COST OF DISTRIBUTING MILK. 15 



The overhead expense is the smallest item and in reality should be dis- 

 tributed between processing and deUvery. It varies from 12.3 to 18.9 per 

 cent, of the total cost in mixed, and 14.7 per cent, in retail business. 

 This item seems to vary directly ■with the size of the business, i.e., with 

 the quantity handled. The processing expense runs from 24.7 to 31.8 per 

 cent, of the total. In general this expense varies inversely with, the quan- 

 tity handled. Delivery costs a little more than one-half of the total, 

 running rather uniformly around 55 per cent. The 1,000 to 2,000 quart 

 group averaged 57.7 per cent, for deliver}^ but the individual variations 

 are wide. On the whole the figures show comparatively little correlation 

 between costs and size of business. 



Investment and Size of Business. 



The relation between size of business and average total amount invested 

 in plant and equipment is of interest. The tabulations in Table VII., as 

 might be expected, show a consistent correlation between investment and 

 size of business. But when the investment per 1,000 quarts of milk dis- 

 tributed is considered, tliis consistent correlation is not shown. The strik- 

 ingly high investment ($22.61 per 1,000 quarts) of the retail dealers is, 

 perhaps, rather surprising when compared with an investment of $4.30 

 per 1,000 quarts in plants during a mixed business of the same size. Enter- 

 prises of the second and fourth classes have also a very high investment 

 ratio. One might suppose that a milk-distributing plant could increase 

 its volume of business by corresponding increase in plant, but an increase 

 from an average of 360 quarts per day to an average of 710 quarts a day 

 seems to multiplj^ the total investment nearly six times, whereas men 

 who do a retail business exclusively have four times the total investment 

 of those who do a mixed business of the same size. 



