New Britain herald., 1924-10-25
EXPERT DESCRIBES BUDGET SYSTEM
Expresses Surprise Some Fac
 tories Manage to Survive.

Charles R. Stevenson, president of
 the Stevenson Engineering corpora
 tion, and cost engineer for num-
 Der of nationally known manufac-
 turing concerns, spoke last evening
 nt joint meeting of the Rotary,
 Lions, Kiwanis clubs, Chamber of Commerce, the Hartford City En- gineers club, the Hartford branch
 of the National Associption of Cost Accountants and the New Britain
 and Hartford branches of the Amer
 lean Society of Mechanical ,Engin-
 eers The meeting was in connec-
 ton with the management week"
 movement and was held in the state
 trade school and followed a dinner at the Burritt hotel. where Mir.
 Stevenson was the guest of the ex- ecutive committee of the local A. s. M. F. and representatives of the va rious organizations.
 MT. Stevenson took as his subje "Budgeting for Better Management"
 He said the present rate of pro- duction in America surpasses the normal demand, but that the normal increase in demand would eventual, ly absorb this if European competi- tion does not affect it otherwise.
 He said American factories are running under good, mediocre and poor management and expressed surprise that some factories can sur- vive with the management they have. He compared budget to the finer tools of an expert mechanic md said "budgeting for better man. lgement means using the right kind 'f managerial machinery"
 Budgeting, according to the speak, 1T is most commonly used in this l country to operate the financial af- l airs of the individual. He drew a word picture of man and his wife | yho sit down together at the begin ling of the year and divide their es- imated income into "so much for ent, so much for clothes, so much or shoes, so much for amusement, Q much for magazines and news 'apers, so much for charity and so much to maintain a car" Then vhen they total it all up they usual, y find, he said that it far exceeds he income and they must go back nd figure all over.
 While admitting that these bud cts usually are balanced only in heory he said it is the only intelli- ent way to handle the family in- ome. He mentioned some large corporations throughout the country which operate on a budget system nd said the same system that is ap-
 icable to the one man butcher hop, also applies to the industry mploying 15,000 to 10000 men.
 He defined budget as a definite Ian upon which to operate and eX- lained that the standardized budget divided into two general divis- ons, the operating and the sales and he financial. He explained that in lguring the operating budget, in- tead of the old fashioned cost sysL em, based on the cost of a job after IS completed, that the factory fig Tres the cost of labor, materials and ther production facilities and then makes a pre- estimate of the cost of | he job Then the production de- 'artment then is required to keep Tithin that preestimated cost and | he sales department, which is en- bled to figure a sales price before he completion of the job. must fig Ire with the preestimated cost as a | 'asis. The sales budget, he said, must be based upon the consuming of the country, illustrating he method by explaining that pre- 'stimated sales are divided into tuotas and each salesmans rscom- 'ense based on the relation of his 'ales to his quota.
 The financial budget, he said,