PROBLEMS IN COST ACCOUNTING 255 



as a "cost" in crop production. Fertilizers applied to the soil 

 form an item of cost which is definite and properly chargeable 

 to costs. 



Signs of Progress. Now that the various Agricultural Experi- 

 ment Stations and their substations and their demonstration farms 

 are carrying out detailed and continuous investigations of costs 

 of producing farm crops there is ground for the belief that standard 

 units of cost for the various factors will be worked out. These 

 units will consist largely in man-labor hours and horse-labor hours. 

 The acre will be the basis for both yields and costs. In the end 

 the industrial term " scientific management" will come to be 

 applied to farm management, in the sense that more efficient 

 systems of farm management are to be established, using better 

 machinery, better seed selection, better crop rotation, better soil 

 management, better organizations of the factors of land, labor 

 and capital. The increasing efficiency of human labor, working 

 under proper organization, is illustrated by the figures published 

 by the United States Department of Agriculture, according to 

 which, in the year 1855 it required 4 hours and 34 minutes of 

 human labor to produce one bushel of corn, while fifty years later 

 it required but 45 minutes. Studies in cost of production under 

 varying conditions will, it is hoped, point out the economic limita- 

 tions of both extensive cultivation and intensive cultivation. 



Farm Accounting. Among the Experiment Stations that have 

 worked out cost accounting systems for farms mention must be 

 made of two Minnesota and Cornell. Various commercial sets 

 are now on the market. It is difficult, however, to interest the 

 older generation of farmers in farm bookkeeping, especially in 

 any system of bookkeeping which involves much time or labor. 

 The Experiment Stations are making a vigorous and partially 

 successful effort to install systems on progressive farms. The main 

 hope must lie with the younger farmers, particularly with those 

 who have had courses at the State Agricultural Colleges. 



Problems in Cost Accounting. As indicated in the chapter on 

 the Economic Conditions of the Farmer, there are many factors 

 in the farmer's " labor income" that need more scientific treat- 

 ment by trained accountants. If the farmer's income is to be 

 stated in dollars, it thereby becomes necessary to place money 



the conditions and practices which confronted us whichever way we turned; 

 instructed in the ways and extent to which these nations for centuries have 

 been and are conserving and utilizing their natural resources; surprised at the 

 magnitude of the return they are getting from their fields . . ." King,F.H. t 

 Farmers of Forty Centuries, p. 2, (Madison, Wisconsin, 1911). 



