338 APPLYING EFFICIENCY PBINCIPLES
be more nearly correct for the case in hand, unless
such distribution would evidently cause substantial
error, in which case some intermediate proportion
should be adopted.
The distribution of Eent is first approximated theoretically
by distributing to each department a share
of the yard space, as nearly as possible in proportion
to its use thereof, and charging it ground rent in proportion
to the space used by it; and by distributing
the rent of any building to the departments housed in
it, in proportion to the space which they occupy.
366. Whatever redistribution of any indirect expense
may be made as suggested in Article 339, the total
of indirect expense provided by the distribution must
not be altered. For example: in the third line of the
diagram, "hE," the cost of direct use of equipment
totals {x -\- y); and however much the amount charged
against each department in the original theoretical
layout of the fifth line may be altered, the total of the
cost so provided for must remain the same. The necessity
of this is evident from the fact that this expense
actually exists in the business; and, in some way or
other, it must be provided for and must be recovered
in the sale of the product.
367. In the diagram, the final distribution of the
total of any indirect expense allocated to labor or
equipment has been made in the fifth line, to the several
departments. It is usual to make these distributions
in proportion to their total direct pay roll,
and in proportion to the total appraised value of their
direct equipment respectively. This assumes that any
skilled mechanic earning 40 cents an hour causes twice
as much indirect expense as any laborer earning 20
cents an hour, and that any machine appraised at