Title: job and cost analysis
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Permanent Link: http://ufdc.ufl.edu/UF00074536/00001
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Title: job and cost analysis
Physical Description: Book
Creator: Thor, Eric.
Publisher: Florida Agricultural Experiment Station
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Bibliographic ID: UF00074536
Volume ID: VID00001
Source Institution: University of Florida
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Full Text

Agri. Icon. Series No. 53-2a


Packing Rouse # 17

'Eric Thor

Confidential Report
florida Agritultural Experiment Station
S Galnesvllle, Iorida
January 22, 1953

.' A\


The time and method study conducted in your house is part of a larger

over-all study being made by the Department of Agricultural Economics of the

University of Florida. The purpose of the detailed study is to move beyond

the research work published in Special Report, Series No. 51-J), Agricultural

Roonomics Department, University of Florida. The purpose of the work pub-

lished in the Series 51- report was to determine and compare packing house

costs based on accounting records. These data reveal vide variation in cost

among houses. The aim of the more detailed time and method study is to find

out why these differences exist.

All data collected a your house has been combined to calculate your

per box cost for packing and handling citrus. These specific costs are for

oranges. Grapefruit cost would be very similar, the difference being mostly

in packing cost. Your cost for the period observed, Nov. 12-15, 1952, has

been allocated as follows:

SCents per box Cost
Item :
: Packed : Bulk
tator .... ..... .. 21.41 : 6.95
Materials . ... 4.3.36 : -
Direct operating I 7.62 : 4.79
IndArect operating. : 2.62 s 2.62
Assessment. V . 5.25 -
SeU lng & administrative. : 17.13 : -

Total . : 97.39 14.36

Total Cost

An Index of averagee total per box cost" has been calculated for the

70-odd packing houses included In the over-all study. This index is a com-
parison expressed in percentages of the "average total per box cost" of pack-

ing and selling citrus.

The seasonal average per box cost for all houses was used as a base

for calculating the index. The calculation of an annual index was necessary

in order that the comparison might reflect as nearly as possible the true

cost relationship which existed during a specific year. Calculation of the

index can most easily be explained by using your packing cost for the season

1950-51 as an example.

Type of


Table 1--Index of Total Expenses

Tour Tour Average Cost
Volute by Total Cost by Type of
Container by Container Container
(3) () (5)

Your Weighted

Your Weighted
Average Cost


house 48,109 13p745.87 .2509 12,070*55

Oranges 1 3/5 Bruce 14,323 138,353.67 .9350 131,202.01
Grapefruit 1 3/5 Bruce 28,883 26,522.74 .8543 2Ii,6746.75

Tangerines 4/5 Bruce,flat 716 1,247.79 1.5052 1,077.72

Total 179,860.07 169,025.03

Index of Average Total per box : T72 860,0' x 100 a 106
Cost for your Packing house 169,0b25.03

It will be noted that Col. (1) Indicates kind of citr=s, Col. (2)

type of container, and Col.1(3) the volume of itrus packed in yo house for

season 1950-51. Col. (1) portrays your total expense for each type of paok,

Type of

Type of



f L 1


and Col, (5) is the average per box cost for all packing houses by type of

pack# In other wprds, it is merely the total of the seasonal average cost

for all houses by type of pack divided by the number of houses included in
the total. Col. (6) is your weighted average cost --what your cost would

have been if your coast had bern equal to the average cost, of all houses.

Col. (6) is determined by multiplying your volume for each type of con-

tainer (Col. 3) by the over-all "average cost by type of container" (Col. 5).
The "index of average total per box cost" is computed by dividing the total

cost for your packing house (sium of Col. 4) by total weighted average cost

of your house (sua of Col. 6),

The interpretation of this index is one of relative cost rather
than specific costs. An index of 100 means that the total per box cost

for packing and selling a box of citrus is the arithmetic average of the

houses in the study. An index of less than 100 would indicate that the

average total per box cost was less than the arithmetic average per box
cost of all the houses included in the study; an Index greater than 100

could be interpreted to mean that the average total per box cost vas

higher than the arithmetic average of all houses. In. addition to cal-

culating the index, houses were placed in their respective quartiles de-

pending upon the index of average total per box cost".
The fitting of an individual house into its respective quartile ,
was accomplished by arraying all the indices for a given year and dividing

this array into four equal parts. Quartile one includes the relatively

lower cost houses and quartile four the relatively higher cost houses.

