20 



N. H. Agri. Experiment Station 



[Bulletin 251 



Although other costs represent only 15.04 per cent of the total op- 

 erating costs of the 41 stores, they show a definite tendency to in- 

 crease as total costs increase. The influence of other costs on gross 

 margins is usually similar to that on total costs. On the other hand, 

 the exceptionally large item of $.075 appearing under other costs for 

 Store 8, due to bad debts, does not increase the gross margin a like 

 amount. Ap})arcntly, the manager accepted this loss as part of the 

 game and did not attempt to make it up by raising the gross margin. 



TOTAL COSTS, GROSS MARGINS AND NET PROFIT 



During the preceding discussion, attention has been called to the 

 important factors which affected the fixed, labor, delivery and other 

 costs of the 41 stores. It was shown in Figure 1 that the costs under 

 these four heads are variable and of much more importance for some 

 stores than others. A summary of these costs for the individual stores 

 is given in Table 22. When total costs are subtracted from gross mar- 

 gins there are 27 stores which made a profit and 14 which operated at 

 a loss. Undoubtedly competition causes gross margins to remain at a 

 low level so that some of these stores are unable to retrieve their losses. 



Many of the stores do not hold the same relative position when sales 

 are compared with the amount of gross margin that they held when 

 sales were compared with fixed, labor or other costs. (Tables 4, 9, 14 

 and 15) . This is to be expected when so much variation is found con- 



Table 15 — Variation of Store Sales Compared with Gross Margin 



