Fixed and variable costs. Production Costs and Profits Fixed and Variable Costs of Production Presentation

slide 1

Production Costs and Profit Costs do not exist by themselves. They always appear when there is a desire to achieve a result. Therefore, it is not the absolute level of costs that is important, but the ratio between efforts and the result obtained. Peter Drucker

slide 2

PRODUCTION COSTS are the costs associated with the production and circulation of goods produced. in accounting and statistical reporting reflected in the form of cost. Include: material costs; labor costs; interest on loans; costs associated with the promotion of goods on the market and its sale. *

slide 3

slide 4

EXPLICIT COSTS are opportunity costs that take the form of cash payments to owners of production resources and semi-finished products. They are determined by the amount of the company's expenses to pay for the purchased resources (raw materials, materials, fuel, labor, etc.). *

slide 5

IMPLICIT COSTS are the opportunity costs of using resources owned by the owners of the firm (or the property of the firm as a legal entity) that are not received in exchange for explicit (monetary) payments. For example: lost profits when you refuse to rent out your own buildings. !!! In accounting, implicit costs are not reflected. *

slide 6

ACCOUNTING AND ECONOMIC UNDERSTANDING OF COSTS For an accountant, there is a fundamental difference between the purchased and non-purchased (own) resources of the company, since the former are paid from the company's funds, and the latter are not. For an economist, there is no such distinction, since both purchased and non-purchased resources used by a given firm are equally diverted from the production of other goods and services. Therefore, economic costs include not only explicit (external) costs, but also implicit (internal) costs. *

Slide 7

DIVISION OF COSTS INTO FIXED AND VARIABLES!!! It must be remembered that the division into fixed and variable costs exists only in the short term, i.e. when the capital stock of the firm is unchanged. *

Slide 8

FIXED COSTS FC (fixed costs) are the costs that the firm incurs regardless of the volume of output. Their value is unchanged, because they are connected with the very existence of the enterprise (with the amount of fixed capital) and must be paid even if the firm does not produce anything. For example: depreciation, rent of premises, property tax, wages and insurance of the administrative and economic apparatus. *

Slide 9

VARIABLE COSTS VC (variable costs) are costs that change in proportion to the volume of output. Variable costs include piecework wages of workers, raw materials, process fuel, electricity, etc. *

slide 10

VARIABLE COSTS Starting from zero, as production grows, they grow very quickly. Then, with a further increase in production volumes, the savings factor begins to affect mass production, and the growth of variable costs becomes slower than the increase in output. In the future, the law of diminishing productivity comes into play, variable costs again begin to overtake production growth. *

slide 11

GROSS COSTS TC (total costs) - represent the sum of fixed and variable costs at each specific level of production. TC = FC +VC On the graph, the summation of VC and FC means an upward shift of the VC line by the OF value along the y-axis. *

slide 12

Average cost is the cost per unit of output. 1. 2. 3. ATC = TC/Q = FC/Q + VC/Q = AFC + AVC !!! With a certain degree of assumption, ATC can be considered the cost of production. *

slide 13

VALUE OF AVERAGE COSTS AFC - with the expansion of production, they are constantly decreasing; AVC - first fall, reach its minimum, and then begin to rise. This means that with a small volume of production, the process will be expensive and inefficient; ATC - depends on the average fixed and average variable costs. MIN ATC is called the optimum cost. *

slide 14

DYNAMICS OF AVERAGE COSTS characterizes the position of the company in the market, but does not determine the supply line and the point of optimal production volume. Point M is not always the point of optimal output where the firm reaches its equilibrium. The manufacturer is not interested in profit per unit of output, but in the maximum of the total mass of profit received. The average cost line does not show where this maximum is reached. *

slide 15

MARGIN COSTS MC (margin costs) are the additional costs of producing each next unit of output in excess of the available volume, i.e. the amount by which total cost increases when output increases by one unit. MC = (TC2 – TC1)/(Q2 – Q1) = ∆TC/∆Q *

slide 16

RELATIONSHIP OF MC AND ATC The marginal cost curve depends only on the size of variable costs. The curve of average gross costs also takes into account the influence of fixed costs. First, marginal cost is reduced, remaining below average cost. This is explained by the fact that if the cost per unit of output decreases, then each subsequent product is cheaper than the previous ones. The subsequent increase in marginal cost means that each subsequent unit of output becomes more and more expensive, i.e. marginal cost is higher than the prior average cost. The line of average costs crosses the line of marginal costs at its minimum point M. *

