COST ACCOUNTING AND ESTIMATING. 253 



over to the estimating department the more accurate and reliable the estimates will be. A 

 general tendency of the accounting department has been to neglect this item, and it is to be 

 hoped that in the future more attention will be paid to the return costs both from the heads 

 of departments in the yard and the accounting department, so as to render the basic informa- 

 tion for the estimating department more concise. 



As is well known in shipbuilding practice, the time allowed for an estimate varies to suit 

 circumstances, and it is therefore essential that the estimator be prepared to make a quick 

 and reliable estimate based on information usually available in the form of specifications. 

 If these are not available or if they consist only of a meager outHne, it is to be recommended 

 that, whenever time permits, they be accompanied by an outline specification upon which 

 the actual estimate is based. 



In order to render a quick and reliable estimate the method of computing curves to 

 cover the cost of the various details such as piping systems, etc., is essential. They are gen- 

 erally based on a standard practice in force at the particular yard, and if the specifications in 

 question demand a higher or lower type of vessel the points on the curve will be chosen 

 accordingly above or below. 



The efficiency and standard of an estimating department is directly based on the amount 

 and quality of information in the form of tables and curves on hand, and the methods pro- 

 posed to attain that end by Mr. Schulze are to be highly recommended. 



Mr. T. M. Cornbrooks, Member (Communicated) : — ^This paper is very interesting 

 to one who has spent a number of years in developing a similar scheme for estimating and 

 who was enabled to develop a system at Sparrows Point which was very much on the lines 

 laid down by Mr. Schulze. 



It has always impressed me that, considering the magnitude of the undertaking and 

 the large sums of money involved, there had been no definite attempt made, until a few years 

 ago, to properly analyze costs and to work up factors which would be valuable for estimating 

 purposes, so that an estimate could be quickly and accurately made. The old rule of 3B or 

 the "guess method" was used by most estimators and the wonder is that, considering such 

 crude methods, the yards were able to exist. 



The scheme which we used was to analyze every ship which had been built, both to 

 determine factors for estimating the materials involved in a ship of similar design and for 

 labor involved, also to tabulate all standards, such as side lights, deck scuttles, valves, fittings, 

 flanges, furnace fronts, etc., so that an estimate of materials could be worked up very quickly 

 or the costs entered per unit. 



We analyzed the returned costs of each ship as completed by first checking the materials 

 as charged on the drawings and orders and then from this analyzing the labor cost on the 

 unit basis. We found in some cases it was necessary to use an empirical formula which we 

 tested out on a number of dififerent types before adopting as a standard. This applied 

 principally to such matters as painting steel hull and other kindred jobs. 



In analyzing the labor costs we used both the hour and dollar costs as a unit, as we 

 found that in ordinary times when the wages did not fluctuate it was much quicker to use 

 thedollar unit, and when wages began to fluctuate, due to the late disturbance, it was neces- 

 sary to use the hour unit rather than the dollar. We were also able by this method to de- 

 termine the effect of overload and underload on the various shops and to have some judg- 

 ment as to the most efficient condition for the dififerent shops. 



