Unearned burden in paper mills: Measuring the loss from curtailed production

Dried Fruit Association of California

Abstract

It is a familiar saying that when production goes down, in dull seasons and periods of business depression, costs go up, and very few business men will question such a statement. But do costs go up? Of the items making up a mill burden, a number are naturally connected with the use of property and plant. Consider first those that vary but slightly whether the mill is running full or slack, and are usually termed fixed charges, such as interest on the investment, taxes, insurance, and depreciation of buildings and equipment.