slide 17

RELATIONSHIP BETWEEN MC AND MARKET PRICE * As long as marginal cost is below the market price, production is profitable. When they start to exceed the price, this is a symptom of reduced efficiency. The production of an additional unit of output brings additional costs and additional profit ( additional income). The value of this additional, or marginal revenue (MR) is the difference between the proceeds from the sale of n and n-1 units of production: MR = TRn - TR n-1

slide 18

RATIO OF MARGINAL COST AND AVERAGE TOTAL COST The marginal cost curve does not depend on fixed costs, because fixed costs exist whether or not an additional unit of output is produced. First, marginal cost is reduced, remaining below average cost. This is explained by the fact that if the costs per unit of production decrease, therefore, each subsequent product costs less than the average costs of previous products, i.e. average cost is higher than marginal cost. * A subsequent increase in average cost means that marginal cost becomes higher than the previous average cost. Thus, the marginal cost line intersects the average cost line at its minimum point M.

slide 19

RELATIONSHIP OF MARGINAL COSTS AND MARGINAL INCOME With an increase in production, the marginal cost curve (MC) goes up and crosses the horizontal line of marginal income equal to the market price P1 at point M, corresponding to the volume of production Q1. Any deviation from this point results in losses for the firm, either in the form of direct losses with more output, or as a result of a reduction in the mass of profits with a decrease in output. *

slide 20

OPTIMUM PRODUCTION The firm will expand its output until each additional unit produced generates additional profit. Those. as long as marginal cost is less than marginal revenue, the firm can expand production. If marginal cost exceeds marginal revenue, the firm will incur losses. MS=MR. *

slide 21

PROFIT AND ITS FUNCTIONS excess in monetary terms of income (revenue from goods and services) over the costs of production and marketing of these goods and services. Profit functions: Reflects the final financial results; Has an incentive function (used to finance the expansion production potential, scientific and technical and social development enterprise, material incentives for its employees); Profit taxes are used to finance various social needs, the state performs its functions, the implementation of state investment, production, scientific and technical and social programs which is important for all members of society. *

slide 22

ACCOUNTING PROFIT is the difference between the selling price (sales proceeds) and accounting (explicit) costs. Revenue – Explicit Costs = Accounting Profit *

slide 23

ECONOMIC PROFIT takes into account additional costs, such as uncompensated own costs of the entrepreneur, not included in the cost, including "lost profits", the cost of "stimulating" officials, additional bonuses to employees. Explicit (accounting) costs + Implicit (lost opportunities) costs \u003d Economic costs Income - Economic costs \u003d Economic profit ceteris paribus), we are dealing with two equivalent alternatives If Economic profit< 0, то вид деятельности (при прочих равных условиях) предприятием выбран неправильно. * Questions:
1. Economic costs. External and
internal costs. Normal profit as
cost element
2. Production costs in the short run
period
3. Marginal cost
4. Law of diminishing returns
5. Production costs in the long run
period. scale effect

1. Economic costs. External and internal costs. Normal profit as an element of costs

Production costs are costs
related to attracting economic
resources needed to create
material goods and services.
The nature of costs is determined by two
key provisions:
any resource is limited;
each type of resource used in
production, has at least two alternative
way of application.

To meet all the diversity
needs of economic resources never
is enough (which causes
the problem of choice in economics). Any solution
about their use in the production of this or that
other good is connected with the necessity of renunciation
production of other goods and services.
Remembering the production curve
opportunities, you can make sure that it
bright embodiment of this concept.

Costs in the economy are associated with the abandonment of
production of alternative goods. In connection with
this is all the costs in economics
accepted as an alternative (or
imputed).
This means that the cost of any resource
involved in material production,
determined by its value at the best of
all options use
this factor of production. In this connection
economic costs are interpreted as follows
way:

Alternative or economic (imputed)
costs are the costs associated with
use of economic resources in
production of this product, evaluated in terms of
lost opportunity to use the same
resources for other purposes.
From an entrepreneur's point of view, economic
costs - payments that the firm makes
resource provider to divert those resources away from
use in alternative industries.
Out-of-pocket payments that a firm can make
be external and internal.

