Second, the system adopted should be as simple as it can be, and still be consistent with the problem in hand. The average manager is a very busy person, usually demanding methods that are simple and easily followed and, ordinarily, being suspicious of methods that he cannot understand, or results the derivation of which he cannot easily see. Furthermore, the system should be stable and not subject to constant readjust ment because of slight changes in operating conditions, since readjustment usually destroys the possibility of comparison with costs already existing.
For these and many similar reasons the cost system adopted is usually a compromise which takes into ac count the surrounding conditions. Thus, it would be a useless expense to instal an elaborate machine rate and supplementary rate in a continuous-process in dustry where a single product is being produced and where a simple method of percentage on material would be accurate enough. Again, in an industry making a few lines of goods of similar characteristics, where the parts do not vary much in size, and where the machines are all small and inexpensive, a method based upon percentage on wages or upon hourly bur den give results sufficiently close. In more complex cases, as in intermittent manufacturing, where many commodities of varying size and charac ter are made, it has been shown that these simpler methods do not give intelligent results. If the compe tition is keen the wise manager will go as far as he can in the direction of the machine rate and the sup plementary rate. Even in cases of this kind condi
tions may be such as to permit the use of simpler methods, particularly if careful departmentization can be effected. The general influence of departmentiza tion on costs should not be lost sight of, since by this means all cost-finding methods are strengthened, as has been noted in discussing the several methods of distribution. A later section will discuss this impor tant factor somewhat more fully.
Above all, the manager himself should have a clear cut view of just what he wishes to do. In general, the practical manager must have the help of an expert organizer to assist him in installing a new system, but he himself should be able to limit intelligently the extent to which the system is carried. It is one thing to lay down general principles, and another to know how far they can be economically carried. One of the most common errors of cost-finding experts who are lacking in practical experience, is to oversystematize in installing new cost-finding systems, with the result that much useless information is gathered and event ually much of the elaborate system is discarded. The cost-finding expert should be a master of the principles of his business; the practical manager should supply the limitations of the system. And finally, it is of supreme importance that some system, be it ever so simple, should be in service. A factory without a cost finding system is like a ship without a rudder, and in these days of strenuous competition it is sure to go on the rocks of failure.