COST ACCOUNTING 233 



hour. If such an arbitrary rate is not used the cost per 

 hour of horse labor is found by dividing the total horse 

 hours worked during the year on all elements into the 

 cost of maintaining the horses. Such cost of maintenance 

 is determined by taking the net loss shown in the Horse 

 account, after considering inventories and deducting ex- 

 traordinary losses. 



If the flat rate of, say, 10 cents is used, and all of the 

 cost of keeping horses is not charged, or if too much is 

 charged out, any balance remaining in Horse account, 

 after considering inventory, constitutes part of the bal- 

 ance carried to Loss and Gain account, along with profits 

 or losses arising from sale or natural increase. 



Tractor Hours. When the tractor is used in the place 

 of horses, a record similar to the horse labor record is kept 

 so as to show the hours worked on each field. At the close 

 of the month or year, an entry is made to bring the proper 

 charges into the ledger accounts affected, tractor account 

 being credited. 



Exchange Labor Account. In order to account properly 

 for all man and horse labor on the farm, it is often neces- 

 sary to keep an account which will record the value of the 

 work performed for the neighbors and by the neighbors. 

 This account bears the title "Exchange Labor." It should 

 be treated, for all practical purposes, as an account with 

 the neighbors. 



We debit our neighbors through exchange labor account 

 when we work for them and credit them when they work 

 for us. This rule applies in all cases, whether the work be 

 done by man or horse; and whether it be in the oat field 

 or for the house. Exchange of work by the women in the 

 house, as at harvest time, for example, would not come 

 under this rule, but any work performed by neighbors, 

 such as sawing wood for the house, would be given con- 

 sideration in the account called Exchange Labor. 



