ESTIMATING FINANCIAL EESTJLTS 351
382. Investigation having determined the approximate
efficiencies and amounts of the various costs, the
feasible saving results at once from the equation:—
8 = C {l.~E),m which
G = cost,
E = existing efficiency, and
8 = feasible saving.
The resulting estimate may be conveniently summarized
in the form of Table 15.
383. The data of Table 15 are derived from the Cost
Finding Diagram, Figure 7, as follows:—
TABLE 15 FIGURE 7
Coat of From
Direct Materials Third line, Block MU
Direct Labor, Total Third Hue, Block HW
Direct Labor
Distribution to Departments Fifth line, Direct Departments
Direct Use of Equipment Third line, Block hE
Power _ Fourth line. Corrected Total
Supervision Fourth line. Corrected Total
Maintenance Fourth Une, Corrected Total
Rent Fourth Une, Corrected Total
Miscellaneous Fourth line, Corrected Total
384. Some explanation of the calculation of the table
may be desirable.
For illustration, suppose the number of direct workers
in the direct departments, 1 to 5, to be as follows:—
Department 1 120
Department 2 90
Department 3 70
Department 4 60
Department 5 75
Taking for example. Department 1; efficiency of use
of direct labor determined as explained in Article 327
is 71.5 per cent. Efficiency of supply of direct labor,
