ABSTRACT
The total operating cost (or expenses) of a food industry consists of the plant operating (manufacturing) cost and the general (administrative and selling) cost. The plant operating cost is the sum of the costs of raw materials, utilities, labor, maintenance, depreciation, and local taxes (Brennan, 1998). The Food Processing Industry is materials-intensive, capital-intensive, and labor-extensive. There are 5 main categories of operating costs in food processing plants: Raw materials, packaging, capital, labor, energy, and business services. Agricultural food raw materials and packaging materials constitute the major plant operating cost. Average food processing industry costs: Raw materials 64%, labor 11%, gross margin 25% (including capital utilization, services and profits). During the recent years, semi-finished (ingredient) food materials constitute about 40% of the total food raw materials (Connor and Schiek, 1997).
