METHODOLOGY 



Firms Surveyed 



All firms contracting with the Commodity Credit Corporation to handle, 

 process, and/or store loan tobacco were contacted in this study. This proce- 

 dure was developed in consultation with the Statistical Reporting Service, 

 U. S. Department of . Agriculture . 



Cost and other data were obtained from each plant by an economist or an 

 auditor assigned to the Economic Research Service from other USDA agencies. 

 The cost data and related volumes for each service performed were summarized 

 and tabulated by plant, type of facility, and area, according to the plan 

 outlined below. 



Depreciation and Interest 



To minimize the effects on cost of variations among plants in depreciation 

 allowances and interest on investment, data were summarized using standardized 

 rates. 



The following depreciation allowances were used for buildings and equip- 



ment: 



Item 



Rate 



Years 



Salvage 

 value 



Tobacco storage warehouse 



Buildings , 



Redryers , 



Threshing equipment , 



Boiler 



Prizing press , 



Scales 



Jacks 



Sticks 



Office equipment and furniture 



Autos 



Forklifts ' 



Trucks 



Stockroom . . 



Shop equipment 



Fire equipment 



Percent 



Number 



Percent 



4 





25 



-- 



5 





20 



— 



6- 



2/3 



15 



-- 



10 





10 



— 



5 





20 



— 



5 





20 



-- 



5 





20 



-- 



20 





5 



— 



20 





5 



— 



10 





10 



-- 



25 





4 



20 



25 





4 



20 



25 





4 



20 



10 





10 



— 



10 



• 



10 



-- 



5 





20 



-- 



Interest was allowed at 7 percent on the average investment in buildings 

 and equipment. 



„ . ,,. , Building acq uisition cost n -. 

 Buildings, I ■ — fi *r — — x .07 



10 



