Chapter ATCP 103

ATCP 103.03 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.04 ATCP 103.04 Distribution of expenses. The distribution of an expense to specific products or functions shall wherever possible be on the basis of measurement of actual use of material or service. Allocations shall follow the functions or other measurable factors to which they are related. Expenses which are jointly caused by all products or function categories and cannot be assigned to specific cost centers or functions, or products, shall be charged to general expense.

ATCP 103.04 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.05 ATCP 103.05 Management personnel. The time of officers and management personnel shall be charged to the functions they perform. In the event officers or other personnel receive no salary or other remuneration, a value shall be placed on their services at a rate no lower than the average current labor rate paid in Wisconsin in the dairy product manufacturing industry (3115) category of the “food manufacturing industry (311)” as reported by the Wisconsin department of workforce development in the quarterly census of employment and wages (ES-202).

ATCP 103.05 Note Note: Current labor rates reported in the above periodical may be obtained from the Department of Workforce Development, Division of Employment and Training, Labor Marketing Information Section, 201 East Washington Avenue, P.O. Box 7972, Madison, WI 53707-7972 or the following web address: http://worknet.wisconsin.gov/worknet/daindustry.aspx?menuselection=daperiodical.

ATCP 103.05 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66; am. Register, March, 1994, No. 459, eff. 4-1-94; correction made under s. 13.93 (2m) (b) 6., Stats., Register October 2004 No. 586; CR 08-075: am. Register April 2009 No. 640, eff. 5-1-09.

ATCP 103.06 ATCP 103.06 Fringe benefits. In the event a wholesaler keeps records of fringe benefits for individual employees or groups of employees, the percentage of fringe benefits expense to total compensation shall be determined. Such percentages shall be used in charging the functions, cost centers or products to which the personnel is charged. If individual or group fringe benefit records are not kept then fringe benefits as a percentage of salaries or wages shall be assigned or allocated in the same manner and be directly proportional to salaries and wages which are assigned or allocated among various functions, cost centers or products.

ATCP 103.06 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.07 ATCP 103.07 Depreciation. The method of depreciation employed by the wholesaler shall be used in determining depreciation expense. In the event a wholesaler has failed to include depreciation as an expense, it shall be calculated by the straight line method and included as an expense item. If more than one method of depreciation has been employed by a wholesaler, then the method that results in the highest expense shall be used in determining costs.

ATCP 103.07 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.08 ATCP 103.08 Representative cost. The department may designate the calendar periods from which expense data shall be extracted. The month in which the price under investigation was established shall be included in such period unless a different period is designated. Cost analysis shall be based on the following:

ATCP 103.08(1) (1) Raw material. The most recent raw material expense shall be used to compute costs of individual products. Ingredient cost shall be based on most recent invoice cost.

ATCP 103.08(2) (2) Containers and cases. At least a 4-months’ period shall be analyzed for purchase prices, inventory records and trippage records.

ATCP 103.08(3) (3) Methods and wages. Wages in effect on the date the cost analysis is instituted shall be used. Manning tables and schedules for the past 6-months’ period shall be used. In the absence of such records, visual observation and work sampling shall be employed. Changes in methods of operation shall not be considered in a cost analysis until such changes have been reflected in expense records for a 30-day period subsequent to such changes.

ATCP 103.08(4) (4) All other expense items. A 6-months’ minimum expense experience shall be used to reflect recent long-term costs. In the case of ice cream, current raw material costs shall be used and the most recent 12-months’ period shall be used for all other expense items.

ATCP 103.08 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.09 ATCP 103.09 Adherence to accounting system.

ATCP 103.09(1) (1) The accounting system provided for herein shall be used to determine accurately:

ATCP 103.09(1)(a) (a) The cost of each unit of product at the platform, defined as platform cost.

ATCP 103.09(1)(b) (b) Delivery cost for each type and size of delivery, expressed as delivery cost per unit of product.

