lated equipment vary. The least-cost methods were determined in a previous 

 analysis and for plants of 1.200 broilers per hour and up, a slush ice 

 system is used. For smaller plants, flake ice is used.*^ 



Feed 



Feed cost is included at a constant rate per bird for the fraction of volume 

 which may be held overnight. Most plants no longer make a general prac- 

 tice of holding birds on feed for weight gain or to recover in-transit shrink- 

 age. 



Expendable Supplies and Services 



This category includes many items incidental to processing. Examples are 

 laundry, aprons, cleansers, brooms, brushes, knives, office supplies. 



Fixed Operating Costs 



When a plant begins operation it sustains costs for management and 

 certain other items essentially fixed in total. For the fixed operating cost 

 category, unit costs decline in direct proportion to any increase in volume. 



Management Salaries 



These include fixed salaries of individuals such as top-level management, 

 buyers, sellers, office managers, plant managers and superintendents, and 

 department foremen. 



Miscellaneous 



This category includes such items as contributions, dues, advertising, list- 

 ings, meeting expense, management travel, entertainment, legal accounting 

 and auditing services. 



Utilities 



Heat and telephone are considered as part of the fixed operating cost group- 

 ing. Although a seasonal item, heat is assigned as an average monthly 

 charge inasmuch as the inquiry is directed primarily at the effects of 

 volume on costs. Telephone costs do not appear to vary with volume on an 



aggregate basis. 



Fixed Overhead Costs 



These costs relate to the ownership of plant and equipment. They are 

 considered as fixed in total, over the planning period involved. Unit costs 

 decline in direct proportion to an increase in volume. The group includes 

 certain elements of depreciation and obsolescence on equipment, all depreci- 

 ation on buildings and facilities, property taxes, interest, insurance, plant 

 repairs and maintenance, and equipment maintenance. These items are com- 

 puted as a flat percentage of value or cost. 



8 Univ. of N. H., Agric. Exp. Sta.. Agric. Econ. Res. Mimeo No. 20, op.cit., p. 9 and 11. 



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