HARDWOOD RECORD 



31 



Veneer Cost Accounting 



By BURDIS ANDERSON 



Years ago, when logs were worth about 

 half their present value, when labor was ten 

 to twenty per cent cheaper than it is now, 

 when almost everything required for manufac- 

 turing veneers cost much less than at present, 

 and the selling prices of ^'eneers were about 

 the same that they are today, cost accounting 

 in a veneer factory was not such a vital neces- 

 sity as it now is, and therefore received far 

 less attention. 



The changed conditions in the veneer busi- 

 ness recall one of "Old Gorgon Graham's" 

 letters to his son; he wrote, "When I started 

 in the packing business it was all straight 

 sailing — no frills — just turning hogs into hog 

 meat — dry salt for the niggers down south 

 and sugar cured for the white folks up north" 

 — "We didn't have to know fractions to fig- 

 ure out our profits. Now a merchant needs 

 astronomy to see them, and when he locates 

 them they are out somewhere near the fifth 

 decimal place." 



With a narrowing, and in some cases com- 

 pletely eliminated, margin of profit, system- 

 atic and accurate figuring of costs became 

 absolutely imperative, and among the chief 

 purposes of the National Veneer & Panel 

 Manufacturers ' Association, organized in De- 

 cember, 1905, have been investigation, educa- 

 tion, and the dissemination of information 

 along the lines of cost accounting for veneer 

 and panel factories. 



All sorts of methods have been devised for 

 figuring costs of veneers, and hardly any 

 two manufacturers use similar systems. A 

 novice in the business usually figures that, 

 since the log rule makes liberal allowance for 

 slabs and saw kerf, all of which is cut into 

 veneers, the cost of veneers of any thickness 

 is easily ascertained by getting the average 

 cost per thousand feet of logs manufactured 

 into veneers and dividing by the number of 

 veneers required to make one inch in thick- 

 ness. A very little experience convinces one 

 that such cost is utterly ridiculous, and that 

 the log rule makes allowance for hardly half 

 the waste resulting from the many opera- 

 tions required to turn logs into merchantable 

 veneers. 



The next effort to figure costs may be to 

 find the average manufacturing cost by tak- 

 ing the total of all operations and general 

 expense accounts for a fixed period, and divid- 

 ing by the total number of feet of veneers 

 of all kinds and thicknesses manufactured 

 during the period; then, to find the total cost 

 per thousand feet of each thickness of veneers 

 produced, the estimated log cost for each 

 thickness is added to the manufacturing cost. 

 This method of figuring shows the cost of 

 manufacturing aU thicknesses of veneers to 

 be precisely the same, which is evidently ab- 

 surd, since, with the same operating expease, 

 a machine may turn out three times as many 

 surface feet of thin stock as of thick stock in 

 a given time. 



The balance sheet will demonstrate, event- 



ually, that such "cost accounting" is not 

 only worthless but positively dangerous; so 

 the next plan adopted is likely to be that of 

 keeping careful records of aU the logs, labor, 

 time of machines, and the exact proportion of 

 any and all expenses entering into the pro- 

 duction of each thickness of stock manufac- 

 tured. Where such records are accurate, they 

 show the true cost of each thickness of stock, 

 regardless of quality, size, or kind of wood; 

 but, as rotary cut stock is usually sold on 

 orders for special sizes and specific grades, 

 this system of keeping account of costs af- 

 fords hardly any reliable data upon which 

 profitable selling prices can be intelligently 

 figured. 



When all other methods of figuring veueer 

 costs have been proved to be incomplete and 

 unsatisfactory, we arrive at the inevitable 

 conclusion that reliable and accurate veneer 

 costs can be ascertained only by means of 

 some system that provides for a separate, de- 

 tailed record of the cost of each order or lot 

 of stock produced. Any such cost accounting 

 system for a veneer factory requires a great 

 deal of routine work and much careful atten- 

 tion, but it shows the approximate cost of 

 each grade, size, and kind of stock manufac- 

 tured, and helps greatly to place the factory 

 on a substantial business basis, which, with- 

 out accurate information as to costs, is im- 

 possible. 



While the systematic and intelligent figur- 

 ing of veneer costs is not generally practiced, 

 and cost accounting systems are in process 

 of evolution, many decidedly discouraging 

 experiences are likely to arise from the fact 

 that any manufacturer who inaugurates a 

 complete system and ascertains to a nicety 

 the cost of each item that he manufactures, 

 may meet intelligent competition and find it 

 diflBcult to obtain profitable prices, or even 

 cost, for many items of his product. 



