If  a  change  in  operating  conditions  has  occurred,  or  if  expenses
have  increased,  such  facts  are  immediately  presented  for  attention
without  waiting  for  personal  checking  of  an  expense  analysis  by
the  management.  Faulty  conditions  are  instantly  revealed  and  can
more  quickly  be   remedied,  while  warranted  increases  in  manufac-


198  TRADE   ASSOCIATIONS

turing  expenses  can  promptly  be  carried  into  the  cost  of  the  product
by  increasing  the  departmental  burden  rate.  Thus  invaluable  informa-
tion becomes  quickly  available  for  the  promotion  of  greater  operating
efficiency,  and  the  burden  accounts  periodically  record  the  progress
in  each  department.  If  desired,  the  operations  of  each  department
can  easily  be  charted  with  the  estimates  for  the  base  line,  the  actual
entries  showing  the  variance  above  or  below.
This  method  of  recording  the  burden  charges  should  be  given
very  careful  consideration  as  burden  constitutes  one  of  the  most
important  cost  items.
All  differences  developing  in  the  burden  accounts  between  the
estimates  and  current  entries  should  be  carried  to  the  Loss  and  Gain
account  as  shown  later  in  the  Under-  and  Over-Earned  Burden  and
Burden  Variance  accounts.
Application  of  Administrative  Burden

Certain  administrative  burden  charges  are  necessary  in  the  opera-
tion of  a  manufacturing  enterprise  and  should  therefore  be  charged
in  such  a  manner  as  to  become  a  part  of  the  manufactured  product
inventory.  They  may  be  combined  with  all  departmental  burden
rates,  but  are  more  easily  handled  in  one  charge  as  outlined  in  the
following  paragraphs.
