176 



MAKING THE RATE SCHEDULE 



0) One-half way between the mean and the mean proportional of the Manufacturing 

 Domestic rates. 



As cubic feet are used, the corresponding values are found 

 to be 8.13, 11.87 an d 16.27 cents per 100 cubic feet. 



A discount of 10 per cent for cash is allowed, and it is desired 

 to raise these rates in such measure that when 90 per cent of 

 all the bills are paid promptly so as to secure this cash discount, 

 the collection will produce the desired revenue. 



For $1.00 billed on this basis, 0.91 will be collected, and 

 all the rates thus far reached must be divided by 0.91 to obtain 

 the rates to be used. 



The calculation is made in tabular form below and shows 

 the new rates that must be used to maintain the revenue with 

 this discount. 



The service charge for a f-inch meter, first found at $5.50, 

 is increased to $6.04 per annum, but as billing is done monthly, 

 the round figure of .50 cents per month, equal to $6.00 per year, 

 is used. In the same way round figures are used for the ones 

 first calculated for all the items of the schedule, and the ones 

 selected are entered in the next column of the table. 



The fifth column shows the number of units to be billed 

 under each class. In the case of the quantities these are con- 

 verted from the gallons given above to cubic feet to correspond 

 with the billing basis. 



Multiplication then shows the amount to be derived From 

 each item. The sum of the products amounts to $100,320. 

 Deducting from this nine- tenths of the 10 per cent cash discount 

 leaves $91,212 as the probable collection under the new schedule. 



