A manufacturer will doubtless obtain just as much solid comfort and real pleasure in knowing that special tools recently made have enabled him to clip a few cents off the cost of one of the units of his product, and that economics in his shops have reduced his operating expenses 2% or 3%, as to be furnished the startling information that his _Printing and Stationery_ account is .7148% of his _General Expense_, his _Insurance_, 6.2714%, _Postage_, .5218%, _Telephone_ and _Telegraph_, .6538%, and so on down the list. The illustration used is not an imaginary one either. Statements are occasionally seen wherein all the individual items of expense are thus figured and the percentages carried out four decimal places. Of what conceivable use can such figures be? The only imaginable excuse seems to be that the accountant hoped to lower these percentages in the next period──possibly the third and fourth figures in the decimal──by bringing pressure to bear on the telephone company and on the insurance underwriters sufficient to get the rates reduced, and by telling the mail boy he must use less postage stamps. Rather a peculiar method of cutting expenses, and it is quite safe to say that the same effort applied in other directions would be productive of far more satisfactory results. A good statement, then, should be clear, concise, and complete. =31. What the Statement Should Show.= The two elements in a factory, in which the management is directly interested, are the _productive output_ and the _operating expense_. The former should be pushed to the utmost limit, while the latter should be trimmed at every point possible; and it is readily seen that the point of greatest efficiency is reached when the plant is producing at its full capacity. A factory with a complete organization is operated at a heavy expense when running at but 50% of its full capacity. These two elements, output and operating expense, are so closely related that a change in one immediately affects the other, and the relationship between the two, which is expressed in a percentage, is either raised or lowered according to the character of the change. (a) If the operating expense remains stationary and the production increases, or (b) If the operating expense is lowered and the production remains unchanged, or (c) If the output increases at a greater rate than the expense increases, or (d) If the output decreases at a lower rate than does the expense, then the percentage which expresses the ratio of expense to production is lowered, which means increased operating efficiency and a decrease in the cost of production. On the other hand: (a) If the operating expense remains stationary and the production decreases, or (b) If the operating expenses are on the increase while the production remains unchanged, or (c) If the operating expenses increase faster than the production increases, or