extra potatoes. It was shown that the extra cost per hundredweight for these
items for packing 10-pound bags ranged from 91.5 cents, if the annual volume
of 10-pound bags was 2,500 hundredweights;to 56.6 cents, if the annual volume
was 50,000 hundredweights. These differences are representative assuming:
(a) the packing firm uses the lowest cost method for its annual volume and
(b) the cost of extra potatoes is 3 cents a pound. Factors with undetermined
cost effects were: (a),the possibility that the firm employs extra workers
at all times that are needed only in the 10-pound operation and (b) the
risk that the investment in facilities for packing 10-pound.bags will be
lost by nonuse.