THE SHOP-ORDER SYSTEM OF ACCOUNTS. 331 



cost. In such a case the cards need only contain room for the 

 symbol S-O. ; the symbols C., O., and N. being omitted. I 

 would recommend this simple method to beginners, although I 

 believe that all will find it to their advantage as they become 

 familiar with the system to analyze more closely. To such the 

 following method commends itself. 



Continued analysis of cost. 



Sort the service and material cards belonging to a completed 

 order according to Plant and Work, and add together their 

 amounts under each head. Then correct the net cost so obtained 

 for indirect expenses, as already described. 



The appraised value for future uses of plant should then be 

 charged to the most probable standing order and credited to the 

 cost of work. The amount thus determined, when divided by 

 the output, gives the factory cost per piece, pound, etc. The 

 factory cost, increased by its proportion of the selling expenses, 

 and profit added, gives the selling price. 



For example, we find the total cost of S-O. 789 corrected for 

 indirect expenses to be: 



Plant $ 50 00 



Work 175 oo 



Gross cost $225 oo 



Suppose that by inspection of the cards we discover that no 

 credit has been given for the contingent value of the patterns, 

 which, let us say, is $25.00, and that they are kept in department 

 No. 2. The omission of the foreman of No. 2, known as 201, 

 should be supplied by making out a card as follows : 



One set patterns. 



CHARGE TO... 2. CREDIT TO. . .789. AMOUNT, $25.00. 



This reduces the gross cost to $200.00, and increases correspond- 

 ingly the liability of S-O. 2, subject to correction by inventory. 

 (The annual inventory would correct the balance of 2, and hence 

 affect distributively its charge for indirect expenses in future. 

 This card should properly have been made out by 201 when the 



