 
 
 Babbitt 
 
 weight 
 
 rivets 
 
 brass 
 
 Checks, door 
 
 rods 
 
4S6 
 
 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Copper — continued 
 
 towel 
 
 rake 
 
 solder 
 
 '• paper 
 
 scoop 
 
 tacks 
 
 Flanges 
 
 shovel 
 
 terminal 
 
 Funnels 
 
 sledge 
 
 valve 
 
 enamel 
 
 socket 
 
 washers 
 
 filtering 
 
 spade 
 
 wire 
 
 glass 
 
 tub 
 
 Couplings 
 
 porcelain 
 
 Hangers 
 
 elbow 
 
 tin 
 
 door 
 
 hose 
 
 rubber 
 
 pipe 
 
 round 
 
 valve 
 
 Hinges 
 
 Crucibles 
 
 Gaskets 
 
 brass 
 
 Cups, oil 
 
 glass 
 
 iron 
 
 Cut-outs 
 
 rubber 
 
 Hods 
 
 Discs, valve 
 
 Glass 
 
 Holders 
 
 Drawers, door 
 
 condensers 
 
 crucible 
 
 Elbows 
 
 gages 
 
 door 
 
 Electrodes, arc 
 
 globes 
 
 shade 
 
 Excelsior 
 
 plate 
 
 toilet paper 
 
 Extinguishers 
 
 reflector 
 
 twine 
 
 Eyelets 
 
 shades 
 
 Hooks 
 
 Eyes 
 
 tubing 
 
 awning 
 
 screw 
 
 window 
 
 bale 
 
 steel 
 
 wired 
 
 belt 
 
 Fans 
 
 Gutter 
 
 ceiling 
 
 ceiling 
 
 copper 
 
 picture 
 
 oscillating 
 
 galvanized 
 
 pipe 
 
 wall 
 
 iron 
 
 screw 
 
 Fasteners 
 
 wrought 
 
 spout 
 
 belt 
 
 Handles 
 
 Hose 
 
 casement 
 
 adze 
 
 air 
 
 clamp 
 
 awl 
 
 rubber 
 
 clip 
 
 axe 
 
 steam 
 
 sash 
 
 broom 
 
 Insulators 
 
 woodwork 
 
 chest 
 
 Iron 
 
 Figures — Letters 
 
 chisel 
 
 filings 
 
 Fittings 
 
 drawer 
 
 palings 
 
 conduit 
 
 file 
 
 retort stand 
 
 electric conduit 
 
 fork 
 
 steps 
 
 flexible 
 
 hammer 
 
 Irons, corner 
 
 hose 
 
 hatchet 
 
 Isinglass 
 
 metal 
 
 hoe 
 
 Jambs, door 
 
 pipe 
 
 mop 
 
 Jars 
 
 Fixtures 
 
 pick 
 
 acid 
 
 STORES LEDGER 
 
 457 
 
 Juts— continued 
 
 drop 
 
 Rings 
 
 battery 
 
 plumbing 
 
 insulating 
 
 flint 
 
 Nuts 
 
 key 
 
 glass covered 
 
 blank 
 
 screw 
 
 glass stoppered 
 
 bolt 
 
 Rivets 
 
 Joints, insulating 
 
 cold 
 
 Rods 
 
 Knobs 
 
 hexagon 
 
 brass 
 
 mortice 
 
 machine screw 
 
 copper 
 
 rim 
 
 square 
 
 iron 
 
 shutter 
 
 tapped 
 
 steel 
 
 split-insulator 
 
 thumb 
 
 Rollers 
 
 Lamps 
 
 Pins 
 
 iron 
 
 arc 
 
 cotter 
 
 steel 
 
 electric 
 
 steel 
 
 Roofing 
 
 hand 
 
 taper 
 
 pro- slate 
 
 headlight 
 
 Pipe 
 
 tin-plate 
 
 oil 
 
 iron 
 
 Rosettes 
 
 repair 
 
 lead 
 
 Scales 
 
 spirit 
 
 terra-cotta 
 
 counter 
 
 tail-light 
 
 tin 
 
 double beam 
 
 Lanterns 
 
 vitrified 
 
 platform 
 
 conductor's 
 
 Plugs 
 
 track 
 
 dark 
 
 basin 
 
 warehouse 
 
 hand 
 
 fuse 
 
 Scoops 
 
 switch 
 
 Plumb-bobs 
 
 Screens 
 
 Lifts 
 
 iron 
 
 Screws 
 
 sash 
 
 brass 
 
 closet 
 
 transom 
 
 Poles 
 
 jack 
 
 Locks 
 
 steel 
 
 Seals, car, lead 
 
 cupboard 
 
 window 
 
 Seats, closet 
 
 desk 
 
 wood 
 
 Shades, electric light 
 
 door 
 
 Pots, glue 
 
 Shields 
 
 drawer 
 
 Racks 
 
 aluminum 
 
 night 
 
 test tube 
 
 expansion 
 
 pad 
 
 towel 
 
 eye 
 
 Loops, chandelier 
 
 Radiators 
 
 finger 
 
 Marble 
 
 auto 
 
 Shut-offs 
 
 Nails 
 
 heating 
 
 Snaps, chain 
 
 Needles 
 
 Railings, iron 
 
 Sockets, electric 
 
 packing 
 
 Rails 
 
 Spikes, railroad 
 
 sack 
 
 iron fence 
 
 Spoons, weighing 
 
 sail 
 
 steel railroad 
 
 Spouting, pipe 
 
 Netting, wire 
 
 Renewals, battery 
 
 Sprays 
 
 Nipples 
 
 Rests, shelf 
 
 disinfectant 
 
 \\ 
 
ni 
 
 ■ 
 
 458 UNIFIED 
 
 ACCOUxNTlNG FOR 
 
 INDUSTRIALS 
 
 Sprays — continued 
 
 floor 
 
 Tweezers 
 
 hose 
 
 wall 
 
 Type, printing 
 
 Springs 
 
 Switches 
 
 Unions 
 
 door 
 
 battery 
 
 Valves 
 
 check 
 
 entrance 
 
 air 
 
 fan 
 
 knife 
 
 flushing 
 
 Sprinklers 
 
 panel 
 
 pump 
 
 fire 
 
 pendent 
 
 radiator 
 
 lawn 
 
 railroad 
 
 steam 
 
 Squeegees 
 
 snap 
 
 water 
 
 floor 
 
 Swivels 
 
 Washers 
 
 window 
 
 Tacks 
 
 brass 
 
 Stakes 
 
 carpet 
 
 copper 
 
 Staples, insulated 
 
 upholstery 
 
 iron 
 
 Stays, chain 
 
 wiring 
 
 lead 
 
 Stencils 
 
 Tanks, water 
 
 steel 
 
 Stone 
 
 Terminals, cable 
 
 Wax 
 
 ballast 
 
 Terra-cotta 
 
 Weights 
 
 broken 
 
 Tiles, porcelain 
 
 sash 
 
 grind 
 
 Toggles 
 
 scale 
 
 sharpening 
 
 Tops, auto 
 
 Wheels, pipe cutter 
 
 soap 
 
 Torches 
 
 Wire 
 
 Stops, door 
 
 electric 
 
 annunciator 
 
 Strainers, paint 
 
 gasoline 
 
 black 
 
 Studs 
 
 hand 
 
 copper 
 
 belt 
 
 Trays, tote 
 
 iron 
 
 fixture 
 
 Tubing 
 
 steel 
 
 insulating 
 
 Tubs 
 
 telephone 
 
 Sweeps 
 
 Turnbuckles 
 
 Wringers, mop 
 
 -1.9 
 Fuel 
 
 In this classification are included any and every material, 
 substance or liquid used to feed a flame for the purpose of 
 producing steam, heat, or light. 
 
 Benzine 
 
 anthracite 
 
 Naphtha 
 
 Candles 
 
 bituminous 
 
 Oils 
 
 Charcoal 
 
 Coke 
 
 Paraffine 
 
 Coal 
 
 Gasoline 
 
 Wood 
 
 STORES LEDGER 
 
 459 
 
 -2.0 
 Leather 
 
 In this classification are included leather belting, lacing, 
 hides, chamois, fur robes, or fur-lined coats, such as those 
 worn by chauffeurs. 
 