When houses were arrayed the midpoint, or average, house was not neces-

sarily the one which would have an index of 100. This is possible because

the "average total cost per boa" index is one of average cost, not one of

"average house.

Of these 70-odd packing houses, a few had a relatively high ost

compared with the majority. The oroe more houses had an inde of less

than 100 tha* more than 100. The median house (middle house) usually

had an index of approximately 98. This median varied from year to year,

from a loa of 97 to a high of 99.

The indiees and quartiles for your house, for the seasons 1946-47

through 1950-51 are as follows:

195464T7 '' 19T7-18 :, 1948-49 : 194g9- 0 : 1950-51

Ifnex : Quar- s Irdex : Quar- x'nde : Quar- : Mez : Quar- : Index Q'uar-
tile : til -,il,'S t .ile, 1, tile

92 .2 BT : 872 67 1 :99: 3 106 -'1 3
S :~ : '-t. : i : :..t: .' r : :: -

labor Cost

labor cost for the petod we visited your plant vwa made by ob-

serving each worker and allocating his wage to the particular job he was

doing. Your labor cost per box is showv in Table 2. The method of cal-

oulating and allocating these costs will be discussed in 'subsequent


.r1 *

Table 2, lItemized4 labor Copt per Box for
Packing and Ranl Ing Oranges

Cents per Box

Packed : Bulk
Trucking-in . . I 2.54 : 2.54
Receiving foreman .... : 49 2 .49
Field Box hadlers,, ., .54 : ,4
Coloring room attendant .48 r ,48
Dumping. ,, .8 : 4
Cull aorting .... +... : .90
Grading .. ; 2.64 :
Packing , . : $.50 -
Box closing . 1.00 : -
Checking. ,. ,: 54 -
Trucking-out, . 1,04
Car loading ..... .80 : -
Boa supply 2.00 3
Souse foreman *, 1,84 s -
Mechanic ., : .42 .42
Compensation insurance : .54 ,54
Social security. . i .20 t .20

Total .. . .... : 21.41 6.95

In addition to allocating cost by specific jobs, detailed otservations

vere made to obtain data to calculate the percent of time eaoh individual

worker was actually engaged in constructive labor. These observations Wre"

.Ade frequently throughout the day in order to obtain a representative
sample. A single observation was taken in the following manner. The

observer, moving from job to Job would approach an area and stop; he

would then glance:at the dumper, paker,; trucker or whatever the job might

be. At this precise instant the "status" (working or non-working) of the

worker was determined. Care was taken not to anticipate observations. The

observer followed one method, such as stopping in a definite place for eaoh

4ob before making and recording an observation. Delay observations such as
when the entire plant was closed down either due to break-for-lots or

equipment failure ere not included in calculations of an individual's

"working" aId "onr-working" time. The results of these adividual observations

are shown in Fig. A and a~tdiscussed in the sections dealing with the

specific labor cost items.

Break-for-lots and Rquipment failure,

In addition to observing the working and non-working ,tis of each

individual worker,'a record was kept of the amount of time that the entire

packing operation as closed down due to break-for-lots or equipment failure.

