EX I. iT P

 EA.UD 3A'-S

 S*'A1TDARD CCST PCFVTULA

 Acknowledged by Mr. Boyd but never a-proved )s no 3Uch were ap-
proved. Never laid before Induistry, th.-,'efore never t-C:cn advantage
of. At the -resent time September 23, 1935, re'arind a calculation
which it is ho)ed irill be effective.

 To arrive at the cost of the productt manufactured:

1. Figure the cost of all Direct Material and Direct Labor.
2. To the total of Direct Material and Direct Labor Costs add a
 percentage of overhead representing all other costs (which
 must include Factory _:-penscs, Desi -nin, Erxenses, Selling
 Expenses, Distribution Ex-cnses, Administrative and General
 Excnsces.)

Illustration of the above method (all fi urcs are assumed):

1. Cost of Material $3.25
 Cost of Direct Labor 2.00

 Total Direct Costs $5.25

2. All Overhead Costs (33 1/31, of Direct
 Costs ($5.25) 1.75

 Total Cost $7.00

 The resulting figure ($7.00) re-)resents the cost of the -=roduct
manufactured, and to sell it for less than this o:iount would be in
violation of the Code. The 33 l/3< in this cxnple is merely an
illustration.

Determination of Overhead Percent,ez:

 The Overhead Percentegc to be used must be comr)utcd by each in-
 dividual concern in accordance with the :lan described on -)agcc 2 to
 10. However, no percentage shall be used lcss than 33 l/3o. Ex-
 ception shall be made to this rule b" the Code Authority if t:-ir
 member of the Industry requesting such exception is wirc--ared, on
 demand, to submit to an a6c;c;., of the Code Au.hority sobjcct to audit,
 a budget and basis therefor which will warrant a lo.-.cr overhead fi'Lre.
 Also in special circumstances or for particular occnsio-.,s v'hcre strict
 adherence to the rule wouldd v, orL excessive hardship, si.:iilar exception
 shall be made by the Code Authority upon sho.i/'i,. of justification
 therefore, provided, however, that a:ny meibcr of the industry whose re-
 quest for an exception to this provision is r.-t ra:.-itcd by th,:i Code
 Authority shall have the right of a))eal to the JURA.


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