It is the cost of housing. When the industrial firm owns its own warehouse it computes the average warehouse cost by summing the cost of operation of the warehouse. This requires adding depreciation cost, warehouse utility cost, warehouse taxes, interest on investment in warehouse, and all other costs except for labor costs, obsolescence cost, stock out cost, and comparable thereto. Since labor cost is charged separately. A distinction must be made between the warehouse rate, or storage rate, and the average warehouse cost. The average warehouse cost is comparable to the warehouse rate.
