in the process of setting the price of a product or service created by the company takes into account the huge number of items, one way or another affect the final cost of the product.Of these, the paramount and most fundamental is the cost.In economics, this figure is the sum of all costs (fixed and variable costs) incurred by a company in the process of creating the final product.It is the economic value of having a decisive influence on the price of the commodity, because how is the initial cost of setting, which is superimposed on the remaining quantities (taxes, interest, sales, etc.).Based on the criteria of efficiency of the enterprise, the main goal of any organization producing products or providing services, a reduction in cost.
can reduce the cost, minimize variable costs - is that part of the cost, direct impact on the amount that has produced the goods.For these types of costs are:
- the cost of material resources involved in the production of goods;
- the cost of fuel used and energy;
- wage workers, piece workers and other personnel, which directly relates to the manufacturing process;
- all costs that are charged to maintenance machinery and equipment (excluding depreciation).
as an economic category of variable costs of the enterprise can be considered as one of three options:
a) proportional - costs that vary completely in the same proportion as the volume of production;
b) progressive - the totality of the costs, the growth rate is greater than the rate of growth of production;
c) regressive - expenses growing at a slower rate than production volume.
Variable costs - namely that part of the cost of production, which can be reduced by effectively using them.A full analysis of consumables and use of resources will reduce the cost of the path: the introduction of energy-saving technologies, new machinery and equipment - all this will reduce the amount of fuel consumed, energy, reduce losses from marriage, and increase the speed of the product unit price.
determine the profitability of a given quantity of goods product allows such a thing as the average cost of production, including constant average and average variable cost.This economic indicator gives an idea of how much of the cost falls on the production of one copy of the product.Average fixed costs can be calculated as follows: the entire amount of fixed costs, which do not depend on the number of manufactured products divided by the sheer number of goods.
thus obtained unit costs.Thus it becomes clear that by increasing the amount of goods produced by the size of the average fixed cost decreases.What can be said about the second indicator, which is part of the average cost.
average variable costs directly related to the growth in production, if the volume of production increases, and rising costs, and vice versa.The way to reduce the level of this indicator is innovation and effective use of tangible and intangible assets of the organization.