In this regard, we can talk about external (explicit,
or monetary) and internal (implicit, or
implicit) costs.
External costs are the payment for resources
suppliers who do not belong to the
owners of this firm. For example, salary
wages of hired personnel, payment for raw materials, energy,
materials and accessories provided
third party providers, etc.
The firm may use certain
resources that belong to her. And here it follows
talk about internal costs.

Internal costs are the costs of
own, independently
resource in use. Internal
costs are equal to cash payments,
which could be obtained
entrepreneur for own resources
with the best of all alternatives
options for their use. It's about O
some income from which
the entrepreneur is forced to refuse,
organizing your business.

The entrepreneur does not receive these incomes,
because he does not sell his
resources and use them for their own needs.
Creating your own business
entrepreneur is forced to give up
salary that he could
get in the case of employment, if not
worked in his own company or from
interest on his capital,
which he could get in credit
sphere, if he had not invested these funds in
your business.

Normal Profit - Minimum Volume
income existing in this industry, in this
time and which can keep the entrepreneur in
within his business. Normal profit follows
be regarded as a payment for such a factor
production as an entrepreneurial ability.
The sum of internal and external costs in
aggregate represents the economic
costs. The concept of "economic costs"
is generally accepted, but in practice, when conducting
accounting at the enterprise, are calculated
only external costs, which have one more
name - accounting costs.

Since accounting does not
internal costs are taken into account.
accounting (financial) profit
will be the difference between
gross income (revenue) of the firm and its
external costs, while
economic profit - difference
between the gross income (revenue) of the firm
and its economic costs (the sum
both external and internal costs).

2. Production costs in the short run

The cost of production depends on
the value of the cost of economic resources.
Somewhat conditionally, all resources used in
production can be divided into two major
groups:
resources that can be changed
very quickly (e.g. raw material costs,
materials, energy, hiring labor, etc.);
resources, change usage
which is possible only for enough
long period of time (construction
new production facility).

Based on these circumstances, the analysis
costs are usually carried out in two
time intervals:
in the short term (when
the amount of some resource remains
constant, but production volumes
can be changed by applying
more or less of these
resources, such as labor, raw materials, materials, etc.)
and in the long run (when
change the amount of any resource,
used in production).

The difference between short term and long term
periods exactly corresponds to the difference between
fixed and variable factors of production.
Variable factors of production - factors
production, the number of which can be changed in
within the short term (for example, the number
employees).
The fixed factors of production are the factors
costs for which are set and cannot be changed in
within the short term (for example,
production capacity). Thus, in
in the short run, the entrepreneur uses both
fixed and variable factors of production.
In the long run, all factors of production
are of a variable nature.

In the short term, there are:
fixed costs (TFC) value
which does not depend on the volume of produced
products (depreciation charges,
bank loan interest, rent
pay, maintenance of the administrative apparatus and
etc.).

fixed factors of production. Value
these costs are not related to production volumes.
Fixed costs exist even when
When production activity on
the enterprise is suspended, and the volume
output is zero.
The company can avoid these costs
only by completely ceasing their activities;

variable costs (TVC), the value of which
varies with volume change
production (costs of raw materials, materials, fuel,
energy, wages of workers, etc.).
This refers to the cost of resources related to
variable factors of production.
As production expands, variable costs
will increase as the firm needs more
raw materials, materials, workers, etc.
If the firm stops production and
output (Qx) reaches zero, then
variable costs will be reduced to almost zero, while
while fixed costs remain
unchanged.

The difference between permanent and
variable costs is essential for
every businessman: variables
he can manage costs
fixed costs - out of control
administration and must be paid
regardless of the volume of production, even
if production is suspended.

Fig.1. Dynamics of fixed and variable costs

In addition to fixed and variable costs,
in the short term, another type is distinguished
costs - gross (cumulative, total,
are common). Gross costs (TC) - amount
fixed and variable costs, calculated
for each given volume of production:
TC = TFC+TVC
Since TFC are equal to some constant
(constant), the dynamics of gross costs will be
depend on the behavior of TVC, i.e. will
determined by the law of diminishing
ultimate performance.

