PART II. 
COST KEEPING FOR HIGHWAY WORK. 
ESSENTIALS OF A COST SYSTEM. 
Certain fundamental principles must be followed to make any 
cost system successful. This applies to road costs as well as to fac- 
tory costs. Any cost-keeping system to be successful must be (1) 
reliable, (2) simple, (3) immediate, (4) flexible, and (5) relatively 
inexpensive. 
(1) Keliability is of paramount importance. If the data collected 
are not reliable, all records based upon them of course will be mis- 
leading and the results dangerous. Accuracy is desirable, but this 
need not be carried beyond the practical limits adopted for measur- 
ing the units of materials expended and the units of work accom- 
plished. 
(2) If simplicity be not maintained the purpose of the system will 
be defeated. Involved and complex forms are confusing to the 
recording officials, difficult to compile for study and analysis, and 
apt to be inaccurate and a useless expense. 
(3) To be effective, the cost records must be susceptible of im- 
mediate analysis and must reach the officials responsible for the 
economic progress of the work in time to be of use. If a week or 
10 days must elapse before wasteful methods and incompetency 
are discovered the information is past history and it may be too late 
to try other methods which might rectify the detrimental condition. 
(4) Flexibihty is very desirable. The system must be elastic 
enough to provide for the recording of all classes of work, irrespec- 
tive of the size of the project, without any material change in the 
prescribed forms. 
(5) Finally, the system must be relatively inexpensive. The 
cost of determining cost must be reduced to a minimum. If expense 
of obtaining cost records to point out the way to efficiency is not 
much below the saving effected, they have no just claim to a place 
in any plan of management. 
CLASSIFICATION OF EXPENDITURES. 
The first problem in developing a cost-keeping system for highway 
work is to devise a general classification of expenditures that will 
conform to accounts appearing upon the ledger of the organization; 
that is, at the outset the cost keeper's records must tie into the book- 
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