Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1912-09-07
Principles of Cost Control Ap-
piled to Business Or
ganization
BY H. COOLING FIELD.


Theory of Costs. ~~.. g."
This article is written with the
hope that 1t will throw some light on
that absorbing, though eyasive, sub,
iect generally spoken of as Cost of
Production. ..a-.
/ am, however, constrained to limit
my views to lucid theoretical ex.
PLANTATION of the principles involved,
as it is my opinion that to confine
them to particular kind of business
or plant might have tendency to
encourage those accustomed to fol-
lowing the lines of least resistance
to observe that it : is probably all
right in that particular line of bust
ness, but my business is different. "
At the very beginning, 1t is well to
forget all about the idea that ""o1r
business is different. The elements
Of time, material and expense arez}to
be found in every business, and the
whole necessity of tracing these ele-
ments of cost, directly lies inzsthe
making up of the cost Of doing busi-
ness. u
just as soon as We forget that "our
business is different" We begin to
find out just how other people do
business That is where we are to.
day-we are after more light on the
subject. :
I would, therefore, strongly empha-
size the fact that the principles un.
DERIVING the science of costs do not
vary under any circumstance. and are
w Ia a. fNr
to undertakings of every character.
Broadly speaking, the main object
eff this science is to locate the line
between profit and loss, but before
intelligent constructive effort can be
applied to the building up of the plan
for accommodating the Information
sought, a determination Of several
cardinal requirements must be first
decided upon These requirements
vary according to the internal condi-
tions of the undertaking to which they
are Intended to apply. sss s
The first question which confronts
the executive contemplating a better
knowledge of cost control is What
information do want e. Before he
can give an intelligent reply to this
question, however, he is confronted
with another question: How can i
apply the Information so obtained to
a betterment Of my business condi-
items ss
The next logical step lis, the recog-
milton of business organization as q
factor in economical production, as
the terms Organization of forces"
and cheap production are ynony-
nous
TO illustrate what is meant by such
organization, the following is quoted
from work by Mr.. Clinton E. Woods
of New York City, who lis considered
enc of the ablest practitioners in the.
science of costs in this country.
Mr. Wood says:
Three things must be obtainable:
what has been done, what is being
done and what could be done, both
as to volume of output and costs for
same.
"The factory, considered as thing
by itself, Is a living, breathing, NOV.
ing being, which has an anatomy, pc
culiar to itself of course, but which
can, nevertheless, be analysed in its
every function. And it is right here
that old and new methods of admin
istration differ. The cost expert Of
today no longer takes an already ex-
listing condition in factory practice
and applies a method of rendering
accounts for it: he first insists as
far as possible on a proper depart.
mental organization and relation,
both as regards the movement OF a
product through the factory from raw
material to finished stores, or units,
and as regards authority from the
down to the last man
who is to be possessed OF authority.
Having accomplished this, he then
takes the body industrial and CLASH
fies it into members and organs, and
applies a system. that. forces each
and every one of these members and
organs to function properly and rem
der correct accounting of ITSELF
at is by such methods, and by
such methods alone, that the manag-
erial mind is enabled to grasp and
interpret the whole body, and not
some portions of it to the exclusion
of others, which has invariably been
the fault of old methods of admins
tration. For, almost without excep-
ton, the tendency of every manager
in the past has been in either one OF
two directions, sometimes both
along the lines of least resistance"
or in. such directions as particular
tastes or past experience would near
Iy always unconsciously lead him.
New methods analyze the anatomy
of business so closely that not the
smallest detail or sub-detail Of an
item escapes it's pro rata amount of
Old methods, for instance,
pay little, if any, attention to the
details of single operations on d
part, or even to the individual part
considered as a whole in the con
struction of a unit of production;
neither did they take cognizance OF
the progress of work through the
shop; but the present day manager
considers ever movement, of ma
terial and every operation performed
on that material as carefully as a