2 BULLETIN &94, U. S. DEPARTMENT OF AGRICULTURE. 
consuming centers. Here, again, it was apparent that there was 
little accurate information by which to judge prices and on which 
to base nndings as to cost of production. The result has been an 
insistent demand from producers and farmers' organizations for the 
cost of production data necessary to a full understanding of the 
farmers' problem of production. 
The same urgent demand for cost figures has arisen in foreign 
countries, especially in England and Scotland. The authorities in 
these countries have appointed cost findings committees to develop 
accounting methods on the farm in order to obtain representative 
cost figures that will aid in a more complete understanding of the 
farm business. 
The complicated details involved in the farmer's method of pro- 
duction and distribution make it inevitable that any hasty attempt 
to collect cost data will result in superficial, misleading, and usually 
inadequate information. This was apparent in many instances 
during the war. Out of the hodgepodge of estimates of costs and 
profits, often made for a specific purpose by various agencies, there 
has sprung a general misunderstanding as to the function and purpose 
of cost data and also considerable skepticism as to methods and 
results. There is no thorough understanding of the value and uses 
of cost of production data, and little material concerning methods 
of attacking the problem from its economic side is available. 
The purpose of this bulletin is to throw some light on the funda- 
mental concepts of cost data and to describe methods of study and 
the uses to which the data may be put. 
THE USES OF COST STUDIES. 
Absolutely accurate or universally applicable cost of production 
figures do not exist. This is apparent with farm products because 
of the many joint costs involved in the production of most of the 
staple products, and the necessarily more or less arbitrary allocation 
of some of the cost factors. The extreme variation from farm to 
farm in the cost of producing the same product, and the variations 
from field to field and in different animal units on the same farm 
become at once apparent in the tabulation of farm cost data. How- 
ever, the value of the results of careful studies of cost is not impaired 
by this fact; for what the farmer needs in the reorganization of the 
farm business is figures which show the comparative profitableness 
of competing enterprises. For such purposes the figures obtained 
by the methods now used in farm cost of production studies are 
probably as satisfactory as are the results obtained in commercial 
accounting for similar purposes. 
