in all means involved in the production (that is, objects in its funds), as well as labor advances invested industrial capital, a form of movement which are production costs.This is the cost of the economic resources that the entrepreneur spends to produce their products.
This notion in economic theory is based on the idea that resources are limited and need to look for alternative ways to use them.The fact that the choice of a particular method that will produce the goods causes loss of the benefits that can be obtained using methods appropriate resources suitable best of all.
In this regard, the two groups share the costs and they are external (explicit) and internal (hidden).
external (direct costs) - are the ones that go to pay for the economic resources - the acquisition of raw materials, equipment, transport services, labor services.Their suppliers are not the owners of the company.
internal (indirect) costs - are the ones who go on to use their own resources, unpaid.This includes those revenues that the entrepreneur did not get at the most favorable alternative use of their own resources.Internal costs - this also is the minimum fee that is required for the continued operation of the entrepreneur in a specific field of business.
Differentiation of direct and indirect costs shows two approaches to understanding the nature of the costs of the company.
1. The accounting approach.It provides for the direct transfer costs.They are paid immediately after receipt of the invoice or waybill.Accounting costs are shown in the balance sheet of the company.
2. Economic approach.He enlists to production costs, both direct and indirect costs associated with the ability to use the resources of your choice.From accounting economic costs differ size value of personal resources.
cost of lost opportunities (alternative) - this is the amount that, when compared with the degree of risk has the highest pay for the possibility of production or firm behavior.
This means that the economic costs - are the ones who must make the entrepreneur to attract resources devoted to alternative use.They reflect the prices of resources in the best possible options for their use.
Depending on the time period during which you can change the economic resources that the firm attaches to produce a certain type of product, distinguish:
- the costs of the company during the period of long-term (ie in a time warp, which is enough to change everythingresources that will be involved);
- costs firm short interval (i.e., in the time interval during which no change is at least one kind of resources).
costs of the latter species are divided even on permanent, total, average, variable, and the boundary.
permanent (or semi-permanent) costs occur irrespective of changes in production volumes.This is the cost of rent, the maintenance of the administrative staff.
Variable costs are directly related to the change in production.This energy costs, raw materials, labor workers.
aggregate, or overall costs - it costs the company to purchase and use of all factors of production.They consist of the sum of fixed costs and variable.
Average costs are presented as the mean cost per unit of production.
Boundary - this increase in costs, which are needed to produce an additional unit of output.
In some cases it happens that the firms bear and irreversible costs.They can not be filled, and indicate:
- lost opportunities, which are associated with faulty administrative decisions;
- the costs that are spent once and for all and not replaced even when the company ceases to exist (for example, the cost of advertising).
