Wisconsin Administrative Code
Department of Agriculture, Trade and Consumer Protection
ATCP 90-139 - Trade and Consumer Protection
Chapter ATCP 103 - Dairy trade practices
Section ATCP 103.10 - Expense categories
Universal Citation: WI Admin Code ยง ATCP 103.10
Current through February 26, 2024
(1) OCCUPANCY EXPENSE.
(a) The functions to be included are the
ownership and operation of buildings and grounds. Expenses shall include, but
not be limited to, wage and fringe benefit expense of janitors, watchers,
groundskeepers and other personnel employed in this function; rent or
depreciation on buildings; real estate taxes; building insurance; building
repairs; janitorial and groundskeeping supplies; purchased services for
building maintenance and groundskeeping.
(b) Occupancy expense shall not include
water, heat, light and power.
(c)
The expenses accumulated in this category shall be allocated to other functions
and cost centers on the basis of the area occupied by such functions and cost
centers. Area shall be determined by measuring dimensions from current floor
plans or by actual physical measurement of dimensions by tape measure.
Occupancy expense for warehouse space shall be allocated to other functions and
cost centers in a direct ratio to the occupancy of other space utilized by such
functions and cost centers.
(2) GARAGE EXPENSE.
(a) The functions to be included are the
housing and maintenance of vehicles. Expenses shall include, but not be limited
to, salary, wage and fringe benefit expense of all personnel engaged in this
function; depreciation and insurance of garage equipment; noncapitalized
expendable tools; garage supplies; purchased parts; purchased repairs to
vehicles.
(b) Expenses not to be
included are gas; oil; tires; licenses; depreciation and insurance on vehicles;
occupancy expense.
(c) Expenses
accumulated in this category shall be converted into a value per unit factor.
The unit factor value shall be based on the number of vehicles in each of 5
categories and upon a factor which represents the relative maintenance cost for
each type of vehicle. The vehicle categories are passenger cars, retail route
trucks, wholesale route trucks, ice cream route trucks, tank trucks and vans.
Maintenance factors are passenger cars 1.0; retail route trucks 1.5; wholesale
route trucks 1.8; ice cream route trucks 1.8; tank trucks and vans 2.5. The
number of vehicles in each category shall be multiplied by the proportional
maintenance factor for that category. The total of such extension shall be
divided into the total garage expense from which a value per unit factor will
be determined. This unit factor value shall be the basis for allocating garage
expense back to the several categories of vehicles. Such allocations shall be
transferred to the applicable functions and cost centers. In the event detailed
records for individual vehicles or types of vehicles are kept, such records may
be used in lieu of the relative maintenance factor, provided such records
include all of the expense items specified herein.
(3) GENERAL AND ADMINISTRATIVE EXPENSE.
(a) Functions included in this category are
executive, financial and accounting; personnel, purchasing and general
clerical. Expenses shall include, but not be limited to, salaries and fringe
benefit expense of officers, department heads, their secretaries and clerical
staffs; telephone and telegraph; dues, subscriptions and donations; stationery
and supplies; professional services; home office expense allocations where
dairy is a division of a larger corporation; franchise taxes; taxes on
inventory or sales volume; insurance and depreciation on office equipment;
interest paid and bank charges; allocated occupancy expense.
(b) Expenses not to be included are salaries,
commissions and fringe benefit expense of salespersons and expense of vehicles
assigned to them; salaries, wages, commissions and fringe benefit expense of
managers of retail and wholesale sales and distribution, unless they are
officers; route supervisors and driver salespersons; salaries and fringe
benefit expense of plant supervisors unless they are officers; bad
debts.
(c) The time and
corresponding salary and fringe benefit expense of administrative personnel and
of their direct secretarial personnel, along with all other expenses in this
category, shall be assigned to individual cost centers or products whenever
possible. The time and corresponding salary and fringe benefit expense of
administrative personnel and of their direct secretarial expense, along with
all other expenses which are not assigned to specific cost centers or products,
shall be assigned to all products and allocated on the basis of total dollar
sales. All expenses assigned to milk products, ice cream products and special
products shall be allocated on the following basis:
1. Milk products expenses shall be allocated
to categories of sales and distribution (retail, wholesale, vendor, special
routes) on the basis of quart equivalents sold or delivered through such sales
distribution methods.
2. Ice cream
products expenses shall be allocated to sales and distribution categories on
the basis of the number of gallons sold or delivered through such distribution
methods.
3. Special products
expenses shall be allocated on the basis of units of weight or measure in which
they are customarily sold (e.g. powdered milk-pounds; egg-dozen).
(4) PRE-PROCESSING EXPENSE.
(a) The functions included in this
category are the procurement of raw milk and transportation to the processing
plant. Expenses shall include, but not be limited to, salaries, wages and
fringe benefit expense of the supervisor of procurement (if not an officer);
fieldpersons and drivers of vehicles used in collection of milk; direct expense
of operation of vehicles used in collection of milk (gas, oil, tires,
depreciation, insurance); contract hauling expense; farm promotion expense;
veterinary fees; expense of field and outside labor; laboratory tests; market
administrator's fees.
(b) Expenses
not to be included are repairs and purchased parts for vehicles, salaries of
officers involved in raw milk procurement; receiving expense; garage expense;
general and administrative expense.
(c) The total of expenses included in this
category shall be included in raw material cost.
(5) WATER, STEAM, POWER AND REFRIGERATION.
