10-20 SM

THE UNIVERSI~Y OF MINNESOTA

GRADUATE SCHOOL

Report

of

Committee on Examination

This· is to certify that we the

unders~gned, as a committee of tr,e Graduate

SchoolJ have given :r...erc Carl Leager

final oral ·examination for the degree of

Master of Science

We recommend that the degree of

~aster of Science

be conferred upon the

I0-20 SM

THE UNIVERSITY OF MINNESOTA

GRADUATE SCHOOL

Report

of

Committee on Thesis

The undersigned, acting as a Committee

of the Graduate School, have read the accompanying

thesis submitted by

for the degree of

Marc Ca rl Leager

e.ster of Science

They approve it as a thesis meeting the require­

ments of the Graduate School of the University of

Minnesota, and recommend that it be accepted in

partial fulfillment of the requirements for the

degree of Master

A COST

for a

T ·u:rAL GRAI ELEVATOR

By

Maro c. Leager . -

A Thesis submitte ~o t~e

Graduate School of the University of in esot

in pa tial fulfill ent of the requir ents for th

4·22-8M

aster of c: nee

y, 1922

.... . '• f '•• ... ....

. . . . .. . . . ' . ..

-re~ cf

PREFACE

.... IBLIOG '.A HY

CHAP~-R I.

T S

I TRO UC':::'IO

. .,ar house facilitie of T in Ci ti D sc=iption of T r1in 1 ·areh se Equip .ent of Ter · al arehouse Cours of ~r~in Thru Ele•_tor F ction of Ter ... in 1 lev tor

a Co it• o .i

.I:!; qui nt ent

au • tion o uction f Cost F:n ing to a

CHAPT R II . DOCKAG I I~ vL A I 'G

Definition of Doc ge .a•ure of Doc age Talue of Doc g

Relat-v Cost of Obt r.i Ez 1 nation of sults

CHA T III. T

nal a· of Op~r -ion Chart of Accounts

G

IO

Doc

Di tr· ution of P~i r Ac ou ts Rep irs La or Po er upe~inten e ce

A · istr -vion De. reciation I terest, Insurance & T es

g

Distri uion of l~l a•e Acooun~s Elev ting Conve i g Lo di O'

Unloa ng eig· in

C eaning

1

TO CO T

Distr i · ut i on of Acocr. r.:•·a re .tages .

p

ar. 2 0 5 6

"

7 to 12 13 & 1

15 & 16 17 to 19 20 to 22 23 to 2 29 3 31 & 32 33

3

. 1 2

6 5

t 9

. 1 0 6

l

l

19

21 22

15

CH PTER IV . THE APPLICATIO OF T YSTE

App ication o. the Si st to Ac tu _ Co t i

uHAPTER C'Y'CLUSIO

Analysis of Resu ts n Conolu io e .

4 22-eM

Preface

This study was undertaken as part of a larger project of the

Agricultural Economics Division of the University of 1.iinnesota, v.hiah

embraces the subject of Dockage in its various phases . It was desired

to find the cost of removi ng dOokage , the information t o be used in

ascerta ining the value of d ockage . _ terminal gL"ain elevator vas chosen

as the base which should be used in determining costs of obtaining dookage

and in order to get this figure it was necessary to prepare a complete

cost accounting system foa a typical terminal elevator .

It was discove'.1.4ed early that no work on this subject had evel' been

done . Grain offices do not use cost finding methods and it was sornetimes

difficult to convince them that sooh methcx:ls could be a.ppliei to their

business . 'l"h e :rrethod of finding inf or mat i on was to get it thru pers an.al

interviews , and these ere had with elsvator superintendents, ain :rre

n.nd boOkkeepers . No opposition was encountered , rather an open-mimed

co-operative attitude . 'i'OO opinions of the men interviewed were o ombined

into a composite result which appears in the following i:nges . The stuey lns

centered around one s:i;ecific house , and the effect of this is to make the

results more consistent as being based on one particular case. ~e methcd a

can be applied , with slight changes in distribution, to :my house 1hich it

is desired to study.

4-22·8M

BIBLIOORAPHY

Coat oount 1ng

Uole, illia.JD u:. c t oounting ror Inati tut ie11a

J.tederal 'J:rade Com:niaaian

b'uildamentala ot a cost Syst tor utacturers

Eggleston, . itt c. cmald Pr 1 1921 ~'hap. I, II, VI, VIII,XVII to XII

omica of ~erminal tlevators

rederal Trade uon:a1&1ian - Bep t the •r n

~epte er 15, 1920.

Vol. II - Terminal Graill

Huelmer, \irover c. Agricultural C roe - D. let & Co. 1915

P• III and IV p e 29 to 92

Chamb r ot Comneroe ot apoli•

'l1lirty-e th Ann R port o. 3lt 19 •

4. 22 ... M

Chapter I. Introduction

l. The purpose of this stW.y is to devise a. Cost Aooonnting system for

a terminal Gr ain Elevator . It seems desirable to introduce t h e subject with

a brief survey of terminal warehouse facilities in the Twin Cities, a descrip­

tion of the equiprrent a.nd operation or a terminal elevator, and a statement of

the necessity 01" a. cost-finding system, and the problems connected with it

for this type of business .

2. 1/arehouse facilities of the Twin Cities.

There are two major classifications of grain a.rehouses, Regulal" and

Private. The latter are operated for the use and benefit of their owners ho

are companies engaged in some specific brnnoh of the grain trade. The flour

mills own and operate large storage a.rehouses in which they store their Wheat

until it is desired to mill it. The warehouses of this type are the largest

in the 'I'win Cities , and the capacity o£ a. few is given.

J Pillsbury Concrete :lashburh-Cr osby Electric Steel

3,500,000 3,500,000 4,000,000

bushels 11

II

'J:he latter house is classed as a regular public a.rehouse, but it is used to

store whea t for the Russell ililler 1U.,lling Compa.ey. Private houses vary

greatly in size as is shown in the foll071ing table:

Tab le I - Co,paoity Of l:i:nneapoUs Terminal ::1evat ors (Fri vat e)

* Capacity I:-umber

less than 100, 000 bushels 9 100,000 and less than 200,000 bushels 8

200 ,000 u II II 300,000 tt 2 300 ,000 II 11 II 400,000 It 5 400,000 II II II 500,000 "

., *.!nnual report o£ e:J.polis .... 500,000 It II It 1,000,000 u 7 Chomber Of Co~rmeroe 1921.

1,000,000 and. greater 5

Linseed oil companies, malting companies and feed mills own elevators,a.nd many

line elevator companies own and operate houses to handle their mvn g ro..in.

* Ar.nt~ l .eport of the inneapolis Chamber o Co

• ul th 0

to r u tions . cit ri

in t e oll .in t bl •

ble II . it ot blio

oity 1"

500 , 000 th 750 , 000 e 750 ,000 II II 1, 000 , 0 0

l,000 , 000 " II 1,500, 0 1, 500 ,000 II 2,000 , 0 7 2, 000 , 000 5

tot i y 0

III

• o al

• lio 0

f

ot 0

or

5 •

• 22.

3. Table TV. Grain Receipts - Crop of 1919

Grain Receipts

.1heat 116,588,810 bushels Corn 8, 841 , 410 II

Oats 17 , 311,180 II

Barley 12,165,330 ti Rye a , 335,470 It

2ln.xseed s . 3f2f2 . 77 0 It

Total 168' 597 ' 970 "

It is seen from these :figures that the capacity of the terminals as used

3. 04 times in handling the 1919 crop. '.1.'h.e tank- houses ere used a smaller

number of tL.::es than the smaller handling houses owing to the nature of their

operations .

6 Description of a Terminal .:a.rehouse . Let us nav proceed to a desc:c"iption of the ~arehouse itself . :i:"nere are

two portio1:s of the structure vlhich are four.d. in all terminal elevators . '&ese

are the storage bins and the head-house , and they are found in some form in

every large elevator . Plates I and II shm these two portior.s very plainly

bot_h in floor plan and in side elevation, the taller portion being the h~­

house and the group of circular structures the storage bins . In the head-

house is done all the bani.ling of the grain; the cleaners are located here,

eighing is done here . A ref'erence to Plate lo. IV sh s that the head-house

is divided into a number of' smll bins , a total of t enty in this ir.sta.nce.

These are used for the purpose of holdin0 a.in temporarily, fo exmnple,

clenn grain that is 1aiting to be loaded into a car , or dirt that has been

cle.:i.ned out of g rain. Grain >;hich is run thru the house or the purpose of

transferri!1£: it from one car to another is put temporarily in one of these

bins . The cross sections o ... the head house , shown on Plate IV, can be

easily found on the side elevation on Plate II . In this instunce the cleaner

floor is at about a third tho height of the head-house, but is usually found

in '.i:'win City houses on the gr ound floor.

