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material spent on their production to a tool order bearing the same number as the stock order number to which the goods are to be made. The cost of these will be recorded in the same way as the cost of other tools, but the number to which they are made serves to identify them, and as they have been made specially, and may or may not be again required, their cost must be considered in the determination of the selling price of the articles, the manufacture of which necessitated their production.

Other channeis of expenditure, such as the wages of foremen, gatemen, timekeepers, and others who are Factory

engaged in supervision, or in the distribu

tion of stores, in keeping time records, charges.

or in any similar work, may be recorded either under a special heading for General Charges in the Prime Cost Ledger, or in a Factory General Charges Book. As will be explained in a subsequent paragraph, these expenses may at any period be summarised, for the purpose of distributing their incidence, and a ratio established between them and the total amount of the wages expended on the various orders during the same period.


Prime cost

We are now able to consider the functions of the book

in which the prime cost of any manufactured ledger. article is aggregated and recorded, with a view of obtaining the cost of production. This book is the Prime Cost Ledger, in which are summarised the allocation of wages spent on manufacture, alluded to in Chapter II., and the various warrants for stores used in manufacture, alluded to in Chapter III. In addition to these two channels of expenditure it will be observed


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Order No.



that the Prime Cost Ledger (Specimen No. 34), provides a column for sundry disbursements which are allocated to the respective working or stock orders, from the Petty Cash Book or its equivalent, or from any similar source. The items of sundry disbursements thus charged are of course debited to manufacturing account in the Commercial Ledger, a process which is facilitated by means of inserting in the Petty Cash Book a column showing the accounts to which the items in question are chargeable.

These records having been made, the clerk keeping the Prime Cost Ledger will periodically draw out the total of his debits for the given period, under the various heads for the several items of wages, materials, and miscellaneous disbursements. He will see that in the case of wages the total agrees with the amount of the wages account in the Commercial Ledger, which also coincides

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with the totals of the Wages Book for the corresponding period. He will also see that in the case of materials his totals agree with the credits to the stores account in the Commercial Ledger for stores issued, cognizance being taken of the credits in the Prime Cost Book; the corresponding debits to stores represent the materials drawn out to a given number but not consumed on that job, and therefore returned to store, as explained later. As regards petty cash, the totals should agree with the debit through the commercial books to sundry disbursements on manufacturing account.

Before explaining the credit side of the Prime Cost Ledger it will be well to give a specimen of the form

called a Stock Debit Note (Specimen No. 35), Stook debit

which is made out concurrently with the sending of commodities into stock.


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This form, which may have a counterfoil, or be copied by means of carbon sheets, emanates from the leading hand in the shop. The monetary column is filled in by the prime cost clerk from such data as he has in his Ledger, and the contents of the note are entered by him on the credit side of that book. The warehouseman or other person in charge of the manufactured goods will, in his turn, make the necessary entry

in the Stock Received Book (Specimen No. ceived book. 30), which bears the same relation to stock that the Stores Received Book, explained in Chapter III., bears to stores.


Stock re

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Stock ledger.

The entries in the Stock Received Book are posted in the Stock Ledger (Specimen

No. 37).

Besides the Stock Debit Note there are posted to the credit side of the Prime Cost Ledger the credit notes (referred to in Chapter III.) for surplus or scrap raw material returned to the store.

By abstracting the credit side of the Prime Balancing primo cost Cost Ledger periodically, it will be seen that lodgor.

it agrees with the amounts passed through the commercial books to the debit of stock account

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Reserve Stock. STOCK LEDGER.-SPECIMEN No. 37.

Article. Received.

(and credit of stock orders account) for stock sent into warehouse, and with the debit to the stores account (also credited to stock orders account) for surplus or scrap material returned from the workshops. The amounts standing to the debit of uncompleted stock orders in the Prime Cost Ledgers will represent the cost price value, pro tanto, of the goods in course of manufacture, and will agree with the balance on manufacturing account in the Commercial Ledger.

It is evident that in the event of any of the articles made to a Stock Order being appropriated before completion of all) unless

the pricing of Balances on stock the Stock Deorders.

bit Notes for articles sent into the warehouse is deferred until the whole of the order is completed, which would involve needless inconvenience, some element of error may enter into the

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