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Show FARM COST RECORDS W. E. Thain, Assistant Professor of Accounting, Utah Agricultural College During the period of liquidation following fol-lowing the war the business man has found it necessary to study and analyze an-alyze his business very closely that he might eliminate unnecessary expenses and thereby reduce hi,s overhead. He has also analyzed his business to ascertain as-certain if there were not particular phases of it that were not paying. To accomplish this analysis he has turned more and moi-e to up-to-date accounting account-ing methods, a "tool" which he had not been using to its utmost. Why cannot the farmer use this "tool" to as good advantage bb the business man ? As a broad business proposition farming is analogous to that of manufacturing. man-ufacturing. The manufacturer is engaged en-gaged in two economic activities, pro-lucing pro-lucing and marketing. Are these not the two activities in which the farmer s engaged? The manufacturer uses his accounting syBtem to determine what his costs of production and sell ing are, and if those costs are tor high. Why could not similar methods vf analysis he applied' to farming op erations? Let us examine the ques tion a moment. Taking first the activity of produc tion. The average farmer raises live stock, crops and keeps a herd of dairj cows. How many know that eacl line of activity paid a profit and how iiiuch? May it not be possible tha the profits made on the crops ant lairy herd is being offset by Iosse: '.in livestock. If the owner of a farn had positive knowledge that such i condition existed he would probabl; ia one of two things. find a wa; :o change that loss into a profit o: elminiate the losing activity entirely A simple set of records would givi iim the Information with which ti nake such ananalysls as above out Ined. With this "tool," an account ,ng system, he could compile fron day to day the cost of carrying oi each of his various activities 1. e. the cost of raising his crops, his live tock, etc., and the returns therefrom He would then te in possession o positive knowledge as to what eacl of his activities, or farm departments was doing, making or losing money More than that, he has a rtetaile statement of his costs and expense ind a careful examination of thei may reveal excessive cost or sho many places where savings could b made. Once started, there is practical no end to the ways in which such system could be used. Should he d sire to carry his investigations int greater detail he could by the sam methods, compile his costs and return or each kind of crop, each class c livestock, etc., thus determining th cost of producing a bushel of wheat c a ton ot beets, or tho cost of preparin an animal for the market. When one the habit is acquired there is a re! pleasure ill the determination of cos The ame is true, except perhaps i a lessor degree, of the cost of nm Ueting. This cost is perhaps not f easily controlled as the costs of pr duction But it would be enlightenin : and well worth the small amount ( - time and effort, for the farmer I know just what It dil cost him I I j mrket his products. |