4-22·8M

7 • -'-" .uipr.ient of t.1 e ~·le vat or. Let us no' take up a detailed desoripti on of the e uipment o the

elevator and sho ho / it is used in harulin_; ain .

8 . .ieighing E'-1uipment . 1.L'h.e 1eighing apparatus is al s founi at the top of the hood- house .

·•ei~hing equipment is clearly shown on both Plate II and III. ~t the top is

a garner or receiving bin into ihich grain is first elevated. soon as it

is ful l the ;veigher lets a little less th3D. 2 , 000 bushels or ll0 , 000 poU?lds

onto the scale, ·1hi ch is located directly beneath the garner . He then adds

grain, a fe•; pounds at a time, till the even eight is reached. l'nese soal

are ond.or uJ.ly accurate and are sensitive to a difference of a aery f

pounds . The wei 1ht is recorded on a. ticket by the official wei t - master o the

Railroad and a.rehouse Cottnission. 'l.'his officisl is paid b the ommi.ssion, but

the man mo do es the work of letting the rain o .. to the scale is 3ll e loyeo

of the elevator. '.:.'he elevator illilstrated in the plates is plv.nn so t t

the '°'rain can be taken from t he scales and at once put into the bins , but th· s

nece"sitates a very hi ..,h he:id.-house as is plainly sher ;n. e u.s'IUl t p e fo d

in .ir.neapolis is not ruilt on this: pl but is built 1 er d p o ·i es or

t: e grain to be taken to the bi..s by an extra elevation.

9 . 1 evat ing .uipment . ... 'his type of structure derives the narre " levator' fro:::i the f ct t t

r~n comiu, to it is elevated many i s , in fact the vertic~l ov ent

pre ominates hero . The e .ui_ ent used or this purpos consists ot on

belt on ,·hich are fixed cups t t dip the h<nt ran the 'boot'~ nd hich

discharge it at the top . ':.he location and arraneem ~tor t•e receivi d

sh!bpping"legs" are sho.m vertic ..... lly on Plates II d III , and sh eoti

on lute I . .'be receivir'-C le0 takes the rain fr the car and dumps it

into the garner for eiShiDS as shown at the veey top of • late II .

11

l

- - -'""'io( ---

- - -, I I I I

- - -- J -- --1

I I

I

~l -~--~~j ~----- ......... ~---·~· ----...ii.-""'""----.....i·----;

I I I -- - ~

- - -1 I I I ___ J

--- -, I I I I I

-- __ J -- --1

I I I I

-- __ ..J

--- - _I --- --, I I I I ___ J

-----1 I I I I

- ---'

I ___ _J

-- -, I I I I ___ .J

---1 I I

I I -- ---'

Plate I - F r t Floor Pl n of a Ter inal Grain

I

II ., ,, :1 ztoo 11~ 11 (lA.•,..,I~

:1

,, " ,, :: 6it10/l.,(1AA~'11f

" " ,,

1-\

'~ I

• I-- --- 1- I ! 1 l l

r----1 r"-'I r'- : --- ___ I_ ------~- I • - ---I/'~-=-~-" -"~·;=1=;~::o&°'." -------- ~ -~ -- A Vertical Vie of a Tern.inal Grain Eleva tor·

I II Jii;J ffi }£ 11 - -- r f 1' II . t ,, '-~ ~- ]- -; ~ ,, ~ -~ II ~ '1 ~ ~ :: ~~ ~ -~ II ~ I

t-11 ,, .:I ,, {'-:::.-. T

-'--- -~ ,,.

' /t ,,. , ~ ' 'r- -1' I ' 'r-..,, ,

_,..._....__ ~~,,____.__ ~ t-----~ ----~

-~ f~-( ~ (----~~~~ '-i---1' ~\--( /---', : ,,,___......_

~ /, ,.,..., ',

11 ..:I 1' ~ II

I~ It ~ ·t ,, 1' I ~ 11 ~ tJ . I \~ II -t 11 ~" ii :.:r 11 ,

~ ~ ~ ~

~ ~ ~

\: 11 ~ ~ ,1

ii I I

~

R_ t"?IV Or U£"1/V.CR /ZOOK.

...... ---~~--Roo/"7

..5ccr10/V T#Rt/ LoweR &IY'.s:

5.

The shipping leg takes grain fr an the bin am dumps it into the garner for

Weighing out .

lO loading equipment .

A side view of the equipment used in unloading cars is indicated. on Plate

III , i; hile on Plate I its location on the floor plan is given. The grain is

thrown rrom the car 'by means of broad ooien blades •lhich scoop it out . These

blades a.re pulled by steel ropes which pull and release alternately, and they

are guided by workmen who plunge them into the grain and guide them to the car

door • After all the grain possible is gotten by this method, the orlonen sweep

the oar to get all the grain. As the grain leaves the oar it falls into a pit

directly under the car . t the bottom of the pit r'lms a broad eildless belt

whiab. takes the grain to the boot of the receiving lE€ •

ll•Loading Equipment. This form of equipment is much siopler than that for unloading. It c cmsi sts

of a spout leading ~ rom the bottom of the scale . This spout ends in an aajus-

table s 1iveled spout vihioh can be directed. to all parts of the car. '~e car

spout is shown in Plate III . The grain is spoutea. to tne oar by gravi • It

is leveled off by ::t:and and the aid of the adjustable spout .

12 • Conveyors . Grain entors t he elevator thru tne head-house ana. then is t en to the

st oraee bins on a wide endless belt , the convcyer belt. ~is belt r-uns t u a.n

alley between the tops of the d ou.ble row of bins rUIIIlin.., over rollers so placed

that its surfa.oe is concave. There is also one on the ground loor, !lich takes

the gr a in m:1ey fr an the bins . Grain is delivered to this l er belt by gravity .

It is delivered to the upper belt cy the recei vinG leg. In the upper belt is

a tripper or a_pparatus for aubl ing back the belt. '~e tripper is on a

movable oar ~hich can be placed in :f':ront of e:ny desired bin. The velooit

of the grain throws it ozf the belt into a chute ich lro.ds to the bin. Both

upper nnd lo .er belts and tripper are shcmn in Plate II.

rri=========.i 6. 13. Course of Grain thru the Elevatol" .

Let us now take up the operation of the house; tracing the course of the

grain in its progress into and :from the house and during its 11.'.lndlinz v1hile in

the house .

The incoming car is spotted directly over the receiving pit , and the grann

is dumped therein. Plate III shows the track-shed, pi tx and ca.rs in place .

The belt conveyor takes the grain to the boot of the receiving leg honce it is

elevated t o the garner at the top of the house . fast as the eigher ~eishs

the grain, it is dropped to the boot of the elevating leg from hich it is

elevated. to the upper conveyor belt . From this belt is is thr n into the

proper storage bin.

14. 'ilie reverse o ... this :procedure takes plooe when grain leaves the storage bim .

It is let onto the lower belt thru the spouts shown in Plate II , and taken t o the

boot of the shipping leg. Tb.is discharges it into the garner rrom hich it e oes

thru the scale as before . .li'r om the scale it oes to t e car spout and is

delivered into the car .

15. L.:.oving ar.d. Conditioning •

.. hen grnin is in sto'.!.4age ·t is not al eys possible to leave it in t e tank

until it is desired to ship it . Someti~es it is stored at such hi~,h temperatures

th~t ir l eft alone it ~ill heat ands eat a.nd cause ~reat deterioration. If i•

has a high moisture content it is more likely to get out of condition than if the

moisture c antent is lo • :Wuch valuable scientific inves igation has be o on

this sub~ect , but it is not pertinent to this paper , hioh is oonoer-ed ith the

actual practices of terminal elevators .

The results of this investigation shcr.7 that grain 1hich · a.s a moisture

content above 14% iill not keep ell. Thora ore grcin is graded lo.er en it

has a hi_;h moisture ccmtent tha."1 ·;hen it has a lOVl percentage of moisture.

7 .

'.l.'hus l.o . l wheat must contain not more th.an 14 moisture II 2 II II II " It " 14. 5% II

II 3 II " It " It " 15% " It 4 II II It It ti " l~ " II 5 II II II II II II 16/~ II

This do es not mean that Wheat which 3rades umber i ve i7ill keep 1i th

16,G moisture. It means that it will not keep as ell a.::;d is there ore gro.ded

down.

