INTERPRETATION OF COST ACCOUNTS 349 



system, as they form the basis for direct conclusions in 

 framing the policies of management. 



An analysis is necessary to assist, in finding the causes 

 of things, because each element of expense or income can 

 be examined separately. It is easier, for example, to ver- 

 ify the reasonableness of a charge for labor on a crop than 

 to take all charges together in an effort to determine 

 whether the total cost seems reasonable. 



A comparison of results is highly desirable because of 

 the recognized truth in the statement, ' ' When there is noth- 

 ing to compare, there is nothing to criticize. ' ' Comparison 

 of results may be of one year with another ; one farm with 

 another; one crop or field with another; or one farm with 

 the average of a group of farms obtained by experiment 

 under similar conditions of soil, climate and topography. 



Using the principles of accounting as presented in this 

 volume, the Ledger account is the starting point for all an- 

 alyses and comparisons of results. Some of the detailed 

 features of analytical and comparative tables are pre- 

 sented in the several pages that follow. 



Comparative Analysis of Crop Account. The prepara- 

 tion of comparative figures showing detailed costs of pro- 

 ducing and disposing of a crop this year, as compared with 

 one or more other years, is quite essential. Such figures 

 are obtained from the appropriate crop account and the 

 accounts with the fields in which the crop was produced. 



As an example, presume that a comparative analysis of 

 Corn account is to be prepared for 1916, 1917 and 1918. 

 We shall trace the figures for 1917 through the three fields, 

 Nos. 5, 6 and 7, into the Corn account for 1917 and thence 

 into the Comparative Analysis of Corn account, as follows : 



The three field accounts and the Corn account appear 

 as in Illustration 63, immediately after closing the books 

 for the year, and before preparing the analysis. 



Using the figures presented in the accounts of Fields 