Fig.2. Fixed, variable and gross costs

In addition to gross costs, an entrepreneur is interested in
costs per unit of output, since it is them that he will
compare with the price of the product to get an idea of
profitability of the firm. unit cost
produced products are called average. This group
costs include:
average fixed costs (AFC) - fixed
costs calculated per unit of production:
AFC = TFC/Qx
average variable costs (AVC) - variable
costs per unit of output:
AVC=TVC/Qx
average total (total, gross, general) costs
(ATS) - total costs per unit of output:

Rice. 3. Average cost curves

Rice. 4. Average and marginal costs

3. Marginal cost

For a manufacturer, it is important
the cost of the firm changes with the output
additional unit of production. Define
this can be done using the limit indicator
costs.
Marginal Cost (MC) -
additional costs for
production of each subsequent
(additional) unit of production:
MC = ∆TC/∆Qx

It must be taken into account that the limits
costs largely depend on variables
costs, therefore, on the MC curve (Fig. 4)
two segments: segment with negative and segment with
positive dynamics, which is also explained by
the existence of the law of decreasing limit
returns. The next feature of the graph
marginal cost (MC) is that it
intersects plots of mean variables and
average total costs at their lowest points (A and
IN).

Cost reduction is one of
the most important sources of
competitiveness of any enterprise. After all
at current market prices for products
cost reduction means additional
profit, and hence prosperity for any
manufacturer. When changed for any
reasons for the level of costs cost schedules
are shifting. In case of cost reduction
the corresponding graphs are shifted down, when
As costs rise, the graphs move up along
y-axis.

4. Law of diminishing returns

According to the law of diminishing returns,
starting from a certain moment
serial connection of units
variable resource (for example, labor) to
immutable (fixed) resource
(to capital or land) gives a diminishing
additional, or marginal, product in
calculation for each subsequent unit
variable resource.

In other words, the growth in output will
become progressively slower as
more workers will be involved in
production. marginal product (MP), and together
with it, marginal revenue (MR) begins to decrease
because the workers hired later turned out to be
less qualified, but because
a relatively larger number are employed at that
the same size as available capital funds.

5. Production costs in the long run. scale effect

The long term is the period
time long enough to
the firm could manage to change the number of all
resources used, and permanent, and
variables, including the size of the enterprise. IN
this period all resources are
variables. Thus, short term
period is a period
fixed capacities, but long-term
period - the period of changing powers.

The positive effect comes from
when, as the size grows
enterprises there is a decrease in average
costs through:
1) more high level labor specialization
workers and management personnel;
2) the possibility of using more
productive equipment;
3) more complete waste disposal through
production of by-products. All this
contributes to obtaining external or
domestic economies of scale
production.

Negative economies of scale
occurs when, as
business growth
there is an increase in the average cost of
control complexity score
large scale production.
Instead of savings, quite
significant damage or loss.

In the long run, there is
a situation where constant long-term averages
costs cause constant returns to growth
scale of production. With the same
economies of scale, the size of a firm's operations does not
affects the productivity of the factors used.
Average and marginal productivity
the firm's factors of production remain
unchanged for both large and small
enterprises. With the same scale effect
instead of one plant using
specific production technology
you can build two factories producing twice

Similar Documents

opportunity cost. External and internal costs. production costs in the short run. Fixed, variable and total costs. Average costs. marginal cost. Private and public costs.

test, added 11/01/2006


Opportunity, explicit and implicit costs. Estimation of resource costs. Production costs in the short and long run. Determination of the average value of the cost of growth or the cost of reduction per unit of output. Price elasticity of demand.

abstract, added 03/24/2015


costs and production. The economic cost of producing a good. Costs in the short run. The opportunity cost of production. macroeconomic dynamics. Economic cycle. Causes of cyclic development. Long waves of Kondratiev.

test, added 01/08/2008


Classification of production costs depending on the volume of output. Private, public, accounting, economic, explicit, implicit, returnable and sunk costs. Expenses for wages, raw materials, materials and semi-finished products.

presentation, added 03/02/2015


Gross revenue and costs, their relationship with economic profit. Fixed and variable costs. General, average and marginal values ​​of revenue and costs. The factor of time and discounting in the economy. Scale effect of production, its types.

