OF LANDSCAPE ARCHITECTS 



135 



the entire overhead expenses of the office 

 with a margin of "profit" which in some 

 years reached as much as 18 to 20 per 

 cent. We came to regard this as not a 

 sufficiently fair approximation, especially 

 as between different jobs, and it became 

 the practice to make an arbitrary and 

 voluntary scaling down of the 100 per 

 cent, "margin" in special cases where it 

 seemed unfair to the client. 



Later, with the gradual improvement 

 of our cost accounting methods, differ- 

 entiations were made between several 

 classes of assistants' services which plain- 

 ly involved different proportions of over- 

 head expenses. DilTerent rates of "mar- 

 gins" were charged on these different 

 classes, and at the end of each year the 

 different items of actual overhead ex- 

 pense were apportioned against the sev- 

 eral "departments" thus established with 

 a real effort to make the apportionment 

 appro.ximately fair so as to find out wheth- 

 er the rate of "margin" charged on each 

 class of assistants had proved to be sub- 

 stantially correct. Of course, it is neith- 

 er practicable, nor fair, to fix the "margin" 

 for every short period of accounting, so 

 as to correspond with the actual overhead 

 costs of that period. In a busy season 

 the overhead costs are apt to be less in 

 proportion to the cost directly charged to 

 each job and vice-versa. All that can be 

 reasonably attempted is to hit a fair aver- 

 age year in and year out. 



For some time prior to 1921 the "mar- 

 gins" for meeting overhead expense varied 

 from 25 per cent, to 80 per cent, on the pay 

 of different classes of assistants for those 

 hours during which their time is directly 

 chargeable to specific work orders, the 80 

 per cent, margin applying to the majority 

 of ordinary office assistants. With the 

 relative increase in overhead costs which 

 came with the post-war deflation, it was 

 found necessary to increase the maximum 

 "margin" to the old figure of 100 per cent, 

 again. Of the total overhead expenses 



about one quarter is charged against the 

 personal professional services of the firm 

 as representing the amount of rent, etc., 

 and clerical assistance, etc., and equip- 

 ment, library, etc., which the firm would 

 require if the drafting and other directly 

 chargeable assistants' services, together 

 with their necessary overhead expenses, 

 were furnished by the clients themselves, 

 as they are in the case of some well or- 

 ganized municipal departments which we 

 serve in a consulting capacity. 



A\'hen we see that with the margins 

 charged any "department," other than the 

 persona] professional services of the firm, 

 is beginning to show year after year a 

 continuing loss, or a "gain" so consider- 

 able as to be more than a reasonable as- 

 surance against occasional losses, we en- 

 deavor to readjust the margins more 

 equitably. 



This is primarily a system of cost ac- 

 counting and is followed for our own in- 

 formation even in those cases where we 

 contract with a client to furnish certain 

 services for a specified lump sum, or 

 within an agreed maximum cost. It en- 

 ables us to know with tolerable precision 

 at any time what each work is costing 

 us, including its fair share of overhead 

 expense. 



But in the majority of cases our con- 

 tracts with clients provide for charging 

 a fee for the personal services of the firm, 

 plus expenses as actually incurred from 

 time to time, "expenses" being defined as 

 including pay of assistants together with 

 the corresponding share of overhead ex- 

 pense. We are then substantially in the 

 position of a trusted employee on a sal- 

 ary, who either employs subordinates in 

 the service of his employer at his em- 

 ployer's expense (without profit or loss 

 to himself), or delegates work to con- 

 tractors, as may seem most advantageous 

 to his employer. 



Under this system we feel at liberty 

 and our clients are glad to have us feel at 



