(_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.