nd timeworkers became effective in Italy
October 27, 1924. The labor of women and children in Italy is limited to
48 hours per week (decree of March 15, 1923). The employment of children
under 12 years of age in shops and factories is prohibited.

COSTS OF PRODUCTION

_Methods of obtaining cost data._--Costs of the domestic Italian and
English hats were obtained by representatives of the commission. In the
United States they were given access to the books and records of the
manufacturers. Domestic costs of materials, labor, and overhead are
based on actual records.

In both Italy and England representatives of the commission were given
access to manufacturers' books showing estimates of their costs. The
estimates of material and labor costs were verified from original
records. Estimates of general administrative and factory expense were
expressed as percentages of the combined cost of labor and materials or
of sales. Access to records from which the latter estimates could be
verified was not permitted.

DESCRIPTION OF COST ITEMS

_Material._--Material includes costs of braid, of bleaching, and of
trimming materials and sundries, and also the cartons in which the hats
are packed.

_Labor._--The amount charged to the individual hat for labor includes
all labor costs connected with its manufacture. The amount of direct
labor on each hat was first determined. The indirect labor charge for
each hat was determined by applying to its direct labor charge the
percentage which total indirect labor for the factory bore to the total
direct labor.

_Overhead._--In each domestic factory the total overhead charges were
obtained and the ratio of these charges to the total direct labor cost
of the respective factory was computed. This ratio, expressed as a
percentage of direct labor, was applied to the direct labor cost of
individual hats to determine the overhead charge to be apportioned to
each hat.

SELLING EXPENSE

(_a_) _Domestic._--The ratio of total selling expense in each factory
to total manufacturing cost (material, labor, and overhead) was first
determined. This ratio (expressed as a percentage of total manufacturing
cost) applied to the manufacturing cost of the selected hat determined
its proper share of the total selling expense. Firms organized to deal
directly with retailers uniformly had higher selling expenses than those