The method adopted and practiced by all terminal elevators is to '-cep

the erain moving . Durin..g the winter , theseasoi:able loo temperatures are

utilized by taking the grain f'r an the bins, ciu::ipil".g it into the recei vi. g pit

and returning it to the bins . This process effectuall oools t- e gr.3.in. It

also aerates the grain and tends to dry it . common remark in :m elevator Tihile

gruin is being moved is "You can hoo.r it now" ich means the grain is d

enough to make a scratching sound as it runs thru the pipes .

16. ilie grain is taken fr om the bin by the looer belt conveyor, elevated

and dumped into the receivin:; pit . ~rom here it is taken to the elevating lEe,

elevated to the u.;_)per co-veyor , a.r.d thence back to the bins. This operation is

bein.:; ca:rriei on constantly in order to move all ti e grain. lFlll'L~ the season,

all the grain in the house is moved at least t ioe.

17 . hlixing. Another operation of terminal elevators is mixi ~ of grain of

different grades. The ethics of this much debated question a e not pertinent

t o this paper. The fact is that, since it is being done dai , it constitutes

one of the operating costs of a terminal elevator, 3.Ild so its econ<Xlic speots

must be oonsidered. . '.i..rne object or mixing is to raise the rade of era.in so t:. t

it ill bring a higher price. ong other considerations , grain is graded an the

eight of a measured bushel . mus

.t·lo . l heat must eigh not less th:ln 58 pounds per bushel

II II II " II ti " 57 II " It

2 II " " II II " II 55 II II II

3 II 4 II " ti " II II 53 II II It

" 5 II " II II " II 50 11 II II

4 -22-BM

a • . 1heat which weighs 56- 1/2 p ounds per bushel would there ore be graded r;o. 3

and it will at once be seen that it wil l bring no better price than v.hea.t which

just makes the grade at 55 potznds per bushel . me profit from mixing is nnde

possible by this fact . An elevator hich has some grain ~hich is h eavier than is

necessary can mix it with some that is lighter and still retain the hi her grnde.

Or it can ta1re grain of two different grades and mix: them in order to make the

resultant coni'orm to the grade between the t 10. This would be one when the aver e

price v1ould show a pr of it on the operation. This is e:x:pla · ed in the follcming

illustration.

18. On L::a..rch 25th, 19 22, the following cash prices were quoted on the

ircne3.polis Chamber of Commerce .

No. 1 Dark Korthern ./heat ""l. 65 lfo. 2 It It II 1. 55 no. ~ II " It 1. 51 r:o. 4 II II 11 1.42

If tho house had sooo Ho. 4 Dark .1.Torthern i'heat of good quality rihich

weighed 54 pounds per bushel it could profitab)¥ mix equal amounts Of ro. 4

Dark northern and 1:0. 2 Dark 1.ot thern. Thus \

1 bushel ..-2 Dark 1 II if4 II

orthern II

Total verage

57 pouzxls _M II

111 II

55. 5 II

'ill.is is a uttioient to be grad~ as v3 Dark · orther

follows : l bushel :/i2 ark l orthern 1. 55 1 II lf4 II II ls.i&

Total 2. 97 Average 1.482

!I1l1 e values are as

But lTo. 3 Dark I orthern (the resulting grade ) is sellillg at l . 5H the gain being

t o and one hal:f.' cents ner bushel.

19 . .After the calculations have been made and the decision arrived at,

the aatU3.l rnixin.-; is dcne . ~e fl0\1 of groin from the bil s is re0 ul.ated by a

device known as a Graver feeder , 1hioh con be adjusted to deliver any desired

amount of grain . 0i~e bin is set to deliver 54 pounds in the same ti the

9 . other delivers 57 pounds. .i:ne t~ o streams run onto the same belt and are

thoroughly mixed. '.Che combined stream is thrown into the boot of the

elevating leg. It is then elevated to the upper conveyor belt a.rd dl.lllp:ted

into the bin containing ·3 Dark 1;-orthern ./heat. '.11h.is ~ be done to ill

particular orders or as is usual it rD8;J be done deliberately as fotmd

convenient through the season.

20 • Cleaning i1h are are three fundamental reasons for cleaning grain. ~e first is that

Th ea.t is not suitable for milling when mixed rzi th other seeds . :J.: e second i a

that the by-pr oiucts (or the seeds that are separated. from the grain) are

valuable. 11ie third is that the grade of a grain like oats may be raised by

cleaning. Any one of these reasons 1ould probably impel clean • In the case

of oats, a. grain which carries a husk or shell, the presence of loose husks

i70uld greatly lessen the weight pel' measured. bushel of oats of a high qu.:ilit •

~ho removal of this loose , light material is therefore a 11payL pr opos i ti on" .

21 . 13.l"me rs occasional)¥ plant \lhat they call succotash, a i:ixture heat

and oats. 1fue resulting orop is about a half and half inixture. ... ere i often

a c cnsiderable a.mount of volunteer oats mxed in heat . ihether cultivated or .

lild oats, they are valuable when gotten out . Other forei n seeds, such as

buck- heat , weed seeds , and other non-cereal seeds fom;.d in ,. eat , have a

varying value. The treatment of screenings oan be II13le profitable by ag n

separating the by-product into :f'urthe. classes to be used s poultr and stoc •

feeds . On '.arch 22, 1922, a car of screenings sold at 9. 00 per ton, and

t11ey lnve been quoted as high as 20 . 00 and 22. 00 P tan. ~~us it is sh cmn

that the value of the by-pr cxlucts is a. stimulus for clean " and separ tir.g

grains . 22. If all foreign seeds and material ere enti ely valueless it .ould still

be necessary to cloon <->rain. ~lour lls , ;hich form the chief . .-a.rket or

whoo.t , :ijave developed the h:m.dling o heat in the mmiufa.cturi.ng of flo'J.:r to a

lo . lii3h degree of per:fection. '.J.'he publ ic has been educated. to use J11ito flour

and it is the business of the mills to supply it. Any ingredient in ea.t

whieh wil l darken the flour or in any other ay injure its baking qualities

lcme:rs the value in the eyes of the miller . '.l.b.erefore, th cleo.n their

wheat ags.in ar..d again until it has an ad.mixture o ... foreit;n materials so smll

that it does not injure the flour .

23 . Cleaning Equipment .

The equipment used in cleaning varies from the co. n fanni ng mill ound

on nearly every farm to the high capacity ru.chi~~e y;hich separates and oleam

in the terminal elevator or the flour mill. :me principle o the sieve is

an old one , in fact the sieve is one of man ' s oldest implements . It depends

:for its act ion on the difference in size of p~ticles to be separn.ted . nus

if one were to run \:heat mixed with oats ar-d eed seeds over a sieve i th holes

lareer than ;wheat but smaller than oats , the oats ouJd be 1 t behir..d.

~'u.rther if he ere to run tho heat and 1eed seed mixture over a sieve .it

holes sr.::aller than ;;heat , he would sift out the smller seeds d leav

1hea.t . 'l'his is the underlyi ig :pril:c iple 011 hich separators are uilt , llltho

there is an in.fir.i te number 01 variatio .s in the .~chi es o ifferent IAl.'.lKes .

24 • .i.'here is a.nothe:r principle used in cor.nectiOZl iith the above mentio ed one.

That is the fact that 1:hen a. mixtu:re is itated , the li_,hter rticles co

posing it rise to tre top. '.i.1hus in a. mixture o t eat ru1d oats , the rots

1ould come to the top been e they. e · h but apprax:i te · lf as much.

•1v:mtago is taken of this act in rw:ning the rain over tho sieves . .i1£l

sieves are g iven a side- ise shaking motion jiich catlses the .~ea.vier oo.t

to go to the bottom ere it i ediatel.y alls th u tho holes in the sieve .

i'he oats rise to the top and as lo. ' as there ·s s:ny · at the nili.:tur e the

clo not touch the sieve. .".hen all the heat has .1£. ssed thr t e oats rest

on the sieve and of course h::i.ve a tondoncy to go thru. ~U!l tho cle3.l'ling

is most thoro tho first third of the sifter surface and leas~ thor 0 tho la.st

third . To adjust this so that cleaning is most efficient is the problem of

makers of cl mners .

26. •>'hen the grain has passed over the first sieve, the rots ru d lar..,er

varticl es 01· forei....;n .. atter , such as stems , tail off at the lower edge. The

wheat and sm.:i.ller seeds has dropped thru onto the lroer sieve . .Here t· e

\'"'.b.ec.t rem.:1.ins on the sieve and tails off at the l er ed.ge . All smller

particles ~o thru and are collected in a bin. To uet n.n a!>proxi tely

perfect result in cleani:r.g oi-'e rust ruive a mchine .i th ga.n.,s of sieves ,

ec.;.uipped. ·;lith an air-blast and a repeating attacbmant . ..;"'lour ·11s , ho. ver ,

use the simpler ±'01·m .::'or their recoivi .,_, separator , and the si pl type is

o~ten :ound in termin3l elevators .

