3. Insurance and taxes: Building insurance was allocated to functions in 

 the same manner depreciation was in item 1. Insurance on machinery and equip- 

 ment was allocated to functions based on use. 



4„ Lease 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: Same as leas© and rentals. 



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 



Tobacco Processing 



Redrying bundle : Receiving tobacco, weighing, segregating, blending, 

 plucking, hanging, redrying, packing into hogsheads, coopering, weighing, and 

 loading out hogsheads. 



Redrying looseleaf : Receiving tobacco, weighing, segregating, blending, 

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

 hogsheads. 



Redrying strip : Receiving tobacco, weighing, segregating, blending, 

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

 coopering, weighing, and loading out hogsheads. 



Storage and Services 



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

 and paperwork 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. 



14 





