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SHOWING THE RELATION OF THE BOOKS AND

(The numbers, where shown, cort

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The Transfers between Warehouse, Plant, and Stor

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; and between Store, Warehouse, and Plant, being contingent ments, are not shown on this diagram.

(Between pp. 58 and 59.

CHAPTER IV.

PRIME COST.

tion.

In the two preceding chapters we have dealt with the routine appertaining to the payment of wages and to Recapitula

the receipt and issue of material. We now

propose to indicate the manner in which these two so far independent factors may together with other, but subsidiary, items of expenditure be united, with the view of obtaining a record of the prime cost of production.

As in the next chapter we shall deal with the distribution of commodities, we do not here refer to the question of stock, except in so far as it has a bearing upon the question of stores and cost of production generally. We think it well at the outset, however, to explain that, so far as the manufacture of commodities is concerned, we regard it as axiomatic that all articles, whether produced in pursuance of an order received from outside or in anticipation of future demand, should be booked as if they were intended to constitute part of the standing stock in trade.

This method of describing as stock all articles manuDistinction factured necessarily involves a clear distincbetween

tion being drawn between material used in stock and stores. manufacture, and the manufactured article which is the product of the expenditure of labour and

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