Each machine forming a part of the equipment of the manufacturing plant should bear a portion of the general burden according to its first cost and annual depreciation, and incidentally an additional portion due to the fact that some of the machines are sometimes idle, therefore earning nothing. Each employee not working at a machine should have a due portion of floor space burden charged in addition to his wages. Since the only source of revenue is that derived from the manufactured product sold, it follows that all expense of whatever kind must be borne as a burden upon the manufacture of these products for the market.

The entire volume of work in the shops is made up of a succession of jobs, each of which has a distinguishing number. They may, however, be classified as product, improvements, repairs, tool making, experimental, and so on.

We may properly commence with the first expenses incurred, the cost of the land upon which the buildings are erected. Then the cost of the buildings. Then the cost of the power, lighting, heating, and ventilating plants, and the plant for the transmission of power, including shafting, belting, electric wiring, dynamos, motors, lamps, and all fixed accessories. In this list of costs are all partitions, railings, shelvings, bins, racks, benches, fixed desks, shop railway tracks and cars, office fixtures and furniture, shop telephones, and all similar appliances not directly connected with the machines. We will add these costs together and ascertain the interest upon the amount per year.

To the amount thus ascertained we will add insurance on buildings, fixtures, etc., taxes, water rates, depreciation and maintenance of buildings, cost of furnishing power, light, heat, and ventilation, per year. To this add also the salary of superintendent, assistant, office force, foremen, watchmen, errand boys, etc., and office maintenance. This will cover our fixed charges plus the expense burden, which is to be divided by the area of floor surface in square feet, giving the burden which every square foot must bear whether occupied by a machine, a work bench, or as an erecting floor or other use. This expense must be gotten out of the sale of product in such a manner as to bear in equal proportion on all jobs in considering carefully the difference of the value of the use of the equipment involved in each of them individually.

Having ascertained the burden due to cost of buildings, power, lighting, heating, ventilating, and maintenance, together with the wages of so-called non-producers, so far as these will be constant, or very nearly so from year to year, we next consider the question of the burden due to the expense of the equipment of machines required for the work contemplated.

It has been pointed out that by one of the plans discussed the difference in time was disregarded, and in another the difference in wages, while in both the difference in the cost of the machines upon which the work was done was lost sight of entirely. In this present plan the method of properly accounting for this burden will be explained.

To ascertain the expense burden of a machine we first consider its first cost, then its annual depreciation, the insurance upon its value, and lastly the expense to house and drive it, in order to fully cover the conditions of the case.

It is customary to fix 10 per cent on the first cost of a new machine for annual interest and depreciation. For the next year we subtract 5 per cent from the original cost and use this result in fixing the next valuation. To this amount we add the expense burden of so much per square foot of floor space occupied by it and its operator, as found by the expense burden percentage previously explained.

While it will not usually be convenient to go over all the machines each year and assess them separately as to their cost, neither will it be necessary as they may be divided into groups or classes on the following plan: those costing $500 or less; those from $500 to $1,000; then by even thousands upwards. Every machine should be numbered in large, plain figures on a conspicuous part, and its special rate recorded in a book kept by the cost clerk, giving its changed rate each year. The employee using a machine will note on his job time card, in a space provided for that purpose, the number of the machine, for the information of the cost clerk, who may thus assess the proper expense burden on the job.

There is one more element or factor of burden. This is the hourly burden of idle machines, or the supplemental expense, and is disposed of in this manner. By having on the job time cards the numbers of all the machines in actual use, and having the numbers of all machines in the shop, the cost clerk readily knows what machines are not in use. An account of the machine rates thus incurred is kept during the month and distributed pro rata over the jobs during the succeeding month. While this is not strictly correct in theory it will be found equitable in practice and is much more easily accomplished than an attempt to follow up each job in the department containing the idle machines and distribute this burden among them before the account on each was closed.

There is an important point gained by this account of the machines idle, in the whole shop, and also in the different departments. It tells a very graphic story of the management of the department in keeping all the machines at work, and the opportunity for placing them in other departments where they will be more constantly employed, or disposing of them altogether. It should be very distinctly kept in mind that every idle machine means lost money.