Furthermore, they realized that the profits from their corn production were better than ever. Enterprise accounts show which enterprises on the farm need attention in order to improve profits. They simply divide or categorize the operation by commodity or enterprise rather than as a whole. Overhead, supplies, and all other expenses are charged to the commodity or production unit that they are used for. For example, seed corn is charged against the corn expenditure.
Some enterprises interact.
For example, manure used for the corn must be charged to the corn and credited to the hog operation. Corn used to feed hogs would be credited to corn and charged to hog operation. Resources such as labor, which are shared by more than one enterprise, must be allocated to the enterprise using it. Enterprise accounts show you which enterprise you need to focus your attention on to improve profits. It is helpful to use enterprise accounts when comparing your farm's progress over a number of years.