APPENDIX 393 



at cost or market price, provided any feed purchased was charged 

 at the same price under each of the two methods. 



In order to present the effect of feeding horses at cost and 

 market price of farm crops, four assumptions are made under 

 the headings, Case I (a), Case I (b), Case II (a) and Case 

 II (b) respectively, all of which are shown in Illustration 74. 



Case I considers that corn is the only crop on the farm. 

 Under (a) it is fed to horses at cost price. Under (b) it is 

 fed at market price. 



Case II considers that corn, hay and wheat are raised on 

 the farm, corn and hay being fed to horses while wheat is not. 

 Under (a) corn and hay are fed at cost price. Under (b) 

 they are fed at market price. 



For purposes of comparison it is assumed that market price 

 of both corn and hay is 50% over cost price, that when three 

 crops are raised the horse labor and other expenses are divided 

 equally among them, that horses work only on crops, and that 

 the market price of each of the three products raised is the 

 same. Inventories of both the horses and crops are ignored. 

 None of the assumptions named affect the conclusions. They 

 are made only for the purpose of simplifying the comparison. 

 A possible exception is the assumption that horses work only 

 on the crops. This assumption tends to decrease the profit 

 relatively as compared with the profit under normal conditions. 



From an examination of the accounts and Summary of Illus- 

 tration 74, it may be seen that when only one crop is raised 

 on a farm and it is all fed to horses the net gain on that 

 crop is the same whether it is fed to the horses at cost or 

 market price. Thus, Corn shows a gain of $440 under either 

 method, as shown in the Summary of Results and in the ac- 

 count under Cases I (a) and I (b). 



It is seen in Case II (a) that the wheat crop is benefited 

 considerably to the detriment of corn and hay when the latter 

 crops are fed at cost price and all other conditions are equal. 

 Under this case Corn and Hay each show a net gain for the 

 year of $166.67, while Wheat shows $216.66. 



In Case II (b) when corn and hay are fed at market price, 

 they return the same net gain that wheat does, $183.3b in each 



