[Letter from Roy E. Henderson to H. L. Williams, November 14, 1973] Page: 3 of 10
[5] p. ; 28 cm. ; 22 x 36 cm.View a full description of this letter.
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Mr. H. L. Williams
Page 2.
November 14, 1973
raws received in September 1973 was $11.3062 per bag.
The average cost of raws received in October 1973 was
$11.2866 per bag, a slight decrease from September.
Despite this decrease and a decrease in the spot price
to $11.07 as of 11-13-73, it is estimated that the cost
of raws melted will not decrease in November or December.
. Refining loss for October 1973 was $.0864 per bag
compared to $.4034 in September 1973 and $.3431 in
October 1972. A liquidation was possible on November 1,
1973, and after determining the liquidation loss, the
reserve contained approximately 2,800,000 lbs. more than
the liquidation loss. The refining loss for October 1973
was reduced by 1,400,000 lbs. and the reserve still
contains 1",400,000 lbs. for use as a reduction of the
refining loss in November and December 1973.
- Other Manufacturing Costs. Freight to Sugar Land was
$.1028 per bag in October 1973 compared to $.0872 in
September 1973. This increase was the result of the
warehouse liquidation. Consumer packaging direct costs
were $1.1579 per bag compared to $1.0173 in September 1973
and $.9622 iii October 1972. Both labor and bag and con-
tainer expense increased over September. Part of the
explanation is increased cost of bags and containers and
higher labor costs due to a 5% labor increase that went
into effect on October 1, 1973. Also the consumer powdered
production and consumer medium brown production was higher
in October than in September. Because these products have
higher labor and bag costs, increased production increases
the total per bag cost.
Contribution Margin
The net sales price increase of $.5406 per bag was thus $.3225
per bag greater than the $.2181 per bag increase in the cost of
sales, thus increasing the contribution margin. The higher
contribution margin together with higher shipments offset an
increase in period costs providing the good profit performance
in October.
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Henderson, Roy E. [Letter from Roy E. Henderson to H. L. Williams, November 14, 1973], letter, November 14, 1973; (https://texashistory.unt.edu/ark:/67531/metapth1211714/m1/3/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Rosenberg Library.