Until uureasoning and ignorant competition 

 is eliminated, there will always be some un- 

 sophisticated tyro or self-sufScient ignoramus 

 to go merrily on his precarious way basing 

 prices upon visionary theory, vain hope, im- 

 agination and guesswork, as irresponsibly 

 happy, and as blissfully ignorant of real con- 

 ditions, as a crazy canary advocating vege- 

 tarianism at a cat 'a convention. 



Through the efforts of our association and 

 the influence of our friends among the trade 

 papers, a considerable interest in cost ac- 

 counting has been aroused among veneer man- 

 ufacturers; but an ideal cost accounting sys- 

 tem, acceptable and satisfactory under all 

 conditions, is yet to be formulated. 



is selling for ten dollars and less. To afford 

 any reasonable profit in manufacture, the price 

 should be at least twelve dollars. This price 

 would mean twenty per cent more to the 

 veneer manufacture and add two to three per 

 cent to the cost of doors. Surely an extra 

 price of even five per cent on the cost of 

 doors would not militate against house build- 

 ing in the least. The present absurd price 

 on veneer stock means the pauperizing of the 

 veneer industry, and redounds to the benefit 

 of neither the door manufacturer nor the 

 ultimate consumer. 



Undoubtedly today there is too much 

 capacity to keep all the veneer mills running 

 full time, but no individual mill can be per- 

 manently benefited by cutting prices and at- 

 tempting to "hog" the whole business. This 

 system simply means forcing all the mills to 

 operate at one-half capacity or less at prices 

 that show no profit. Today twelve or fifteen 

 mills are selling about ninety per cent of all 

 the commercial rotary cut birch, and are 

 making prices that fall fully twenty per cent 

 below legitimate values. 



Are the rotary cut veneer producers big- 

 soul philanthropists, or are they a bunch of 

 pig-headed pikers? The answer is up to the 

 "bunch." 



The Price of Veneer Door Stock 



Unfortunately there is a general demoraliza- 

 tion of prices in all lines of rotary cut veneer 

 stock. It is unfortunate because no one is 

 benefited by these demoralized prices. For 

 example: One-eighth inch birch door stock. 

 No. 1 face, required for five cross panel doors 



Oak Veneer Panels Make Trouble 



The foilowing account was recently given in 

 the Building. Age, being sent in by a reader 

 from Winnipeg, Can., who is interested in the 

 building trades, particularly the carpenters' 

 section. The question that he asks will un- 

 doubtedly prove interesting to others as well 

 as himse)'" 



I have had occasion to make an oak veneer 

 panel 3 ft. 3 in. by 7 ft, in size and 1% 

 in. in thickness which would neither shrink 

 nor warp. I proceeded to make it in the fol- 

 lowing manner: Taking the core out of V2 by 

 10-in. pine, I cut the center board and the 

 veneer 7 ft. long. The other portion of the 

 core V2 by 10 by 10 in., to be most explicit, 

 would be % in. by 7 ft. by 10 in. I next 

 glued up all the material, making four pieces 

 of five-ply 1% in. by 10 in. by 7 ft., and put 

 them into the press, where they remained for 

 18 hours in an average temperature of 65 de- 

 grees F. 



After taking out of the press, I placed the 

 pieces on the jointer, that each piece should be 

 perfectly straight and true on the face. I 

 next jointed the four pieces up to make my 

 panel 3 ft. 3 in. by 7 ft., strengthening the 

 joint by grooving full length through the cen- 

 ter 1-2 in. wide and an inch deep, where 1 

 inserted an oak tongue % by 2 in. in cross 

 section and 7 ft. long. Everything seemed 

 most satisfactory and I proceeded to glue the 

 four pieces together, placing cramps across 

 the panel to secure the joint until dry and 

 standing it against a post in an almost up- 

 right position until the next day — a matter 

 of 14 hours. On taking the panel to the bench 

 for the purpose of cleaning up, I noticed it 

 was not straight in the length, being ^4 of 

 an inch regular curve, whereas the night be- 

 fore, when I glued it up, it was perfect. 



I am at a loss to understand why this 

 change should take place, as the material was 

 dry and built up into five ply. Thinking, per- 

 haps, the moisture caused by the glue or the 

 strength of the veneers might have had some- 

 thing to do with it, I put the panel on the 

 bench, convex side up, forced it to a concave, 



