COST OF DISTRIBUTING MILK. 13 



Costs of Processing and Delivering summarized. 



Table IV is an itemized summary of costs tabulated for 42 plants in 

 Springfield and Worcester. Facts obtained in these cities are fairly com- 

 parable and the conclusions are quite as satisfactory as if the data for 

 all six localities were included in the tabulations. The summary represents 

 an annual business of approximately 9,000,000 quarts of retail milk, 

 3,000,000 quarts of wholesale milk and 222,000 quarts of cream out of a 

 total distribution of about 15,000,000 quarts of retail milk, 4,700,000 

 quarts of wholesale milk and 300,000 quarts of cream — or about 60 per 

 cent, of the total deliveries considered in this investigation. The milk of 

 these 42 distributors was dehvered to about 21,000 customers. 



The total investment in plants and equipments amounts to about I5 

 cents per quart of milk dehvered. The largest investment items are milk 

 sheds, horses and stables; boilers and ice houses come next but are com- 

 paratively insignificant. 



The chief items of depreciation apply to horses, wagons and harness. 

 These account for three-fifths of the total depreciation; another fifth is 

 assigned to milk shed, stable, boxes, cans and boiler. By ascertaining the 

 first cost, the present value and the time used, most of the items of depre- 

 ciation are easily calculated. 



Nearly $55,000 is classified under maintenance. More than three-fifths 

 of this is for horse feed and just about 80 per cent, is for feed, repairs 

 and horseshoeing. Lost bottles and cans are classified as maintenance 

 and make up most of the remainder. 



Circulating or working capital is here used to include overhead and fixed 

 charges and supplies which are destroyed in one using. The largest item 

 is interest on the investment, computed at 5 per cent.; the second is ice; 

 and the third is bad bills. These items, with rent, insurance and taxes, 

 fuel and loss by spoilage and shrinkage, account for 75 per cent, of this 

 charge. Other items are soap, caps, stationery, light and oil. Labor of 

 all kinds is by far the largest item, amounting to nearly three-fifths of 

 the entire cost, or one and three-fifths cents per quart of milk retailed. 



The average cost of processing and retailing milk is 2.79 cents per quart 

 for an average daily deUvery of 175 quarts of retailed milk per horse the 

 year round. This cost is arrived at by deducting from the total expenses 

 one-half cent a quart for the wholesale milk distributed and 3 cents a 

 quart for retail cream. 



