The Providence news. (Providence [R.I.]) 1891-1906, 1897-04-21
Saving on Original Cost-Sevoral Item
of Cost Practical Illustration of Bus
ness Methods.

In lesson No / / have given brief
outline of the first principles of business
It is now advisable To consider more fully
"cost or production" expenses, which Is
probably one of the most important items
or factors in the practical application oi
the science of business.
Under many conditions IL will he found
that the business man has comparatively
no voice in regulating the price whlch
he must ask for his goods, II he wishes To
do a successful trade III competitor, on
parties engaged in the same business sell
an article at, say 80 cents, IL would be
absurd for one man TO try to hold his Gus
toners while marking his goods at 70
cents
On the other hand i'm the first stage of
business operations involving the process
OF securing by purchase or otherwise, tine
goods to be sold, lies largely the scope OF
business success or failure.
The price paid or means exerted TO pro-
euro the commodity and make OF 1t "a
commercial commodity Is what we mean
by "cost production.n Everything that
goes into the making, handling and put
ting Oh the market ready for sale 10 the
wholesaler, If you can sell to the whole
saler, or To the retail customer III you
| conduct n retail or direct business, must
| bo considered under this head.
In business u man not only sums up
| under this head the amount paid TO tho
producer or wholesaler, but also what IL
| cost to place the article on sale. lie con-
| siders rent, clerk hire, advertising, light
| and heat, and in order To make profit he
must make his selling price greater than
| the sum total of these various items.
| Cost of production includes material
| and labor. For example,, farmer, IN
order to find out what 1t cost him To pro-
duce "a crop of potatoes, must charge up a
nd
| for labor expended In cultVatlng the
| crop, and for taxes or rent on the land.
In manufacturing business cost OF
| production, expense should be considered
as including the price of crude material,
n reasonable charge for the wear and tear
Of machinery, labor, taxes, power heat
| and light, and other necessary items III
the cost of producing an article ready u
| pass To the consumer.
| In "A mercantile business, the items e.
| he considered as cost OF production are
the price of the article, rent clerk hire,
advertising light and heat and Other
items necessary to enable the business
man 90 determine how much the goods
stand him In hand.
In all lines OF business 10 is absolutely
necessary to success that this cost o
production" factor he a known quantity
Without exact knowledge, learned from
experience or careful calculation, based
! on tDt tAIelltntc Oh bIntI~, uo man Nau
iltclligently map out or engage in bus
mess operation.
| Cost, rs a business term, does not
mean merely money payment a busi
ness man has the right tO, and should tax,
into account, the Skill and energy which
he has expended in the acquisition.
| First cost for material or commodities
L. "A most important item, and one that
| live business man will keep down b,
every proper n.,ans In buying goods
! either for manufacture or ns mcrchan
disc lie many latent business possihili
| ties, which II AYailcd OF properly, pOin
20 success. and, II neglected, may bring
failure and ruin.
Tho business man should la familiar
with the market in which he buys IL,
should be ConNcrsnnt with all Customar,
and special discounts.
\ discount Il ~ certain deduction from
the market ur catalogue price. allOwct
either HS "a premium for volume of pur
chasr. ~ premium for quick payment
ur as an ordinary trade practice
II - husiness man can, hy reason oi
capital avail himself ~ all possible trad,
disrounts or Discount his bills, " ~ th'
/ prutc-s j. known in the business world, h'
- loo position to successfully meet al
/ ordinary ComIVtitiun, aud to uutstrip
! Cou.pctitur who cannot do the same.
" tie. husinCss man does enough ~
volume 90 Cuullc him tD avail himself q
the lsst quantity discounts ON hi. pur
! chasCs De- may in many Instances aiiUr,
3, sell his goods at retail at price practi