COST ACCOUNTING 273 



ILLUSTRATION 57 



LABOR INCOME AND CAPITAL INCOME DETERMINED FROM Loss 



AND GAIN ACCOUNT IN ILLUSTRATION 55 WHEN INTEREST 



WAS CHARGED AS A COST OF PRODUCTION 



Income from Oats $250 



Income from Corn 400 



Income from Potatoes 375 



Income from Swine 60 



Income from Cattle 210 



Net Income as a farfti manager. $1,295 



Less Household Expense 200 



$1,095 

 Add Interest on Investment . . 305 



Income as an individual including both interest on 

 investment and remuneration for management and 

 risk above laborer's wage, previously charged to 

 productive elements $1,400 



and the net income as an individual, $1400. These figures 

 are based on the assumption that the household is charged 

 with an amount representing interest or rent on the house, 

 even when the productive elements are not charged with 

 interest as part of the cost. 



. Interest on Land. Interest on land being a fixed charge, 

 it may be calculated and charged to the various accounts 

 at any time during the year. Unless impractical in any 

 special case, it is better to credit Interest on Investment 

 account at the beginning of the year and debit the several 

 fields, General Expense or Household with the appropriate 

 amounts. Interest is figured at 4% on the value of the 