abstract, added 02/23/2011


feature of production costs. Economic and accounting costs. The meaning of the isoquant map. Fixed and variable costs in the short run. Essence of macroeconomic dynamics. Causes of cyclic development. Long waves of Kondratiev.

test, added 10/08/2010


Production costs and expenses. Calculation of accounting and economic profit. Costs in the short and long run. Fundamentals of production costs. Reimbursable and sunk costs. Relationship between productivity and costs.

term paper, added 05/18/2015


Essence, classification and methods of planning the costs of production and circulation. The costs of selling and consuming own products and purchased goods. Factors affecting the costs of production and circulation. The volume, composition and structure of trade.

term paper, added 11/12/2010


Transformation and transaction costs, protection of the entrepreneurial position in market transactions. The cost of acquiring applied production factors. The law of diminishing marginal productivity of the firm, fixed and variable costs.

test, added 12/19/2010


The concept, classification, structure of accounting and economic costs production. Net economic profit; production costs in the short and long run. Positive economies of scale in production, counteracting factors.

Economy

Permanent and variable costs irreversible costs. The main sources of business financing. Shares, bonds and other securities. Banking system. financial institutions. Types, causes and consequences of inflation.

Rukavishnikova M.V., teacher of history and social studies. Social studies grade 10 basic level

Fixed and variable costs.

Production costs and economic costs.

Internal and external.

Constants and variables.

The concept of profit.

Economic profit.

accounting profit.

Features of calculating the value of costs and profits.

accounting method.

economic method.

• production costs- this is the cost of the producer (owner of the firm) for the acquisition and use of factors of production.

• economic costs are the payments that the firm must make to suppliers necessary resources(labor, material, energy, etc.) in order to divert these resources from use in other industries.

economic costs

Internal (implicit)

Permanent

Variables

• Internal (or implicit)- the cost of one's own resource - is equal to the cash payments that could be received for an independently used resource if its owner invested it in someone else's business - unpaid use costs own resources. The resources belong to the company and are used for its own needs. Have the form of "lost income" (for example: office and warehouse space) – rent (alternative use) would give a profit in monetary terms.

• External (explicit, accounting)- payments to suppliers labor resources, raw materials, fuels, services, etc. - The amount of cash payments that the firm makes to pay for the necessary resources ( wages, purchase of raw materials, transportation costs) are calculated on the basis of financial statements-accounting.

• fixed costs- that part of the total cost that does not depend on this moment time from the volume of output ( the rent of the company for the premises, the cost of maintaining the building, the cost of training and retraining of personnel, wage management personnel, expenses for public utilities, depreciation ). Occur when production has not yet begun, because. there must be a building, cars, etc. They are financed even when the enterprise stops.

• variable costs- that part of the total costs, the value of which for a given period of time is directly dependent on the volume of production and sales of products ( purchase of raw materials, wages, energy, fuel, transport services, costs for tare and packaging, etc. . ). if the products are not produced, they are equal to zero.

Profit

• economic profit is the difference between the firm's total revenue and economic costs.

• Economic profit directs the entrepreneur not just to earn income, but to compare this income with that which could be obtained as a result of an alternative use of available resources.

• Accounting profit is the difference between total revenue and accounting costs.

• Different understanding of the company's profit by economists and accountants leads to different conclusions about the state of affairs in the enterprise.

• To calculate the actual value of costs and profits, the accounting method should be used. For making decisions on the choice of one of the alternative options for investing resources, only economic method cost calculation.

Money- this is a special product that performs the role of a universal equivalent in the exchange of goods. It expresses the value of all goods and acts as an intermediary in their exchange.

The main functions of money (essence of money):

• measure of value- express price - monetary form the value of the goods;
• medium of exchange- act as a fleeting intermediary in the acts of sale of goods;
• store of value- withdrawn from circulation money is used as a store of value ( gold, securities, real estate, currency, etc.)
• instrument of payment– are used to pay off various liabilities ( wages, taxes, etc.)
• world money - used for settlements in the world market ( gold, dollar, euro, pound sterling, yen, ruble) as a universal means of payment and purchase, and also as a universal materialization of wealth.

Cash cash (paper money and small change) - a form of making cash payments and settlements, in which banknotes are physically transferred from the buyer to the seller when paying for goods or when making other payments.