 Bags 
 
 document 
 
 hand 
 
 money 
 
 Belting 
 
 Chamois 
 
 Coats, fur, chauffeurs' 
 
 Gaskets 
 
 Hides 
 
 Laces 
 
 Lacing 
 
 Rawhide 
 
 Robes, fur, automobile 
 
 Straps, gun 
 
 Washers 
 
 -2.1 
 Lubricants 
 
 In this classification are included all oils, rrreases or sub- 
 stances of any kind used for lubricating machinery. 
 Graphite graphite Havoline 
 Grease Oil machine 
 auto auto Tallow 
 axle cylinder Vaseline 
 cup engine 
 
 i 
 
 -2.2 
 Lumber 
 
 In this classification are included all wood of any descrip- 
 tion, whether in the rough or dressed state, and also boxes used 
 for packing. 
 
 Arms, cross 
 
 Gum 
 
 Poplar 
 
 Ash 
 
 Hemlock 
 
 Posts 
 
 Backing 
 
 Hickory 
 
 Scantling 
 
 Basswood 
 
 Maple 
 
 Shelving 
 
 Boxes, packing 
 
 Millwork 
 
 Siding 
 
 Capping 
 
 Moulding 
 
 Slats 
 
 Cedar 
 
 Oak 
 
 Spruce 
 
 Chestnut 
 
 Paling 
 
 Stepping 
 
 Cypress 
 
 Pine 
 
 Strips, weather 
 
 Flooring 
 
 Poles 
 
 Walnut 
 
f^ t 
 
 460 
 
 UNIFIED ACCOUNTING FOR IXDUSTRIALS 
 
 -2.3 
 
 Machinery 
 
 In this classification are included all machines and ma- 
 chinery erected in the shops (including time clocks) such as 
 burring, broaching, chambering and miUing machines. 
 
 Arrester, dust 
 
 horizontal 
 
 double stroke 
 
 Assembling, grip 
 
 sensitive 
 
 upsetting 
 
 Automobiles 
 
 upright 
 
 Joining 
 
 delivery, light 
 
 vertical 
 
 Jointing, saber handle 
 
 touring 
 
 Driving, bolt nut 
 
 Key seater 
 
 truck, electric 
 
 Engraving 
 
 Lathes 
 
 Backing-oflF 
 
 Exhaust fan 
 
 barrel turning 
 
 Balancing-knife 
 
 Exhauster 
 
 bench 
 
 Barrel bedding 
 
 Fans 
 
 cone head 
 
 Beading 
 
 double 
 
 engine 
 
 Belt 
 
 single 
 
 double 
 
 benches 
 
 Filing 
 
 geared 
 
 scarfing 
 
 Folding 
 
 quick-change 
 
 lacing 
 
 Forming 
 
 single 
 
 Benches, saw 
 
 Gaging 
 
 speed 
 
 Boring 
 
 Grinders 
 
 tool makers 
 
 saber handle 
 
 automatic 
 
 turret 
 
 spindle 
 
 barrel drill 
 
 variety 
 
 vertical 
 
 form cutter 
 
 wood 
 
 Brakefolder 
 
 hemming 
 
 Marking 
 
 Broaching 
 
 open side 
 
 Mill 
 
 Burring 
 
 plain 
 
 boring 
 
 Calibrating 
 
 precision 
 
 charcoal 
 
 Centering, gun stock 
 
 rivet 
 
 turning 
 
 Chambering, barrel 
 
 special 
 
 vertical 
 
 Coilers 
 
 tool 
 
 Millers 
 
 Compressors 
 
 vertical 
 
 adjustable 
 
 Cutters, bolt 
 
 wet tool 
 
 automatic 
 
 Cutting-ofT 
 
 Grooving, graining 
 
 bench 
 
 Dental engines 
 
 Hammers 
 
 cam 
 
 Dies sinkers 
 
 drop 
 
 external thread 
 
 Drilling, hand guard 
 
 cushion 
 
 hand 
 
 Drills 
 
 steam 
 
 internal thread 
 
 automatic 
 
 strap 
 
 plain 
 
 barrel 
 
 Heading 
 
 semi-automatic 
 
 high speed 
 
 single stroke 
 
 universal 
 
 STORES LEDGER 
 
 461 
 
 Millers — continued 
 
 machines 
 
 Shears 
 
 vertical 
 
 traps 
 
 alligator 
 
 Nut Screwing 
 
 Sawing 
 
 angle 
 
 Planers, 4 roll 
 
 band 
 
 bar 
 
 Planing, jointing 
 
 rip 
 
 bench 
 
 Polishers, automatic 
 
 scroll 
 
 combination 
 
 Polishing 
 
 wood 
 
 lever 
 
 frames 
 
 Saws 
 
 power 
 
 heads 
 
 equalizing 
 
 special 
 
 Presses 
 
 facing 
 
 squaring 
 
 arbor 
 
 hack 
 
 Slotting 
 
 bench 
 
 high speed 
 
 automatic 
 
 embossing 
 
 hot 
 
 die 
 
 hydraulic 
 
 wood-trimming 
 
 hand 
 
 knuckle 
 
 Screw machines 
 
 Splinters, receiver 
 
 hot trimming 
 
 automatic 
 
 Spotting 
 
 pillar 
 
 automatic cut-off 
 
 Spring 
 
 plain 
 
 automatic turret 
 
 setting 
 
 power 
 
 hand 
 
 winding 
 
 punch 
 
 plain 
 
 Stake holders 
 
 reducing 
 
 slotters 
 
 Stamping 
 
 special 
 
 wire feed 
 
 Straighteners 
 
 Profilers 
 
 Separators 
 
 Striking 
 
 automatic 
 
 oil 
 
 Swagging, hot 
 
 horizontal 
 
 sterling 
 
 Tapping 
 
 spindle 
 
 turbine 
 
 multiple spindle 
 
 wood 
 
 waste 
 
 vertical 
 
 Punching 
 
 Shapers 
 
 Tenoner, standard 
 
 Reamers 
 
 crank 
 
 Testing, vertical 
 
 Rifling 
 
 horizontal 
 
 Thread, rolling 
 
 Riveting 
 
 universal 
 
 Tilting 
 
 rotary 
 
 vertical 
 
 Turning, wood 
 
 spindle 
 
 wood 
 
 Welding 
 
 vertical 
 
 Shaping 
 
 acetylene 
 
 vibrating 
 
 butt 
 
 automatic 
 
 Rolling 
 
 crank 
 
 electric 
 
 Sand-blast 
 
 vertical 
 
 spor 
 
 barrels 
 
 Shavers, bench 
 
 Wheel washing 
 
 cabinets 
 
 Shaving 
 
 Wiring, turning 
 
 [ 
 
 I ii 
 
 ] 
 
462 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 -2.4 
 
 Metals 
 
 In this classification are included all bar, cast, sheet and 
 pig metals of any kind whatsoever which are not actually made 
 up into definitely named articles. 
 
 Aluminum 
 
 pig 
 
 Steel 
 
 bar 
 
 sheet 
 
 component 
 
 sheet 
 
 Lead 
 
 high speed 
 
 Babbitt, bar 
 
 bar 
 
 high speed tool 
 
 Brass 
 
 cake 
 
 machine steel 
 
 bar 
 
 pig 
 
 Tin 
 
 sheet 
 
 sheet 
 
 block 
 
 Bronze 
 
 Magnolia 
 
 pig 
 
 bar 
 
 Manganese 
 
 sheet 
 
 block 
 
 Sheathing 
 
 Zinc 
 
 Iron 
 
 Sheeting 
 
 bar 
 
 bar 
 
 Solder 
 
 sheet 
 
 cast 
 
 Spelter 
 
 
 -2.5 
 
 Paint 
 
 In this classification are included all paints, varnishes, 
 shellac, rosin, tar and other supplies of like nature. 
 
 Drier 
 
 Lampblack 
 
 Preservative 
 
 japan 
 
 Lead 
 
 Putty 
 
 paint 
 
 sugar 
 
 Resin 
 
 Dry 
 
 white 
 
 Rosin 
 
 Enamel 
 
 red 
 
 Shellac 
 
 Filler 
 
 Lime 
 
 Stain 
 
 Finish, wall 
 
 Mixed 
 
 Tar 
 
 Gum, veneering 
 
 Pitch 
 
 Turpentine 
 
 Japan 
 
 Plaster of Paris 
 
 Whitewash 1 
 
 STORES LEDGER 
 
 -2.6 
 
 463 
 
 Paper 
 
 In this classification are included all bulk paper, cardboard, 
 made up pasteboard boxes, etc., etc. 
 
