Cost of Instantizing Nonfat Dry Milk

The economic engineering method is used to develop processing and fixed investment costs for instantized nonfat dry milk powder. Total cost is analyzed on the basis of milk powder processed and packaged in one type of consumer package--a 20-quart (4-pound) carton. Results indicate that raw material costs represent more than four-fifths of total cost, with packaging costs accounting for 10 percent, and instantizing and administrative expenses making up the balance. Cost centers are developed for administration, powder handling, instantizing, and packaging.