Zl . ~he Ou:rter-:.':ayhew disc separator is used 1here ~r in must be e

'Wlusually cle~m. It consists of steel discs into :hich .ave been sunk holes

just large enou.2h to cct-tain wheat kernels. lliooe discs a. .. e s t ve t·cal

and as they revolve thru the ·rain, t" ey pick up the t d t t i to

a small trou.;;h .1hich carries it a cy. :me ~a.ct that .:heat or export . st e

very clean (,. .:.thin .5,~ ) has en.used these discs to be r.nic used in mad.a - at

ort ~thur an .'ort ,;nliam. olis terminal eleva.t ors do not use •h •

28 . .ihen it is decided to cle ._,rain, the grain is let onto the lCr.ler co eyor

belt ,Xlielevated. by tre elevating 1E€, and dropped by avity to the cle ers .

is fast as it is cleaned it is elevated to a bin provided o cl

rhich is USU'.llly located in the head- house .

29 . ':'rans- hiprnent . It scmeti~nes becaoos necossary to transfer gr in f a::i ..... e c to another .

"t t i .. :es -;;hen rc.ilr oad comp.:.-inics ·rill not 1 0'>7 their c::i. to leave their

4-22-SM

12.

linos tr • I c

tho ... r ·n ld

consist o unlrodi th

bin in the h e , th on n it

30 . unctio s of 10 mirull ~1 v tor.

Tue o e ,oi. ...; d scription of o e ... tio o

of .... termi.rul.l l to • se funct io

or c en ition1

pri r · i ort

stori

•

nl:.i pi

• 1c

·ti oni. is o

it is re T not a oep ate f ct on

necessar to succ so ul tor •

ext t in the a er or

l . o ncce~s y as •

ltho the ... o 0

ll terminal ho ., s nnd tho oc

t th r io or

gr in, o h rs

o hOU3e do c

"'D.in is t c c

0

to th n t e or tho c op

ept in tore un1

e oold or doll

co rs t o tor e o rge , it

o .. th t re son , there is

t

t

e_evators this e , b cause u eat o no h

oat a does.

b 0 ,

into

•

th ct 1 •

in '

t t

i

11

1

t

l

l

l" .

32. It is, thu , obvio t t for th po

o se st be s lect •

4 , 000 , 000 bushels c pacity , but the typic

o e lf million to o llion .

capacity o 500 , 000 bushels o ich 100, 000 i

400 , 000 in the bins . .e t t t th

icicncy and th t t e moving co i tioni

implies that all the gr~in in the h se 1

·~ v • e ore leav s o-J.r as pti

of cpr uctio • In ord r to

el v tor uil er D.nd ins anc

lou.r mill e i or

clo .. el • 0 00 t ot

ive cent to e ol p r bu

Q co.root or oon

co t 0 the tor b

r b •

p t lect 0

- ou .. e 1 ,ooo b • e bin 400 , 000 I

c t ucti co ni

p 0 t 0 th h

coot 25 , 0 oo. ·n

i divid

• 22 M

6 , 500. 1,000. 00

, 500 . 4 , 00 • 3,ooo.oo

25,ooo.oo

0 hi ic

' hi

t

•

e

or

14.

ilie total cost of reproduct i on of the ho e i therefore 225 , 000 . 00 , i'fhich

is the final assumption mich 1e um.st ma •

34. The above description ives "' inti ti on o the de'"· ability or Cost-

~counting System for a terminal elevator . The

business thru suoh a s~te

nethods or hand 1

accrue to this .

the variation be

e aria t on

make it app3rent that it does not al ays cost the same to

l:1ich aocrue t o aey

ousea in

y

le r in.

Ho. ver , the terminals of i neapolis do not ona. z the· r 1siness on

cost- accatmting basis, beine satisfied to their o

cleaning, tr2.nsferrL ;, etc ., on t• o is or ience

or custan

d their

statistics . T .. e present st y, there ore , h no ... ore it .

terminal ess cc.nnot be classes as a i it

a process system. It is rather a ha.nil bu:;i ess , d the c i

hmld.led is a cr op of rain. e is no possible poi t t

ccn be said to be complr.ted , nor is it ever· c til th rain 1

the h01 se . e only possible approooh is to co t crop

or in other i10rds the .dli ., or one crop. 0 r ir t

t o . u ·ust thirt irst 111, :her b in n 1

practice in a in o .fices .

15. II

Dockage in its Relation to Cost of Cle.:lnin •

1. The subject of d ock:Jee is a 1 ge one , am h s been disou..sed in

ID<'.1IJiV of its phases . ~erefore , it ill not be d iscus::ied here exoe in

its relation to this study . It ~ill be ell, ha ever , to revi to

definition 3i vw. in the Federal a.in Gr.'.ldes . ockage , according to

'ederal standards , is the forei n ma.to_ ial :1hich c be screened. ran

iheat . In short , if it can be sopar ... ted. by camnerci 1 ole ods ,

it is classed. as dookage am if it is inseparable , it is classed s

"foreign nnterial othe'!' than dockage" . ockaee is me urea in terms of

per cent and t e percentage is based on the total ei blclu ·n the

dockage .

2 . ter the dock.age has been removed , the r.nin th t io left is

grcied . i.s previously oxpla.in , the r e depends in p t; an e t

per measured. bushel. It also depends in p t on tl e n ture o the

forei ter Ll loft in it . :.i: e imum ts of sue teri 1 in

heat re in the follo. ing table. Table V 'orei•n ~terial Co tent in Different es

r de Limit

~o . 1 1 o ... be no. -ce II 2 2 II 11

II 3 3 4 5 II

II 5 7 II II II II

3 . a.tu.re of ock.aGe •

Doc e y include dirt , san , c c s , tems t , tr It

~ also i c lude seeds of vario: kind • e follo ing cl si ic tion

foreign seeds m.33' be useful•

Cereal ains ye , Barley, inkorn , or . ,

r , pelt , • lax , or}Jhum, oats , R ce

16. I. on-cereals.

Chess , Iangheau , Cockle , etch, • ild lose , Buck-vrnea.t , .:ild Onion

1/eed Seeds Pig-weed, hlustard , ox- tail Pigeon Grass , Sow Thistle Russian Thistle, Ia.mbsqua.rters

4 . Value of Dockage

It is obvi~~s th~.t these seeds could all be used for poultry and

st ook feed . Cleaners are to be bad ·mich ill se:p3.l'ato out oats am

flax n.nd these woulci. then carry the prevailing oar}r.et value. ~'here is

no q_uesti on that d ooka.ge often has a high value, but on the other hand

much d oc lm.ge is valueless , for example, sterm, chaff, s21 , dirt, stra :.

'£'here have been recent periods ·1hen a s tr demand for screenl~s

existed run even the chaff and stra. had a value. t present , the value

is low even -Of the better grades of screenings.

5. :&e question of dbokage has been very vital to the rain-gro rers Of

the I: orthwest, ruil it has been a persistent :cy- d isoussed prob le ~rs

have felt lreenly t t they lnd a. grievance. '?ney rave brought gr in to

their loca l rrurket and have seen it docked because of the prese ce of

foreign material •hich they knm to be valuable, rmd they have so.id th t

they ~hould be paid for such "'" toria.l. 1rne reply o ... t elevator d

grain men has been that forei nnt er ial is a.et:r imental to the eat

since to et it out is nn eA-pensive process . In short, the· h~vo acted

on the principle that the cost of seinra.ting dockl!.ge is, in the lo a run,

just abrut equ.:il to the value OJ. the b -pro uct. ere is inportant

implication here , that tne urca.ter the a.mount 0 dock.age prese t, t e

gre ..... ter is th c eA-ponse ol separating it.

6. - elative Jost .

One of tho purposes of this study is to throw so .e light on the cost

Of cleaning grain. If the implication mentione in tie last paragraph

• be true, .'.ll'ld there is in re .... lit. a difference in cost of cleaning beti1eon

grains of high and o... lou d ocka.ge content - a stuiy ~iuch as this shouJd.

show it . It ms determined early in the stud.y to include so e ... indings an

this phase of the matter . ·or purpc::ies of nnldng comparison :.in accurate index

1 s desireu , one which ··;ould indicate tho true d i!ference bet .een costs for

varyin~ mix':.ures of grain. ·'or this purpose , po;ver consumption ~as chosen .