 Bags 
 
 oil 
 
 colored 
 
 mailing 
 
 press 
 
 manila 
 
 mails 
 
 straw 
 
 white 
 
 Board 
 
 tag 
 
 Paper 
 
 beaver 
 
 Boxes 
 
 wrapping 
 
 binders 
 
 cardboard 
 
 writing (in bulk, 
 
 bristol 
 
 pasteboard 
 
 uncut) 
 
 illustrating 
 
 Cardboard 
 
 
 -2.7 
 
 Stationery 
 
 In this classification are included all cut paper, letter-heads, 
 envelopes, forms (printed and blank), pens, pencils, etc. 
 
 I 
 
 Bands, rubber 
 
 prepared 
 
 steel 
 
 Binding devices 
 
 Charcoal, artists' 
 
 Films, pack 
 
 loose-leaf 
 
 Clips 
 
 Folders, paper 
 
 passe-partout 
 
 board 
 
 Frames 
 
 Brushes 
 
 brass 
 
 label 
 
 artists* 
 
 paper 
 
 map 
 
 copy 
 
 spring 
 
 printing 
 
 draftsmen's 
 
 steel 
 
 Glasses, drinking 
 
 mucilage 
 
 photo 
 
 Gum arable 
 
 paste 
 
 Compasses 
 
 Ink 
 
 Calendars 
 
 beam 
 
 colored 
 
 desk 
 
 pen 
 
 copying 
 
 wall 
 
 pencil 
 
 drawing 
 
 Cards 
 
 Cups, paint 
 
 duplicating 
 
 guide 
 
 Cushions, pin 
 
 fountain pen 
 
 index 
 
 Cutters, paper 
 
 indelible 
 
 manila 
 
 Edges, straight 
 
 marking 
 
 pressboard 
 
 Envelopes 
 
 numbering machine 
 
 Chalk 
 
 Eradicator 
 
 stamp pad 
 
 crayons 
 
 Erasers 
 
 stencil 
 
 French 
 
 rubber 
 
 Inkstands 
 
 
^1™f' 
 
 464 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 ' 
 
 Instruments, drawing 
 Knives 
 office 
 
 pencil sharpening 
 Labels, gummed 
 Magnets 
 Mallets 
 Mucilage 
 Pads 
 chair 
 desk 
 
 numbering machine 
 stamp 
 typewriter 
 Paper 
 backing 
 
 billing machine 
 binding 
 black print 
 blue print 
 bond 
 bromide 
 carbon 
 
 computing machine 
 detail drawing 
 detail manila 
 developing 
 drawing 
 filter 
 fly 
 
 gummed 
 impression 
 India 
 ledger 
 
 machine finish 
 manila 
 map 
 
 note 
 off-set 
 onion skin 
 paraffine 
 photostate 
 photographic 
 platinum 
 process 
 sketching 
 stencil 
 tissue 
 typewriter 
 Paste 
 Pencils 
 artists' 
 automatic 
 camel's hair 
 carpenter 
 colored 
 lead 
 slate 
 Pens 
 bow 
 drafting 
 fountain 
 lettering 
 ruling 
 steel 
 
 stylographic 
 swivel curve 
 Pins 
 Plates 
 
 photographic 
 printing 
 Pounces 
 Racks 
 pen 
 
 stamp 
 Ribbons 
 
 adding machine 
 
 computing machine 
 
 dating stamp 
 
 duplicating machine 
 
 typewriter 
 Rulers *' 
 
 drawing 
 
 parallel 
 
 patent 
 
 shde 
 Scales 
 
 automatic 
 
 coin 
 
 drafting 
 letter 
 Scissors 
 Silk, oiled 
 Sponges 
 Tabs, index 
 Tacks 
 push 
 thumb 
 Tags 
 key 
 
 merchandise 
 
 shipping 
 Tank, developing 
 Tape 
 
 adhesive 
 
 gummed 
 
 linen 
 Thermometers 
 Trays, photo 
 Triangles 
 Wax, sealing 
 
 -2.8 
 
 Tools— Small and Hand 
 
 In this classification are included all small and hand tools 
 of any kind whatsoever. 
 
 Adzes 
 Anvils 
 Augers 
 Awls 
 
 book-makers' 
 ice 
 Axes 
 Bellows 
 Bevels 
 Bits 
 auger 
 expansion 
 plane 
 
 screw driver 
 twist drill 
 Blades 
 awl 
 saw 
 Braces 
 corner 
 ratchet 
 Brushes 
 cleaning 
 dusting 
 kalsomine 
 machinists* 
 marking 
 paint 
 radiator 
 sash tool 
 scrub 
 stencil 
 stipplers 
 toilet 
 varnish 
 whitewash 
 Calipers 
 Caulks 
 Chisels 
 cold 
 hot 
 Clamps 
 
 Combs, graining 
 Countersinks 
 
 STORES LEDGER 
 
 metal 
 wood 
 Couplings 
 Cups 
 force 
 plumber 
 Cutters 
 glass 
 pipe 
 Dies 
 
 pipe cutter 
 stamp 
 stencil 
 stock 
 Dividers 
 bow 
 
 hair-spring 
 proportional 
 Drills 
 
 auto boring 
 breast 
 carbon steel 
 hand 
 
 high speed 
 metal 
 miller's 
 machine 
 Stanley's 
 shank 
 star 
 taper 
 twist 
 
 wood, taper 
 wood, square 
 Files 
 bastard 
 flat 
 
 one-half round 
 rasp 
 round 
 triangular 
 Gages 
 Hammers 
 blacksmith 
 
 465 
 
 bookbinder's 
 bricklayer's 
 claw 
 
 engineer's 
 machinist's 
 planishing 
 riveting 
 sledge 
 tack 
 tinner's 
 upholstery- 
 Hones 
 oil 
 
 water 
 Instruments, preci- 
 sion gages, etc. 
 Irons, soldering 
 Jacks 
 
 hydraulic 
 lifting 
 wheels 
 Knives 
 drawing 
 hacking 
 putty 
 
 shoemaker's 
 Levels 
 
 carpenter's 
 
 hand 
 Mattocks 
 Microscopes 
 Mops 
 Mortars 
 
 glass 
 
 porcelain 
 Moulds 
 Mowers, lawn 
 Oilers 
 
 brass 
 
 copper 
 
 iron 
 Picks 
 
 concrete 
 
 railroad 
 
 M 
 
 \ 
 
466 UNIFIED ACCOUNTING FOR INDUSTRIALS 
 
 Pincers 
 
 tinner's 
 
 blacksmith's 
 
 Planes 
 
 trimmer's 
 
 chain 
 
 Plungers, screwdriver 
 
 Shovels 
 
 ice 
 
 Points, glazier's 
 
 D handle 
 
 Trowels 
 
 Pumps 
 
 L handle 
 
 brick 
 
 force 
 
 post-hole 
 
 cement 
 
 section 
 
 S handle 
 
 circle 
 
 suction 
 
 scoop 
 
 corner 
 
 Reamers, hand 
 
 snow 
 
 garden 
 
 Saws 
 
 Spades 
 
 plastering 
 
 circular 
 
 D handle 
 
 pointing 
 
 coping 
 
 L handle 
 
 Vises 
 
 crosscut 
 
 S handle 
 
 chain 
 
 hack 
 
 Spatulas 
 
 hand 
 
 hand 
 
 Squares 
 
 machinist's 
 
 rip 
 
 carpenter's 
 
 saw 
 
 Scrapers 
 
 machinist's 
 
 Wrenches 
 
 paint 
 
 Swedges 
 
 hand 
 
 wood 
 
 Tampers 
 
 monkey 
 
 Shears 
 
 concrete 
 
 stillson 
 
 grass 
 
 railroad 
 
 tap 
 
 hedge 
 
 Tongs 
 
 
 -2.9 
 
 This number section provides for a possible future sub- 
 division of one of the now existing classes should it be deemed 
 necessary. 
 
 INDEX 
 
 (Form references are to pages.) 
 
