4. Leases and rentals: Building leases were allocated to functions in 

 the same manner as building depreciation in item 1 and leases of equipment were 

 allocated in the same manner as equipment depreciation in item 2. 



5. Interest on capital investment: Interest cost was allocated on the 

 same basis as costs for leases and rentals; see item 4 above. 



Variable Costs 



All variable costs except direct labor, machinery repairs, office supplies, 

 and hogshead material were allocated on the same basis as building depreciation. 

 Direct labor and hogshead materials were allocated according to labor use. 

 Machine repairs were allocated according to machine use. Office supplies were 

 allocated according to clerical salaries. 



DEFINITION OF TERMS 



Processing Services 



Redrying : Receiving, weighing, segregating, blending, plucking, hanging, 

 redrying, packing into hogsheads, coopering, weighing, and loading out hogsheads 



Threshing (strip ) : Receiving, weighing, segregating, blending, plucking, 

 threshing, separating, picking, redrying, packing into hogsheads, coopering, 

 weighing, and loading out hogsheads. 



Storage Services 



Innage ; Receiving hogsheads of tobacco, placing in storage on dunnage, 

 and paper work necessary for checking bills and entering on books. 



Storage : Maintenance, custodial, and accounting functions necessary 

 during storage period. 



Outage : Identifying hogsheads ordered for shipment, removing and loading 

 onto transportation equipment, and associated office work. 



Sampling : Identifying hogsheads to be sampled, removing from storage to 

 display area, removing casks from tobacco, pulling samples and displaying, 

 replacing casks, restoring, and associated office work. 



Reweighing and restoring : Identifying hogsheads to be weighed. Removing 

 from storage, reweighing, restoring, and associated office work. 



Reweighing while performing other service : Reweighing while hogshead is 

 removed from storage for another service. 



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