Cost item 



Basis for allocation 



Fixed Costs (Cont.) 

 Autos 



Trucks and trailers 

 Forklifts and pickups 

 Stockroom and other equipment 

 Shop equipment 

 Fire equipment 

 Insurance 

 Taxes 



License and bond 

 Lease and rentals 

 Home office 



Green-weight basis 

 Green-weight basis 

 Green-weight basis 

 Value of equipment and usage 

 Green-weight basis 

 Included in building cost 

 Green-weight basis 

 Green-weight basis 

 Green-weight basis 

 Green-weight basis 

 Green-weight basis 



Storage and Services 



Fixed Costs 



1. Building depreciation: Costs were based on area devoted to tobacco 

 storage and total warehouse area as shown on warehouse records. Included as 

 tobacco storage area were clearances and aisles as provided for in CCC storage 

 contracts plus 2 feet of the main aisle space. The ratio of storage area and 

 working area to total area was used as a basis for determining depreciation 

 costs allocated directly to storage and services. 



For example, assume that 90 percent of the warehouse was used for stor 

 In this case, 90 percent of the total depreciation was chargeable directly to 

 the storage operation. The remaining 10 percent would then be allocated to all 

 services including storage based on the volume handled in each funct 



2. Equipment depreciation: Cost for equipment could be identifier 



a particular function or allocated directly. For example, scales were all< 

 directly to weighing. Motorized equipment (autos, trucks, forklifts" 1 * 

 allocated according to use. A weighting system was devised using estima 

 from each firm involved and checked with industry people to determine if t 

 relative weights were realistic. 



3. Insurance and taxes: Building insurance was alio 

 the same manner depreciation was in item 1. Insurance 

 ment was allocated to functions based on use. 



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