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Veneer Factory Costs 



Editor's Note 



The following three papers on Veneer Factory Costs were presented at the annual meeting of the National 

 VenetT c"? Panel Manufacturers' Association, held at Chicago, December 12 and 13. The first paper Is by J. T. 

 Edwards of the Mcdtord Veneer Company, Medford, Wis. ; the second is by V. J. Hill of the Augusta Veneer 

 Company, Augusta, Ga., and the third is by F. C. Rice of the Gerry Veneer & Lumber Company, Sindairville, 

 N. Y. All three of these documents have the same general viewpoint of the necessity of v^ueer" manufacturers 

 Uguring accurate costs, and they generally arrive at about the same conclusion in the necessary methods li> be 

 pursued. The documents comprise a symposium on this important phase of the veneer manufacturing industry. 



J. T. EDWAKDS' PAPER dryer and two dry-kilns. We operate the dryer day and night. My 

 It is assumed that this title applies to the cost per M feet for figures are based upon the operation of one lathe, 

 producing veneer from common native hardwoods by the rotarj' We have had reports of much greater outputs than our average 

 process. As the mill with which I am connected produces more birch shown, and we have had day's runs that are much greater, but 

 veneer than any other wood, and as %" is an average thickness, and to get at the real output, each thickness of veneer must be charged 

 as we produce considerable veneer of this thickness, I will figure on with its share of lost time, and the other adverse factors, which cut 

 this wood and this thickness. Secretary Young recently issued a buUe- down the average greatly. We find that we are unable to start our 

 tin to this association entitled, "Suggestions for Cost Accounting in lathes first thing each morning and run all day. Before we could 

 Eotary Veneer Business. ' ' As uniformity in methods of cost account- do this our equipment for handling the veneer after it comes 

 ing facilitates comparison, I have reduced my figures to his outUne, from the lathe would have to be more than doubled. A mill that is 

 with the following results: equipped to trim and dry the whole of the output of its lathes run- 

 Cost for operating one day in the manufacture of Vs" birch veneer: ning full time, could certainly produce more stock per lathe per day 



First Cost : 4 M ft. logs at $20.00 per M ft $ 80.00 "^^ ^'^ <^^^, '^^'^ I think that the cost per M feet should be less, 



Direct labor for all processes, including crating 44.00 although I am not posted as to this and would be very glad to hear 



■ from those who are. 



$124 00 Referring to the reports that the rotary veneer manufacturers 



Burden ; Indirect labor $12.00 made to Mr. Young during 1909, the latest at hand, I find that the 



Taxes •- . . 1.30 . ■ tj, ^, t „ ■ n .c , ^ , 



Insurance i 3.40 average price received for all ys veneer, aside from oak and poplar, 



Unlieeo' 3 80 '"'^^ $8.50 per M feet, which would not allow my concern much of a 



Depreciation 5.00 profit at a cost of $8.10, especially if the sales shown were f. o. b. 



Office, includes selling cost 9.00— $ 38.00 , ,. ,■ ^ . , \-,.-, nn it .c . ^o, * i.i 



. destination. Poplar averaged over $12.00 per M feet, so that would 



Total final cost of operating one day $162.00 seem to be the wood to cut in order to make money. Birch veneer 



We find that an average day's run on %" birch veneer is just has been selling so low this year that we could see no profit in it. 



about 4 M feet of logs, as given above, and that from 4 M feet We understand that Vs" birch has been delivered here in Chicago at 



of No. 1 logs we can jiroduce 20 M feet of Vs" merchantable veneer, $8-50 per M feet, 



or at the rate of 5 M feet of veneer to every 1,000 feet of logs. I liave figured out the cost of one other thickness, 1/20" birch, on 



Since the total expense for operating one day, including cost of tlie same basis, and find the cost per M feet of merchantable veneer 



logs, is $162.00 and we cut 4 M feet per day, the cost per M feet of to be $3.40. 