ATCP 103.09(2) (2) All expenses of operation from the purchase and receipt of raw material to the sale and delivery of the finished products shall be categorized by functional groupings. Expense data collected under each functional category shall be distributed to other functions, cost centers and products as provided herein and in accordance with the forms and schedules prescribed by the department to arrive at unit costs for all products by size and type of delivery.

ATCP 103.09(3) (3) Upon approval by the department, a wholesaler who maintains sub-records which enable such wholesaler to directly assign rather than indirectly allocate expenses to functions, cost centers, or products, may employ such direct assignment in lieu of following the allocation procedures prescribed for such expenses.

ATCP 103.09 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.10 ATCP 103.10 Expense categories.

ATCP 103.10(1) (1) Occupancy expense.

ATCP 103.10(1)(a) (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.

ATCP 103.10(1)(b) (b) Occupancy expense shall not include water, heat, light and power.

ATCP 103.10(1)(c) (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.

ATCP 103.10(2) (2) Garage expense.

ATCP 103.10(2)(a) (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.

ATCP 103.10(2)(b) (b) Expenses not to be included are gas; oil; tires; licenses; depreciation and insurance on vehicles; occupancy expense.

ATCP 103.10(2)(c) (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.

ATCP 103.10(3) (3) General and administrative expense.

ATCP 103.10(3)(a) (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.

ATCP 103.10(3)(b) (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.

ATCP 103.10(3)(c) (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:

ATCP 103.10(3)(c)1. 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.

ATCP 103.10(3)(c)2. 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.

ATCP 103.10(3)(c)3. 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).

ATCP 103.10(4) (4) Pre-processing expense.

ATCP 103.10(4)(a) (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.

ATCP 103.10(4)(b) (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.

ATCP 103.10(4)(c) (c) The total of expenses included in this category shall be included in raw material cost.

ATCP 103.10(5) (5) Water, steam, power and refrigeration.

ATCP 103.10(5)(a) (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.

ATCP 103.10(5)(b) (b) Occupancy expense shall not be included in this category.

ATCP 103.10(5)(c) (c) The total of the expenses in this category shall be included in processing and packaging expense.

ATCP 103.10(6) (6) Processing and packaging expense.

ATCP 103.10(6)(a) (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.

ATCP 103.10(6)(b) (b) Expenses not to be included are salaries and fringe benefit expense of plant supervisors who are officers of the company.

ATCP 103.10(6)(c) (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.

ATCP 103.10(6)(d) (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.

ATCP 103.10(6)(e) (e) Other expenses in this category shall be assigned to cost centers on the basis of available records or utilization.

ATCP 103.10(6)(f) (f) The transportation to branch expense shall be assigned to the loading platform function.

ATCP 103.10(6)(g) (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.

ATCP 103.10(6)(h) (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.

ATCP 103.10(7) (7) Sales, advertising and promotion expense.

ATCP 103.10(7)(a) (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.

ATCP 103.10(7)(b) (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.

ATCP 103.10(7)(c) (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.

ATCP 103.10(8) (8) Raw material expense.

ATCP 103.10(8)(a) (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.

ATCP 103.10(8)(b) (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.

ATCP 103.10(8)(c) (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.

ATCP 103.10(8)(d) (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.

ATCP 103.10(8)(e) (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. × 35)
Class I butterfat value = Class I price + (B.F. Diff. × 965)
Class II skim value = Class II price – (B.F. Diff. × 35)
Class II butterfat value = Class II price + (B.F. Diff. ×965)

ATCP 103.10(8)(f) (f) All raw materials purchased from sources other than producers shall be included at invoice cost.

ATCP 103.10(8)(g) (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.

ATCP 103.10 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66; am. (8) (c), Register, December, 1972, No. 204, eff. 1-1-73; corrections made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1993, No. 448; am. (8) (g), Register, March, 1994, No. 459, eff. 4-1-94.

ATCP 103.11 ATCP 103.11 Unit labor and expense.

