-<J' 



A California study, in which efforts were made to bold other factoirs constant 

 by standardizing data from the plants, also clearly illustrates the 

 "economies of scale," The effects of volume on fixed cost (insurance, 

 taxes, repairs, interest, and depreciation) for typical apple packing 

 plants in that State are shown in table 5. Fixed costs per packed box 

 of apples dropped rapidly from 35 cents at a pack of 42,800 boxes to 

 10 cents at a pack of G5,700 boxes, and then to 12 cents at a volume of 

 128,500 boxes. Costs continued to fall, though less rapidly, to 4 cents 

 a box at a volume of 428,500 boxes. 



Table 5. --Effect of annual output on average fixed costs per standard 

 packed box in typical apple packing plants, California, 

 1950 price level ^T 



Season pack * Fixed cost ■:; 



Boxes Dollars per box 



■ 42,800 .;..:-.. . . $0,355 



85,700 .178 



- .- .— •:' 128,500 •^i;'; : ':/--.-:' 



- - 171,400 ■' - • 



214,200 

 257,100 ■ 

 342,800 

 428,500 ■ 



Source: "Building and Equipment Costs, Apple and ^' c . 

 Pear Packing," Mimeo Report No. 141, University 

 of California, December 1952. 



A U. S. Department of Agriculture study, where again efforts were matde 

 to control factors affecting costs other than size of operation, shows 

 "economies of scale" in the handling of apples within the packing plant. 

 As seen in table 6, cost of handling 1,000 boxes of apples by clamp truck 

 declined from $53,91 for 100,000-box plants to $43.62 in 400,000-box 

 units. Similar declines were seen for other types of apple handling 

 equipment. It should also be noted that by reading the table in the 

 opposite direction, that is, left to right, the economies of using more 

 modern equipment can be seen. For example, cost dropped from $53.91 for 

 clamp trucks to $41.39 for 48-box fork lift trucks. 



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