-7- 



Secondly, we find that cost per unit is reduced by enlarging the scale or 

 size of operation, often referred to as the "economies of scale." This 

 is primarily because in the operation in large-scale enterprises it is 

 possible to use technological advances and obtain a more efficient com- 

 bination of labor, power, and equipment. These 'economies of scale" are 

 illustrated in the tables 4, 5, and 6. 



The data in table 4 comes from accounting records. Thus many other factors, 

 such as age of plant and equipment, type of pack, varieties handled, and 

 skill of management are not held constant. Nevertheless, based on the 

 experiences of 16 Washington apple warehouses in the 1957 season, we see a 

 higher total cost (44 to 76 cents a box, or an unv/eighted average of 61 

 cents a box) for plants under 200,000 boxes. This compares with lower 

 total costs of plants over 200,000 boxes (36 to 57 cents a box, or an 

 unweighted average of 47 cents a box). Similar cost reductions are shown 

 for other cost items. 



Table 4. — Relationship of size of warehouse to selected operating costs in 

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

 box 



Cost items 



Under 

 200,000 boxes 



Rated capacity of warehouses 



200,000 to 

 250.000 boxes 



250,000 boxes 

 and over 



Packing labor costs 

 Unweighted average 

 Range 



Total labor costs 

 Unweighted average 

 Range 



Total indirect costs 

 Unweighted average 

 Range 



Total general and 

 administrative costs 

 Unweighted average 

 Range 



Total costs 

 Unweighted average 

 Range 



17 



19 

 to 



22 



24 



29 

 to 



35 



13 



22 

 to 



36 



10 

 7 to 15 ^ 



■}.f;A, r,v 



61 

 44 to 76 



cents 







17 





,A\r^ 



13 



to 



IS, 



A^S, 





23 



icr^ 



s^t 



17 



to 



25 , 



•..' '..' '.^ 



,sO.\-v^ 





16 







13 



to 



23 







18 





16 



to 

 25 



21 



22 



to 



30 



V;OC 



15 

 11 to 17 



^f-irr. 



7 7 



6 to 9 



11 to 17 



47 ■' ^*"::;i; •■>i-.'--« !■ i ,- 47 



36 to 57 /^v 39 to 56 . 



Source; Uniform Fruit Accounting and Exchange (UFAX) 