(a) The function included in this category is
the purchase or production of water, steam, power and refrigeration. Expenses
shall include, but not be limited to, wages and fringe benefit expense for
stationary engineers and other personnel engaged in the production of these
services; depreciation, insurance, supplies and repairs on equipment used in
the production of these services; electric power and lights for plant and
office; fuel for heating and steam production and similar services for plant
and office; water for plant and office.
(b) Occupancy expense shall not be included
in this category.
(c) The total of
the expenses in this category shall be included in processing and packaging
expense.
(6) PROCESSING AND PACKAGING EXPENSE.
(a) Functions included
are all plant functions from receiving of raw materials to loading of route
trucks and including the handling of finished products at branch depots.
Expenses to be included in this category are all salaries, wages and fringe
benefit expense of all plant and loading platform labor and supervision; all
supplies and purchased services for the plant, warehouse, cold room, hardening
room and platform; all repairs, royalties, depreciation and insurance on plant
equipment; all wages, fringe benefit expense, truck expense and other expense
of transporting finished products from the plant to a distribution point which
is not located at the plant; allocated general and administrative expenses;
allocated occupancy expense; water, steam, power and refrigeration.
(b) Expenses not to be included are salaries
and fringe benefit expense of plant supervisors who are officers of the
company.
(c) The salaries, wages
and fringe benefit expense of personnel assigned to processing, packaging and
loading platform functions shall be assigned to the cost centers in which they
are employed on the basis of time spent in such cost centers.
(d) The depreciation expense for equipment
used in processing and packaging and loading platform functions shall be
assigned to those functions on the basis of depreciation records for such
equipment.
(e) Other expenses in
this category shall be assigned to cost centers on the basis of available
records or utilization.
(f) The
transportation to branch expense shall be assigned to the loading platform
function.
(g) The expense for
water, steam, power and refrigeration shall be allocated to milk and ice cream
products through the cold room and hardening room cost centers on the basis of
point values (see Table I). For the purpose of this allocation only, one gallon
of ice cream, one gallon ice cream mix or 3 dozen novelties are the equivalent
of 20 fluid milk points.
(h) The
general and administrative expense shall be allocated to cost centers in the
same proportion that other identifiable cost center expense sub-totals bear to
total expense.
(7) SALES, ADVERTISING AND PROMOTION EXPENSE.
(a)
The functions included in this category are sales, advertising and promotion.
The expenses shall include salaries, commissions, fringe benefit expense and
traveling expenses of sales managers, salespersons, advertising managers,
promotional driver salespersons not serving a regular delivery route, and the
stenographic and clerical help directly assigned to such personnel; automobile
and truck expense of personnel engaged in this function; promotion expense,
including contest expense; advertising space, time, preparation and printing
expense; all other direct expenses of advertising and promotion; bad
debts.
(b) Expenses not included in
this category are salaries and fringe benefit expense of sales managers who are
officers; wages, commissions and fringe benefit expense of driver
salespersons.
(c) Expenses in this
category shall be assigned to product groups, milk or ice cream on the basis of
the method of distribution (milk retail, milk wholesale, milk vendor, milk
special route, milk private label, ice cream wholesale, ice cream vendor, ice
cream special route, ice cream private label), provided that advertising space,
time, preparation and printing expense and all other direct expense of
advertising and promotion, other than internal promotion not directed to the
general public, shall be assigned to all products and allocated on the basis of
total dollar sales. None of the advertising or promotion expense shall be
allocated to private label sales. Allocated occupancy expense shall be assigned
to all products and allocated on the basis of total dollar sales.
(8) RAW MATERIAL EXPENSE.
(a) The expenses shall include, but not be
limited to, the following: raw milk; cream; skim purchased; ingredients;
pre-processing expense; ice cream or ice milk mixes; condensed or concentrated
milk or skim milk; dry milk powders; any other fluid or dry milk
products.
(b) The cost of raw milk
to a wholesaler, regulated by Federal Market Order, shall not be less than the
applicable class price and its applicable butterfat differential announced by
the federal market order administrator regulating such wholesaler and any
additional cost to the wholesaler such as premiums, handling and all other
charges, unless a lesser cost for any applicable class can be shown by the
wholesaler. Such costs shall include any federal market administrator audit
adjustments.
(c) In the absence of
proof of a lesser cost, a producer wholesaler selling milk of his or her own
production shall include a cost per hundredweight of milk not less than the
applicable class price and its applicable butterfat differential announced by
the federal market administrator when such producer wholesaler is located in a
geographic area regulated by any Federal Market Order. When such producer
wholesaler is not located in a geographic area regulated by any Federal Market
Order, in absence of a proof of lesser cost, he or she shall include a cost per
hundredweight of milk not less than the applicable class price and its
applicable butterfat differential announced by the federal market administrator
of the Federal Market Order that is closest to the plant of such producer
wholesaler.
(d) Any wholesaler not
regulated by federal market order administrator shall use the price actually
paid for milk purchased from producers or other sources. The price shall
include all additional costs, such as premiums, handling and all other related
charges.
(e) In determining
separate prices for a hundredweight of butterfat and skim milk, the computation
involves applying the announced butterfat differential to the prices of 3.5%
milk. The computations would be as follows:
Class I skim value = Class I price - (B.F. Diff. x 35)
Class I butterfat value = Class I price + (B.F. Diff. x 965)
Class II skim value = Class II price - (B.F. Diff. x 35)
Class II butterfat value = Class II price + (B.F. Diff. x 965)
(f) All raw materials
purchased from sources other than producers shall be included at invoice
cost.
(g) The cost accumulated in
this category of raw material expenses shall be accumulated for all products
processed, and converted by computation to unit costs in accordance with unit
weights specified in s.
ATCP 103.17, Table
VI.
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