System work initiated by the cash questionnaire;

              82 HASKINS & SELLS November
System Work Initiated by the Cash Questionnaire
By R. A. DALRYMPLE
COST records, it has been stated, con­stitute
a pivot on which swing the
control of inventory, internal audit of pay­roll,
and knowledge of profit or loss realized
on various products handled. In fact, it
is believed that the good management of
an enterprise often swings on the same
pivot.
The importance of cost records, there­fore,
needs no amplification to the ac­countant,
but many accountants need to
be more deeply interested in the matter of
ways and means of cost finding. It is
highly specialized work, and therein lies
the opportunity for individuality and
adaptability. If a client's cost work is
inadequate, poorly adapted, or improperly
controlled, every accountant, granting that
his advice has been requested, or is de­sired,
should be able to make concrete
recommendations for improvement of the
system as specifically as he would in the
matter of cash accounting and control.
The accounting for costs in enough detail
to permit of ready comparison with the
market price of similar commodities is one
of the most important features of any ac­counting
system. The work of obtaining
such data frequently is exceedingly com­plex
and at times a client will deem it im­practicable
to include a detail cost system
as a part of his accounting organization.
Notwithstanding this, an accountant may
still urge the vital necessity of cost statistics
and will insist that such statistics, to be
fully reliable, must be an actual part of the
bookkeeping procedure. When faced with
the expense which such work frequently
entails, clients perhaps will not be willing
to admit the necessity.
In such cases the opportunity is pre­sented
to the accountant of devising con­trolling
accounts which are susceptible to
monthly reconcilement with actual condi­tions
and thus would prevent an erratic
costing of sales. In other cases, by the
issuance of material in accordance with a
definite production schedule, it is possible
to control the cost of material and, by this
control, to measure the cost of direct labor.
The factory overhead frequently can be
apportioned to various products by using
the percentage of overhead to direct labor.
In cases where the fluctuation is either so
wide or irrational that the resulting costs
would be distorted, a recognition of the
relation of the total proposed production
for the year to the total proposed annual