352 APPENDIX. 



it myself to charge expenses as nearly as possible at the time 

 when they are incurred. Then the record is shoved away and 

 passed on to another person. 



The general scheme is this: You stand in the center of your 

 works, give your orders, and echoes come back to you telling 

 what is going on. Now, these being physical items having indi- 

 vidual numbers, to which labor and material are charged, they 

 may be assorted in pigeon-holes corresponding to the orders. 

 They can be sorted from time to time during the progress of the 

 work, so that, for example, the number of hours' work by opera- 

 tives of the same class of wages being noted to get the cost of 

 labor to date, you will merely have to add in those which have 

 not been assorted. The differentiation can be carried still 

 further, if necessary, so that, by providing in the beginning for 

 a more complete analysis, the number of days' or hours' work 

 by each class of men on each component in that job may also 

 be ascertained. 



Mr. W. H. Doane. My query had reference to the bases on 

 which Captain Metcalfe proposes to apportion the incidental 

 expenses of an establishment. 



Captain Metcalfe. The cost of work is made up, I believe, of 

 the cost of labor, the cost of material, and its fair share of the 

 incidental expenses of the establishment. I believe that the 

 incidental expenses of an establishment should be distributed on 

 the basis of the quantity of labor which the establishment holds, 

 by what I call a cost factor. I find it is used in several shops, 

 Mr. Smith's among others. I divide the incidental expenses of 

 each department, plus their fair share of the general expenses 

 of the whole factory, by the number of days' labor done in that 

 department during the past year. That gives us, say $1.25 per 

 day. Rent, insurance, taxes, salaries, motive power, lighting, 

 are all in the nature of facilities for the performance of labor. I 

 once applied this method to the case of a stove factory, and 

 with some satisfaction to those who heard me, I believe. If the 

 price of iron goes up, your incidental expenses do not increase. 

 If your change of material were to be very great, say from an 

 iron stove to a brass stove, your cost for motive power, etc., 

 would not be any greater, so I leave material entirely out of the 



