Budget Units
Rather than using the present size of the enterprise (e.g., two hundred acres or two hundred sows), the smallest rational unit (e.g., one acre or one litter) is used to describe enterprise budgets for three reasons.
1. The amounts and values are expressed in contant and understandable terms.
2. The smaller units make it very easy to evalurces different combinations of potential enterprises because of the ease of adjusting activity levels.
3. The smallest rational units are usually the units used by USDA, Extension, credit sourses, and other agencies that develop representative budgets. Thus, by using these standard budget units, the manager can easily compare his or her estimates with other sources of information.