childhood home of Randy Travis | I would only charge that equipment to that enterprise if it is solely used for that 1 enterprise. If it is shared between 2 enterprises kick it up a level to a division. If it is shared between divisions kick it up a level to the business.
For example. Jusolson Farms is the business. It has 2 divisions: Row Crop and Cattle. Row Crop has 3 enterprises: Corn, Beans, and Wheat. Cattle has 2 Enterprises: Cow/Calf and Feeders.
If you have a tractor that stays hooked to the mixer wagon for your Feeder Calf Enterprise charge that to the overheads of the the Feeder Calf Enterprise.
If you have a tractor that pulls a grain cart for your Row Crop Enterprises AND pulls a feed wagon for your Cow Calf Enterprise int he winter, charge that to the Julsolson Farms Business.
Start at the the enterprise levels and back everything out to the business levels. This is different than Universities teach, but it will let you nail down the financials for each enterprise. You will see the Gross Margins the tractors contribute to, and thus the actual costs, and the rates based off of that. |
Farm wife talking. Please help me understand
