40 



SCIENCE 



[N. S. Vol. XL. No. 1019 



a factory which manufactures a product as 

 intangible as the instruction of the edu- 

 cational plant, even though we neglect all 

 the higher connotations of the word edu- 

 cation and confine our attention to its 

 lower and more utilitarian characteristics. 

 Moreover, there probably exists no case of 

 an industrial plant in which one class of 

 labor pays a premium for the privilege of 

 working for a limited period — three to six 

 years — with the avowed intention of leav- 

 ing the factory at the expiration of the 

 term of service. There is no industrial 

 plant which willingly and knowingly con- 

 ducts its business at a loss; no business in 

 which the product is never sold. Finally, 

 it is impossible to conceive of an industrial 

 plant in which, no matter how much of the 

 product be disposed of, there still remains 

 as much of the product in the factory as 

 before. 



n 



For the sake of investigation, however, 

 these discrepancies, these failures of 

 analogy, may be overlooked, and we may 

 proceed to the determination of costs on the 

 hypothesis of a product, instruction; a 

 class of paid workmen, the teachers ; and a 

 class of unpaid apprentices, the students, 

 who pay a premium to the plant. 



Adopting a usual classification of costs 

 into (i) prime cost: workmen's wages and 

 cost of raw material; (ii) works cost: prime 

 cost plus the expense of shop production; 

 (iii) total cost: works cost plus the ex- 

 penses of administration and management ; 

 we may note that in the educational plant 

 the second item is eliminated, and that there 

 is practically no raw material. 



Thus the items of cost fall into two 

 classes: (1) Direct costs: salaries of the in- 

 structing staff. (2) Indirect costs: all 

 costs except item 1. 



But since the instructing staff is paid for 

 both teaching and administration, item 1 



must be subdivided into (o) Pay for in- 

 struction; the only direct cost. (6) Pay 

 for administration; an indirect cost, and 

 again subdivided into departmental and 

 general administration costs. 



Moreover, the various constituents of 

 item 2 must be examined with care, in order 

 that they may be properly allocated to dif- 

 ferent departments. 



For purposes of illustration we shall as- 

 sume a college of two departments, D^ and 

 D^, with the following data. Department 

 I>i has 10 professors, salary $3,000 each, 

 serving 300 hours each per year ; 10 associ- 

 ates, salary $2,000 each, serving 400 hours 

 each per year; 10 tutors, salary $1,000 

 each, serving 500 hours each per year. 

 Department D^ has 5 professors, salary 

 $4,000 each, serving 250 hours each per 

 year; 10 associates, salary $2,000, serving 

 400 hours; 5 tutors, salary $500, serving 

 500 hours each per year. The analysis of 

 the data is given in the following table :^ 



The general administration costs — salar- 

 ies of the president and other general ad- 

 ministrative officers— amount to $20,000 

 per year. 



2 TMs table of data is taken from the article in 

 the BducationaX Review to which reference has al- 

 ready been made. The same article may be eon- 

 suited for a tentative analysis of the several items 

 of cost. 



