358 



THE INDIA RUBBER WORLD 



[April 1. 1916. 



DECEASED RUBBER JOURNALISTS. 



ANALYSIS OF POWER COSTS. 



wlio 

 h the 



To THE Editor of The In-dia RrnnER World: 



We have read with appreciation your sketch of the late E. 

 Ule, whose death is a loss to the whole scientific world. In 

 connection with it we have the impulse to mention other dis- 

 tinguished men connected with the "Tropenpflanzer," who have 

 passed away within tlic twelvemonth. For example there was 



RUDOLPH ENDLICH 



one of the oldest of the "Tropenpflanzer's" contril)Ul. 

 died in Ghent, Belgium, of appendicitis, while connected 

 commissary department of the German army. 



Mr. Endlich traveled extensively in Brazil. Paraguay and 

 Argentina, and added to the botanic museum of Berlin a rich 

 collection of exotic plants. His most notable contributions to 

 the "Tropenpflanzer" were : "The Present Condition and the 

 Future of the Guayule Industry" and "The Eu])horbia Rlastica— 

 A New Rublier Tree" 



As plantation manager for the Kilimandjaro Plantation Co. 

 he spent three years in German East Africa, wliere he laid out 

 a large MjiiUioI rubber plantation 



KARL SUPF. 

 Founder and manager of the "Tropenpflanzer," who died 



at the age of 59. 



vas born in Nuremberg 

 1892. He founded the 

 Colonial Commercial 

 Committee, which re- 

 sulted in 1914 in an 

 organization c o m - 

 posed of G e r m a n 

 princes, scientific insti- 

 tutes, chambers of 

 commerce a u d of 

 agriculture, colonial 

 and commercial cor- 

 porations, workmen's 

 unions, missions, etc., 

 all with headquarters 

 in Berlin and branches 

 in German East 

 Africa; an organiza- 

 tion of not less than 

 1,100 commercial, in- 

 dustrial and scientific 

 institutes, corpora- 

 tions and firms. 



In 1906 he was 

 prnminent in the es- 

 tablishment of the 

 "cotton commission." and just previous to the war he did the 

 largest part in organizing the production of this most important 

 raw material in the German colonies. 

 Furthermore, there was 



FRANTZ MATTHIESEN 



general secretary of the German Colonial Commercial Commit- 

 tee and editor of the "Tropenpflanzer." 



.'\t the beginning of the war he was sent to Konigsberg. and 

 then to the frontier as officer of a reserve regiment. He was 

 bady wounded in the chest and legs, and after receiving the 

 Iron Cross died from his wounds in the hospital at Insterburg. 

 He was born in Sablon (near Metz) June 5, 1878, and passed his 

 youth in different parts of the annexed provinces where his 

 father was called by his profession. He graduated in Metz 

 and entered the Kommerz und Diskonto-Bank, Hamburg. After 

 his military service he did not return to banking, but took up 

 botanical work. After graduating as Doctor in Botanies (Munich), 

 he obtained employment with the Colonial Committee and later 

 became editor of the "Tropenpflanzer." 



rIE fotlir.^-in,^ h-ltcr, of interest to imiiiufnclurcrs, has been 

 sent to The I.vdi.\ Kibber World by <i sufcrintriidciU '.flwse 

 wide experience in rubber jaelorics renders his expression 

 worthy of consideration : 

 To THE Editor of The Indi.\ Kcbber World: 



Every rubber factory, to successfully compete and not suffer 

 by competition, requires a cost system which will tell actual 

 manufacturing costs with promptness and with accuracy. Cost 

 finding is really a very simple matter if one will take the trouble 

 to prepare a system to meet the special factory requirements and 

 then see that the system is kept up. ' 



Most people understand in a general way how to figure the 

 cost of a job that consists principally of labor and material. They 

 may, however, consider the problem difficult when the cost of 

 power and machine time predominates over the wages of hand 

 labor. From the case described below, it will be seen that when 

 tlie method is once really understood, this prolilem resolves it- 

 self into a very simple matter. 



For an example, let us take the milling and mi.\ing of rub- 

 ber. Making no attempt to give details, I submit the following 

 practical description of the method that is in actual use. 



Each purchase of material is manufactured as a separate lot 

 and is so entered in the general as well as the stock ledger ac- 

 count. When entered for manufacture, each job is identified by 

 a separate production number, and all materials and labor used 

 on it are reported on stock requisition slips, or time slips. 



.■Ml power costs, inclusive of fuel, repairs, depreciation, wages 

 of foremen and engineers, are determined on a inonthly basis. 

 The total factory horse-power is divided into separate horse- 

 power units and each power division is assigned an hourly rate 

 in ratio to the total horse-power. It is thus possible to charge 

 each production order with the cost of power employed, .^t the 

 end of the month the totals of these power charges are checked 

 by the actual power costs. This method is applicable only where 

 it is possible to charge each job as a separate unit. 



In the case of a process where it is impracticable to determine 

 the power cost for any particular job, because several are in 

 the works at the same time, the power item, together with super- 

 intendence and cost of cleaning machines and surroundings be- 

 tween jobs, are combined into a monthly total. The ratio which 

 this sum bears to the monthly total of productive labor deter- 

 mines the proper amount to charge each job for power cost, ac- 

 cording to its share of productive labor. 



The foregoing essentials furnish the basis for a monthly state- 

 ment of profit and loss which can be prepared without taking a 

 physical inventory. In a well-ordered factory these figures for 

 one month should be ready early the next month. 



Efficiency is the keynote of present-day industry, and there 

 can be no efficiency without organization. It is the work of the 

 accountant to devise accurate and adequate systems of account- 

 ing which will automatically show leakages and fluctuations, thus 

 organizing a business to indicate where costs may be decreased 

 and efficiency increased. The day when a manufacturer can rea- 

 sonably risk selling on "cost guesses" is over. A knowledge of 

 production costs is absolutely necessary if dividends and surplus 

 are to be maintained. 



Under the ordinary plan of accounting, a physical inventory is 

 taken once a year, the books are closed and profit or loss deter- 

 mined. The accuracy of the result is largely based on the correct- 

 ness of the inventory. This brings about a condition of uncer- 

 tainty and often exhibits results which come too late for remedy. 

 An adequate system of cost accounts, free from "red tape" and 

 dealing only with essentials, is the only kind worth consideration. 

 It should harmonize with the general records and provide a 

 perpetual inventory with a statement of profit and loss rendered 

 monthly. Price making by such a system is safe and intelligent. 

 Losses are detected and eliminated, and profit substituted. 



