Show FAR mv accounting REVEALS LESSONS principles of sound business management that apply to all farms an analysis made of detailed records kept by a group of 0 wisconsin farms revealed several important lessons and the principles of sound business man argement derived from them apply equally well to other farms says an article in the bulletin of 0 the agrical tural commission of the american bankers association the article says investment costs including inter est depreciation repairs taxes and in aurance su rance are approximately two thirds ot of all farm costs furthermore these costs are largely independent of the production program of the farm this means that if a farmer cuts his production of crops or livestock he ha increases his investment costs per unit of product produced as a smaller maller number of units must then carry as large an expense load as before this illustrates tb the importance from the standpoint of costs of operating a farm at or near capacity investment mistakes are more costly than many others because they cannot easily be corrected it if a farmer pays too much for his farm his investment costs will be abnormally high as long as he owns it if he be constructs a barn when a 2000 barn would have served his purpose he will have excessive barn costs year after year luring during the entire service life of the structure this emphasizes the importance of a knowledge of investment values and the specific investment requirements of individual farms determining real or false economies in working tor for greater economy it 11 is essential that the farm manager be atle able to distinguish between a real and a false saving this can be done only through a careful estimate of the con trib ution to income over a pc period of 0 time of each item of expenditure only it more is saved in expense than will be lost in income can a contemplated cut in expense be designated as a real saving for example dropping dairy herd improvement work may result in a yearly expense reduction the question to decide is what effect the drop ping of this work will have on the present and future income from the dairy herd if the estimated loss in live stock receipts due to a lowered effi clency in feeding and breeding Is greater than the original saving then it would obviously be a false economy Sub stanla savings can be effected on many farms through the use of more home grown garden produce po duce and farm cured meats why pay out money for products of this kind hind that can be produced produce much cheaper at home the money saved from the family food budget can be used for the purchase ot ol many things that will make the farm home a more comfortable and pleasant place to live |