 Accounting, 
 commercial, 241-264 
 industrial, 
 elements of production con- 
 stant, 6 
 standards developed, 6 
 unified, 9, 10 
 purposes of, 28 
 Accounts, 
 analytical, 
 
 cost accounting requires, 7 
 controlling, 265-315 
 asset accounts, 270, 272-281 
 chart of, 269, 270 
 
 Forms, 444 
 liability accounts, 270, 299- 
 
 310 
 moral effect of, 33, 34 
 nomenclature of, 9, 10 
 principles applied to pro- 
 duction costs, 9, 10 
 profit and loss accounts, 
 
 270, 271, 310-315 
 purpose of, 267-269 
 stores, component, 98, 99 
 unify cost and general ac- 
 counting, 268 
 payable, 
 cash disbursed, entry, 253 
 controlling account, 301 
 datings, controlling ac- 
 count, 302 
 personal, 264 
 voucher system, 243-249 
 
 467 
 
 receivable, 
 cash receipts, entry, 251 
 consigned, asset account, 
 
 274, 275 
 controlling account, 273, 274 
 past due, controlling ac- 
 count, 274 
 suspense, controlling ac- 
 count, 275, 276 
 Advanced expense (Sec "Ex- 
 pense, advanced") 
 Advertising expense, 
 advanced, 278 
 
 distribution of selling expense, 
 263 
 Allowances (Sec "Rebates and 
 
 allowances") 
 Analysis sheet, sales, 239 
 
 Forms, 430 
 Assembling, 
 production order, 62 
 material distribution, 106 
 Forms, 368 
 requisitions, 103, 104 
 Forms, 365 
 Assets, 
 
 accounts, controlling, 270, 272- 
 
 298 
 current, 270 
 fixed, 
 repairs chargeable to depre- 
 ciation, 7 
 inventory, 270 
 
 classification of, 329 
 investments, 270 
 
 ! 
 
II 
 
 468 
 
 INDEX 
 
 B 
 
 Balance sheet (monthly), 27-40 
 Forms, 343-347 
 executive's viewpoint, 33-36 
 
 collections, 34 
 financier's viewpoint, 30-32 
 earning capacity, 31 
 solvency of company, 31 
 industrial manager's, 27-40 
 
 Forms, 342-347 
 manufacturer's viewpoint, 36 
 time of completion, 30 
 unified, 
 availability and value, 38, 39 
 Betterments, 181-183 
 order record, 233 
 orders, 182, 183 
 Forms, 393 
 defined, 168 
 
 distribution of copies, 182 
 numbering of, 182 
 time ticket (daily), 183 
 
 Forms, 401 
 "work in progress," treatment 
 of, 182. 183 
 Blue prints (See "Drawings and 
 
 tracings") 
 Board, 
 control or planning, 190 
 
 Forms (insert), 404 
 machine, 193, 194 
 Bonds, 
 controlling account, 308 
 redemption fund, 
 
 controlling account, 306 
 treasury, 279 
 Buildings, 
 controlling account, 289 
 depreciation on, 64, 290 
 
 reserve for, 305 
 equipment, 
 controlling account, 289, 290 
 depreciation on, 64, 290 
 Burden (Sec "Overhead") 
 
 Calculations, 
 extensions, handling of, 107, 
 108 
 Capital stock, 307, 308 
 common, 
 controlling account, 308 
 treasury, 280 
 preferred, 
 controlling account, 308 
 treasury, 279, 280 
 Card, time (See "Time card") 
 Cash, 
 bank controlling account, 272 
 disbursements (check), entry, 
 
 252-254 
 incoming, sheet, 250 
 
 Forms, 436 
 petty, 254-256 
 controlling account, 272, 273 
 "imprest system," 254 
 record, 254-256 
 voucher, 254-256 
 Cash sheet, incoming, 250-252 
 Censorship of materials, 73. 74 
 Charge voucher, 247 
 
 Forms, 434 
 Charts, 
 controlling accounts, 269 
 
 Forms, 444 
 graphic, 161-164 
 
 Forms (insert), 389 
 component schedule, 162 
 
 Forms. 390 
 order control, 188-189 
 Forms (insert), 404 
 pay-roll, 160 
 unit schedule, 162 
 Forms (insert), 390 
 organization, 223-224 
 
 Forms, 422 
 wages, 
 day work rates and piece-work 
 earnings, 202 
 
 INDEX 
 
 469 
 
 Check, 
 
 disbursements, record of, 252 
 Forms, 437 
 Claim voucher, 54 
 
 Forms, 355 
 Clerks, salaries of, 
 
 overhead distribution, 227 
 Clock card (See "Time card") 
 Commercial accounting (See "Ac- 
 counting") 
 Commercial expense distribution 
 sheet, 258-264 
 Forms, 442 
 Commission, expense (selling) 
 
 distribution, 262 
 Compensation of employees (See 
 
 "Wages") 
 Component stores (See "Stores, 
 
 component") 
 Control, 
 created by unified methods of 
 accounting, 28 
 Control board, 175 
 
 Forms (insert), 404 
 routine of, 190 
 Controlling accounts (See "Ac- 
 counts, controlling") 
 Costs (See also "Labor," "Over- 
 head," "Production") 
 flat (See "Costs, production") 
 primes, 67 
 production, 186, 187 
 accounts, analytical, 7 
 card, 236-238 
 
 Forms, 428, 429 
 commercial transactions not 
 
 included, 7 
 quantities made affecting, 14 
 reduced by volume output, 14 
 sales policy effect upon, 11 
 Credits, 
 expense, commercial, 263, 264 
 stores, general, 89, 90 
 Forms, 359 
 
 Day-work, 
 clock cards, 207, 217 
 
 Forms, 416, 419 
 daily production time tickets 
 
 and slips, 173 
 
 Forms, 396, 399 
 time sheet record, 213, 215, 216 
 
 Forms, 417, 418 
 Debts, bad. 
 reserve for, controlling account, 
 
 306 
 Defective repairs, 
 rejection for, 188 
 
 Forms, 404 
 time ticket, daily, 177, 178 
 
 Forms, 400 
 Demonstrations, 262 
 Depreciation, 
 accounting, principle same in all 
 
 industrials, 6 
 buildings, 290 
 
 costs charged monthly with. 32 
 departmental overhead, 
 
 basis of calculation, 230, 231 
 drawings and tracings, 65 
 equipment, building, 290 
 equipment, by obsolescence, 6 
 investments, reserves for, 286 
 material, by obsolescence, 6 
 monthly, overhead distribution, 
 
 230, 231 
 rates of, 64, 65 
 recovery through repair orders, 
 
 234 
 reserves for, 
 
 buildings, controlling account, 
 305 
 
 patents, controlling account, 
 305 
 
 plant repairs, 184 
 Dewey decimal system, 
 classification of betterment 
 
 orders, 64, 65 
 
470 
 
 INDEX 
 
 I 
 
 Dewey decimal system — continued 
 classification of stores, 
 Forms, 449 
 Dies, 
 depreciation on, 65 
 standardization of, 116 
 Dies, jigs, and fixtures, 
 
 controlling account, 293, 294 
 Disbursements, 
 petty cash, 254-256 
 Form, 439 
 Discount, 
 allowed, 
 expense (commercial) distri- 
 bution sheet, 261 
 earned (cash), 
 expense (commercial) credit, 
 264 
 purchase, 
 
 cash disbursed, entry, 253 
 sales, cash receipts entry, 250 
 
 Distributions, 219-239 
 commercial expense, 258 
 
 Forms, 442 
 factory overhead sheet, 224-233 
 
 Forms, 423-426 
 organization on required, 221 
 production cost card, 236 
 
 Forms, 428, 429 
 record of production, betterment, 
 
 and repair orders, 233-236 
 
 Forms, 423 
 sales analysis sheet, 239 
 
 Forms, 430 
 
 Dividends declared, 
 controlling account, 309, 310 
 
 Drawings and tracings, 
 card index and record, 128, 129 
 
 Forms, 375 
 controlling account, 297 
 cost record covering, 128 
 depreciation on, 65 
 numbering of, 121 
 
 Earnings, 
 financier's viewpoint of balance 
 
 sheet, 31 
 Efficiency, 
 engineering (See "Engineering, 
 
 industrial") 
 factors, 
 
 labor stability, 22 
 
 nature of product, 22 
 Electrical service, 
 depreciation on, 64 
 overhead distribution, 231 
 Employees, 
 absentees' report, 203 
 