Po~1er c onsti tut es a large s e of c:Je ing costs , it can be accurately

rooasured and thei:ntically analyzed. Fne other cleanin costs are not so

variable as is po;10r , and do not sho snnll cl1anges caused by varying c itio .s

Ic.oor , for example , is a fairly constant clemii~.g cost .

~'herefore it ·as decided to cmd.uct en experiment il .. hich pcr.:er

c O!lsumed in cle~ing grain of varying docl:nge content :oul be me ::iured .

'.!:he co-oper<:?.t ion o the Jtate .:::Xperimental ·"lour 11 , s enlisted in the

experiment . l't'.e r1heat used at tie perimental 11 is un over a

receiving separator i ..mediately on its reoeipt , ai'te ~·ch it i5 placed

in ~ bin until needed. :.i: is sepurstor corresponds to the type usual:cy found

in flour mills and terminal elevators . The motor th.ich drives it also dri es

the receiving leJ ( hich takes the grain to the so les) , lxl a sho. t 1

\'.hich takes it from the separator tot e bin. is unit of the mill is n

sufficient :i;,r snnll pa.rt of the e .uiprner.t 'or ha ling the grain nt the

• rimontal 'ill to nn.l:e the costs o~ operating it co. able ;o the co t

of cleaning at a c rckl mill or elevator •• e e. er 1 lootric

'om. i:y co-operated in tho e. perimeut ~ inst 11 · a stt- ter iah :ould

measure the cu::.<rent con::;unpt ion of that o e motor . The chemist o the mill

Ill3.de the nece::rna.r meter re ings on the grain rece 'ved . ile the e··perimwt

;vus conc1ucted , ~d the ;hec.t-beyer secured cars o ... varyi do e c to t

for the eYperirnent .

7 . U3 a point from .:hich to coq>are read' s , :neat .. ith ze:ro dcx:Imge (or in

other ords, cle-n .:hen.t) is highly desirable. In order to . ke t e reaa.ings

HS . on such ilheat it vc.s a.rrangeu to run zomo clenn i'heat thr the syste 103Jl

•1he.:i.t was , therefore , spouted to the receiving pit , f'.!.'an .7hich it as elevated

to the scales , 11eighed, run over the separator , and then elevated. to the

bin from \1'.hich it came . .i:ne pit held 6231 pounds of 1heat . ter this meter

readil16 was r;nde , a readi 1 1as tuker for every car that 1as bought . It ms

decided to make the c anpirison in terms of l , 000 pounds , .d thus obviate

t he con.fusion be tueen the mro.zured busho 1, and the legal bushel of sixty pounds

weight . .able VI

Consumption per different dooiag oontent per 1000 pouma . .tttlative Power

C'l.r Do l 2 3 4 5 6

7 8 9

65 . 890 88 . 087 65 . 828 82. 289 88 . 462 83 . 579

Po :;er C nsmr.ed

1. 8 T I

'27 . 7

17 . 0 21.0 16. 5 20 . 5 22 .

20 .

Kilowatt ner

. 2888

. 2747 - . 0141 1 . 88

. 2580 - . 0167 l . 89

. 2384 . 0196

. 2506 . 0122 1 . 97 . 2491 .0015 1 . 82 . 2487 . :!393 - . 0098

Power a anslllDpti an for amoun ta required I , 000 lbs . ol n Wheat • 8. ne si.gnifico.nt feature o ... the data obt~ined .rom the exi:>erinxmt is the

comparative uniformity in the of po ;er re uirei ... or di...:'ferent lots o

grain . In no case is the i ... 'forenae bet ean one re i1 and its edinte

predecessor gre ter than . 02 kil atts . e memi of the series is . 2472

kilowctts and the greatest deviation from the cean is . 04.:16 kilo atts

(the case of the clean .heat) . Tr.a range o the series is . 0504 kil tts .

Eiti. ... er o ... these variat io. s is entirely negligible .. };en uce to ter of

bushels . ~'he o::> nclusion is plain, that the power c "umpt10?! per t is

pr"ctically tmiform. Inasmuch as the grade is i ·ed. on tho clean .boat :mi

the aroount of the cle.:;.n -; l eat etermines the number o • bu.she le , it as

thought de"'irable to reduce t e above fi 0 u es to terres o 1000 pow ds of

cle.'.1n .meat . In other :oros to cleD.n enou 'h of the ori ina.l cixture to

pr oiuce 1000 pounds of cloc-.n : ec.t as a result .

19.

b"a.rthermol'e, as the grain becomes bulkier by the addition or foreign matter

the fr i ction involved in moving it is less. Clean Wheat ~oles more fi1'lll4"

than wheat which contains sane dookage, and the f'riotian developed in moving

it i s greater. Power requirements decrease, therefore, hen dookage is

:present.

Car Dock.age

l fi1j, 2 . ;q, 3 S',h 4 4% 5 5% 6 6fo 7 f1J,

:rab]a VII vlea.n Wheat Dookage

1000 0 980 20 970 30 900 40 950 50 940 60 920 80

Amount mixture necessary to produce lOOOf clean Wheat

1000 1020. 4 lOZ0 . 9 1041. 6 1052. 6 10~. 6 1086. 9

Power required to clean lOOOf wheat Plus d ooJrage

. 2998

. 2603

.2659

.2483

. 2637

. 2649

. 2601

Variation

- . 0085 - . 0144 - . 0176 /.0154 -.0012 -.0048

·mese f' igures point to the same c CJJOlusions as do thcs e in :cable VI.

The variation is less between cars and the ratlge of' the seri is also 1 ss.

A ditterenoe of . 0176 kilowatts between two items of' 1000 poanda is a di.t':terence

ot e00l06 kilowatts between two bushels Of 60 pomids each. In terms Of fir

coat, such amounts ot differeno are absolute~ negligible.

9. ~lanation ot .ttesults.

me o a:i.ollusion is contrary to the implioatiC11 1n paragraph fi ot thi

section, that increase in dockage c<:11tent should r ult in 1norea.s oleanin8

costs. ·.i:he reas en is not tar to seek. Oats, barle;v, stem and chaff' ar all

appreciably l1g:b.ter than Wheat, and the more th.En"e is of' them in the ixture,

the lighter 1a a g1 ven bulk of the mixture. '.!!his being true one woald expect

power consumption to decrease pr <gl'essively as dool$8ge 'is ind.'eaaed, and the

mixture beoomes lighter and bulld.er. .But it do not do so, a is shown ill

Table VI. Clean Wheat consumes the most, and the amotmt deoreaa tm.til :tour

per cent of dookage is .reaohed. 'J!he addition ot the next one r:er oent of

4 · 22-8M

?.()

dooka8e shOllJB n increase, but this does not persist as at eight per oent"

the power cmsumed is again as low as 1t was at fror pe'I!' oent. The reason

tor this is that as fOJ!eign matter incx-eases the grain will go thru the

separator more slow~. The longer time consumed means an increase in power

ccnsume:l. ·.1.'he ahange makes its appearance at the point vih8l'e t'iTa per cent

ot doakage is present, but the downward tr8Dd sets in again and tor the ame

reason.

'l'hus, it appears that there are two compensating forces, on or time

am. one of' weight and fl'iction. me benefit caning from lessened weight a.DI

t'riotion is compensated 'h3' lessene:l cleaning ca:pe.oity. If cleaners in terminal

elevators •ex-e coopelle:l to operate at utmost capacity at all ti s in ol"der

to get the work d cne, this might be a serious OOl'l.S ideration. 'they are not so

l'UD., however, being idle a share of th time as a rule, save in e:z:oeptional

oases.

10. H ving determine:l to use po r ccmsamption as an iJXlu to relative

cleaning cost , we have learned by experiment that this oost does not Ta.Tl

appreciably. · e aire j~tifial now in applying our fmlings to oleanillg

costs in general. In the later sections of the atmy, hen it i neoessa.r7 to

distribute total cleaning cost over product handl , such total co t 111 be

distriW.ted unifor~. explained, the receiving separators used bJ

te1'1Din.al elevators and flour mil do not vary from a standard type to a ext t

.die se!l'l'ator used in this experiment is of' this type. :.i:h results are

&pPlic ble to all mills and elevators. Even tho the JbYsica.l arr emanta

ma.k:e absolute coats greater or less, relative oosts 111 not var,..

---------------~

21. I I 00

l. I 1 1 or

b 0 r • it t •

or 00 t ' t ' it 0 1

0 t lti

•

ur 0 0

0 •

• 000 0 t

0

1

22 . accow1t i11g is e:cplainai in detail ' tie iml sect ion of this pa r .

