28 BULLETIN 994, U. S. DEPARTMENT OE AGRICULTURE. 
In enterprise surveys, such as studies of dairying, beef cattle, 
and special classes of farm investment, the interest rate is often 
increased slightly, usually by 1 per cent, as compared with the total 
farm capital rate, since short-time loans are often made to cover 
such operations at a rate of about 6 or 7 per cent. This should be 
charged upon the average capital used in the enterprise during the 
period of study. ■ On beef cattle it may often run from three to six 
months, while on dairy cattle it would be for the entire year. 
The point is often raised as to whether interest should be charged 
on feed on hand at the start of the year and purchased during the 
year that is fed to live stock. One method of handling this charge 
is to assume that the farm price from month to month should cover 
the interest, while another method that has been used is to charge 
interest at the short-time loan rate on one-half the value of the feed 
which is consumed during the entire period. The same argument 
might be used for charging interest on the value of seed, the returns 
from which are not obtained until the crop is harvested. 
The practice of the Office of Farm Management and Farm Econo- 
mics has been usually to ignore this charge on supplies and feeds, 
on the assumption that, strictly speaking, only two general kinds 
of farm property should bear an interest charge for any purpose, 
namely, the fixed assets and the specific current investments, such as 
cattle and hogs purchased for resale purposes. 
Overhead. — One of the most difficult phases of cost accounting 
to the beginner is the composition and distribution of the overhead 
expense. There are various uses of the term u overhead." In some 
instances it may be found to cover a large number of items and to 
amount to as high as one-third of the costs, or it may embrace only 
those charges that can not be apportioned directly to the enterprise 
in hand. 
The latter usage is the proper one, namely, to keep the amount 
charged to overhead as small as possible and to include under this 
head only those items of expense that are so general as to preclude 
direct charging to the various accounts. Common among the cash 
items that go to make up the overhead in a well-conducted system 
of cost accounting are general farm advertising, stationery, telephone 
rents, subscription to farm journals, and postage, while the principal 
labor expense is made up of the labor that is necessary to maintain 
the farm business in running order but which can not be charged 
directly to any particular enterprise, such as work on weed control, 
road maintenance, picking stones, etc. Overhead also includes 
interest and taxes on the roads arid lanes, on the farmstead, and on 
the headlands of the various fields. 
One of the misuses of this item has been to include the shelter 
costs of live stock, equipment expense of live stock, sire service for 
