258 MANAGEMENT OF DAIRY PLANTS 



IV. Overhead Expenses. The overhead sales expenses 

 differ greatly in the various ice cream plants and it is impos- 

 sible to give any figure which would be fair to all. The overhead 

 expenses in the ice cream plant should be carefully looked after 

 perhaps more so in the ice cream plant than in any other dairy 

 establishment. 



D. COST OF MARKETING MILK AND CREAM 



I. Selling Milk and Cream at Retail. By retail sales is 

 understood sales made directly to the consumers. The principal 

 factors to consider in determining the selling value of milk are: 



Purchase cost of milk 



Processing and bottling cost 



Distributing cost 



Loss due to shrinkage and waste at the milk plant 



Loss on surplus milk 



Loss on bad accounts 



Office expenses 



Advertising 



Interest on investment 



Depreciation 



Miscellaneous expenses 



The cost of these various items differ greatly in the various 

 milk plants. Such differences may be due to greater or less 

 ability on the part of the manager, size of the city, size of the 

 plant, the relation of investment to size of business, etc. 



i. Purchase Cost of Milk. By purchase cost of milk is 

 understood the cost of milk to the distributor, including the 

 transportation cost to the distributing plant. This cost may 

 fluctuate with the butter market. Some dealers pay the same 

 price during the entire year, while it is perhaps the most com- 

 mon practice for the distributor to have a yearly contract with 

 the producer whereby the latter obtains a price for the year 

 which will change at certain predetermined intervals, so the 

 price paid will to some extent conform to the current butter 

 market. 



