The Providence news. (Providence [R.I.]) 1891-1906, 1897-05-21
LESSON NO. 2.

| line of the first principles of business. 1t
| is now advisable TO consider more fully
'cost OF production" expenses, which il
probably one of the most important items
or factors in the practical application of
the science of business.
Under many conditions IL will be found
that the business man has comparatively
no voice in regulating the price which he
must ask for his goods, If he wishes 20
| do q successful trade. If competitor or
] parties engaged In the same business sell
an article at, say 80 cents, it would be
| absurd for one man to try to hold his GUS
| toners while marking his goods at 20
cents.
On the other hand in TIE first stage of
| business operations involving the process
| Of securing by purchase, or otherwise, the
! goods TO De sold, lies largely the scope OF
business success or failure.
The price paid or means exerted 10 pro-
| cure the commodity and make Of IL "A COM
| mercial commodity is what we mean by
| cost production. Everything that goes
| into the making handling and putting
on the market ready for sale 10 the whole
| saler, if you can sell 10 the wholesaler, or
| to the retail customer, If you conduct "a
| retail or direct business, must be consid-
cred under this head.
In business "A man not only sums up
| under this head the amount paid To the
producer or wholesaler, but also what 10
| cost to place the article on sale. He con
| siders rent, clerk hire, advertising, light
and heat, aad in order to make profit
| he must make his selling price greater
| than the sum total of these various items.
Cost OF production includes materia
| and labor. Fer example farmer, in
| order 10 find out what it cost him tn pro-
| duce crop Of potatoes must charge up u
| certain amount for potatoes used as seed.
: for labor expended in cultivating the
+, crop, and for taxes or rent on theiland.
In manufacturing business, cost OF
production, expense should be considered
as including the price of crude material.
n reasonable charge for tho wear and tear
of machinery, labor, taxes, power, heat
and light, and other necessary items In
the cost OF producing an article ready to
pass to the consumer.
In mercantile business, the items TO
be considered as "cost of production" are
the price of the article rent, clerk hire,
advertising, light ana heat and other
items necessary TO enable the business
man to determine how much the goods
stand him in hand.
In oil lines of business it is absolutely
necessary TO success that this cost of pro-
duction" factor be a known quantity.
Without exact knowledge, learned from
experience or careful calculation, based on
the experience of others. no man can in
telligently map out or engage in busi-
ness operation.
Cost, as "a business term, does not mean
merely a money payment "A business
man has the right to, and should take
into account the skill and energy which
he has expended in the acquisition.
First cost for material or commodities
is most important item, and one that
live business man Will keep down bV
every proper means. In buying goods,
either for manufacture or as merchandise,
lie many latest business possibilities,
which If availed of properly, point to sue
cess and, If neglected, may bring failure
and ruin.
with the market in which he buys. lie
should he conversant with all customary
and special discounts.
A discount is "a certain deduction from
the market or catalogue price, allowed
either as a premium for volume of pur
chase, as "A premium for quick payment
or as an ordinary trade practice.
If business man can, by reason OF
capital, avail himself of all POSSIBLE trade
discounts, or discount his Dllls' as the
process is known in the business world,
he is in a position to successfully meet
all ordinary competition, and to outstrip
a competitor who cannot do the same.
II the business man does enough in
volume to enable him TO avail himself OF
tho best quantity discounts on his pur-
chases, he may in many instances afford
TO sell his goods at retail at price prac-
tically tho same as smaller business
house pays for them at wholesale and
still realize q profit.
Thus it will be seen that the key TO sue.
ccssful business Is Intelligent and judi
cious buying.
In this connection the old adage,
Nothing succeeds like success, " may be
applied To business Success makes profit,
profit makes capital, capital secures cash
discounts, cash discounts enables large
sales large sales secure best quantity
discounts, and best quantity discounts
make possible increased profit and success.
Likewise in tho cost of production or
manufacture lie latent business oppor
tunities which, availed of lead To success.
III business man, by reason of i'm
proved machinery or process, can manu-
faCtuTe or prepare an article ready for tho
market cheaper than "a competitor, in.
creased profit will seward his ENTERPRISE
or ingenuity.
Thus 1t will be seen that business OPP
erations place a premium on superior
human energy, labor and brains and
make the incentive for further investiga-
tion and invention.
SIMPLE BooKKEEPING.
Again leaving the further analysis of
the science Of business we will give
simple method of keeping accounts when
small business branches out, to the ex-
tent OF charge accounts. That is when
the business involves the extension Of
credit % customers and where good are
delivered without immediate payment
ihe book which may be- uesd for the
purpose Of keeping the simplest form of
charge accounts' may be- called "hlot-
ter - or memorandum book. 10 may he
ruled or not but ruling Is preferable.
The entries on "A single page should be
made as follows: