Men's Sewed Straw Hats / Report of the United Stated Tariff Commission to the President of the United States (1926)

by United States Tariff Commission

Overhead.—In each domestic factory the total overhead charges were obtained and the ratio of these charges to the total direct labor cost of the respective factory was computed. This ratio, expressed as a percentage of direct labor, was applied to the direct labor cost of individual hats to determine the overhead charge to be apportioned to each hat.

SELLING EXPENSE

(a) Domestic.—The ratio of total selling expense in each factory to total manufacturing cost (material, labor, and overhead) was first determined. This ratio (expressed as a percentage of total manufacturing cost) applied to the manufacturing cost of the selected hat determined its proper share of the total selling expense. Firms organized to deal directly with retailers uniformly had higher selling expenses than those whose products were marketed chiefly through jobbers. The average selling expense of the selected hats was $1.64 per dozen, or 10.8 per cent of the average manufacturing cost. In selling expense is included the charge for cases and other packing material.

(b) Foreign.—Costs of selling hats to importers in the United States are included in the general overhead expenses reported by foreign companies, but are an inconsiderable item when compared with manufacturing costs. No expenses of the offices maintained in this country by foreign manufacturers have been included.

TABLES SHOWING COST COMPARISONS

In Table 8 are shown the costs of domestic and Italian men's sewed straw hats, irrespective of the type of braid used in their manufacture. In Table 9 are shown similar cost data for domestic and English hats. In both tables costs are shown with and without transportation charges on foreign hats, and ad valorem rates of duty necessary to equalize differences in foreign and domestic costs have been computed.

Table 8.—Rates of duty necessary to equalize differences incosts of production of men's sewed straw hats in the United States andin Italy, the principal competing country
Item	Domestic1	Italian2
(a) Cost (transportation not included):	Per dozen	Per dozen
Material cost	$6.44	$4.35
Labor	4.60	.87
Overhead	1.70	.76
Total manufacturing cost	12.74	5.98
Difference	...	6.76
Foreign valuation3	...	6.42
American selling price4	13.28
Ad valorem duty necessary to equalize on basis of—		Per cent
Foreign valuation	...	105
American selling price	...	51
(b) Cost (transportation on Italian hats to New York included):		Per dozen
Total manufacturing cost	12.74	$5.98
Transportation to New York—Inland freight, ocean freight, marine insurance, consular fee	...	1.10
Cost, including transportation to New York for Italian hats	12.74	7.08
Difference	...	5.66
Foreign valuation3	...	6.42
Ad valorem duty necessary to equalize on basis of—		Per cent
Foreign valuation	...	88
1 Average costs of 15 domestic hats selling to jobbers at $10.55 to $15.52. 2 Average cost of 15 Italian hats whose imported cost plus duty ranged from $8.51 to $13.10. 3 Average of wholesale selling prices reported by foreign manufacturers. 4 Average of wholesale selling prices to jobbers reported by domestic manufacturers.

Table 9.—Rates of duty necessary to equalize differences incosts of production of men's sewed straw hats in the United States andin England
Item	Domestic1	English2
(a) Cost (transportation not included):	Per dozen	Per dozen
Material cost	$8.34	$5.47
Labor	5.85	1.84
Overhead	1.87	2.01
Total manufacturing cost	16.06	9.32
Difference	...	6.74
Foreign valuation3	...	9.73
Ad valorem duty necessary to equalize on basis of—		Per cent
Foreign valuation	...	69
(b) Cost (transportation on English hats to New York included):		Per dozen
Total manufacturing cost	16.06	$9.32
Transportation to New York—Inland freight, ocean freight, marine insurance, consular fee	...	1.35
Cost, including transportation to New York for English hats	16.06	10.67
Difference	...	5.39
Foreign valuation3	...	9.73
Ad valorem duty necessary to equalize on basis of—		Per cent
Foreign valuation	...	55
1 Average costs of eight domestic hats selling to jobbers at $16.74 to $22.50. 2 Average costs of eight English hats whose landed costs duty paid ranged from $15.64 to $18.60. 3 Average of selling prices reported by foreign manufacturers.