Today we'll talk about some of the most important concepts of economic theory, without proper understanding of which will not work any economist professional: the theme of this article will be the cost of production and cost of production.These two concepts are closely related, because the costs are the basis for the formation of the cost of production.
To begin with we shall understand in terms of:
Production costs - all costs associated with production at the plant, and which is necessary to cover for profit.Depending on the approach to take into account in the production costs may also include administrative costs, marketing costs, financial costs and other.However, classical economic theory considers production costs as all costs that are necessary for the production process.
Sebestoimost- is the amount of costs to be incurred by the company for the production of a unit of production.Of the two above definitions it is evident that the cost of production and cost of production are inextricably linked, and the cost of a simple cost per unit of output.
should also consider the types of costs that are considered in the economic analysis.Some believe that such a classification of costs can not be applied to real businesses.Although this model is largely abstract, it still shows some important aspects, which sooner or later faces every company.
Fixed costs - the costs that the company bears no matter how many products it manufactures.These include the cost of maintaining premises, compensation of employees with a fixed rate, depreciation of fixed assets and others.
Variable production costs - it costs, the magnitude of which is related to the volume of products produced by the enterprise.For variable costs include the cost of the raw materials needed for the manufacture of finished goods, wages of employees by piecework payment scheme, the cost of electricity machines and so on.
marginal cost - the sum of the costs of growth that occurs in the production of an additional unit of output.This indicator is particularly important as its comparison with the indicator of the marginal revenue (revenue that the company will receive an additional per unit sold) provides an important indicator of the profitability of the additional production, based on which a decision is made to expand production capacity.
production costs and cost of products are widely used in the analysis of profitability and return on enterprise.But do not think that the company is profitable only if it makes a profit.We can not forget about fixed costs, which will need to be covered, even if the output is zero.Therefore, to analyze the costs of production and production costs need to carefully, taking into account all possible factors that could influence the economic condition of the company.In general, however, you can always apply this rule: the lower the performance of production costs and production costs and the higher market price of products sold, the higher the profit will receive the owner of the enterprise, and therefore, the better it works.
We hope that this article has helped you understand the most important economic concepts.Of course, we have led obschuyuinformatsiyu on "cost and cost of production", however, it will suffice to carry out the simplest economic analysis.
