8.,D. Minton, Presents Cost Figures on Producing Stock Moulding

Costs ,of producing finished lumber in various parts of California seenr to vary considerably, r according to estimates of several very reliable concerns bngaed in the busiNCSS.

A month ago The California Lumber Merchant printed a cost analysis by P.J. McDonald of the Los Angeles Plan- ing Mill Company show,ing the net co$t of producing finished lumber, based ,on a delivered price of $54 shipside at Los Angeles harbor, to be $98.06r/2.

Now comes Earl D. Minton. oresident of The Minton Company of M,ountain View, "nd pr.s"trts a set of cost figures, showing that moulding stock can be mianufactured and sold at a profit at g9l.2o from lum,ber costing $50 delivered at his plant.

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The difference in the base pr,ice is due probably to the circumstance that Mr. McDonald figured on rough, ,green stock while Mr. Minton's figure is based on kiln dried stock. It might be added, too, that the price of rough green cle,ars has gone up since Mr. McDonald's calculations were made.

"We were very much interested," says Mr. Mint,on in submitting his report, "in the article *iitt..r by Mr. P. J. McDonald sl-rowing the cost of producing finished lumber.

"We keep a cost system which we think is equally efficient and m,uch easier to figure than the system published, and think it would be of great benefit to the mill men to discuss these matters."

Here is a specimen a page from Mr. M,inton's cost book with an explanati,on of how he arrives at the cost:

We would criticise the cost of this operation as inefficient because of the fact that the 3 pieces of picture mould sh'ould have been made from 1 piece 1x8 in the one operation, thus saving labor of ripping, amounting to $2.2O; and also saving 10 hours time on sticker, amounting to $8.75, or a total of $10.95. This saving inr turn would save about $2.70 on the shop burden and the sarne amount on the com'mercial burden, making a total saving of $16.35 on this one operatio,n.

Every factor in this cost has been proven in our plant, except the item known as shop burden, which includes electric power, \\'ages of foreman, and wages of sweepe:s and helpers. A complete analysis of this ite,m will be made sometime in .the near future and will be used in all our cost records.

The item of comm'ercial burden includes the labor of unloading from the cars, the labor of piling and sticking lumber, putting m,oulding int,o the racks, all depreciation, interest, office expenses, delivery, selling expens,e, insurance, compensation insurance, and is a proven factor in our plant.

We do not think interest on money .invested in buildings, machinery or land is chargeable to the cost of production, but depreciation on these ,items is chargeable to the cost of production. The returns a firm gets from its investment in machinery, land, buildings, is its net profit, and the net profits of course, should be greater than the mere interest on the mon,ey invested.

At present we are selling finish on this market at $100 per M. delivered on the job, and from ,our cost studies figure that we can s,ell as low as $91 per M. and still make a satisfactorv profit.