Non-cash funds(credit money, check, bill of exchange, banknotes, electronic money) - a form of cash payments and settlements in which the physical transfer of banknotes does not occur, but records are made in special documents

• credit money- these are debt obligations, the appearance of which is associated with the development of credit relations;
• check- a written order of a person who has a current account on the payment by the bank of a sum of money or its transfer to another account;
• bill of exchange- a written promissory note, which indicates the amount of money and the timing of its payment by the debtor; It is in circulation as money.
• banknotes- Bank notes - bank notes issued into circulation by central issuing banks. They differ from paper money in that: they have double security - credit (commercial bill) and metal (gold reserves of the bank); are issued not by the state, but by the central issuing bank; function as a means of payment.
• electronic money is a system of non-cash payments made through the use of electronic technology, covering banks, enterprises retail, household services etc. Smart cards appeared, which are an electronic checkbook

The financial market consists of a number of sectors

• Credit market. This is an economic space where relations are organized due to the movement of free money between borrowers and lenders on the terms of repayment and payment ( Central commercial bank, commercial banks, banks and individuals and legal entities, Russian and foreign banks).
• Currency market. System economic relations between banks, as well as between banks and their clients regarding the purchase and sale of foreign currency.
• Securities market (stock market). A market where the issue (release) and purchase and sale of securities, shares, bonds and derivatives of them is carried out.
• Market of insurance and pension products. This is a special system of organization of insurance relations, in which the purchase and sale of insurance services as a commodity takes place, the supply and demand for them is formed. The insurer and the policyholder regulate insurance economic relations by a special agreement - a policy.
• Investment market (investment market). This is a set of economic relations that develop between sellers and buyers of investment goods and services. The goods are the objects of investment activity ( real estate, new construction, art values, precious metals and products, deposits, government obligations).

Stock Exchange is an organized market in which transactions with securities and other financial instruments and whose activities are controlled by the state.

Stock exchange functions

• Mobilization of funds for long-term investments in the economy and financing of government programs.
• Purchase and sale of shares, bonds joint-stock companies, government bonds and other securities.
• Establishment in the course of trading of the rate of securities circulating on the stock exchange.
• Dissemination of information about securities quotes and the state of the financial market as a whole.

Bank(it. bench) is financial institution, which concentrated temporarily free funds of enterprises and citizens for the purpose of their subsequent provision in debt or on credit for a certain fee.

Bank functions

• acceptance and storage of deposits (money or securities deposited in the bank) of depositors;
• issuance of funds from accounts and settlements between clients;
• placement of collected funds by issuing loans or providing credits;
• purchase and sale of securities, currency;
• regulation of money circulation in the country, including the issuance (issue) of new money (a function only of the Central Bank).

Central State Bank– conducts public policy in the field of issue, credit, money circulation. home credit organisation country, is owned by the Russian Federation. Operates on the basis of the law of the Russian Federation.

Commercial banks- carry out financial and credit operations on a commercial basis.

• According to the form of ownership, they are divided into state, municipal, private, joint-stock, mixed.
• On a territorial basis, they are divided into local, regional, national and international.

Functions of the Central Bank

• Emission center of the country (only it has the right to issue money, banknotes into circulation).
• Regulates the economy through monetary policy.
• It concentrates the minimum reserves of commercial banks, which gives it the opportunity to control their activities.
• He is the banker of the government (he gives all profits in excess of certain norms to the treasury and is an intermediary in all payments, therefore he occupies a leading position in the country's banking system).

The main instruments of the state's monetary policy

• Operations on open market (government loan)
• Discount rate policy
• Change in the required reserve ratio

• Internal. External.
• Internal.
• External.

Internal sources of financing.

• Firm profit. Depreciation.
• Firm profit.
• Depreciation.

• Bank loan. Transformation of a sole proprietorship into a partnership. Transformation of the partnership into a joint stock company. Use of funds from various funds to support small businesses.
• Bank loan.
• Transformation of a sole proprietorship into a partnership.
• Transformation of the partnership into a joint stock company.
• Use of funds from various funds to support small businesses.

All sources of financing in business can be divided into internal and external.

• – sources available to the firm. This is the company's profit + depreciation.
• External - bank loans + funds of various financial institutions and investment companies, pension funds + state and regional small business support funds.

Domestic funding sources

Profit- main internal source firm financing.