ATCP 103.11(1) (1) Expense summaries from other functional categories shall be converted into unit costs. Expense totals shall be divided by a quantitative factor which accurately reflects the volume or level of activity for that expense total.

ATCP 103.11(2) (2) For dairy plant processing and packaging functions the following conversion factors shall be used; receiving—quart; pasteurizing and separating—points; bottle wash and sorting—quart equivalent (glass); fiber case handling—quart equivalent (paper); filling and casing-paper—quart equivalent; filling and casing-glass—quart equivalent; filling and casing-cottage cheese—pound; bulk wash and filling—gallon; processing-other products—quart equivalent; processing-special products—pound or other unit of weight or measure customarily used; cold room—case; processing ice cream mix—gallon; packaging ice cream—gallon; packaging novelties—dozen; hardening ice cream—gallon, or dozen (novelties); loading platform-milk—case; loading platform-ice cream—gallon, or dozen (novelties); loading platform-special products—pound or other unit of measure.

ATCP 103.11(3) (3) Expense summaries for each of the sales and distribution categories of sales, advertising and promotion shall be converted to unit cost on the following basis:

ATCP 103.11(3)(a) (a) Milk products on the basis of points as shown in s. ATCP 103.17, Table I.

ATCP 103.11(3)(b) (b) Ice cream and novelty products on basis of gallons.

ATCP 103.11(3)(c) (c) Special products on basis of the unit of quantity or measure in which they are customarily sold.

ATCP 103.11(3)(d) (d) Sales, advertising and promotion expense not specifically allocated to sales or distribution categories shall be summarized and charged to all products equally on the basis of total dollars of sales; provided none of such expense shall be charged to private label sales.

ATCP 103.11(4) (4) Each of the expense summaries for filling and casing-paper, filling and casing-glass, filling and casing-cottage cheese, and bulk washing and filling shall be further segregated into expenses and costs associated with specific package sizes. Total expenses for each of such functions shall be allocated to individual package sizes on the basis of the proportionate amount of time required to fill a normal day’s production volume based upon the rated machine or line speed expressed in units per minute. In the event of a recent and significant change in filling equipment or method, the period chosen to determine filling machine line speed shall be limited to the period subsequent to the change.

ATCP 103.11 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66; am. Register, March, 1994, No. 459, eff. 4-1-94.

ATCP 103.12 ATCP 103.12 Unit container cost.

ATCP 103.12(1) (1) Unit container cost shall be determined for each size and type of container.

ATCP 103.12(2) (2) In the case of glass containers the purchase price for each size and type of container shall be determined from purchase records. The purchase price shall be divided by the number of trips for each size and type of container to determine the unit trip cost. Trippage shall be determined from documented records. The cost of any additional packaging materials shall be added to the unit container cost. Container deposits actually charged to and collected from customers may be deducted from unit container cost.

ATCP 103.12(3) (3) Purchase price for plastic and paper containers shall be determined from purchase records, to which shall be added costs due to losses in filling and the cost of any additional packaging materials to arrive at unit container cost.

ATCP 103.12 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.13 ATCP 103.13 Unit case cost. Unit case costs shall be determined for each type and size of case by dividing the purchase price by the number of trips per case. The cost per case trip shall be divided by the number of containers each case holds to determine the case cost per unit sold.

ATCP 103.13 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66.

ATCP 103.14 ATCP 103.14 Unit platform cost. The unit platform cost shall be determined for each product and package size. Platform cost includes all cost for material, labor and expense up to and including the loading of the product on the route truck and includes adjustments for sales returns. It includes all costs except local delivery cost. Selling, advertising and promotion costs and other general costs shall be determined on a per unit basis based on the number of points assigned to individual products and packages under s. ATCP 103.17, Table I.

ATCP 103.14 History History: Cr. Register, November, 1966, No. 131, eff. 12-1-66; am. Register, January, 1975, No. 229, eff. 2-1-75; am. Register, March, 1994, No. 459, eff. 4-1-94.