342 APPENDIX. 



COST OF SHOP-ORDER NO. 7,654, FOR 521 " O. K." STOVES. 



Patterns $2,460 oo 



Molding . 1,56300 



Melting (iron in castings) 2,328 oo 



Mounting 1,574 oo 



Gross cost $7,925 oo 



Deduct \ patterns $1,230 oo 



Extra parts 200 oo 



$i,430 oo 



521 stoves at $12.46 $6,495 oo 



Foundry cost, each $12 46 



Selling expenses, at 30 per cent 3 74 



Net cost $16 20 



Profit, say at 10 per cent i 62 



Selling price $17 82 



Let us suppose that another set of men are employed, who* 

 work so much faster that we can afford to increase their wages 

 50 per cent., the direct outlay for labor remaining unaltered. 



The time on the job, and, consequently, its share of the indi- 

 rect expenses, will be one-third less than before, and the cost 

 factor determined with correspondingly slow labor remaining 

 unaltered, we shall save $395 in the cost of the stoves, or 

 about six per cent.* 



Of course, if we continue with this grade of labor for the same 

 yearly product, our cost factor may increase ; but this tendency 

 will probably be diminished either by an increase in product for 

 the total number of days' work per annum, or by a diminution 

 in interest charges on invested and working capital, or by both 

 causes and other causes also. 



The example is offered to show in dollars and cents that cheap 

 labor is not always profitable, and how the rate of work enters 

 into the rate of wages. 



It will be observed that, as soon as the patterns are made and 

 the piece prices for molding and mounting established, the 



* The saving will depend somewhat upon the departments in which an increase of 

 earnings is allowed. The illustration supposes the increase to be uniform. 



