The Richmond Virginian. (Richmond, Va.) 1910-1920, 1919-04-03
Plan FOR FINDING
COST OF PRODUCTION

Washington. u. c.. March is.--
Cost of production studies are Of
value 10 the Individual farmer ant
at the same time are helpful In as
ccrtaining the economic status Of
farming as an industry, says the re-
port of the committee appointed by
I he secretary of agriculture to con-
slider q plan OF organization for the
Office Of far,n management. and out
be- H.. =st~<E ssss ssssaEa9skxs oszAt xgaec~
cost of production studies. The pfim-
AIRY purpose of cost-of- production
studies. says the report. are:
]. The record the details of tho
farm business for reference.
z. To give an Insight into the eie-
inents and interrelatiops Of the Diff
ferent farm activities.
g. To furnish information that may
enable the farmer to reduce costs, or
otherwise increase profits.
A. To make possible "A comparison
of the prosita hleness of the different
enterprises and com binations OF en-
ierprises.
From the standpoint of the public
cost -of-produetion studies provide the
facts which give basis for intelli-
gent judgment upon the probable eff
fects of any given legislation or other
public activity upon the farmer as
producer and as a citizen. Cost-of-
production studies are therefore one
Of the means of providing the basic
facts needed ny leg slators and price
commissions in corr naring the profits
of competing lines of production and
estimating necessary price.
Men of ripe experience IN various
fields OF agricultural research con-
stituted the committee. They are; III.
c. Taylor. agricultural economies,
University of Wisconsin: Andre Boss
9gronomy and farm management,
University of Minnesota: J. A. Foord.
Agriculture and farm manaaement-
Massa chusetts Agricultural college: J.
l. Faiconer, rural economies. OHIO
State university: r. l.. Adams. farm
uanageme nt, University OF California;
u. I. Christie, assistant secretary of
a agriculture. and representatives Of the
bureau of crop estimates. the bureau
of markets, and the ONCE of farm
management of the department OF
agriculture.
Three Methods Recognized.
The committee recognizes three
ways OF obtaining cost data--cost ac-
counting, the survey method and the
QUESTIONABLE sent by mail The ac-
counting method liz based on complete
records of all farm work and business
transactions Arrangements are made
with farmers to keap detailed records
of all operations and transactions in
connection with the farm business
The work is supervised ny personal
visits 10 the farm II Is desirable, the
committee says, that cost accounts he
kept 20 obtain basic data, and cumu-
latlve results of such work become
increasingly valuable.
\ BY sts survey method trained tnves-
tigatora obtain the necessary data,
some from the farmers books, some
from the books of persons to whom
the farmer sells and from whom he
buys some from his bin. silo and
/ building capacities, and some from
estimates made by the farmer. One
! of the advantages of this system If
} tflat records are obtained from All
/ classes of farms aftsr the close of the
farm year. so that, when desired. areas
more represe NATIVE OF normal con-
ditions may be chosen. The commit
/ tee points out, however, that by the
survey method II Ii sometimes diff
cult to determine the amount Of gen
eral expense and miscellaneous labor
and the proper basis for appTtion-
ing such Items to different enterprises
and that. unless the Investigator Is
thoroughly experienced in the subject
he Is studying some items Of import
ance are likely to be omitted.
Both Systems Arc Reliable.
Either method. the committee says
is' useful and reliable when the work
lis carefully conducted, but preferably
both should be used. The detailed
cost accounts serve as q check or
the survey work. which in it's turr
shows the relationship of the farms or
which COST accounts are kept to tht
average farm.
The questonnairs sent by mail car
he used 10 advantage in securing sup
Elementary data from large numbers
Of farmers, bat, in the opinion Of thu
committee, II should cover only q
limited number of cost items, and tht
questions should he direct and clear
This specific items to be considered
in cost f-producfion studies, the re-
port continues, will always depend up.
On the enterprise under consideration
When the survey method is used. II
! is essential that the list be complete
enough so that no item win he omit.
ed either by the farmer or the inves-
! ttrator. when the accounting method
( Ia used n classification in needed that
Is broad enough TO include all charges
but The cos items will be developed
in the WORKING ont Of the records
and viii vary with the enterprise
The following proun'rg Is suggested
4 Enterprise Co~ta.
, Labor: Man labor ftnciudiny labor
Of men. women and ch'ldren). Animal
labor. Mechanical labor ttractor and
trUck).
! Materials: Crop materials--Secd
! fertilizer. Irvine, sprays.
I Stock materials---Eeed, bedding.
Cash: Selling. Insurance. taxes
( threashing. veterinary, breeding fees
Investm emit: Depreciation Of invest
mcnt in live stock. Interest on IN
vestTnent In live stock.
Indirect Charges to Farm Enter
prise Accounts: Consisting Of labor
material. cash and investment costs
that cannot be charged as such tc
enterprise accounts, but which may
he assembled under definite. headings
and distributed on the basis OF use.)
Use OF Mechanical Equipment:
lS roSb and }pverf ~, n ~