3 . · ixing .

ixi "' is done :is found c vmiient ,,after the rain has boen pla.ced in

the bin and that is replaced in c.nother bin a:fte~ bei mi:-ed . The operations

required. are t ·ns ra:in from t .o bins ·letting it onto tie belt at the

sa.r::e time (in order to mix it l , elevatin_, to he upper conveyor and movL1g back

to the bin 1hi ch is to hold the mixture .

i:xing

4 . tori110

(Conveying ( ... levating ( Co .. veying

i"nis : ction is more canplex than the ot ors embrac.i.Ilg s it doos tl o

movement of the grain into the hous e and its dioohar<Ye , o· h

in-col:ling and out-going l , and moving it · 1e in the house as

deccribed .

1ho cna.rt of oporat ions is then

.:>toring

(Incoming

( ( (

{ ovine ~ ( ice l

( ( Out"'oi

5. :i: aus-shipn:ent or trans ... er fr an c r to c •

2 2 2

lliis operation amsists of' uul:>adi the rain, le at

in the h - house and droppine it to anoth r car .

these operations are ver sitniJ.ur in nature to t e oo

t ice. 2"ne cost of tr sfer is ther ore not a preci l di

cost or mi ine explained in aragraph 3 e el tivcl sc:lll

ork makes this classL.ication satisfactory.

it (both

evio "'l

... t to a in p

11 in

t ro tho

unt of th.:s

23. 6• Intermediate ccounts .

It ~ill be seen :from these u.nalyses thn.t t'1e component o p ations are

'f"neso . -Elevating Conveyir..g Loading Unloading .:eighing Cleaning Operation

llet tn.ese , the~ be t_he titles of the intermediate accounts of our proposed

syste ~o them must bo allocated all pri!r.ary expense accolll!.ts .

7 . 1-'rL ry Expense Accounts .

The items v;hich -o to r.nke up these accounts are the usua.1 expense itens

r1hich rnal'.:e up the costs of running the elevator . They m3.y b listed thus,-

ooer Labor :.lepairs Interest Insurance Tax.es Depreciation Buildings uepreciation Eq_uipocnt

8. Chart of Accounts

'...1he follcw.•i.:ng is a graph of the flO'il of items ran Pr

.Accounts .

- epairs ) ( .... levating ) ( tor ing

Labor ) (Jo veying ) ( Cle ing o ier ) (Loading ) ( · i ing

Interest l (Ur.loading )

Insurance ) ( .ei hing )

Taxes ) (\Jleaning ) (

Deprec . :Bldgs . ) ( er tion) ( II E .uip. ) ( ) (

Superintendence) ( ) (

Let us no take up e::>.ch of these pri y nnd inter

separately, and discuss its distribution.

toUlt· te

i.ate aoco~ts

9 . • epairs . lie items in this ace aunt uny be alloc ... te q_ui te accti.ra.tely r :JD

observation or actual re uiremcnt s o ... the sever types of e .uipoont . mo

Repair mm should keep a record o:f the hours expended on tb.O different jobs

24 . and the su9plies req,uired. or the rom this infor, tion the distribution o:m

be calculated accurately. Keeping this record does not cc:nsune the repair

man ' s time and it a.:ffords him and the canpaey an insi@lt as to the upkeep o:r

the O<!uipment .

10. Iabof'.

This account also is subjeot to a high degree of accuracy. T"ne o:.i.· n

should be re _uired to keep ti:::e cards , on hich ould be shcr.m the hours expend.a

on the various jooo . ,ran the infor ....... tion on these cards the foreman or

accountant could distribute tbo labor to the pr op er inter iate acco ts , e . g . ,

moving the tripper ould go to ccnveying, cleaning out a PlUGged. elevator l~

1ould o to elevating. ~o allocation o...labor should be done each month

even if tho accom'!t :ing period be a ear or half-year.

11. Po .er .

If a. high degree of accuracy ere desir for thi::. oost , it c mlld be

secured by attachine a. current .. ter to each orm of ecruipccnt requiring po er .

:1his rnuld , or course , be absolutely accurate. !£ the ters ere lctt for a

stated period and an average or the po.er consunption for a eek or a month

determined, it ould be noo.rly as satis aotory. Ho•ever , if this ethodbe

impracticable , a close observation must be made o the p er re uirE111ent or

the vario1.1s operations , and if this be done carefully, it y the

re m.irements . If steron pooer is used, as is the case in some of the older

elevators , the distribution . uld be the s e , altho the costs ould consist

o ... different it s.

12 . uperintemence.

... here are throe possible ays :for di st i buti the cost for superintei:-

dence to the into~ iate accounts.

1. ~otal labor hours 2. :.i:otal labor costs 3. I:~ber of employees

25 . 11!. e .:.~irst i1:iplies tbat the superintendent is ret1uired to oversee quite

closely the iork o his men and that , inasmuch as he puts in the same length

of dey , that his ti.I:.e is expended 1n the same ratio as theirs . 0 ':..'he seond.

is really similar to the first , but is superior in the case or a lar~e

organization with many departments here tre labor cost of each deinrtman t

is knomi . The thim is nearly the same as the second , using number of

employees instead of labor cost . '.l'he latter two a.re not o. lioable to a

..:ieroinal ;.;.levator , since it is not divided into ell definai de.J.):lrtr::ents .

'.~he mr.. , m. th the exception of the eigher , rrray ·i'ork all over the house .

J.1ho .first , there ... ore , is used . 'J.he labor cost has already been dist!'ibuted

in Para.graph 10 , and we lill distribute superintendence on the saree basis .

13 . Ad.ministration.

Expenses of ministration are not included. It is the usual c to:n or

a com_pacy to cr .. n a number of elevators in vario1. parts of the city, and

ad.minister them fr an a do.,n- to1.'Il office . ere is6ften a li .e of country

elevators in connection ith it, and often the can,!>any o s me:nbership on the

Chaober o:r 'oomerce and oes its am tr ing . The question of adminiotration

costs therefore resolves itself into a separate problem "' d the re~ de ree

of variation in the different offices rnakes a typical e noorly i::ipossible .

.e ill , therefore , leave t:..ese costs out of tre elevatonr costs , ass e

that they are Qeducted fran the profits o the oanpany.

14. nepreciation on Buildin s .

reference to the ost o .epr oiuot ion al ule disc loses the t

that the typical head-ho ·"e descri ed. therein has a aap1tal cost 01 100,0 .oo.

It is abvious that the depr ecia.t ion on the st o e bins should c ar ed. tot e

ult~ o.te account . o..1tor~d this dep ... eciation need not be rw thl.·u an

intcr:i:ediate account . On this basis, so,; or t. e total deprec· tion ·s set

over at once , and 50, is run thru the inte. d.iate accounts . is proportion

represents the c"pital cost of the head- hou.se .

2 . in co this c tains th e uipm t o

l

uoed

and lllllO i d

cleaning, l ~ ine,

it b

d unloodi

ei~hed and or s ilar short ti p poses ,

t c

to pl

it oa.n b

the grain t

oes t ru the h - house uzes the service ... ropr cnt by o::i.ch o tho inte

i~te accou.~ts , this portion of depr ci tion should be n loo t to th

inter. odi te ace oun ts on o.n eq l sis.

bears 8-1/~ Of' bui depreciation.

~e depreciation on b-11il i ._.s shoul ·

1 st , 0 . to the suostantinl tu'

15. cpreci tion on uip t .

:l°' e OGt o· opt uct ·on ;.;c edule

o · o uip ut . t ... c be c lcul

o these ite • De eci tion e

the apportio nt of its capit 1-co

di t ... ibuto t

co ts .

accounts .

17 .

tion

ill n t n o

e a ... is o t e co

b

0

i

t

t

s

ti

e itabl div· oion

on

st uct ·

a it l co 0

0

i

or

er

co

r l ti

0

0

h

at

1

0

to

0

27. that tl:e. elevating operation is used in performin the ult te ct ion.

'.l!Lus

.'hus mixing is torin0

II

Clenningtt

.. 'ho totG.l cost

Jlea ·ng toring i:xing

ci'J..ar.,cable II

II

ith II

n

of the elevati

2 ti...cs 5 " l II

l/8 or 12. 5 J, 5/8 or 62. 5 ;, l/4 or 25 . 0 ,b

opcrat ion is alloc!l.ted on the above basis .

18. Conveyi::g. me anc.lysis of the ulti .. at accolI!lts sho.rn that the conveying operation

is mod in the • ollo. inJ manner in perf'ormin0 tlle ultir.nto functions .

