Document 5kjB71V0jQpm4L2Jw5o8YM98e

GENERAL ACCOUNTING DEPARTMENT OFFICE OF THE AUDITOR 601 CANAL*ROAO, N. W., CLEVELAND. OHIO f o r Executive Dept. mr . R. W. Levenhagen ANSWERINQ LETTER OF OFF/CE Da t e May 10th, 1913. SUBJ ECT: The Martin Varnish Co. - Factory Statement Feb. 28th, 1915. DICTATED BY Analysis of the factory accounts haa now been made and discloses a grand total manufacturing deficit of $3,044.39, lass deterred expense reserve accounts $232.00. The deficit is composed of items commented upon heneath; Productive Labor Deficit - $89.53 ThiB is caused h7 the cost clerk inaccurately transcribing the labor from the time cards to the manufacturing slips. Varnish Storage Deficit - $190.0? This item is a separation of cost which is not necessary in a plant of this siie and it was discontinued March let, having been unabsorbed to that time. Hereafter it will be included in the productive service. Peat. Burden Deficit - $20.84 Varnish storage rate mentioned above will from March 1st be in part absorbed through this department burden. At my last visit to the Martin Varnish Co. I advised Mr. Marsh to commence using, at March lot, a burden of 100$ in place of 50$ they had been using. General 3urden Defloit - $712.95 The oost is 127'$ while they are using IOC;-. advised Mr. Msrsh to increase to 125$. This burden I also Package Additions Surplus - $139.79 I'o comment necessary. Raw Material Account Deficit - $2,170.79 This is heavy for a small plant like the varnish company. There are four possible explanations for this deficit. First, inaccurate inventory either at Aug. 3let or Feb. 28th, either as regards quantity, pricing or calculating. Second, inaccurate charging to rex slips of the quantity of material used in the manufacture. Third, inaccurate pricing of the materials charged to the manufacturing slips. And, fourth, insufficient allowances for losses by sediments, etc., or differences be tween weighed and measured gallons. FAStF Copies to Messrs; W. K. Cottingham Z. E. Martin Tours very truly, -L/i General Auditor.