8 BULLETIN 529, U. S. DEPARTMENT OF AGRICULTURE. 



investigator, if he is competent, supplies the deficiency in the farmer's 

 knowledge of bookkeeping, and together the two of them are able to 

 arrive at an approximately correct solution of the problem. 



Similarly with the profits from the entire farm. The farmer knows 

 the facts necessary to calculate these profits, even though he may not 

 know how to make the calculations. 



It should also be rememembered that the farmer's less accurate 

 memory for small details is not a matter of great importance, for 

 the smaller the item the less influence an error in it has on the final 

 result. 



ACCURACY OF COST-ACCOUNTING METHODS. 



Those having even the most elementary knowledge of the prin- 

 ciples of cost accounting are aware that such work always involves 

 estimates, no matter how accurately it may be done, and these esti- 

 mates not infrequently constitute an important proportion of the 

 cost. Consider, for instance, the cost of a day of horse labor. This 

 is the annual cost of keeping the horse divided by the number of days' 

 work the horse does in the year. It is possible to arrive at a fairly 

 accurate valuation of the feed the horse consumes and of the man 

 labor required in caring for the horse, though the latter item itself 

 is based partly on estimates (especially of the cost of the man's 

 keep). Even then the variation in feeding practice from farm to 

 farm and in the eating capacity of individual animals make the 

 actual cost of feed a highly variable quantity, so that a single so- 

 called " accurate " record is of little, if any, more value than an 

 intelligent estimate of an experienced horseman. Another item in 

 the cost of keeping the horse is interest on investment. To arrive at 

 this we must estimate the market value of the animal. Deprecia- 

 tion is also an important element. In arriving at this we must not 

 only assume a value for the horse, but we must make a guess at how 

 long he will last. Barn rent is another item. To arrive at this we 

 must estimate the value of the barn, the length of time it will last, 

 the cost of future repairs, and the relative value of the space occu- 

 pied by the horse, as compared to that used as a shelter for machin- 

 ery, etc. We must also estimate the cost of harness required in 

 order that the horse may do its work. The animal must also be 

 credited with the value of his manure, another estimate. 



The above facts suffice to show that on the farm even cost account- 

 ing is at best largely a matter of estimates. It is merely a question 

 of the dependability of the estimates. It has been shown above that 

 in matters in which farmers have had extended experience their 

 estimates are so sufficiently reliable that when large numbers of them 

 are averaged the results possess a very satisfactory degree of accu- 

 racy. However, it is not possible to overestimate the importance of 



