252 COST ACCOUNTING AND ESTIMATING. 



DISCUSSION. 



The President : — The paper on '"Cost Accounting and Estimating" embodies the result 

 of a great deal of experience. Mr. Schulze quite naturally, but quite incorrectly, thought 

 that the chairman was referring to various meetings which he himself had with the chair- 

 man, in the chairman's official capacity as a naval officer. That thought was not at all in the 

 chairman's mind. What the chairman really referred to was the very difficult task through- 

 out the period of the war of determining equitably and with reasonable accuracy the actual 

 amounts of money which the naval department had contracted to give to those who were 

 engaged in the naval construction program, the total costs involved approaching very closely 

 to $1,000,000,000. It was that particular class of work which the chairman had in mind, 

 and all of us have learned a great deal about costs, especially overhead costs, during the past 

 five or six years. We will be glad to hear any comment upon this paper contributed by Mr. 

 Schulze. 



Professor Herbert C. Sadi^'eu, Member of Council: — I think that Mr. Schulze has 

 given us a very clear and concise method of procedure for getting out estimates, and on that 

 I have no criticism to make at all, but I do feel that the value of the paper would be 

 greatly enhanced if he could see his way to give us the values of some of the coefficients he 

 refers to. (Applause.) Perhaps I am asking a little too much, but it seems to me that 

 in the long run everybody is going to gain, if they are willing, up to a certain point, to give 

 information that may appear somewhat confidential. I think the profession as a whole 

 will gain because there is an incentive for the next man also to give his experience and data. 



I think that any of us who have done estimating know that it is an extremely valuable 

 thing to have a feAV coefficients, even though they do not apply exactly to the case we have 

 under consideration, as a basis from which to start on our own estimate. I just throw that 

 out as a hint, because in his last remarks Mr. Schulze mentioned that he would be glad to 

 show us some of his information. If he would include that in an appendix to his paper, 

 I think it would be very valuable. (Applause.) 



Mr. John T. Dalcher, Member: — ^The paper in question is one that has particularly 

 appealed to me, and its importance is readily recognized in view of the large evolutions 

 regarding cost of manufacture through which we are passing at the present time. 



The chief function of the estimator is to work out as accurately as possible the factory 

 cost of a proposed ship based on previous cost records obtained from the accounting depart- 

 ment. Where such records are not available the estimate is based entirely upon previous 

 experience and good judgment of the estimator, and it is therefore quite apparent that his 

 qualifications must be based on a sound training in the shipbuilding field and, if it covers 

 both theoretical and practical knowledge, is so much more advantageous. 



Having in view the fact that cost records vary in the diflferent yards due to variety of 

 methods and labor conditions, the estimator must be guided primarily by these records, and 

 if none are available his judgment must be based on general conditions of the particular 

 shipyard. 



Although the primary function of the accounting department is to furnish information 

 to the management, the fact should be emphasized that the more accurate the data turned 



