8 BULLETIN 994, IT. S. DEPARTMENT OF AGRICULTURE. 



of costs are of more value than money costs because of their more 

 stable character, and the various uses to which they may be put. 

 It is essential, for example, to know rather definitely the measure of 

 a day's work with various implements and various-sized power 

 units under various farm conditions. It is important to the farmer 

 to know how much labor is required, just when this labor is likely 

 to find it hard to keep up with the business, and when work must 

 be provided to give profitable employment during slack periods. It 

 is important to know approximate feed requirements of various 

 classes of live stock. With such information, the farmer can some- 

 times buy feed and supplies in advance in sufficient quantities to 

 effect a considerable saving in operating expense. 



Such measures of cost are here called ''basic elements" because of 

 their relative stability, as compared to money costs. Well-established 

 quantity factors make it possible to estimate costs at any time by 

 applying current prices to the requirements in hours of labor and 

 bushels of seed. 



The proportions of certain major costs to the total cost may often 

 be considered basic in that the relative proportions do not change 

 greatly under ordinary conditions, and calculations, the results of 

 which closely approximate accurate costs, are readily made by using 

 the proportions that are worked out by long-time cost studies. 



PRESENTATION OF RESULTS. 



Unfortunately, a considerable amount of the available information 

 relating to the cost of producing farm products is solely in the form 

 of dollars and cents, with the basic data as to labor and materials 

 lacking. Furthermore, the time that elapses between the closing of 

 the study and the publication of the data is often so long that a part 

 of the value is dissipated because of the rapidly changing conditions. 



Cost data should be so itemized as to allow detailed analysis and 

 regrouping of items as desired. As an example, interest on capital 

 should be shown as separate from operating expense, so that various 

 computations of net earnings, gross profits, and other items may 

 readily be made. 



The principal factors to be kept in mind in the presentation of the 

 results of cost data, particularly from a farm organization standpoint, 

 may be mentioned in the following order: 



1. Description of the physical conditions and contributory influences that affect 



practices and economic results of cost studies in a locality. 



2. Data in basic quantity form (days of labor, bushels of seed, pounds of fertilizer) 



providing economic measures of capacity and production more or less 

 widely applicable. 



3. An array of individual variations in costs, profits, yields, and practices, to 



illustrate not only averages, but the extremes and the bulk line figures. 



4. Arrangement of individual results into frequency groups with the interval 



selected to show the necessary dispersion and desired grouping. 



