246 COST ACCOUNTING AND ESTIMATING. 



necessary. When large fluctuations in material cost and labor rates occur, the mind cannot 

 readily compensate for the varying rates, and comparisons with previous returned cost and 

 with previous estimated costs become of no practical use; therefore a method should be 

 adopted of placing all estimates on the same basis, viz., uniform base for material and labor 

 rates. 



By an adoption of a standard schedule of material unit rates for the various commodi- 

 ties, and by reducing labor to hours, estimates can be placed on a uniform basis and 

 would not only be comparable one with the other, but would also be available for use at any 

 period by applying current rates to the quantities and to the labor hours which, combined 

 with the current expense rate, produces an estimate on current rates. The relation of the 

 current estimates to the standard estimate should be very nearly constant for the same period. 



It is not alone sufiScient that details be calculated accurately, but every estimate should 

 be subjected to a check method to determine whether the total represents a reasonable figure. 

 To accomplish this, resort is made to check summary cards, which indicate the quantities and 

 costs combined in large groups, together with appropriate weight factors, and unit rates of 

 material and labor. 



The character of the estimate depends largely upon the character of the inquiry. Fre- 

 quently inquiries do not give any particulars, and sometimes not even the general dimensions. 

 This probably means that the prospective purchaser is merely feeling the market, and in such 

 cases approximate estimates are prepared in condensed groups, using as a basis the check cards 

 of the nearest similar vessels. In the hands of an expert with good judgment, such check- 

 card estimates will give results which compare quite favorably with the detailed estimates. 



While space will not permit describing in detail the method of determining the dimen- 

 sions of vessels and their horse-powers to fulfil required conditions, it might be briefly stated 

 that recourse is made to design cards bearing lineal ratios, displacement and weight co- 

 efficients, also to the freeboard tables and to model experiments conducted by Admiral 

 Taylor and Constructor McEntee. The freeboard tables have been reduced to curve form, 

 making the determination of depth for any draught, length and extent of erections a very 

 simple operation. By reducing the model results of Taylor's Standard Series to a mechani- 

 cal operation and plotting curves of the relative performance of known models, the horse- 

 power can be quickly determined, and with a reasonable degree of certainty. 



In cases where only the general particulars are given, an estimate is prepared by the 

 condensed groups without going into great details, except for the larger groups, such as 

 structural steel hull. 



When complete plans and specifications are submitted, or when it is probable that the 

 prospective purchaser seriously contemplates construction, estimates are prepared in full de- 

 tail. One of the first steps in preparing such detail estimates is the determination of the sizes 

 of auxiliaries purchased from subcontractors and the submitting of the necessary inquiries. 

 The subcontractor, before he will quote, will require complete information regarding 

 the auxiliary, which necessitates not only the engineering knowledge for determining but 

 also knowledge as to how this material is furnished by the subcontractor. In most cases 

 the time required to prepare the estimate is governed by the time necessary to receive prices 

 from outside contractors. This is particularly true when the auxiliaries are not of their 

 standard manufacture. 



Having briefly described the general principles and the several kinds of estimates, a 

 description of the procedure in preparing a detail estimate will now be given. 



In a large company the work of estimating is divided among men who become special- 