During the period observed your house was engaged in pa king citrus

twenty-two bors and 30 minutes. Two hours and 14 minutes, or 9.9 percent

of this time the entire packing operation was closed down. Of this time,

7.6 percent was for break-for-lots and 2.3 percent was for equipment
:failure. The percent of tie .that the house was delayed du tb break-

for-lots or mechanical failure is shown in Fig. Be. On November 13 the

line were closed down forh 32 5 minutes, or 4.9 percent .the tife, for

break-for-lots. On November 14 the lines were delayed a total of 23

minutes out of 253 minutes for break-for-lots, a total of 9.1 percent.

On November 15 the total plant delay due to breakF-for-lots and equipment

failure vas 21,7 percent. Break-for-lots accounted for 14 percent of the

delay, and equipment failure accounted for the other 7.7 percent.


One of the high coat items for the period observed, was "trucking-in"

of full field boxes. The cost during the observed period was 2,93 cents

per box.

11. 1 .

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One of the reasons for the high cost is the distance that it is

necessary to hand-truck citrus. During the period when citrus was put

through the de-greening operation, 18 percent of the citrus vas hand-

trucked at leat 340 feet. :he remaining 82 percent of. the citrus was

band-trucked at least 220 feet.

Time studies were made to determine the man-minutes required to

hand-truck full field boxes, stacked four high, various distances within

the house. This calculated relationship, which is illustrated in Fig. 0,

excludes all delays and non-working time. Adjustments either up or down

were made whenever the observer found the truckers were working faster or

slower than what was considered nomail.

The relationship in Fig. C illustrates the man-miinutes required to

truck 100 boxes vhen truckers are operating at capacity.

The trucking-in of full field boxes in )our house involves hand-

trucking each box a minimna of three times in moving the citrus from the

field truck to the dumping table. First, the citrus is unloaded fro the

field truck and transported to the coloring room. During seasons when:

citrus is not colored it is necessary to truck it to a storage area in

order to assemble a grower's lot before putting it through the packing

operation. Second, the citrus is hand-trucked from the coloring room or

storage area to the dump area. This is necessary in order to assemble a

partiuar lot of citrus in preparation for dumping. Thir, it is neces-

sary to transport the citrus by hand-truck from the assembly area up to the

dumping table. This necessity of moving the citrus three times increases

the cost. Oach time a worker has to grasp and release a group of boxes,

the time of hand-trucking a given distance is increased.

11 1- 4
4 '. ,, I 4+;; l 4:
4-4i I
ffil 1 T t t' ~t7" jii ~ t it

ii. r-t nmtt i t-i t-r-ttin I _
4 -I 4 '' 44; I -'-
17~h174Tf gTrt t gt h t1 I *-* 41 -'T 4 q I rT.I--

Lt11 -.-+t: ............
h t r r t i r V' 4 I- + -4 1 t fr ft 2' 1 ~. 2 Pt~ f r i JRf ht t k t tl 1 4f7
.i'' i- i. r~~ 1 ,II

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44 ----- -

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=t-4 t. C a.

4 4 A .......
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------- -- 1- II> ----~7r.~~~~~

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A comparison was made to determine the difference between cost of

processing citrus through the north end coloring rooas and the south end

coloring rooms. order to make a valid comparison it was necessary to

eliminate all delays, This elimination was done by using the data 11-

lustrated in Tig. C.

The 18 percent of citrus that passes through the south end coloring

rooms was on the average first trucked 60 feet into the coloring rooms,

then 250 feet from coloring room to assembly area, and 30 feet from assam-

bly area to dumping table, a total of 340 feet,

It will be noted in Figure C that transporting 100 full field boxes

60 feet requires 21 man-minute, 250 feet requires 2 man-minutes, and

30 feet requires 17 an-minutes. The total man-minutes required for hand-
trucking full field boxes these distances with boxes stacked four high

and with truckers working at capacity is 94k

Thewotal distance necessary for hand-trucking full field boxes from
field truck to dumping table for the 82 percent of citrus processed through

the north end coloring rooms is 250 feet, The average distances are 100

feet from truck to coloring room, 90 feet from coloring room to assembly

area, and 30 feet from assembly area to dumping table. The calculated

time, with truckers working at capacity is 25 man-minutes for 100 feet,

24 man-minutes for 90 feet and 17 man-minutes for 30 feet. -The average

total time required to move 100 full field boxes these distances 1i 66

The vage rate for "trucking-in" in your house for the observed period

was 75 cents per hour. Using this wage rate we calculated the coat, with
band-truckersvorking at capacity, to be 1.17 cents per box for the citrus


unloaded at the south end, and .825 cents per box for the circus unloaded

at the north end. ThiB is a difference or .345 per box.

