. Electric railway journal . ars much good material is available in therecords to serve as ammunition for the cabinet to usein bombarding the head who is trying to get hisestimate through, so that he is distinctly on the firingline while this procedure is going on. After the cabinet has arrived at a tentative expensebudget the earnings for the ensuing year are some it may seem to be a waste of time to estimatefuture earnings, but it is a fact that in the last budgetset up by this company the gross earnings were fore-casted within 1 per cent of the actual. It is, in ouropinion, jus
. Electric railway journal . ars much good material is available in therecords to serve as ammunition for the cabinet to usein bombarding the head who is trying to get hisestimate through, so that he is distinctly on the firingline while this procedure is going on. After the cabinet has arrived at a tentative expensebudget the earnings for the ensuing year are some it may seem to be a waste of time to estimatefuture earnings, but it is a fact that in the last budgetset up by this company the gross earnings were fore-casted within 1 per cent of the actual. It is, in ouropinion, just as necessary to set up a bogey for earn-ings of the traffic department as it is to fix one forthe expenses of the mechanical, the way and the powerdepartments. Obviously, when the earnings as well as the expensesare estimated, it is possible to set up a proposed netincome, which after all is the real goal in operation. With us, after the trial budget has been acceptedafter revision by the cabinet, the department head turns. GRAPHICAL, REPRESENTATION OF ESTIMATED AND ACTUAL, EXPENDITURES BY ACCOUNTS jFigr. 4—Account No. 8, roadway and track 5—-Account No. 33, electrical equipment of 6—Account No. 57, substation employees. Fig. 7—Account No. 59C, electrical energy. iFig. 8—Account No. 64B, passenger conductors. over his estimate to the auditor, who assembles thebudgets. The budget is spread over the year by months, asindicated in the form reproduced in part in Fig. 3. Theestimates are put into graphic form, graphs beingplotted for each expense item by account number andalso for the earnings. Sample graphs are reproducedin Fig. 4 to 8 inclusive. The diagrams show the actualfigures for the preceding year and the estimates forthe current year. The actual expenditures for the cur-rent year are then plotted in as the year advances andserve as a splendid check on variations from the budgetestimate. The efficacy of a budget system depends, of course.
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