(adjustments are made based on special studies for 

 individual fisheries) (see Appendix Table 23). 



At the wholesale level, cost and profit ratios are 

 derived from the "food and kindred products" 

 statistics based on the Census of Business 1967: 

 wholesale trade, commodity line sales (U.S. Bureau 

 of the Census, 1967a, b). At the retail level for fresh 

 and frozen processed fish products, costs and profits 

 of the "meat and fish retail market" from business 

 income tax returns and corporate tax returns which 

 were both published by the Internal Revenue Ser- 

 vice (1968 a, b) are used (Appendix Table 24). 

 Canned fish products are sold in the grocery de- 

 partments of supermarkets; costs and profits 

 statistics of the supermarket published by the 

 Supermarket Institute, Inc. are applied to canned 

 tuna and salmon retailing margins in this study 

 (Supermarket Institute, 1963, 1964). 



Data for costs and profits of fishing vessels are 

 gathered by the Economic Research Division ac- 

 cording to types of boats from different fishing areas. 

 Each type of vessel is understood to be specialized in 

 the fishing of a particular species of fish although 

 some of them are capable of alternating from one 

 species to another. 



Classification of Costs 



None of the cost statistics assembled from differ- 

 ent sources provides information in the detail needed 

 for cost allocation. Furthermore, each source has its 

 own breakdowns of cost items. Under the circum- 

 stances, the estimated costs are grouped in a way to 

 satisfy the different conditions that the primary data 

 present. They are classified into four groups 

 — materials and fuels, labor, capital costs, and 

 operating expenses. Together with net profit, they 

 form the five components of each margin (or gross 

 profit) at each functional level. The estimates are not 

 made with perfect precision; they must be dealt with 

 as approximations. 



Under materials and fuels are included paper 

 products (for packing and wrapping), metal contain- 

 ers, ice. gas, electric energy purchased, and office 

 supplies. Bait and food on fishing vessles are includ- 

 ed in the category. Capital costs are comprised of de- 

 preciation, rent, and interest. Operating expenses 

 include salaries, employee benefits, insurance, ad- 

 vertising, commission, bad debts, taxes, contract 

 work, office maintenance and repairs, telephone 

 charges, mailing, and miscellaneous expenses. 



Labor costs at the production level are wages paid 



to the directly productive workers in the processing 

 plants and wages paid to the crews while working on 

 fishing vessels. Vessel owner's share and 

 crewman's share except for wages are considered as 

 salary and bonus, respectively. As salary it is an 

 operating expense; as bonus it is considered as 

 profit. Labor cost at the retail and wholesale lev- 

 els are wages paid to workers in wrapping and label- 

 ing products and in unloading and moving cargoes. 

 Labor costs at the production and distributing 

 levels increased faster than costs of material and 

 fuel, capital expenditure, and operating expenses 

 during the last two decades as shown in Figure 1 5 for 

 a few major items. 



Allocation of Costs 



Margin components are reduced to ratios expres- 

 sed as percentages of the margin or gross profit at 

 each of the four functional levels — harvesting (fish- 

 ing), processing, wholesaling, and retailing. They 

 are summarized in Tables 8 and 9 with the latest data 

 available, gathered from the sources mentioned in 

 earlier sections and shown separately in historical 

 series in Appendix Tables 16 to 24. The ratios pre- 

 sented in Tables 8 and 9 are used as bases to allocate 

 the costs of each fish product according to the actual 

 margins calculated from price studies at each level as 

 exemplified in the margin component Appendix Ta- 

 bles 25 to 38. A summary of margin estimates for all 

 products is shown in Table 10 for comparison. The 

 margin at the lowest level, harvesting, is the ex- 

 vessel price itself. 



DIVISION OF CONSUMER'S DOLLAR 

 SPENT ON FISH PRODUCTS 



Prices offish products are expressed in cents per 

 pound. They can be converted to pounds per dollar 

 at the retail level, i.e.. the value of a consumer food 

 dollar. A consumer's dollar spent for each fish prod- 

 uct can be sliced many ways. It can be divided 

 according to marketing functions to show how much 

 is earned by the retailer, the wholesaler, the proces- 

 sor, and the fisherman out of each dollar spent by the 

 consumer. The share of a consumer's dollar can also 

 be distributed according to costs spent by the four 

 functions to show how much goes to labor, materi- 

 als, capital expenses, operating expenses, and net 

 profit in the production and marketing of each fish 

 product. A different comparison is offered here to 

 evaluate the services rendered and profits earned by 



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