UNITED STATES DEPARTMENT OF AGRICULTURE 



BULLETIN No. 660 



Contribution from the Office of Public Roads and Rural ' 

 Engineering, LOGAN WALLER PAGE, Director 





Washington, D. C. 



September 12, 1918 



HIGHWAY COST KEEPING. 



By James J. Tobin and A. R. Losh, United States Engineer Economists 

 Reviewed by Halbert P. Gillette, Consulting Cost Engineer. 



CONTENTS. 



Page. 



Part I. Cost keeping in general 1 



The fundamentals of cost keeping 1 



Cost elements 2 



Fixed charges 9 



Highway cost analysis 10 



Units of measurement 11 



Part II. Cost keeping for highway work 13 



Essentials of a cost system 13 



Classification of expenditures 13 



Operation code 16 



Method of obtaining class and operation 



number from code 17 



Page. 

 Part II. Cost keeping for highway work- 

 Continued. 



Use of code in operations 18 



Detail of cost accounts and necessary 



codes 19 



Recording forms 23 



Immediate use of cost data 30 



Final disposition of cost data 30 



Definitions of operation terms 29 



Appendix 42 



PART I. 



COST KEEPING IN GENERAL. 



THE FUNDAMENTALS OF COST KEEPING. 



Definition. — Cost keeping is a system for recording the cost of 

 each unit of product or division of work in order to facilitate com- 

 parison of such costs with cost of other similar units or divisions 

 under like conditions. Cost keeping analyzes each unit of product or 

 work to determine the reasonableness or unreasonableness of the 

 cost, and also to secure an intelligent basis for predicting the cost 

 of producing similar units in future. 



Lack of cost records. — The Office of Public Roads and Rural Engi- 

 neering, in an extensive investigation of highway management, both 

 by the State highway departments and by a large number of indi- 

 vidual counties and townships, brought out, among other condi- 

 tions, the very general absence of cost keeping. Few examples of 

 practical and efficient cost keeping were found in operation, and 



41601°— 18— Bull. 660 1 