This cost figure does not represent the true difference in cost of

band-trucking full field boxes, First, it does not allow for the time

truckers are idle or taking time out for rest. Second, it does not

include the receiving foreman's time. If truckers had operated at capacity

(no time out for rest or delay), it should have taken 1,239.74 nan-minutes

to transport the 18 percent, or 1,351 boxes of the citrus trucked-in from

the south end during the observed period. It likewise should have taken

4,170.01 man-minutes to truck-in the 82 percent, or 6, 155 boxes unloaded

at the north end of the building. When w compare the hours actually

worked with those the truckers would have worked if they had operated at

capacity, we find that only ,64.6 percent of the tiea actually worked
would have been needed to "truck-in" the citrus handled during the observed


This calculated time compares quite ifbrably with the "working" and

"non-vorking" observations. A total of 7,730 observations were made on the
"truak-in" workers. Of these 7, 730 observations, z4,939 were non- working

ones, a total of 63.9 percent. I ring the observed period November S12-15,
the seven truckers were on the payroll a total of 254.5 hours. The amount

of delay for the various days, illustrated graphically in figure 3, was

76 percent at November 12, 70 percent on November 13, 68 percent on November
14, and 53 percent on November 15. These large percentages of non-working
time by the hand-truckers seem to Indicate that there was a surplus of

However, upon careful study one notes that the location of the

coloring rooms probably makes it necessary to have a surplus of band-truckers


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in order to have enough workers on hand during the period when citrus is

truoked-in fraa the south end coloring rooms. For example, when citrus

is being hand-trucked 280-300 feet, it requires (working at capacity)

about 63 man-minutes per 100 boxes. a4nd truckers need about 10 percent

for rest. The "trucking-in" time plus a rest period each hour makes it

necessary to allow about 70 man-minutes per 100 boxes for hand-trucking

this distance. Dumping capacity of your house is about 400 boxes per hour.

Therefore, When you are operating at capacity, 280 man-minutes per 100

boxes would be required. One i an is needed to truck-up from assembly

area to the dumping table. Another trucker is probably needed to offset

any absenteeism due to illness, etc. Consideration also needs to be

given to the possibility of field trucks requiring unloading during the

period of "truck-in" from the south end coloring rooms.

The allocation of cost of "trucking-in" full field boxes from the

south end coloring rooms probably should include the greater part of the

non-working time. If this were doaa there would be a greater difference

in per box cost between the citrus processed through the north end and

that processed through the south end than .345 cents per boxs.

Receiving Yoreinan

The per box cost for the receiving foreman, was calcualted on the

basis of field boxes trucked into the house and it averaged .49 cents per

box. The receiving foreman is paid on a weekly basis, and therefore the

per box cost was determined by dividing salary received by volume of

citrus trucked-in. Allocation of coot was distributed equally between

cannery fruit and packed fruit because froa the field truck to the dump-

ing table each requires the same amount of labor.

Field Box. Handlers.

These workers stack the empty field boxes as they come off the

c 'onveyor. They also assist in loading empty field boxes on trucks for

distribution in the grove.

The per box cost was '.5 cents per box and was calculated by -

multiplying hours worked by wage rate and dividing by number of boxes

dumped. The per box cost was equally allocated to both packed and bulk.

