Costs of Production of Sawn Timber.

Progress, Volume XIV, Issue 3, 1 November 1918, Page 361

Costs of Production of Sawn Timber.

A Treatise on Pre-War and Present-Day Figures. By W. R. NANKERVIS (Messrs. Gamman *S? Co., Ohakune). (Concluded from October issue). Forestry Department and Logging Operations. This departmental cost should be taken out under separate heads as follows : Falling, Cross-cutting and Hauling Delivery per Loco to Mill Upkeep of Tram Cross-cutting on Mill —Management. Actual wages paid should be allocated to each section of the work and cost per 100 shown. As to pre-war costs in this department We have taken May, 1914, and May, 1918, as the comparison years and we find that wages paid compared as under: —

When the cost per 100 on account of wages is known, it is necessary to take in GEAR PURCHASED, including such items as saws, wire ropes, blacksmith's repairs to blocks, hauler, and bush trucks, wire nails (where wood tram is used) and other such charges We find increases in principal lines of hardware are:— 1914 1918 Crosscut Saws . . 21- per foot . . 4|6 per foot Wire Ropes . . 65/- per cwt. . . 300/- cwt. (also quoted up to 500/- per cwt.) Wire Nails . . 15/- cwt. .. GO/- cwt. We have not taken in STEEL RAILS, as this is nearly always a capitalisation charge, but where any need replacing the cost is £8 in 1914, as against £25 in 1918, an increase of over 200 per cent. To allocate to any one month the cost of gear as above, an average of the prior 12 months cost should be taken. Some companies debit their monthly cost account with each month's purchase irrespective of whether it is a heavy month or not, and they then take the average of their six or twelve months' costs. This to our view is not right, as the miller has to wait six. months before he knows just where he is; whereas if he takes the average of the prior twelve months he gets very near the mark right off. The cost of gear is a most important one and every means must be taken to ascertain that all charges are in, as often it will be found that the upkeep of bush plant will run' into half the wages cost.

Milling and Yarding.

The separate heads here are :— —Yarding —PlaningHandling Orders Out Cost of Gear Used in Upkeep of Mill (circular saws, belts, wire ropes for winches and carriages, files, machinery, repairs, etc). Here a divergence of opinion arises. Should we take our basis tally as a credit to wages of planers and cost of handling outwards? Some mills take their basis right through the cost. We contend that the head machinist should take a daily tally of timber run through his machines to base his cost on, and that the handling outwards cost should be based on the actual sales. The increased wages cost in this department is:

Hardware costs compare : 1914 1918 Wire Ropes .. 65/- cwt. .. 240 -to 500/- cwt. Circular Saws, 42in., £5 5/- .. £l2 10/Belting —Increase 100 per cent. Files .. .. 6/9 doz. .. 19/6 doz. Oils —Increase 25 per cent, on contracts (up to 50",. now) Bar Iron Steel 15/- cwt. . . 85J- cwt.

Loading. We now come to the last department of cost and almost every mill has different methods of loading out to their customers. In our case from the yard to the battened truck we do this work by contract at per 100 feet actual measure and our cost is simplified, but in other cases where Government waggons are run to the yard by siding or where timber has to be otherwise handled, the wages of orderman and loaders must be kept separate. This brings us to the total cost per 100 feet of sawn timber loaded into Government waggons, and it is recommended that each month's cost be compared and the comparison shown in drawing up the statement. There is not so much in the making up of a cost account as there is in using a method of bookkeeping whereby the figures we so urgently need are easily obtained and files easily scrutinised. Standing Charges. These should be kept separate from the milling costs, and if the cost per month of interest, depreciation? salaries, rates, travelling expenses, discounts,

fire insurance, stamps, telegrams and stationery be worked out, it is a simple matter to finally add this to the mill cost. Accident insurance should be taken into account after the wages, and as this is at a fixed rate of 40s per cent., it is easily calculated. The final cost is a total of royalty, milling cost, and standing charges In these days when the accountant has almost enough to do without worrying about costs, he naturally turns to the simplest method when the job is called for and in this connection it might be mentioned that if the Wellington Timber Workers' Award provided for a twice-monthly mill pay instead of fortnightly, the trouble of the broken week would be obviated and the work simplified. The members of our associations could help the accountant and themselves a great deal by asking for this and seeing that the Auckland award provides for it, there seems no reason why the Wellington award should not. Finally, There has been no attempt here to show what the increased cost is, but it may be stated that cost accounts taken out on the same lines as herein suggested SHOW AX INCREASE OF NEARLY 100 PER CENT IN MAY, 1918, OVER MAY, 1914, and as stated at the outset this is at a mill where labour troubles have not been so acute, where hardware has been bought on the lowest market, and where the general cost of running is lower than the average. A separate return taken out showing "Comparison of selling prices, 1914 and 1918 (copies hereto attached) show that we are not getting approximately 45 PER CENT. MORE FOR OUR TIMBER. Schedule No. 1. COMPARISON OF SELLING PRICES.

The above are vett prices. The first list is Rangilikei Association^-off which 10 per cent, has been deducted, while toff the latest lists 5 per cent, has been deducted, as"an average discount. It will be noted that an average increase can only be taken on the "number of feet of each quality sold at the time the lists were in force.

1914 1918 4 Crosscutters were paid . . 11/- .. 15/Ropemen (Hauling) i 16/Hauler Drivers 11115 1Loco. Drivers 14/Skidmen 11/15 Tram Navvy 14/Management £20 £28 Average increase 35 per cent. 35 per cent.

1914 1918 Head Breaking Down 11)6 15/Pacific Lever 12/- • • 16/6 Pacific Carriage 14/Head Bench 14/- . . 16/Tail Bench 12 /- • • 14/Engine Driver 15/Slabs 10/6 12/6 av [Machinist 15/- . . 16/6 Tail-out Machines 8/Head Orderman . . 12/- . . 15)Stackers 10|6 12/6 [Management £20 £28 Average increase wages 36 per cent.

April April Oct. June April July May 1914 1915 1915 1916 1917 1917 1918 Rangitikki Gammans H ANGITIKEI Bid. Ht. Rimu Scant’lg. 10/9 10/6 11/6 11/9 12/4 13/4 16/- ,, „ Eds. &Plks. 11/9 11/3 20/O.B. Rimu Boards 9/3 8/G 14/O.B. Rimu Scantling .. 8/9 7/4 7/10 8/9 9/6 10/6 12/3 liii. Rough Lining 7(2 5/9 6/3 6/10 7/2 7/8 8/6 lin. Sarking 7/G 5/9 6/G 7/9 8/6 9/6 11)3 Rimu T.&G. Rustic. B. B 12/4 10/G 11/3 13(8 14/9 15/9 17/6 O.B.Mat.T.&G. „ or 10(9 9(9 10(3 11/3 12/4 13/4 15/9 O.B. Rimu Match Lin. 12/4 10 JG 1113 13/8 13(9 14/9 16/6 Clean O.B. Rimu Bds. 10/10/6 12/3 12)10 13/10 15/9 Ht. Rimu T.&CV. Rustic 17/-17/-14(3 14)315)6 151618/6 18/622/6 22/623)6 23)626)26 JHt. Matai V,; or -Rustic 17/15/9 16/9 18/6 22/6 23(6 26/Dressing Ht. Rimu 15/9 12/9 17/20/6 21/6 24(3 Clean Ht. Rimu 17/G 16/6 26)29)-