Bookkeeping and Cost Accounting for Factories

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John Wiley & sons, Incorporated, 1918 - Cost accounting - 261 pages
 

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Page 20 - ... it because of his bookkeeping methods the bank will, not consider him a desirable credit risk. Another very important point to which the bank gives consideration is whether the prospective borrower is making proper provisions for depreciation on stock, buildings and fixtures, and his books should be so arranged as to show the amount of these provisions. No merchant can be said to be managing his business properly unless adequate provision is made for depreciation.
Page 103 - Second, that the cost of an article should include only those expenses actually needed for its production, and any other expenses incurred by the producers for any reason whatever must be charged to some other account.
Page 130 - ... and good English. A machine symbol consists of a group of three arbitrary letters — capitals A piece symbol consists of an arbitrary number and follows the machine symbol, connected by a hyphen ; thus FPA-2 might symbolize the force-pump handle before alluded to — smallest size. The machine symbol may be used alone when required, as FPA. As thus described, these symbols fully possess the qualities of isolation and brevity. To make them also suggestive, some attention must be paid to what...
Page 79 - A FACTORY SHOULD BEAR THE SAME RATIO TO THE INDIRECT EXPENSE NECESSARY TO RUN THE FACTORY AT NORMAL CAPACITY, AS THE OUTPUT IN QUESTION BEARS TO THE NORMAL OUTPUT OF THE FACTORY.
Page 126 - ... furniture is just as inevitably an addition to its cost, and just as fair an addition to its inventory price, as the cost of seasoning it beforehand. In short, it takes capital to manufacture, more or less capital according to the kind of product made, and according to the manufacturing policy pursued. Frequently a liberal use of capital diminishes other costs, and the too meager use of capital increases other costs. Interest on investment is the conventional and logical way of expressing capital...
Page 79 - Most of the cost systems in use, and the theories on which they are based, have been devised by accountants for the benefit of financiers, whose aim has been to criticize the factory and to make it responsible for all the shortcomings of the business.
Page 131 - ... first planing, then drilling or boring, then turning. We also aim to place the heaviest and most important pieces first. Between each group we "gap" the numbers. Regarding position in naming pieces, we assume a front to the machine (where the operator is most likely to be placed), and define direction tersely as "forward," "back," "right," "left," "down,"
Page 130 - ... might be such a number of machines having identical initials that the letters would be almost arbitrary. In practice, the designer can usually succeed in making the symbols sufficiently suggestive. In considering how many letters to use in a symbol, considerations of brevity advised two, suggestiveness three or four. Two letters did not allow of enough permutations, nor indicate well enough the kind and size of machine. Three seemed amply sufficient in the first respect, as it provided over 17,000...
Page 130 - ... brevity, combined with simplicity. Of the importance of isolation to prevent mistakes and confusion ; of suggestiveness to aid the memory ; of brevity to save time and trouble, it is hardly necessary to speak.
Page 130 - A similar system to the above consists in the use of letters for both symbols. It has the same disadvantages, and the additional one of a limitation in the quantity of letters at disposal. Our system, as finally decided upon, is as follows : — Machine names and piece names are determined by the designer, in general according with the principles already pointed out, being, of course, made as brief and suggestive as possible, with no two machine names alike, and no two piece names alike in the same...

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