No time analysis was conducted on the box boys,

Coloring Room Attendant

The duties of the coloring room attendant were to handle the

de-greening operation. The per box cost was ,48 cents per box and was

determined by multiplying the hours worked by wage rate and dividing by
number of boxes put through the de-greening rooms, Equal distribution

of cost between bulk and packed was made because both went through the

coloring operation.


The cost 'of dumping during the period of this studywas .84 cents
per box, as is shown in Table 2. Two dumpers were employed and they ro-

tated at the job. The "off-job" dumper usually performed other jobs,

such as trucking-up to the dumping table or out of the coloring room,
.etc The dumpers were engaged in dumping fruit 89.7 percent of the

time, as is shown in Fig A'. This percentage is based oh observations

of the "on-job" dumper. Observations were not kept on the "off-job"

-dumper. ', .

The cost of dumping was calculated by multiplying the hours

worked by the two dumpers by their wage rate and then dividing by the


number of field boxes dumped. This cost was allocated to packed and
cannery citrus at equal rates because the labor required per bo is the

same whether the fruit is packed or sent to the juice bin.

Cull Sorting
The cull sorter's job is to remove damaged citrus from the volume

going to the juice bin. The cost of this job was allocated entirely to

bulk oitrus, xt was computed by dividing the total wage of the cull

sorter by the number of boxes sent to the cannery. This cost was .9
Scents per box. It is relatively high because it represents the entire
time of one person charged to cannery volume. No observations were made
to determine percent of time working and not working for the cull sorter,


The cost of grading during this study averaged 2.64 cents per box
as is shown in Table 2, This cost was calculated by dividing the total
number of boxes packed into the total wages paid to graders during the
observed period. None of this dost was allocated to bulk because grading
was done for the benefit of the packed citrus.'

Fig, A shows that graders were working practically all the time--
the actual percentage being 9940,I.


Packers were paid 5.5 cents per box for packing oranges. It was
found that, due to the lack of volume,, the packers on the average worked
only 75 percent of the observed time. The amount of time the packers
worked ranged from a high of 84 percent on Saturday morning, November 15,

to a low of 52 percent on Friday morning, November 1.,
+ '. / ,, ..'/:+'. : ,.. '


Box -Closing

The "box loserss, similar to the packers, were paid by the piece.

The rate of pay was one cent per box. It will be noted in Fig, A that

they did not operate at capacity. During the period observed they worked

only 6l16 percent of the time,

Checking '

The checker 'was paid by the week. The cost was .* cents per box.

This coat was calculated by determining the total wage for the period ob-

served and dividing by the number of boxes packed. The entire cost was

allocated to packed citrus.'


The cost for trucking packed boxes from the packing line to the
railroad car or motor truck was l.04 cents per box. This cost was com-

puted by dividing the total wages for the three packed box truckers by

the total number of boxes packed, Fig. A shows that this group were
observed working a lower percentage of the time than any other group-

-0.6 percent, '

constructive labor only 5*J5 percent of the time observed. If remunera-

have been $1.8, per hour.

The actual observed cost of loading $25 boxes into a rail car
was $i.20 for the loader and $i,18 for the hand-truokers, a total of


$9,38. If there had been a large enough volume of pack available to
have the truckers operating at capacity, or few enough truckers so that

the citrus that was packed could have kept the truckers operating at

capacity, it might have been possible to reduce trucking costs from $$.18
per ar to $2.10 per car .

Loading Rail Car vp. Truck:

The per box cost of loading a motor truck is higher than that
of loading a rail ear, The difference in cost is due to the greater dis-

tance required to hand truck packed citrus, and due to the fact that the,

trucks do not remain at the loading station for a period similar to the

rail car. The desire of motor trucks to "be on the road" necessitates
the hand-trucking of the citrus into an assembly area before it is loaded.
This creates the necessity of hand-trucking the packed citrus twice*

There is no convenient place within the house to assemble packed
citrus for preparation for loading into a motor truck. Packed citrus is
S assembled in a rather make-shift manner which also increases the cost of


A calculated total labor cost (loading plus hand-trucking) of
loading a large motor truck, with hand-truckers working at capacity,

would be 1.L cents per box. The cost of loading a, rail car, with hand-
S truckers working at capacity, would be 1l2 cents per box.

