Appendix II 



Methods Used in the Development of Tahles 35 and 



36 — Cost Data on Comparable Can and Tank Routes 



in Maine. New Hampshire, and Vermont 



A. Basis for Adjustment 

 of Fixed Cost 



1. Depreciation 



Each chassis was depreciated on 

 a three-year, straight line method 

 based on dealers' average price, less 

 estimated trade-in. Can truck bodies 

 were depreciated over an eight-year 

 period, and the tank truck bodies 

 over a ten-year period. 



2. Taxes 



To amortize the excise tax, it 

 was figured on the new truck price, 

 or first-year valuation, at 1.7 percent. 

 Federal Transporation Tax of 3 

 percent was figured on the estimated 

 route yearly billing to producers for 

 transportation. 



3. Insurance 



Cost of insurance varied consid- 

 erably between routes, according to 

 the maximum density of population 

 in the area served and the length of 

 the route. For example, rates on 

 Bodily Injury and on Property Dam- 

 age for routes in entirely rural areas 

 were considerably less than for those 

 in which some trucking occurred 

 under city hazards. Increasing route 

 mileage from fifty, or under, to one 

 hundred miles may double or triple 

 the cost of Comprehensive Fire and 

 Theft and Collision rates. These dif- 

 ferences were allowed for in ex- 

 amples of the fifty and hundred-mile 

 routes. 



4. Registration 



Trucks were rated according to 

 New Hampshire cost brackets on two- 

 axle vehicles, as follows: 



Gross Vehicle Weight Fee 



To 4200 lbs. 

 To 5000 lbs. 

 To 6000 lbs. 

 To 8000 lbs. 

 Over 8000 lbs. 



$15.50 



$19.50 



$25.00 

 based on $ 0.50 per cwt. 

 based on $ 0.60 per cwt. 



5. Interest on Investment 



No charge was included for in- 

 terest on investment. 



B. 



Basis for Adjustment 

 of Variable Costs 



1 Based on reports of truck operators in 

 farm-to-plant assembly. (The average for 

 the main-highway tankers of from 3000 to 

 4500 gallons is approximately 5.0 miles 

 per gallon, or less.) 



2. Oil 



Based on an oil change each 

 2000 miles. 



3. Tires and Tubes 



A set of tires and tubes each 

 twenty thousand miles was used as 

 a basis for this expense. 



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