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TeachMeFinance.com - explain Production expenses Production expenses The term 'Production expenses ' as it applies to the area of agriculture can be defined as ' Measures the aggregate business cost of farming. The two main components are current farm operating expenses and overhead costs. Farm production expenses are accounted for differently in calculating farm income measures. Only production expenses paid in cash are deducted from gross farm income to derive net cash farm income. Gross farm income and net farm income include both cash and noncash production expenses. Non-cash expenses include such overhead costs as charges for depreciation and other capital consumption associated with farm buildings and other structures, motor vehicles, farm machinery and equipment, and expenses associated with farm operator dwellings'. Previous 5 Terms: Production contract Production costs Production Credit Association (PCA) Production expense Production expenses Next 5 Terms: Production flexibility contract Production payments Production plant liquids Production, crude oil Production, lease condensate About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005-2011 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional medical, legal or financial advice. Information presented at TeachMeFinance.com is provided on an "AS-IS" basis. Please read the disclaimer for details.