-o- 



In the first place, we find the greater the volume of production from a 

 given set of resources, whether these resources be orchard land or packing- 

 houses, the lower the per unit cost of each item produced or processed. 

 From this standpoint, cost can be reduced by using the facilities and 

 equipment to capacity, through skillful management, and by use of techno- 

 logical advances --palletized operations and bulk bins, for example, in 

 apple packing. Thus in the case of packinghouses, we would expect that 

 the more modern the equipment, the lower the operating cost per unit would 

 be. 



Table 3 shows the differences in cost per box at Washington apple ware- 

 houses having modern equipment as compared with those using older methods 

 of operation. Costs averaged 44 cents a box for plants with modern 

 equipment; 47 cents a box with partially modern equipment; and 53 cents 

 with older equipment. Similar costs are shown for other cost items. It is 

 clear that volume and modern equipment go hand in hand. But vjithout ques- 

 tion, the most important consideration relative to lower operating costs 

 is modern equipment. Real advantages, costwise, can be had by investing 

 in the most modem types of equipment, if it is the decision of growers 

 that they should rebuild in Entiat. 



Table 3. --Effect of modernization of equipment on selected operating costs 

 in 16 apple warehouses in Washington, 1957 season, in cents per 

 loose box 



Cost items 



Type of equipment 



Partially : 

 Old : modern : Modern 



Gents 



Packing labor costs 



Unweighted average 19 

 Range 16 to 22 



Total labor costs 



Unweighted average 27 

 Range 22 to 35 



Total indirect costs 



Unweighted average 18 

 Range 10 to 36 



Total general and 



Administrative costs 

 Unweighted average 9 

 Range 7 to 15 



Total costs 



Unweighted average 53 

 Range 39 to 76 



16 



18 

 to 18 



16 

 13 to 18 



24 



24 



to 25 



21 



■ • 17 to 25 



15 



16 

 to 17 



16 

 13 to 23 



7 

 6 to 8 



7 

 6 to 9 



47 



44 to 49 



44 

 36 to 57 



Source: Uniform Fruit Accounting and Exchange (UFAX) 



