costs, or in other costs, it is the budget line, which all economic entities are actively trying to minimize.The balance sheet for the reporting period may include a plurality of expensive items, as long as their size was normal, and allows you to have a steady income, and thereby develop.The amount of the costs in relation to the industrial activity is often correlated with the concept of the cost of production.In this regard, between different economic schools often inflame the debate over whether to include the cost of sales of products in its overall costs.On the one hand, this expense has indissoluble connection with the production, because without properly constructed marketing policy is impossible to provide the volume of sales that would cover all costs.In this case, it is clear that the company is doomed to liquidation.
In terms of individual economic experts, the costs associated with the promotion of products on the market and their advertising reach its maximum value during the production and distribution of innovative products, after which the curve of such costs in the chart tends to bottom.This implies that the manufacturer, increasing production and sales volumes, over time minimize these costs and their share of the real cost (under the real cost of all the articles necessary to understand the costs associated with the production and sale of products).Thus, in this situation, the yield curve has a vector, constantly looking up.
In this regard, there is a perception that it is worth to distinguish between the cost of production on the cost of production and cost of implementation.Production costs in the short term may indicate how the company will be profitable in the long run.Such costs include the costs of labor and materials per unit of product, which usually must remain constant value.But such a smooth course of events tend to only static and stable economy, which today seems unreal idyll.The cost of production and sales are subject to changes from both external and internal factors, among which include the seasonal demand, changes in market conditions, innovations in production and many others, including a variety of force majeure.Production costs in the short term to optimize taken to a constant value, so the majority of manufacturers is much easier to set the threshold of profitability for each product.
In today's economic science is considered to be relevant to classify the costs of transformation and transaction.If the first type of costs associated with the process of recycling materials in the final product realization, the second refers to those costs as the protection of trade position, brand, brand.These costs are not associated with the creation of value of the finished product.Production costs in the short term for the most part belong to the transformational costs.
Very often uneven changes in total costs leads to the fact that with the increase in production costs vary in relation to a unit of production.Such costs are called average.Average production cost is calculated as the ratio of total costs and the amount of output.Initially, the cost element is large, but in the growth process of production tends to decrease it.For small-scale production is crucial to minimize the cost of production in the short term, since this fact will allow to fix on a certain level of fixed costs and lower the profitability threshold.