Firm profit is the difference between income and its costs or the cost of the product.

The amount of profit depends

• From commodity prices .
• From unit costs .
• From the volume of sales of products .

• Gross or total profit - the difference between income and product cost. Part of it goes to pay taxes, perhaps it will be paid to the bank in the form of interest.

• Residual or net profit - the amount remaining after deducting the transferred payments from the gross profit.

Depreciation (from lat. amortisatio - repayment) -1) the depreciation of fixed assets calculated in monetary terms in the process of their application, production use.

2) It is at the same time a means, a method of transferring the value of worn-out instruments of labor to the product produced with their help.

3) the institution of compensation for depreciation of fixed assets is depreciation deductions in the form of money allocated for the repair or construction, production of new fixed assets.

Sinking fund- funds intended for the reproduction, reconstruction of worn-out fixed assets. The amount of ready depreciation deductions of an enterprise, organization is determined as a share of the initial cost of objects representing fixed assets. Standard value This percentage is called the depreciation rate.

External sources funding

• Other firms.
• Sale of shares
• Banks
• Credit
• Trade(or commodity) credit

State

• The state allocates funds to public sector enterprises in the form of direct capital investments .
• The state can also provide firms with its funds in the form of subsidies .
• The main difference between state financing and a bank loan is that the company receives funds from the state free of charge and irrevocably. This means that the firm does not have to return the amount received from the state, and does not have to pay interest on it.
• Government order .

Homework

§ 12, test, notes in a notebook. Block "Financial institutions" complex plan

slide 1

FIXED AND VARIABLE COSTS
Social studies Grade 11 Basic level
Social science codifier Chapter 2. Economics. Topic 2.5
The presentation was prepared by Ol'eva Olga Valerievna, teacher of history and social studies, GBOU School No. 1353

slide 2

FIRM (enterprise) - commercial organization acquiring economic resources for the production and sale of goods and services for profit. Firms are engaged in collective (organized) entrepreneurship.
ENTERPRISE - an economic agent that owns property, produces goods and services, has income and expenses.
COLLECTIVE (LLC, JSC)
INDIVIDUAL (CHP, PBOYUL)

slide 3

The firm is a LEGAL ENTITY. SIGNS: must have founding documents(usually this is the charter), the location and the executive body. has separate property (limited property liability, unlike an individual entrepreneur) is liable for its obligations with this property has property rights and obligations can be a plaintiff and defendant in court (as well as an individual) has an independent balance sheet (estimate) and its own current account
ENTITY

slide 4

ECONOMY OF THE COMPANY
THE MAIN FUNCTION OF THE FIRM is to produce goods and services to meet consumer demand. FACTORS OF PRODUCTION - resources necessary for the production of goods and services:
LABOR is an expedient human activity to create economic benefits. CAPITAL (investment resources) - all the benefits created by a person's past labor used for business. The capital also includes raw materials (oil, gas, timber, etc.). LAND - all agricultural and urban land that is used for agriculture or industrial development. INFORMATION - any information necessary for the organization and conduct of production. MANAGEMENT (entrepreneurial) abilities - the ability of an employee to use his knowledge to make the best decision in the circumstances.

slide 5

PRODUCTION COSTS -
the costs of the producer (owner of the firm) for the acquisition and use of factors of production.
When will the firm be profitable?


REVENUE FROM SALES OF PRODUCTS
COSTS OF ACQUISITION AND USE OF FACTORS OF PRODUCTION
REVENUE FROM SALES OF PRODUCTS
COSTS OF ACQUISITION AND USE OF FACTORS OF PRODUCTION
PROFIT

slide 6

PLACE OF PROFIT IN THE STRUCTURE OF THE COST OF THE GOODS
COST OF GOODS (REVENUE)
COST LEVEL
PRICE LEVEL
the amount of social labor and time required to produce a given commodity. It consists of the value of constant capital, the value of variable capital of surplus value.
the amount of money in exchange for which the seller is willing to transfer (sell) a unit of goods. In essence, the price is the coefficient of exchange of a particular commodity for money.
COST OF GOODS -
THE PRICE OF THE PRODUCT -

Slide 7

Slide 8

ECONOMIC AND ACCOUNTING COSTS
ECONOMIST AND ACCOUNTANT CALCULATE PROFIT DIFFERENTLY