I 



ll^'^-. 



A FORTNIGHTLY REVIEW 



OF THE 



IMPERIAL DEPARTMENT OF AGRICULTURE FOR THE WEST INDIES. 



Vol. XVIII No. 450 



BAEBADOS JULY 26, 1919. 



Price Id, 



Estate Costing. 



'^^YSTEMS for a.scerta 



aining the cost of 

 G^^*^"!^ production, both final and at different 

 S'^r^y^-^ s-tixges, are quite common in large manu- 

 facturing concerns. A motor-car manufacturer knows 

 exactly the prod yiction -cost of his engine and the 

 proportion it bears to the lotal production-cost of 

 the car. He also knows the production-cost of a 

 cylinder, or even a valve or a simple screw. Not 

 only that, he knows what it cost -it any stage in its 

 mar.ufacture. 



Similarly a boot manufacturer knows the pro- 

 duction-cost not merely of a certain pair of boots. 



He knows what the soles cost compared with the 

 uppers, and what it cost to give the leather its finish 

 This is a good example of the value of costing, 

 because, in this particulr.r ease of a pair of boots, the 

 uppers cost far more than the soles (owing to unavoid- 

 able waste): hence it is very necessary to keep 

 a close check on, and to try and reduce the cost 

 of this the highest item of expenditure. 



In agriculture, costing has not yet become 

 general practice. Indeed it never will until good systems 

 of financial book-keeping are adopted first. However, 

 one may presume that large concerns like central 

 sugar factories employ some sort of costing system, 

 and that brings us to consider the possibility of a 

 similar system on the estate. 



It will perhaps be simpler, if we first give an- 

 example of the application of costing to agricultural 

 work that has succeeded. The particular example we 

 have in mind refers to milk production in Engfland. 

 By careful records it was found exactly what had to be 

 expended in terms of money on different items to 

 produce a gallon of milk. For the sake of demonstra- 

 ting the principle, we will assume 10 per cent, of the 

 expenditure was on labour, 20 per cent, on home-grown 

 feeding stuffs, 65 per cent, on concentrated feedinc 

 stuffs, I per cent, on housing the animals, and 4 per 

 cent, on manager's supervision. Now we see at once 

 from these figures, that concentrated feeds is what costs 

 the money in milk production. In consequence it is 

 on this item that there is most scope for effecting 

 economy, that is by reducing expenditure to increase 

 the profits. The costing has shown us, in other words, 

 where to concentrate our energies to effect economies. 



