186 COST OF MANUFACTURE 



Decision 170 for sweetened condensed milk and condensed skim 

 milk. 



Requirements of Condensed Milk for Export to the Allied 

 Nations. Condensed milk shall contain not less than 9.2 per- 

 cent butterfat. 



In order to meet the high butterfat requirement in con- 

 densed milk furnished to the Allies, American condenseries 

 which receive largely low-testing milk are compelled to rein- 

 force their product with butterfat. This is done either by 

 removing a portion of the skim milk, or by the addition to the 

 milk of butterfat in the form of cream or unsalted butter. 



CHAPTER XXII. 

 COST OF MANUFACTURE 



General Discussion. The cost of manufacture varies, in a 

 general way, with the organization and size of the factory, 

 capacity of machinery and the amount of the output. These 

 variations are further modified by the cost of available labor, 

 the price of milk, cane sugar, tin cans, box shooks, coal and 

 other supplies, etc. 



In a properly organized plant the cost of manufacture per 

 case of finished product decreases with the increase of the out- 

 put, provided that the capaciy of the machinery is sufficient to 

 take care of such increase. When the plant is forced beyond 

 its capacity, the factory operates at a disadvantage, and the 

 extra labor and possible waste and losses tend to increase the 

 cost per case. When the output drops below 100 to 150 cases 

 per day. profitable manufacture becomes difficult, the overhead 

 expense is out of proportion with the business, the factory can- 

 not take advantage of rebates in the purchase of supplies, the 

 factory labor is relatively high, because skilled men have to 

 do manual labor, and occasional losses due to spoiled goods 

 devour the profits of a comparatively large portion of the entire 

 output. 



The price of milk fluctuates with season and proximity and 

 strength of competing markets. The fluctuations embrace a 

 range from $1.00 to $2.00 per one hundred pounds of fluid milk, 