 Forms, 411, 413 
 department, change of, 203 
 
 Forms, 413 
 dismissed, 204-206 
 Forms, 414 
 
 monthly record, Forms, 415 
 pay-roll system, 206, 207 
 quitting card, 204, 205 
 
 Forms, 414 
 rate card, 201 
 
 Forms, 411 
 rate, change in, 203 
 
 Forms, 412 
 record of, 205 
 
 Forms, 414 
 resignations, 204-206 
 
 monthly record, Forms, 415 
 time or clock card, 207, 217 
 
 Forms, 416, 419 
 time sheet, 209, 215 
 
 Forms, 417, 418 
 Employment, (See also "Labor") 
 application for, 199, 200 
 
 Forms, 406-408 
 Engineering, industrial, 3-24 
 conditions necessitating, 3-5 
 phases of, 5, 6 
 principles of, 6, 7 
 purpose of, 5 
 
 INDEX 
 
 47 A 
 
 Engineering, industrial— cow/mM^d 
 
 qualifications required, 5, 6 
 Entertainment, 
 expense (selling) distribution, 
 262 
 Equipment, (See also "Machines") 
 balance of, 16, 17 
 
 idle machines, 15, 17 
 depreciation, 5, 290 
 machine tool, 
 
 analyzing and grouping of, 
 116, 133-148 
 miscellaneous, 
 controlling account, 295, 296 
 overhead distribution, 229, 230 
 obsolete, controlling account, 307 
 record, 332 
 Forms, 447 
 Erasures, 
 
 errors not to be changed by, 250 
 Error in incoming cash sheet, cor- 
 rection of, 250 
 Executive, balance sheet as viewed 
 
 by, 33-36 
 Expense, (See also "Overhead") 
 advanced, 
 advertising, 278 
 development and experimental 
 work, controlling account, 
 298 
 insurance, 277 
 salesmen, 278 
 commercial or office, 
 controlling account, 312 
 credits, 263, 264 
 distribution sheet, 258-261 
 Forms, 442 
 distribution of, 7, 8 
 clement of production cost, 6 
 
 legal, 
 
 expense (commercial) distri- 
 bution sheet, 260 
 overhead distribution, 230-232 
 
 Forms, 423-426 
 
 patents, 
 expense (commercial) distri- 
 bution sheet, 260 
 percentage based on net sales, 
 
 258 
 selling, 261-263 
 Express (See "Freight and ex- 
 press") 
 
 Factory materials (See "Ma- 
 terials") 
 Factory overhead sheet for distri- 
 butions. 
 Forms, 423-426 
 Failures, industrial, 
 
 causes of, 7, 8 
 Filing, 
 
 drawing and tracing index, 128 
 key card, 126 
 
 material receipt and notice, 53 
 pattern record cards, 130 
 purchase orders, 51, 52 
 Finances, 
 
 scheduling requirements, 159-161 
 Financier, 
 balance sheet as viewed by, 30- 
 32 
 Finished stores (See "Stores, fin- 
 ished") 
 Fixtures (See "Furniture and 
 equipment," "Tools and fix- 
 tures") 
 Follow-up (See "Tickler") 
 Foremen, 
 wages of, 
 overhead distribution, 228 
 Foundry, 
 costing on, 
 "per pattern" basis, 9 
 "per pound" basis, 9 
 Freight and express, 
 bills, approval of, 55, 56 
 
 1 
 
 
472 
 
 INDEX 
 
 ■I 
 
 Freight and Express — continued 
 
 commercial, 
 
 cash receipts, entry, 250 
 expense distribution sheet, 260 
 
 overhead distribution, 232 
 Fuels and lubricants, 
 
 overhead distribution, 230 
 Furniture and equipment, office, 
 
 controlling account, 291 
 
 depreciation on, 65 
 
 Gages, 
 depreciation on, 65 
 standardization of, 116 
 General stores (See "Stores, gen- 
 eral") 
 Goods returned, 
 accounting for, 111, 112 
 memorandum, 110, 111 
 Forms, 369 
 
 Improvements (See "Better- 
 ments") 
 Incoming cash sheet, 250 
 
 Forms, 436 
 Index, 
 dies, jigs, fixtures, gages, 116 
 drawings and tracings, 128, 129 
 purchase orders, 52, 53 
 
 Forms, 355 
 stores record, 77, 80-86 
 Indirect labor (See "Labor, non- 
 productive") 
 Industrial accounting (See "Ac- 
 counting, industrial") 
 Industrial engineering (See "En- 
 gineering, industrial") 
 Industrial manager (See "Man- 
 ager, industrial") 
 Industrials, 
 balance sheet as viewed by manu- 
 facturer, 36-38 
 
 failure of, causes, 4, 5, 7 
 loans to, ratio to assets, 4 
 organization, divisions of, 221, 
 
 222 
 standards lacking, effect of, 4 
 
 Inspector's punch, 
 production ticket, 176, 177 
 
 Instruction card, 
 production ticket, 175 
 Forms, 396-398 
 
 Insurance, 
 
 expense, advanced, 277 
 
 monthly, overhead distribution, 
 231 
 
 stock, expense (commercial) dis- 
 tribution sheet, 261 
 
 Interest, 
 
 accrued, general, 
 controlling account, 303 
 
 accrued on bonds, 
 controlling account, 304 
 
 paid, expense (commercial) dis- 
 tribution sheet, 261 
 
 received, expense (commercial) 
 credit, 264 
 Introduction card, new employee, 
 201 
 
 Forms, 412 
 Inventory, 317-333 
 
 accounts, 282-286 
 
 classification of assets, 327 
 
 drawings and tracings, 128, 129 
 
 equipment record, 332, 333 
 Forms, 447 
 
 formal announcement, 321 
 
 organization required, 319 
 
 perpetual, factor in stores sys- 
 tem operation, 167 
 
 pricing of, 329, 330 
 
 specifications, 321-326 
 
 tag, 321, 322, 330-332 
 Forms, 446 
 
 work in progress, 329 
 
 INDEX 
 
 473 
 
 InTCfitment, 
 accounting, f rindple same in all 
 
 industrials, 6 
 accounts, 286 
 reserves for depreciation, 286, 
 
 287 
 Invoices, purchase, 
 duplicate copies of, 
 
 when necessary, 53, 54 
 method of handling, 53-56 
 receipts, checking of, 50 
 
 Jigs, 
 depreciation on, 65 
 standardization of, 116 
 
 Journal, 
 register, 256, 257 
 
 Forms, 440 
 voucher, 256, 257 
 Forms, 441 
 
 Key card, 
 die, 139 
 filing of, 126 
 fixture and die, 139 
 
 Forms, 380 
 operation, 146, 147 
 
 Forms, 385 
 part, 104, 120. 124. 125 
 
 Forms, 373 
 piece, 104, 120, 122-124 
 
 Forms, 372 
 preparation and care of, 126 
 production data shown on, 127 
 tool, 137, 138 
 
 Forms, 379 
 tool set-up, 
 
 Forms, 379 
 unit, 104, 120, 125 
 
 Forms, 374 
 
 Labor (Sec also "Costs," "Pay- 
 rolls," "Employees") 
 account, 280, 281 
 capacity, 117 
 check upon cost, 160 
 costs, 
 
 distribution, 214, 216 
 
 variation in, check upon, 160, 
 161 
 day-work (See "Day-work") 
 distribution sheets, 209 
 
 Forms, 423 
 element of production cost, 6 
 employee's change in rate card, 
 
 203 
 
 Forms, 412 
 employee's rate card, 201, 202 
 
 Forms, 411 
 employment, 
 
 application for, 199, 200 
 Forms, 406-408 
 
 introduction card, 201 
 Forms, 412 
 general expense (commercial) 
 
 distribution sheet, 259 
 non-productive, 159, 180, 181 
 
 overhead distribution, 227, 22H 
 Forms, 423 
 
 time sheet record, 212 
 Forms, 417 
 
 time ticket (daily), 180, 212 
 Forms, 403 
 payment of, 
 
 day work, 173 
 
 period, 206 
 
 piece work, 173 
 
 premium method, 173 
 piece-work (See "Piece-work") 
 premium work (See "Premium 
 
 method") 
 productive, 158, 159 
 reference inquiry letters, 200 
 
 Forms, 409 
 
474 
 
 INDEX 
 
 INDEX 
 
 475 
 
 Labor — continued 
 requisition for help, 201 
 
 Forms, 410 
 scheduling, 158, 159 
 selling expense distribution 
 
 sheet, 262 
 stability of, 
 eflSciency development affected 
 
 by, 22 
 employees' resignations and 
 
 dismissals, 204-206 
 motion study dependent upon, 
 146 
 standardization of, 18, 19 
 time sheets, 209-217 
 
