COSTING

Evening Post, Volume CXV, Issue 123, 27 May 1933, Page 24

COSTING

IN CIVIL ENGINEERING

Cost accounting, or "costing,'' is the analysis of work in terms of money, and has evolved as a product of that remarkable phase o£ human development, the industrial revolution, which originated about the close of the eighteenth century and is still proceeding, said Mr. M. C. Peebles', costing officer to the City Council, in an address to members of the Wellington branch, of the New Zealand Society of Civil Engineers last evening. Today a costing system was an essential part of all large-scale production, and competition was rapidly forcing smaller manufacturers into line, said Mr. Peebles. Itwas developed at the urge of profit-seek-ing industry, and by natural transition had come to be applied to the greater utilitarian products of the engineer. l( rom the engineer's point of view costing was an aid to increased efficiency, aud .the analysis of costs was a natural process in the development of improved methods. ■ Costing systems, however, had limits; they were not infrequently expected to supply understanding as well as information. No method of satisfying this dual demand had as yet been invented. Cost accounting was a means to an end, and not an end in itself, and that fact should Always be kept in mind when installing of operating a costing system, he continued. The purpose of costing was simply to supply information when and in such manner as to be of the greatest use to executives, and therefore must conform to the general organisation. Cost keeping had been regarded (and to some extent still was) as a function of Ijookkeeping and not as within the field of the engineer. It was, he considered, definitely a managerial function, and though bookkeeping principles and con-, ventions were involved, cost records, to be of any use to the engineer must be more flexible and contain matter not germane to bookkeeping proper. The bookkeeper was concerned with the payment to Brown of Brown's wages: the cost-keeper -was not interested in Brown, but in the elapsed time for ■which Brown was paid and how that time had been expended on the units of production. The information to be drawn from costing records of works ia progress was invaluable to an engineer, and it followed that the engineering point of view and engineering requirements were of paramount importance when designing a system to cover a civil engineering project.

Mr. Peebles then.proceeded to deal with his subject in technical detail.