and a 
which 
nager 
mpeti- 
tation 
when 
ünery 
r that 
Man- 
linery 
n the 
were 
es an 
duced 
extile 
yaged 
3 that 
ted in 
sened 
com- 
Ww in- 
pable 
ndus- 
eater 
rease 
ment 
ondi- 
nples 
chine 
hand 
vhich 
Determination of Costs 117 
The profits in an industry may be increased by (1) 
increasing the selling prices with stationary or lowered 
costs of production, (2) by increase in quantity of sales 
with the same plant and equipment, or (3) by decreasing 
the cost of production under either of the first two 
assumptions. 
Unfortunately, the tendency in some industries has 
been to maintain selling prices even in the face of lower 
costs of production. In order to secure a uniform dis- 
tribution of wealth and greater general purchasing 
power in the nation, it is absolutely essential that lessened 
production costs be accompanied by lower selling prices ; 
otherwise, the lack of uniform distribution of wealth will 
lead to a deereased general demand for commodities of 
all kinds, which demand is the basis of continued manu- 
facturing activity. 
Cost or Repair AND DrraiLep Parts 
The establishment of correct prices on repair parts and 
minor details is greatly facilitated by accurate cost sys- 
tems. It stands to reason that a company making 
individual parts in quantity is in position to make a 
considerable profit on these individual parts, since the 
selling price need be only slightly less than that offered 
by a job shop which would have to make the parts singly 
and consequently at a much greater cost than the manu- 
facturing establishment. Moreover, the manufacturing 
establishment making them in quantity and having them 
in stock can, under ordinary circumstances, make immedi- 
ate delivery of all standard repair parts. 
Any cost system relating to assembled products, 
therefore, should be built up in such a manner that the 
costs of individual parts are easily determined. The 
cost data should be indexed and classified in such a way