 Forms, 417, 418 
 time tickets and slips (See "Time 
 
 tickets," "Time slips") 
 timing of, 176-179, 180, 181 
 "turnover," defined, 18 
 waiting time, 177, 212 
 Ledger, 
 general, 257, 258 
 stores (Sec "Stores record") 
 Legal expense (Sec "Expense, 
 
 legal") 
 Liabilities, 
 accounts, controlling, 270 
 capital, bonds, and mortgages, 
 
 271 
 current, 271 
 reserves, 271 
 Loans, 
 industrials' borrowing capac- 
 ity, 4 
 .merchants' borrowing capac- 
 ity. 4 
 Location card, patterns, 131 
 
 Forms, 376 
 Loss (See "Profit and loss") 
 
 Machines, (See also "Equip- 
 ment") 
 
 analysis of operations, 
 standardization through, 19, 
 20 
 and tools, 
 
 controlling account, 291, 292 
 capacity, balance of, 117 
 depreciation on, 65 
 numbering of, 135, 136 
 study card, 135, 136 
 
 Forms, 378 
 tabulating, 
 "Hollerith," 339 
 "Powers," 339 
 tool equipment, 
 analyzing and grouping of, 
 133-148 
 Management (See "Scientific 
 
 management") 
 Manager, 
 employment, 199 
 industrial, 
 balance sheet (monthly) of, 
 25-40 
 
 Forms, 342-347 
 duties of, 27, 28 
 report (daily) for, 30, 39, 40 
 Forms, 348, 349 
 Manufacture, continuous, 
 
 defined, 68, 69 
 Manufacturers (See "Industri- 
 als") 
 Manufacturing (See "Produc- 
 tion") 
 Material (See also "Stores") 
 censorship of, 73, 74 
 classification of, 80-86, 449 
 depreciation by obsolescence, 
 
 6 
 element of production cost, 6 
 factory, classification of, 80-83 
 manufacturing supplies, 82, 83 
 obsolete, controlling account, 
 
 306, 307 
 office, classification of, 80, 81 
 
 Material— con^tnutfd 
 operating supplies, 81, 82 
 receipt and notice, 49, 157 
 Forms, 354 
 distribution of copies, 49 
 filing of, 53 
 requisitions for, 86-88, 172, 173 
 
 Forms, 359 
 routing of, 192-193 
 standardization of, 115 
 stores, general (See "Stores") 
 Merchandise, 
 returns of, 110, 111, 112 
 standards of operating, 4 
 Merchants, 
 
 loans to, ratio to assets, 4 
 Models, 62 
 
 standardization of, 115 
 Mortgages, controlling account, 
 
 308, 309 
 Motion study (See also "Time 
 study") 
 labor stability factor in use 
 
 of, 146 
 record card, 144-146 
 
 Forms, 382 
 schedule, 144 
 
 Forms, 383, 384 
 time allowance, 145 
 
 N 
 
 Non-productive labor (See "Labor, 
 non-productive" ) 
 
 Notes payable, 
 cash disbursed, entry, 253 
 cash receipts, entry, 251, 252 
 controlling account, 302 
 
 Notes receivable, 
 asset account, 276, 277 
 cash receipts, entry, 251 
 
 Numbering, method of, 
 pieces, parts, and units, 120, 121 
 
 Obsolescence, 
 depreciation due to, 6 
 parts or pieces, 155 
 repaired value offset by, 234 
 Office, 
 appliances, 
 systematizer, work of, 339, 
 340 
 material, classification of, 80, 81 
 Operation, 
 described not symbolized, 138 
 key card, 146, 147 
 
 Forms, 385 
 method of, variation in, 143, 
 
 144 
 studies, 139, 140 
 study card, 140-144 
 Forms, 381 
 Operations, 
 rotation of, 116, 120 
 
 advantages of, 142, 143 
 standardization of, 116 
 tabulation of, 116 
 time studies covering, 116 
 Orders, 
 betterment, 64, 168, 182, 183 
 
 Forms, 393 
 central station, 188-190 
 classification of, 59, 167 
 contract or sales, defined, 60 
 control board, 175, 190 
 Forms (insert), 404 
 control chart, 188, 189 
 Forms (insert), 404 
 manufacturing, 60, 61, 62, 152, 
 153, 169-170 
 Forms, 388 
 production, 169-170 
 Forms, 392 
 assembly (See "Orders, pro- 
 duction, assembly, below) 
 classes of, 62 
 defined, 61, 168 
 
476 
 
 INDEX 
 
 Orders — conimued 
 production — continued 
 distribution of, 170 
 distribution, depsirtmental, 
 
 105, 106 
 material distribution, 104 
 
 Forms, 367 
 numbering of, 169 
 origin of, 61 
 processing, defined, 62 
 prorating, 63, 64 
 record, 233-235 
 
 Forms, 427 
 stores, defined, 63 
 production, assembly, 62 
 distribution covering, 106 
 extensions on distribution 
 
 sheets, 107, 108 
 material distribution, 106 
 
 Forms, 368 
 prorating, 179, 180 
 defined, 168, 169 
 time tickets (daily). 
 
 Forms, 402 
 purchase, 47 
 
 Forms, 353 
 cancellation of, 55 
 contractural features of, 47 
 
 48 
 distribution of copies, 47, 48 
 filing of, 51, 52 
 index, 52, 53 
 
 Forms, 355 
 schedule, 156-157 
 
 Forms, 389 
 spoilage, excess to cover, 
 
 157 
 tickler, 48, 49 
 
 Forms, 354 
 record of production, better- 
 ment and repair, 233 
 
 Forms, 427 
 repair, 66, 168. 184, 234 
 
 Forms, 394 
 
 stores clerk, 67, d8, 101 
 Forms, 369 
 Organization, 221-224 
 chart, 223 
 
 Forms, 422 
 commercial, 222 
 defined, 221, 222 
 functions, classification of, 
 
 221-223 
 production, '222, 223 
 Overhead (See also "Costs," 
 "Expense") 
 analysis, 264 
 classes of, 232, 233 
 controlling account, 312, 313 
 distribution of, 224-233 
 Forms, 423-426 
 classification (Dewey deci- 
 mal system), 225 
 common percentage not 
 
 equitable, 8 
 costs, non-productive labor, 
 
 159 
 departmental method nec- 
 essary, 7, 8 
 error in, 8 
 expense, 230-232 
 factory, controlling account 
 
 as medium, 7 
 labor, 227, 228 
 materials, 228 
 purpose of, 225, 226 
 redistribution, 232 
 standing order method ob- 
 solete, 226 
 foundry, 
 
 "per pattern" basis, 9 
 "per pound" basis, 9 
 manufacturing order to re- 
 cord, 60, 61 
 non-productive department as 
 
 origin, 232, 233 
 productive department as ori- 
 gin, 232 
 
 IND&X 
 
 477 
 
 Orerhead — c^ntinned 
 
 prorated, 233 
 
 redistribution of, 232, 233 
 
 unclassified, 
 distribution of, 232 
 Overtime, time sheets, 
 
 recording of, 211, 212 
 
 Parts, 
 "common to all" practice, 118 
 
 manufacturing plan, 154, 155 
 defined, 62, 122 
 finished or semi-finished, 
 
 purchase of, 117, 118 
 key card, 104, 120. 124, 125-127 
 
 Forms, 373 
 special, cost of scrapping, 119 
 standardization of, 115 
 Patents, 
 controlling account, 297, 298 
 depreciation, 65 
 
 reserve for, 305, 306 
 expenses, 260 
 Patterns, 
 asset, 129 
 
 exceptions, 129 
 controlling account, 296, 297 
 depreciation, 65 
 location cards, 131 
 
 Forms, 376 
 record card, 129-131 
 Forms, 376 
 Pay check, 
 and time or clock card, 208, 
 217 
 Forms, 416, 419 
 Payable, accounts (See "Accounts 
 
 payable") 
 Payable, notes (See "Notes pay- 
 able") 
 Pay-rolls (See also "Labor") 
 clock or time cards, 208, 217 
 Forms, 416, 419 
 
 day-rate method, 
 piece-work adjustment ay- 
 plied to, 215, 216 
 employees' receipt, 208 
 "four-times-a-month" system, 
 
 206-207 
 graphic charts of, 
 
 check on labor, 160 
 method of making up, 207 
 time sheets, 209-218 
 Forms, 417, 418 
 Petty cash, 254-256, 272, 273 
 disbursement sheet, 254 
 
 Forms, 439 
 voucher, 254 
 Forms, 438 
 Pieces, 
 defined, 62, 122 
 key cards. 104, 120, 122-124 
 
