2012 User Conference, "Best Practices" for Activity -Based Costing, Part 3, Farm Financial Standards 2012 Conference, July Webinar Schedule, Q&A : Moving Feed Between Groups
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 FarmSMART                                                     June 2012 

In this Issue:

2012 User Conference

"Best Practices" for Activity -Based Costing, Part 3

Farm Financial Standards 2012 Conference

July Webinar Schedule

Q&A :  Moving Feed Between Groups 

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Click here to learn about the Pork Profit Center Dashboard


Thanks to everyone who joined CPA firm Latta, Harris, Hanon and Penningroth and FBS Systems at the PORK$HOP benchmarking seminar at the World Pork Expo. 

Mark Penningroth at Porkshop 2012
CPA Mark Penningroth presenting pork cost benchmarks at the World Pork Expo.


  • We'll transition to crop cost benchmarks at the FBS User Conference, August 29-30th. 
  • Read the concluding article on Activity-based costing (ABC) in agriculture in our Best Practices column. 
  • Schedule your free webinar training for July.
  • The Q&A of the Month describes how to "move" feed between groups.
  • We encourage you to attend the Farm Financial Standards Council annual conference, July 31- August 2nd, in Bloomington, Illinois.
  • Has farm enterprise analysis lost its usefulness?  Join the discussion in the Farm Management Software Blog 


Benefit from Replication, Integration and Innovation at the 2012 FBS User ConferenceUC preview logo

 Once a year FBS Users from across North America gather to exchange ideas and discover what's new. Our 19th annual User Conference will be held at the Stoney Creek Inn in downtown Moline, Illinois, on August 29th and 30th.  The emphasis this year will be from users sharing their best practicesfor organizing, analyzing and making decisions from their data.  There will also be plenty of breakout training sessions for users with every experience level.

  • Featured speakers this year will cover margin protection strategies, crop cost benchmarks, and new mobile-to-cloud data solutions.
  • FBS users will show creative solutions to manage complex and unique business enterprises.
  • Experienced users will exchange ideas and tips with new users.
  • FBS staff will demonstrate new versions and specialized program modules.
  • Network with leading ag producers, accountants and consultants.

To pre-register, receive more information or contribute topics you want us to cover click on this link.  

Moe Russell on the boat
After intensive management training join us for the popular Mississippi dinner cruise.

"Best Practices" for Activity-Based Costing PaA-B-Crt #3 


Editor's noteThis article continues a new series on the "best practices" FBS users have developed to improve effectiveness, efficiency, internal control and compliance from their information system.  Last month we described how to use standard cost drivers in Activity-Based Costing (A-B-C). 

Overhead Variance Analysis  

Activity-Based Costing returns both obvious and unexpected benefits:

  • Greater reliability in product cost accounting, inventory valuation, marginal cost analysis and financial reporting, because indirect costs are more accurately allocated. 
  • Simplified data entry/automatic allocations. 
  • Internal and external services can be "rolled up" to equivalent levels and evaluated at equivalent rates. 
  • Costs, personnel and performance can be monitored within each responsibility center. 

This last example is where overhead variance analysis comes into play. Remember that cost center allocations are normally based on predetermined rates. Therefore, there will always be variances between those standard allocations and period costs within a cost center (see Figure 6). If the difference is small, those costs simply "fall through" the income statement in the time period. However, significant variances send a message to management that further analysis is required. The two sources of variance are cost/price (spending) and volume. They are calculated using these formulas: 

Cost/Price (Spending)   (SP - AP) x AQ

Volume                          (SQ - AQ) x SP

Total varianc              (SP x SQ) - (AP x AQ) 


  • SP = Standard Price
  • AP = Actual Price
  • SQ = Standard Quantity
  • AQ = Actual Quantity 
Overhead variance analysis
Figure 6 Sources of Ovehead Variance.

Using variance analysis, managers can continuously control costs, monitor throughput, and optimize efficiency within each cost center, rather than "burying" this valuable information within products. 


Adopting ABC--or even responsibility-center accounting--is not just difficult, it's next to impossible unless the accounting software is designed to:

  • Allow multiple levels of allocation and responsibility center "roll-up." 
  • Integrate cost drivers with production records
  • Perform work-in-process (WIP) and inventory adjustments
  • Retain cost center detail after those costs are allocated to products. 
  • Automate all of these processes.

Specialized software alone is not the answer. The CPA you rely on for tax accounting can become your trusted guide for every phase of this unfamiliar, but vital accounting mission. 

Time is of the essence simply because it takes so long to produce most agricultural products. That means that if you start today, it will be a year or longer before you begin experiencing the full benefits of responsibility-center accounting and ABC. Producers who have implemented this system eventually realize that the "journey is the destination"--as with each production cycle, they discover and explore new dimensions of their operation. 

To download a free white paper describing the full ABC allocation process click here.

Farm Financial Standards 2012 Conference on July 31 - August 2 
Farm Financial Standards 


The only national organization that creates and promotes uniformity and integrity in financial reporting and analysis for agricultural producers is holding its 2012 conference and annual meeting in Bloomington, Illinois, on July 31st  - August 2nd. 
Highlights included:
  • Economic and Financial Outlook - Kevin G. Waspi, CFA, University of Illinois College of Business 
  • Farm Credit Evaluation - Using the Standards and Ratios - Ron Homann, Risk Management Officer, 1st Farm Credit Services 
  • Cash vs Accrual Farm Income Statements, Ratio Scoring - Paul Ellinger, Professor and Head of Department of Agriculture and Consumer Economics, University of Illinois; Gary Schnitkey, Ph. D., Extension Specialist, University of Illinois; Nick Paulson, Ph. D., Assistant Professor in Agricultural and Consumer Economics, University of Illinois 
  • Using the Standards with Producers and Lenders to Analyze Operations - Todd Doehring, Centrec Consulting Group 
  • Using the Standards in Accounting Practices - Ben Romine, EA, The Romine Group, CPAs

For more information on the conference or the organization, connect to the Farm Financial Standards Council website.

Free July Webinar Schedule
Webinar Screen

Editing Feeding Entries, July 2 

Using Accounts Payable and Receivable, July 9

Using Cost/Profit Centers, July 16

User Defined Menus--quickly get to your favorite options, July 23

Feeding Groups, July 30
All webinars run between 10:00 am and 11:00 am CDT.  To register, e-mail support@fbssystems.com by 9:00 am CDT on the day of the webinar.
Q&A of the Month--Moving Feed Between Groups  
Sarah Dixon
Sarah Dixon, FBS Technical Services Manager.

Q.   I was running the Ticket/Ration report today and couldn't find the feed fed to a group I knew had received feed. After looking into it I see that all of the feed for that group was incorrectly assigned to another group. I tried to right-click into the entry on the report to change the group but that changes only one ingredient at a time--that would take way too long. Is there another way? 

A.   Yes, there is another way!  No need to go through and change each ingredient. Go to Input | General | Feeding | Move Feed by Ticket.  Select the appropriate date range and a center then the following screen will appear:
Moving feed between groups.

 From this screen you can change the ticket date, pounds, center, group or location. To reassign the entire ticket to a different group enter the exact date and pounds from the original ticket and select the new group and press Save. Note this screen can also be used to split a ticket between two groups. The original ticket will be unaffected, but new set of Move Feed entries will be created based on the "target" ingredient distribution from the Setup | Feeding | Rations screen. Ingredient prices are based on the last price used in the feeding database. 

Learn other tips and shortcuts from Sarah at the 2012 FBS User Conference.


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