logs is one-fourth of $102.00, or $40.50. And as we produce 5,000 ^ cheerfully submit these figures relating to our business to you 



feet of merchantable veneer from every thousand feet of logs cut, foi' what they are worth, and invite your comment, and trust that 



the cost per M feet of veneer is one-fifth of $40.50, or $8.10. this association may eventually have the cost figures on the same 



These figures are taken from our 1910 records, during which year basis from such a number of mills as to make it possible to fix upon 



we spent over two months in cutting %" birch veneer. About two- a reasonable average cost for producing each thickness of each wood, 



thirds of the veneer produced was dimension stock, mostly faces, but The determination of a reasonable selling price would then be an 



some backs and centers, and the balance long run. easy matter. 



To get at the cost per day we took the whole cost of operating for V. J. HILL'S PAPER 

 the year, as shown by our books, and divided by 300, the number of ' Never in the history of the veneer business, so far as I am 

 days the mill was active. Then, having a record of the time spent acquainted, has there been a time when such general chaotic condi- 

 in cutting, the logs used, and the veneer produced, we worked out tjo^g jj^ve prevailed. Something is radically wrong; evidently it is 

 the above figures. The resulting cost per M feet is practically the g, case that requires heroic treatment. The price of logs is being 

 same as we obtained from a cost system whicli we kept by a constantly advanced, and the quality of the logs is becoming con- 

 different method throughout the year. stantly inferior, which results in an increased waste in the manu- 



Some familiar with log prices in our country may question my facture of logs, and not only so, but in an increase in the cost of 



figure of $20.00 per M feet, and I will say that the first cost of j-^^jor necessary to the manufacture; the price of labor is being 



birch logs decked in our yard was not over $16.50, but considering advanced, while labor itself is less efficient, and with it all, the 



the shrinkage in scale from the yard to the mill, the deterioration as astounding fact remains that the selling price of veneers is less than 



summer advanced, amounting at least to fully one-third, the final j^j. fg^j. qj. gyg years past, 



average cost came up to the figure I have taken. Tljg situation is painfully serious, and it is an evident fact that 



Mr. Young has itemized some things to which I have not given a veneer manufacturers themselves are largely responsible for the dire- 

 separate cost. Under "First Cost" he has crating separate from conditions by which they are at present confronted. There appears, 

 direct labor. This seems to me to be direct labor as truly as drying ^^ ^^ g^ lack of understanding between the manufacturers themselves, 

 or others of the processes. ^j^^ ^jjg situation is not unlike that of the widower, who having six 



He has a separate set of items— "Office, Salesman, Advertising, ^^^n^en, married a widow with six children, whose matrimonial union 



Travelins: and Indirect Expense," under the heading of "Selling ,, , .,, . ,,.,. , , -, , ^ ■ , 



iia.ciiug li-u iuiui^v-u f , , ^ . , , . was blessed with six additional children. On one occasion when an 



Expense." As we have no Sales Department we have included this , , , , -, ■ i, , ^, ■ , -j ^ i, 



^ , ,.„ , , ,, -1 ,,/^^ ,, unusual brawl was heard m the home, this man's wife ran to the 



cost under ' ' Burden ' ' m with the item ' ' Office. " ^. ,,,, „i....-,,.t,.^ 



-rrr, .. ^ ii-r, TT^. jT'n TTDiMii-D „ lescue, aud seciug the trouble, called to her husband: "John, for 



We have no items of " Power, Heat and Light and Rent. ' "Power ic^^,uc, .^iiu i,ov ^ > ' 



Bud Heat and Light" cost us in the way of "Indirect Labor" and goodness sake, come here! my chiUuns is fighting your chiUuns; your 



we pay no rent, except a small amount to railroad for piling ground. chilluns is fighting ray ehilluns; and my chiUuns and your chilluns 



I will explain as to equipment, that we have two lathes, one roller are just beaten hell out of our chilluns ! " or, in other words, it 



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