This article focuses on the cost and inventory values in the glue industry. The manufacture of glue is so old an industry that its origin goes back into antiquity. It can be traced back 3,300 years to the sculptures of Thebes in Egypt, which depict a workman applying a piece of rare wood of a reddish color to a yellow plank of sycamore with the use of glue. Near him with his tools is a pot on a fire for melting glue and a piece of dry glue yet to be melted. The plant here used as a case illustration is a glue plant of Consolidated Chemical Industries, located at Bayshore, California. Consolidated Chemical Industries has been in business under various names since 1878. Recently it was merged with Stauffer Chemical Company, also dating back to 1885, and now operates as a division of Stauffer. The chemical industry, especially in heavy chemicals, considerable inventory verification is done by estimation. The cost factors used by Consolidated Chemical Industries at its Bayshore plant are basically, raw materials, chemical supplies and containers, labor, fuel, water, repairs and maintenance, depreciation, fixed overhead, and variable overhead. An average cost is determined by a continuous process costing method.