 Forms, 372 
 standardization of, 115 
 tabulation of, 116 
 Piece-work, 
 
 clock cards, 207, 217 
 
 Forms, 416, 419 
 earning capacity, 148 
 scientific management applied 
 
 to, 20, 21 
 time sheet record, 213, 215, 216 
 
 Forms, 417, 418 
 time tickets and slips, 173 
 Forms, 397, 399 
 Planning, 
 board, 193-195 
 
 Forms (insert), 404 
 central station, 167 
 system, 188, 189, 190 
 Plant, 
 betterments, 181-183 
 
 Forms, 393, 401 
 capacity, 
 labor schedule based on 
 
 analysis, 158 
 utilizing, 116-119 
 
 II 
 
478 
 
 INDEX 
 
 i 
 
 I 
 a 
 
 Plant — continued 
 repairs, 181, 183-186 
 Forms, 394, 402 
 Postage, 
 expense (selling) distribution, 
 263 
 Power and light equipment, 
 
 controlling account, 292, 293 
 Power plant, depreciation on, 65 
 Premium method of paying em- 
 ployees, 
 clock cards, 207, 217 
 
 Forms, 416, 419 
 earning capacity, 148 
 time sheet record, 213, 215 
 
 Forms, 417, 418 
 time tickets and slips, 173 
 Forms, 398, 400 
 Price, stores record, 78, 79 
 Processing, 
 factors, 
 expense, labor and material, 
 38 
 production order, 62 
 Product (See also "Produc- 
 tion") 
 finished, 
 controlling account for 
 
 each, 310, 311 
 labor, material and expense 
 converted into, 165-195 
 unfinished (See "Stores, com- 
 ponent") 
 Production (See also "Costs," 
 "Operation") 
 assembly production order, ma- 
 terial distribution, 106-108 
 Forms, 308 
 costs, 186, 187 (See also 
 "Costs, production") 
 card, 236-238 
 
 Forms, 428, 429 
 reduced by unified output, 
 12 
 
 reduced by volume output, 
 14 
 
 stabilizing by depreciation 
 
 charge to liabilities, 234 
 variety of items increases, 10. 
 department, 
 cost, 158, 159 
 key card, use of, 127 
 elements of, 6, 226, 227 
 factors of, 
 expense, labor and material, 
 38 
 handling of, 113-131 
 
 analysis of, 115, 116 
 haphazard, results due to, 23 
 ledger, 233-236 
 
 orders, 169-170 (See also 
 "Orders, production") 
 Forms, 392 
 defined, 168 
 distribution of material, 104 
 
 Forms, 367 
 record, 233, 234, 235 
 Forms, 427 
 pace-making department, 117 
 parts balance schedule basis, 
 
 116 
 preparation for handling, 113- 
 
 131 
 rate-setting, 117 
 record clerk, duties of, 104 
 sales policy controlling, 118 
 schedule, 119, 120, 153-156 
 
 Forms, 389 
 standardized output, 15, 16 
 terminology used, 62 
 time slip (daily), day-work, 
 173 
 Forms, 399 
 time slip (daily), piece-work, 
 173 
 Forms, 399 
 time slip (daily), premium, 173 
 Forms, 400 
 
 INDEX 
 
 479 
 
 Production — continued 
 time tickets, 173-177 
 Forms, 396-398 
 day-work, 173 
 Forms, 396 
 distribution of, 175 
 numbering of, 174 
 piece-work, 173 
 
 Forms, 397 
 premium, 173 
 Forms, 398 
 unified output, cost reduced 
 by, 12, 13 
 Profit and Loss, 
 accounts, controlling, 270 
 general, controlling account, 
 
 314, 315 
 monthly, controlling account, 
 314 
 Prorating orders, 63, 64, 168, 169, 
 179. 180 
 time tickets, 180 
 Forms, 402 
 Purchasing 
 and receiving, 41-56 
 department, 
 key cards, use of, 127 
 work of, 43 
 orders, 47 (See also Orders, 
 purchase") 
 Forms, 353 
 requisitions, 44 
 
 Forms, 352 
 specifications covering ma- 
 terial, 43 
 voucher system, 243-249 
 Forms, 432 
 
 Railroads, 
 depreciation on, 65 
 equipment, depreciation, 65 
 
 Rate 
 compensation, basis of, 117 
 
 memo, 147, 148 
 Forms, 386 
 Real estate, 
 controlling account, 288 
 depreciation not written off, 
 
 64 
 
 Rebates and allowances, 
 expense (selling) distribution, 
 262 
 Receipt and notice, material, 49, 
 53 
 Forms, 354 
 Receivable, accounts (Sec "Ac- 
 counts receivable") 
 Receivable, notes (Sec "Notes 
 
 receivable") 
 Record, 
 check, 252 
 
 Forms, 437 
 drawing and tracing, 128, 129 
 
 Forms, 375 
 equipment, 332 
 
 Forms, 446 
 machine study card, 135-137 
 
 Forms, 378 
 motion study, 144-146 
 
 Forms, 382 
 patterns, 129-131 
 
 Forms, 376 
 petty cash disbursements, 254 
 
 Forms, 439 
 price, perpetual, purchasing de- 
 partment, 49 
 production, betterment and 
 repair orders, 233 
 Forms, 427 
 stores, component, 95, 97 
 
 Forms, 362 
 stores, finished, 99 
 
 Forms, 363 
 stores, general, 75-80 
 
 Forms, 358 
 voucher, 248 
 Forms, 435 
 
48o 
 
 INDEX 
 
 INDEX 
 
 481 
 
 I 
 
 Record — continued 
 waiting time (daily), 178 
 Forms, 401 
 Recorder, stores, 72, 73 
 Reference inquiry letter 200 
 
 Forms, 409 
 Register, journal, 256, 257 
 
 Forms, 440 
 Rejections, 
 defective repairs, 188 
 
 Forms, 404 
 scrap, rejected for, 187, 188 
 Forms, 403 
 Rent, 
 expense (commercial) distri- 
 bution sheet, 261 
 overhead distribution, 231 
 Repairs, 
 assets, fixed, 
 
 depreciation charged, 7 
 defective, 
 rejected as, 188 
 
 Forms, 404 
 time ticket (daily), 177, 178 
 Forms, 400 
 merchandise sold, 
 sales department transac- 
 tion, 111, 112 
 plant, 168, 183-186 
 order, 66, 168, 184 
 
 Forms, 394 
 order record, 233 
 
 Forms, 427 
 reserves chargeable with, 66 
 time ticket (daily), 185 
 Forms, 402 
 Report, 
 general manager's daily, 39, 40 
 
 Forms, 348, 349 
 verbal information unreliable, 27 
 Request tickets, material, 73, 74 
 Requisitions, 
 assembly, 103, 104 
 Forms, 365 
 
 component store, 97, 99 
 for help, 201 
 Forms, 410 
 general stores, 86-89 
 Forms, 359 
 routing tag to accompany, 
 88 
 purchase, 44-47 
 Forms, 352 
 shop stores. 
 
 Forms, 360 
 storekeeper's, 109 
 Forms, 369 
 Reservations, stores, 69 
 Reserves, 
 bad accounts, 
 
 controlling account, 306 
 commercial expense distribution 
 
 sheet, 261 
 controlling accounts, 304-306 
 depreciation, 184 
 of buildings, controlling ac- 
 counts, 305 
 of patents, controlling ac- 
 count, 305 
 investment, 286, 287 
 repairs, chargeable to, 66 
 Revenues, total, 
 
 controlling account, 310 
 Routing desk, routine of, 190-193 
 Royalties, 
 expense (commercial) distri- 
 bution sheet, 260 
 
 8 
 
 Salaries, 
 expense (commercial) distri- 
 bution sheet, 259 
 Sales, 
 analysis sheet, 239 
 
 Forms, 430 
 cost of, controlli«g tcc«u«t, 
 311 
 
 Sales — continued 
 department, 
 costs affected by policy of, 
 
 11 
 function of, 11, 12 
 goods returned, handling of, 
 110-112 
 expense percentages based 
 
 upon, 258 
 orders, 60 
 
 records, factor in determining 
 production, 23 
 Salesmen, advance expense, 278 
 Schedules, 149-164 
 department, use of key card, 
 
