6. Power factor.—The distribution of the cost of the power used may be very simple, or it may be com plex. If electric power is purchased and each machine has its own meter, it would not be difficult to apportion the power cost with accuracy. But in the average factory such simple conditions seldom exist. The same set of boilers may furnish steam for operating engines which supply power to the factory, to hy draulic pumps which supply an hydraulic system, and also to air compressors which supply a pneumatic system.
The transmission system may be complex, and it may be difficult to separate its services by depart ments unless the system has been constructed with this end in view. In addition, a large amount of power may be used in testing new product, as in the case of factories making electrical machinery.
But even in complex cases a division of the total power supplied can be made in a satisfactory man ner, tho it may not be absolutely accurate. Evi dently, in very complex cases some estimating must be done; the total output of power of any kind can then be debited to the several centers using it, in pro portion to the capacity of the motor or belt which operates it.
As before explained, an estimate must be made of the time each center will be in actual operation. The product of this estimated time and the horsepower assigned to each center gives the horsepower hours which each center is expected to use. The total horse power hours developed, divided into the total cost of the power, will give the rate per horsepower hour that must be used in distributing the power expense. The total cost of any one kind of power must include depreciation, repairs, fuel, etc., and the interest on that part of the power plant which supplies the power.
7. Lighting factor.—The general method of ap portioning the lighting expense would be similar to that pursued for the problem of power, in so far as allocating the total cost to any one building is con cerned. The total cost of lighting that is assigned to any building, divided by the total floor area of the building, as in the case of the building factor, will give the total charges per unit of floor area, and the amount that would belong to each production center may be found by multiplying this unit charge by the floor space assigned to the center. Due care must, of course, be taken that interest, repairs, depreciation, etc., over the entire lighting equipment are equitably distributed to each building so far as possible, as well as that the actual cost of the gas or electricity supplied is accurately estimated.
8. Heating factor.—The problem of heating and ventilating is very similar to that of lighting, the cost being reduced to a charge per unit of floor area. These items, as in the case of lighting, are not con stant the year round. Thus, heating may be required during only a few months of the year. It would not be good policy, however, to charge off these heavy expenses during the months they are incurred. The total cost of heating and ventilating the factory is, therefore, spread out over the entire year, lighting being treated in a similar manner.
It would appear, therefore, that even in this method of distributing expense, some averaging must be re sorted to; exact distribution in point of time would not be desirable. It should be noted, however, that this averaging is within the service itself. It simply equalizes the service charge over a period of time, differing in this respect from the old averaging meth ods, which average all services over all activities, re gardless of the use each activity has made of such services.
9. Organization factor.—Under the term organi zation factor, Mr. Church includes such elements as the building factor of offices, cost of time and cost keeping, factory office expenses, wages of watchmen, interest, and depreciation and repairs on office fur niture and fixtures. There is no difficulty in obtain ing the yearly and monthly totals of these items, and it only remains to assign this total by machine rate.
In a very large establishment which is highly depart mentized this total could be apportioned to the sev eral departments with a fair degree of accuracy; but after such an apportionment is made for a large plant, and always in the case of a small factory, fur ther allocation, based on services rendered, would be difficult. It is sufficiently accurate, however, to dis tribute these departmental totals by simple division over the production centers involved. The cost of this class of service is not, in general, affected by the size or weight of the parts handled. It costs as much to put in a production order for a small part as it does in the case of a large one. This method will, therefore, be substantially correct. The dividend obtained by dividing the total organization expenses by the number of production centers involved, will give the factor which may be included in the machine rate to cover these expenses.