'le.: .. ning 2 ti. es 't aring 6 ti.~es

LIL'tine 2 t irnro

.L'l'l.us cleaning is charg ble ith 2/10 Cir

t oring I\ II " 6/10 or

.. i:dng " " II 2/10 or

reference to the 3llalynis or ulti.~ate ccounts discloses the f ct that

the loodi c:: operation is used once on , DJ d that in the c se o sto· · • ;ith

the e=ception or cu.sto cleanin~ and trans-s ipping. e e c n s are

~c..raeru:phs z a.ncl 5. T' e cl:c.reinc of nll lo costs to stori is explained

20.

f."le r cma.rks in • urn.graph 19 egardin loaiing ali in th c se Of

unloading.

21 • . :c~ · • tha.t t e opcra.t ·on or ':fue anal nin f

ra.ph 2 to 4 s o•s

is us - t. ice , s the gr .... in ters t e houze as it _e veiJ it . ei

ci J ings are b th ch ea le t o tor· g, and t .. e t:re .. ei h · co t t

ocs to to:ring .

., • '.llli g

It is obvious th t e entire cost o the oleanin o tian o s to

the ult i te account - l ni •

.& 22•8M

al. • epairman Repair Supplies

Lleotric Current

'uperint endcnt Laborers

.te:rost at 4;i re.. ()apital cost of Bldgs . & .... quip .

-axes expense

II ur .r..ce .i:.xp .

rs

lovati?li; 1J o!l. voying Loadine Unloa:ling ei:;hing

Cleaning oporation

Power ( iJ c, iq t l

t

I su.ra.uoe

.ulevating Conveyir...g Loading Unloading .le· ghi .g

Cl ni:r-'6 Oper.

... le tillb Conveying Loading Unl:> illg

.ei"' ing loo.nine Oper .

toring levating

Convoyixg Loading Unloadi .1ei£}lins .Cleanin o_ er .

above

\s a ove

20 20 10 18 10

2 100

25 25

20

~o

100

10 10 22 2

ro 1

100

44. 4,. 9 . 6%

10. ;j a.· ~ 8. 7 9 . 2

1f ~ 100. 0 'I>

30 . Deurecfat ion Ju· 1c j _ \

Dep:!.4ociation on Iiewl-house storage bins

- epairs Po·. er ..:..abor Interest ':..1axes Insur2.Ilce Depree . Bldgs . Depree . .... quip.

- cpairs o er

Labor Interest

es Insurance

20(.1 25% 10/3 9. 6% 9. s-; 9 . 6';a 8 . 3 l/t>%

20 7;,

Eleva.ti

Depr ec . -'ldgs . 11 Eg_uip.

m% 25 / 10 ~ 10.:5 10. 3 10. 3 %

8. 3 1/3 ~~ 26 . ,;

•. epairs Labor Interest

10 ,; 22 ~

8. 3 ... -es 8 . 3 p

Insurance 8. 3

LoPA.

Dep~ec . leigs . 8. 3 1/3 ~ e) ::ec . .....quip. 8.

A·22 .. 8M

..itorin,::: Elevating

onvey-ing Loming Unl ding ·a ghing 1 eaning Oper .

J!jleva.ting Coi:ve:ring Loading Unloading . ·eighing

1 Oper .

"'loaning utoring I:.Uxing

'lean· g torinB

.. i:d.ng

25% 62. 5 -;, 12. 5 ~6

20 60 d

20 ,·

100

50 . 8. 3 1/3 8 . 3 1/3 8. 3 1/3 8.3 1/3 8. 3 1/3 8 , 3 1/3

I

100.00

:!O ~6

8 12 16 18 100

31 . • epairs Po ;or Labor Int or est 1a.xes Iru:;urance eprec . 3 ldgs .

Depree . · q_uip.

Repairs Labor Interest '.Ca::r:es Insurance eprec . Bldes .

II

Repairs Po er Labor Interest ~ es Insurance

_uip.

Cl

eprec. Bldgs . " E _uip.

Interest ... axes Insur mice eprec . B1ags .

... 1evating 0 v ing

Load.in Unlo ing . ei i:ng

18 ;:, 20 ,'U 22 f

8 . 7 .~

' 8 . 7 10 I

8 . 7 /0

8 . 3 1/3% 12. %

.. ei"'hius;

10 I

20 % 9 . 2 JO

9 . 2 % 9 . 2 I

8 . 3 l/'.6 % 16.

22 p 30 ~ 16 ~ 9. 5 % 9. 5

18.

tor in.1{

1 44e4 I

44. 4 44. 4 50 • 62 . 5 60

100. 100 • 100.

~lovatin 25 , Convoying 20 le~ing Oper . lOOQ

~levating 12. 5 C orveying 20.

toring 100 I

taring 100 %

'le::.i.ng 100 /O

32 . T pplication

~"'his chaptor consists cxr tm application of the orego· stem to tho

cost of ~ el evat.or as a.ctmlly incurred. 11b.e iou:t-es charged in the

follo·.7 ing accounts .ere taken fran the books of a COllip.'.l.DY operati a several

terminal elevators , ani they apply to a house ~ the size and oupacity

desori bed in the '"'ost of • epr cxiuct ion chedule. The ures or Interest

ere calculated on the "Opportunity ost 11 basis , t t is , the Interest account

1as charged a.t a. rate ihi ch the c anpaey could earn an their capital invested.

if it uere laced at a:ey- tim in other lim s . 1.1.he :r te is set conservatively

low. Depreciation is figured cm the ost of eprod.uction Sche ule on a

forty year term for the storage bins , and a ten yea:r term for e.uip ent .

·I1axes include taxes paid both on ro.'ll estate and an grain, the latter t

being id at the rate of one half mill per bushel on eat d fl d one

quarter mill per bushel on other grc. ·n. Insurance i oluies premi on

t he grain in the house ur.ci on the hO'J.se itself, th or or p otection

inclu.iing "Use and Occ ,pancy" ( ~ insur"' ce inst bei deprive of th

use of tho building for businesspurposes) , and

a.inst dust explosiac) . The other expense ite

losion-

e those us

termin3.l elevator bu.sii:ess . 'i'he vol e o '"iness or the year

e

th

ust 1,

33 . Repaij s

l..200 . 00 w::io .oo ~7 ~o .oo

labor

746 746 373 671. 40

820. 60 'J7Z,O , OO

'o vey . Lo00.1.. Unload. ieighing lro.n .

14,oti o.oo 1 o~ .oo ~lev.

1'104. 00 Convoy. 3088. 80 J.oadi~ '088. 80 Unlo:xl . 2808 . 00 . ei ·· ing

-----....J>1:.~:.&.::1::J...."le ing 14, 0-0. 00

~axes .. · -st . 5817 • Gr a in_.,..'""""--:-.

6880. 00

'054. . 70 ' tor. 660 . 50 .... lev. 708. 65 onve • 571 . 0o Loading 598 . 55 Unload . 6 2 , 95 .a ing 653. GO 1 •

6, 860. 00

2500 . 00 416 . 65 416. 65 416. 65 416. 65 4lt>. 65 •Ci • 4 .75 Cle •

s,ooo. o

aper 918. 75 918 . 7 5 720 . 00

1102. 50 67::>. 00

te ·est 9,ooo.oo 'J99G.

864. 9Zl . 7 7 . 783 . 82 • 855.

lev. Convoy. Un lead. 'leaning

9,ooo.oo

6265 .

400. 450.

2500.

-·------------1

Lo pairs 7 1!6 . oo o~or 918. 75

Labor 1404. 00 Interest 864. 00 ~axes 660 . 50 Insurn.me 271. 70

epl' ec . Bl gs . 416. 65 Depree . quip . p00. 00

5781. 60

epairs 746. 00 Power 918 . 75 ~bo 14-04. 00

Irterest 9::!7 . 00 ~~es 708. 65 Insurance 291 . 50 ~eprec . Eldgs . 41G . 65 =:-eprec . ..... uiP. r::

6062. 55

• epairs Labor Interest ':'axes InslU' 1ce i)opr ec. 3ldgs .

Loa(i B

73. 00 080. 80 747. 00 571. Ob

. 90 _10 . 65

ep ec. ~ .uiP ··~~~

.epa.irs 571 . _o ro. r 735 . 00 Labor .... 08a. 00

783. 00 598. r.5

246. 20 Depree . oS • 416. 65 Dep!' oc . uip. 500 . 00

111 5. 40 6l;j . 5Q 722, 70

5781. 60

1212. 51 637. 53

1212. 51 6062. 55

56 l . _o

vleaning to fag

being

Cl ing Storing

iXin.«i:!

