ABSTRACT
This chapter presents some notes on cost records, a neglected branch of accountancy. First, it provides definitions of terms such as prime cost, direct expenses, and indirect expenses. Then, the chapter discusses the advantages of cost records. A cost system possesses an equally great value in enabling estimates to be prepared with practically absolute certainty; in enabling contracts to be taken in the knowledge of the cost of similar work in the past. The chapter provides an outline of the system of cost books. The various elements of cost seriatim are classified as to the labour, as to material, and as to material given out of store. It is essential is a thorough check upon stock or stores is done, especially where the principal cannot always or often he on the spot. In an established business the trading accounts should afford most valuable material from which a forecast of current expenses may be prepared.
