CHAPTER XL 



CALCULATING DIVIDENDS. 



I. Whole Milk. It is customary to pay for milk at 

 creameries once a month. Such payment is called the 

 monthly dividend. The method by which this dividend 

 is calculated depends, o course, on the basis upon which 

 the milk is bought. Fortunately the large majority of 

 creameries now pay for it according to the butter fat con- 

 tent. Milk so paid for is spoken of as being bought by the 

 "Babcock test" or on the "fat basis." Since it makes 

 butter in proportion to the amount of fat it contains, the 

 Babcock test or fat basis is manifestly the only just way 

 of buying milk at creameries. This method will be dis- 

 cussed in detail. 



CALCULATING DIVIDENDS ON A FAT BASIS. 



The different steps in this calculation are indicated as 

 follows : 



1. Find the total pounds of milk delivered by each 

 patron for the month. 



2. Find each patron's average percentage of butter fat 

 for the month by averaging up the number of tests. 



3. Multiply each patron's total milk for the month by 

 the average percentage of butter fat it contains, the prod- 

 uct will be the total pounds of butter fat delivered. 



4. Add together all butter fat delivered by the patrons 

 for the month, the sum will be the total butter fat. 



5. Determine the total gross receipts for the month 

 by multiplying each sale of butter by the price received 



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