Box Supply

Box supply was paid at a rate of two cents per box. Total cost
was allocated to packed citrus.

The ratio of "working" and "non-working" time during the observed
period showed that the box supply crew worked on the average 73 percent

of the time ,

House Foreman

The house foreman is paid by the week, and is employed for the
entire season. The per box cost was 1,8 cents. It was determined by

calculating the total wage for the season and dividing by the volume of

your 1950-51 season pack' All of tho foreman's cost was allocated to

packed citrus,


The mechanic was paid on a weekly basis. The er box cost of

his labor was calculated by determiinng his total wage for the observed

period and dividing by the number of boxes dumped. This average was

.42 cents per box. Per box cost was equally distributed between bulk

and packed citrus because equipment upkeep was estimated to be about
proportional to volume.

Compensation Insurance and Social Security
Per box charges for compensation insurance and Social Security
was allocated equally to bulk and packed. No attempt was made to dis-
tribute this cost according to jobs performed by the workers, Per box

cost was determined by dividing the total payments by the number of
boxes dumped. ,
i `,
.+ '. i ... : + r .

V'~ ~~~~~~~~~~~~~~~~~~~:: + 44 +'+ + ++ + f +""+
.~~ ~~~~~ ~~ ~~~~ +++ + +(

Material Cost

Material cost was sub-divided as follows


Cents per box

Crate material.................. :; 0.18
Labels and paste '...........,.....*, t ..27
End guards ...... ... .....; ... 89
Color and wax ................. : 2.02
Total ........... .................. 3.36

Direct Operating Costs

Direct operating costs were sub-divided as follows:

ents per box
SPacked; Bulk

Power, light water ............ 1.18 : 1.18
Repairs ............ ........ t 1.3 1.35
Miscellaneous supplies ......... t .60 i :
S Truck, tractor ..... ............ 2.23 ?
Field box repair .............. 2.26 i 2.26

S' Total .................... ....... : 7.62 : 4.79

Indirect Cost

Indirect costs were sub-divided as follows:

SCents per, box:
Packed i Bulk

Fire and casualty insurance ..... .68 68
STaxes, licenses, rental ..,...... t: .5 : .55
Depreciation ................ .. 1,15 : 1.15
S Property losses ................. : 2ht : *.2
Total ...... ........;....... ...... 2.62 t 2.62



Assessment Cost

Assessment costs were sub-divided as follows:


F.CoC.e ........ ... .... .. ..
Growers administrative ......ii
Testing and inspection .......

Total ..................*.....

. Cents per box


:. 3.00

t 5200


Selling and Administrative Cost

The selling and administrative costs were allocated entirely to

packed citrus. Some charge probably should have been made for admin-

istrative cost for handling the bulk, Hdwever, this cost under the'

present method would be rather small and indefinite, and therefore no

division of allocation was made. The breakdown of costs is as follows:

Itsn Cents per box

Management & office salaries *... 1.96
Office supplies and expense .... : .39
Auto and travel .. ..*.*.* ..... 1.69
Telephone, telegraph & postage : 1.00
Miscellaneous expense .......... .38
Legal, sales adjust ........... 1
Trade Assoc. Dox, .... .. .... i .06
Commissions, purchasing ...V. : 1,00
Selling expense ........... 10.

Total ...................... : 17.13



No attempt has been made to draw any conclusions or make any

'recommendations in your individual report

SThe aim of the over-all study is to compare the methods used

by various houses to determine their relative cost and efficiency, It

is anticipated that an over-all publication will include suggestions

and ideas that may be useful to individual packing house managers in

reducing their marketing costs.,

All data collected in your house is kept strictly confidential

and will be published only when it is combined'with other data.

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