 127 
 importance of, 161 
 labor, 158, 159 
 master, 152, 159 
 
 Forms, 388 
 motion study, 144 
 Forms, 383, 384 
 production, 153-156 
 
 Forms, 389 
 purchase order, 156, 157 
 
 Forms, 389 
 purpose of, 151, 152 
 sales requirements, 116 
 scope of, 151, 152 
 Scientific management, 
 results of, 20, 21, 23 
 Scrap, rejected for, 187, 188 
 
 Forms, 403 
 Selling (See also "Sales depart- 
 ment") 
 profit affected by method 
 used, 12 
 Semi-finished stores (See 
 
 "Stores, component") 
 Shipping supplies, 
 
 overhead distribution, 228 
 Shop, 
 
 fixtures and fittings. 
 
 controlling accotinf, 294,20? 
 
 depreciation on, 65 
 stores, 68, 285, 286 
 requisition, Forms, 360 
 Shorts, 103, 107 
 
 elimination of, 108 
 Shows and demonstrations, 
 expense (selling) distribution, 
 262 
 Solvency, 
 financier's viewpoint of bal- 
 ance sheet, 31 
 Standardization, 
 
 advantages gained by, 118 
 Stock (See "Capital stock") 
 Stores (See also "Material," also 
 "Stores, general," below) 
 balance, daily report, 108 
 classes of, 68 
 component, 91-99 
 controlling account, 98, 99, 284 
 costing out, 94 
 defined, 68, 93, 94, 95 
 items excluded from, 93 
 record, 95-97 
 Forms, 362 
 requisitions for, 97, 98 
 "work in progress," method of 
 handling, 93 
 finished, 
 controlling account, 284, 285 
 defined, 68 
 
 items excluded from, 93 
 record, 99 
 
 Forms, 363 
 "work in progress," method of 
 handling, 93 
 general (See "Stores, general," 
 
 below) 
 receipts in, parts or pieces fin- 
 ished, 96 
 requirements as to, 68, 69 
 requisition, assembly, 103, 104 
 
 Forms, 365 
 reservation of, 69 
 
482 
 
 INDEX 
 
 Stores — continued 
 shop, 68, 285, 286 
 requisition, Forms, 360 
 Stores, general, 57-90 (See also 
 ''Stores," above) 
 classification, 80, 83-86 
 
 Forms, 449 
 control of, 74, 75 
 controlling account, 282 
 defined, 68 
 
 department floor plan, 76, 88 
 distribution, classification, 80 
 inventory should not exceed 
 
 sixty days requirements, 34 
 keeper (See "Stores keeper," be- 
 low) 
 ledger (See "Stores record," be- 
 low) 
 location chart, 76, 88 
 material returned to, 89, 90 
 
 Forms, 359 
 office material, 80 
 order, 67, 68, 109 
 
 Forms, 369 
 receipts, 49, 157 
 
 Forms, 354 
 record, 75-80 
 
 Forms, 358. 449-466 
 entries, 77-80, 157 
 functions of, 75 
 indexing of, 77, 80-86 
 prices, 78, 79 
 work in progress, 75, 76 
 recorder, requisitions, purchase, 
 
 45,46 
 requisitions, 86-88, 172, 173 
 
 Forms, 359 
 standardization, 59 
 voucher system, 244 
 Stores keeper, 71, 72 
 key card, use of, 127 
 order, 67, 68, 109 
 
 Forms, 369 
 responsibility of, 43, 46 
 
 Stores-keeping, 68-71 
 objects of, 108, 109 
 routine of, 69, 70 
 Studies, 
 machine, card, 135 
 
 Forms, 378 
 motion, 144-146 
 
 Forms, 382 
 operation, 139, 140-144 
 Forms, 381 
 Supplementary tag, 187 
 
 Forms, 403 
 Supplies, 
 manufacturing, 
 
 classification of, 82, 83 
 office, 
 expense (commercial) distri- 
 bution sheet, 260 
 expense (selling) distribution, 
 263 
 operating 
 classification of, 81, 82 
 defined, 228, 229 
 overhead distribution, 228, 229 
 shipping, 228 
 Surplus, controlling account, 309 
 Symbols, 
 material and process identifica- 
 tion, 61, 62 
 use of, advantage, 225 
 Systematizcr, work of, 335-340 
 
 Tag, 
 inventory, 321, 322, 330-332 
 
 Forms, 446 
 machine, 193, 194 
 rejected for defective repairs, 
 
 188 
 
 Forms, 404 
 rejected for scrap, 187, 188 
 
 Forms, 403 
 
 INDEX 
 
 483 
 
 Tag — continued 
 routing, requisitions for produc- 
 tion material to have, 88 
 supplementary, 187 
 
 Forms, 403 
 tracing. 170-172 
 Forms, 395 
 use of, work in progress, 96 
 workman's, 194 
 Taxes, 
 accrued, controlling account, 303 
 corporation, 
 expense (commercial) distri- 
 bution sheet, 260 
 overhead distribution, 231, 232 
 Telegraph and telephone, 
 expense (commercial) distribu- 
 tion sheet, 260 
 Tickler, 
 
 purchase order, 48, 49 
 
 Forms, 354 
 purchase voucher, 246 
 Forms, 433 
 Time, 
 card (clock card). 207, 217 
 Forms, 416, 419 
 checking against, 212 
 sorting of, 216 
 keeper, duties of, 207 
 lost (See "Waiting time") 
 sheet, 209-218 
 
 Forms, 417, 418 
 departmental and order distri- 
 bution, 216 
 use of, 209, 210 
 slip, 173 
 day-work, 173 
 Forms, 399 
 piece-work. 173 
 
 Forms, 399 
 premium work, 173 
 Forms. 4(X) 
 studies, operations to be covered 
 by, 116 
 
 ticket, 
 defective repairs, 177 
 
 Forms, 400 
 distribution of, 216 
 non-productive labor, 180 
 
 Forms, 403 
 plant betterments, 183 
 
 Forms, 401 
 plant repairs, 185 
 
 Forms. 402 
 production. 173 
 
 Forms. 396-398 
 prorating order, 180 
 
 Forms, 402 
 waiting time, 178. 212 
 Forms, 401 
 Tools, 
 and fixtures, 
 shop, depreciation on. 65 
 standardization of, 116 
 care of, 137 
 
 data for operation key card, 147 
 depreciation on. 65 
 key card. 137, 138 
 
 Forms, 379 
 set up key card, 138, 139 
 
 Forms. 379 
 small and hand, 
 
 classification of. 82 
 symbols assigned to. 137 
 Tracings (See "Drawings and 
 tracings") 
 tag. 170-172 
 Forms, 395 
 Transportation charges. 55, 56 
 Traveling, 
 expense (selling) distribution, 
 262 
 Treasury, 
 bonds, 279 
 stock, 279, 280 
 Trucking, 
 
 overhead, distribution, 228 
 Turnover, labor, 18 
 
484 
 
 INDEX 
 
 U 
 
 Unfinished stores (Cee "Stores, 
 
 component") 
 Unified balance sheet (See "Bal- 
 ance sheet") 
 Unit, 
 defined, 62, 121, 122 
 key cards, 104, 120, 135 
 
 Forms, 374 
 secondary, defined, 122 
 standardization of, 115 
 
 Voucher, 
 cash, petty, 254 
 
 Forms, 438 
 charge, 247, 248 
 
 Forms, 434 
 claim, 54 
 
 Forms, 355 
 journal, 257 
 
 Forms, 441 
 purchase, 243, 245-247 
 Forms, 432 
 
 charge voucher deducted, 247 
 
 tickler card, 246 
 Forms, 433 
 
 impaid file, 246 
 record, 243, 244, 248, 249 
 
 Forms, 435 
 system, 
 
 general stores under the, 244 
 
 void, disposition of, 255, 257 
 
 W 
 
 Wages, 
 day rata to be set, 202 
 department, change of, 203 
 
 Forms, 413 
 employees rate card, 201, 202 
 
 Forms, 411 
 piece rates, 202 
 
 reduction of, 202 
 premium earnings, 
 
 method of handling, 208 
 rate, change of, 202, 203 
 
 Forms, 412 
 Waiting time, 
 ticket, daily, 178 
 
 Forms, 401 
 time sheet record, 212 
 Work in progress, 
 
 betterments, treatment of, 182, 
 
 183 
 controlling account, 282-284 
 inventory, 329 
 stores, 
 
 as medium of handling, 69-71 
 
 component, relation between, 
 93 
 
 finished, relation between, 93, 
 94, 95 
 general stores record, 75, 76 
 
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