Jtor in

to

35 .

epairs Iaoor Interest 1axes

37 ~.oo 2808 . 00

628. 00 632. 95

Incu:rar co 260. "'5 10."S• 416. 65

i; • ui p •. ___.ti....,.~x._ 5718 . 95

.... ep:.· cc . Dep:::cc .

5716 . 95

Cle~.i ; Oooration Repairs Po er

820 . 60 6813. 70 1102. 50

Labor 2w46.40 Interest 855. 00 11 es 653. 60 In::mrance 268.85

e:r>rec . Bldgs . 416.7 5 Depree • .c; q_uiP.~5 ....... .......,

681~ . 70

terest 3996. 00 laxes 3054. 70 I ::nUD.1106 4691. 50 oprec . Bl dgs 500. 00 lo •ati1 g ol . 50

.. o. vcyL 0 '6' 7 . 53 oading 56~1 .40

Unload . 68 9 . oo •Oi...,h. f71 • 95

-lev. Co vey.

z9 , 68 .18

lean. Op r.:.·~~~

~9 , 683.18

9471. 61

Storing

vlocning

n Office

·n O fice

ice

l. Some analysis and comparisons bet een our results and

figures and rates now in use will now be made.

2. Storing.

We have seen in Paragraph 5, Section 1, that the terminal

elevators of inneapolis used their capacity 3.04 times in

handling the 1919 crop, the public houses more ti es, and the

private and tank houses less times than the average. Let us

see hoi this co pares with our results. If our volume is 2,126,338

bushels and our storage capacity 500,000 bushels, our capacity

was used 4.25 times in handling the voluzre. From this f i gure

can be calculated the average length of time the grain re~ained

in the bl)use, by dividing the year or t elve onths by 4.25.

The result is 2.S2 months.

3. The total storing cost divided by total volume gives t he

cost of handling one bushel for t he average length of storage.

Thus 39,683.lS divided by 2,126,338 gives 0187, the cost of

storing 2.82 months. Reduced, this figure is .00663 as the coat

of storage for one month, When the elevator is used to capacity.

The legue rate for storage charges is one thirtieth of one cent

per day or one cent per month. Thus the maximum margin for man

office expenses, salaries and profits, ould be 00337 or 33 1/3%

of the income from storage charges.

4. It is obvious that the average terminal el v tor is not full

to capacity at all times. The grain crops are largely marketed in

the fall, and during fall and inter the elevators a.re taxed to the

full capactiy. During the summer this is not true. As heat is

4·22·8 M

37. constantly being milled, the old crop is approaching exhaustion

by the time the ne~ crop is marketed. It would have been inter-

eating and valuable if the facts could have been secured showing

the actual amount of grain in storage in relation to total capac­

ity. The officials of the inneapolis Cha ber of Commerce could

not furnish this information, ho ever, and it as not contained in

a usable ~ay in their annual report . This information is neces­

sary, ho ever, if the present findings are to be applied to the

business of any specific elevator, or if they are to be used to

determine the fairness of rate charged by Terminal lev tors. The

per unit (per bushel) cost f handling grain is increa ed n the

margin of profit is decreased hen tne quar~ity of grain h ndled

in an elevator is decreased, either by using the c pacity a portion

of the year or by using only a portion of the ca acity t ou h the

year.

Table VIII. Effect of degree of Utilization of Stor -e c p c ty

on costs of storage grain.

Percent of Capacity utilized

100 90 so lg 50

Capacity in bushels

500,000 450,000 400,COO 350,000 300,000 250,000

.Jumber of titte u e

Aver ge el ti ve length in cost per months bu el

2. 82 • 63 2.5 .00735 c.. 26 • 00 22 l 97 0094s l. 69 . 01 C6 l. l • 0 325

5. The above table is calculated on the c p city nd vol e of

business used i n the calculation in pa.ragraph 3, and the c pacity

being utilized to different degree, but the hou e bein aper ted

the year around. This is the practice in terttical elevators, the

management of which attempts to keep some kind of grain in their

bins at all times whatever ill pay them their handling charge.

The table points out t.e tendency of costs to increase rather

rapidly as the degree of utilization of storage capacity decreases.

It is therefore apparent that the degree of utilisation becomes an

important part of the application of this system to the amounts

of specific companies. The records of the company ould ~·~lo tbe

desired information tf the daily or eekly amounts of stored grain

were averaged and the result compared with the total storage capac­

ity.

6. It should be observed that in the above calculations the

coats of operating the terminal elevator are regarded as fixed.

Thia is substantially true. The practice is for the elevators to

maintain a full or maximum ere througho~t the year - by this means

obviating the necessity of training men each fall in the busy

season. Overhead expenses , such as depreciation, interest, taxes,

etc., are constant throughout the year. The chief items of ex­

pense which vary with volume of busine s handled are po er, 1nsura.nc

on grain in storage and taxes on grain in storage. A terminal

elevator operates under decreasing costs and by reducing its stor­

age activities,- it increases its per unit costs. Ho ever, in so

far as the costs vary directly ith the volume of business, they

do not increase with a decrease in the quantity stored. In apply­

ing this system to the accounts of a specific company, no special

calculation is necessary, as the actual expenses incurred and the

actual degree of utilization a.re both determined.

39.

7. Cleaning.

The total cleaning cost is 9,471. 61 and we ish to know the

cost of cleaning one bushel. e have already assumed that all

grain is cleaned, and the amount is as before 2,126,338 bushels .

The cost of cleaning one bushel is, therefore, . 00445 hen grain

is cleaned while in storage. Let us analyze this further •

Cost to clean 60 lbs. n n n 6000

" n 2000 "

• 00445 .445 .1483

Thus cleaning costs are 14.83¢ per ton.

s. Custom Cleaning.

This is more involved and a more expensive process since it

comprises unloading and loading, elevating t ice and cleaning.

These costs are:

Unloading Loa ing Elevating Cleaning

6,539.60 5, 6 i. JJ.o l, 5.40 6,813.70

20,730.10

Using the sa e volume of business a before. The ver ge

cost of handling one bushel in this ay is 00975. s before

Cost to clean 60 lbs 60 0 •

a 2000

.00975 975

.325

The cost to ole n in this ay is 32. 5 cent per ton

to 1 .83 cents for cleaning from torage

compared

Let us ee ho cleaning costs oompar~ 1th value of ockage at

different price and different doc ge content 1th t he unit of

comparison being the ton of mixture.

)

Table IX. Value of dockage from one tom at different prices

& percent of dookage . ------------------------------------------------------------------% Docka.ge Amount Value @ Value @

Dockage ~~.oo Eer ton 120. 00 Eer ton

2 40 lbs .lS .40

~ 60 " .2l .60 so tt .so

~ 100 ft :~~ 1.00 120 n .5 1.20

Cost of cleaning one ton of heat ( ith dockage) is oonst

at . 14S3, but the value of the by-product varies from eighteen

cents to fifty-four cents at present prices.

nt

The above costs do not include transportation of dockage fro

the elevator to the place of utilization. If the elevator retain

the creenings as pay for cleaning, th's cost should be included.

en, in a dition, main office expenses are consiaered as co ing

out of t he margin bet een the prices of dook ge an the co t of

cleaning, t he margin narro s .

Chapter v. - Conclusion.

It h s been su gested in e rlier pa.rt of this paper th t

ter~in 1 elevators do not use cost ccounting metho in the con-

duct of tneir business . Thi does not me , ho ever, t t they

a.re not applicable to the grain bu iness. he syste devised n t i

paper could be pplied to a.ny ter inal warehouse. Slight modific

tiona ould doubtless be necessary to suit individual ca e • e

distribution of t e pri ry accounts should be change to meet

requirements . The underlying pri~ciples, ho ever, ill apply to

the business of all terminal elevators. It is the op-nion of men

in the grain trade that costs should be allocated over a crop year .

The 422•8M

41 .

The handling cost thus obtained would be an average cost. If it

iere desired to obtain monthly costs distributed over the volume

of business handled during each month, there is no reason why it

could not be done. Depreciation, interest, prospective taxes for t

year could be divided into monthly parts . Current expenses, such

as labor, power, repairs, etc., are easily gotten by the month .

The volume of grain handled, the degree of utilization of stor ge

capacity can be determined each month . The system thus is seen to

be an elastic one, meeting the needs of the grain trade, lending

itself to adjustment to eet varying conditions . The infer ation

obtained by a general application of coat finding to terminal

elevators shoula prove valuable in the problem of putting a fair

rate for storing, cleaning and other services of Terminal Gr in Ele­

vators.