8 BULLETIN 660, U. S. DEPARTMENT OF AGRICULTURE. 
classes. One will be referred to as "'engineering and supervision" 
and will include those items of inspection and engineering which, can 
be charged directly to the project. The other class will be referred 
to as ''administration expense" and include those expenditures 
incurred in conducting all the activities of the department which 
are so general in character that they are not assignable directly to 
any particular project. 
The desirability of separating the project cost of engineering and 
supervision from administration cost and unit costs will be apparent 
after a little consideration. The work of the engineer in preparing 
the plans and specifications affects labor and material costs only in 
the kinds and amounts that may be required and not at all in the 
efficiency of their expenditure. By carefully worked out profiles and 
cross-sections an engineer may reduce the yardage of excavation 
required, but such planning may not reduce the cost per unit of 
excavation. To secure efficiency hi operations is the function of the 
superintendent or the foreman who is responsible for the cost of such 
operations. If engineering and supervision cost is incorporated in 
unit cost, an element is included over which the foreman or superin- 
tendent has no control, and his efficiency is obscured thereby. If, on 
the other hand, engineering and supervision cost is included in the 
charge for administration, it is placed in a class of expenditures over 
which the engineer has little or no control. 
Highway administrative organizations are prescribed largely by 
statute and the attendant costs necessarily are dependent, in a large 
measure, upon the form of the organization, the various duties 
required, the methods of financing, and many other factors, all of 
which are conditions imposed by legislation. To include with these 
administrative costs the cost of project engineering and supervision 
would mean the loss of valuable comparable information on the 
efficiency of the divisions of an organization and one type of admin- 
istrational organization with another. 
Administration. — Administration costs include such expenditures 
as salaries and expenses of the executive officers, legal services, main- 
tenance of office, departmental engineering, investigations, experi- 
ments, clerical staff, fiscal operations, and miscellaneous fixed charges. 
These expenditures can not be allocated directly to any particular 
class of work or to individual projects. 
Cost accountants have devised numerous ways of distributing 
general expenses to the various classes of work. Most of these, 
however, are not practicable hi the distribution of such expenses on 
road work. Since indirect labor and indirect materials are distrib- 
uted directly in the unit costs, and engineering and supervision are 
chargeable directly to projects, the remaining portion of what would 
be considered "burden" by factory cost accountants is comparatively 
