(to simplify, measured in monetary terms), used in the course of the enterprise's business activities at (for) a certain time stage. Often in everyday life, people confuse these concepts (costs, costs and expenses) with the purchase price of a resource, although such a case is also possible. Costs, costs and expenses have historically not been separated in Russian. V Soviet time economics was an "enemy" science, so there was no significant further development in this direction, except for the so-called. "Soviet economy".

In world practice, there are two main schools of understanding costs. This is a classic Anglo-American, which includes both Russian and continental, which rests on German developments. The continental approach structures the content of costs in more detail and therefore is becoming more common all over the world creating a qualitative basis for tax, accounting and management accounting, costing, financial planning and controlling.

cost theory

Clarifying the definition of concepts

To the above definition, more clarifying and delimiting definitions of concepts can be added. According to the continental definition of the movement of value flows at different levels of liquidity and between different levels of liquidity, we can make the following distinction between the concepts for negative and positive value flows of organizations:

In economics, there are four main levels of value flows in relation to liquidity (in the image from bottom to top):

1. Equity level(cash, highly liquid funds (checks ..), operational settlement accounts in banks)

payments and payments

2. Level of money capital(1. Level + accounts receivable - accounts payable)

Movement at a given level is determined costs and (financial) receipts

3. Production capital level(2. Level + production necessary subject capital (material and non-material (for example, a patent)))

Movement at a given level is determined costs and production income

4. Net worth level(3. Level + other subject capital (tangible and non-material (for example, accounting program)))

Movement at a given level is determined expenses and income

Instead of the level of net capital, you can use the concept total capital level, if we take into account other non-subject capital (for example, the company's image ..)

The movement of values ​​between levels is usually carried out at all levels at once. But there are exceptions when only a few levels are covered, and not all. They are numbered in the picture.

I. Exceptions in the movement of value flows of levels 1 and 2 due to credit transactions (financial delays):

4) payments, not costs: repayment of credit debt (= "partial" loan repayment (NAMI))

1) costs, not payments: the appearance of credit debt (= the appearance (of US) of a debt to other participants)

6) payment, non-receipt: input accounts receivable(= "partial" repayment of debt by other participants for a product / service sold (by NAMI)

2) receipts, not payments: the appearance of receivables (=provision (by NAMI) of installments to pay for the product / service to other participants)

II. Exceptions in the movement of value flows of levels 2 and 4 are due to warehouse operations (material delays):

10) costs, not costs: payment for credited materials that are still in stock (=payment (by NAMI) on debit regarding "stale" materials or products)

3) expenses, not expenses: issuance of unpaid materials from the warehouse (in (OUR) production)

11) receipts, not income: pre-payment for subsequent delivery (of (OUR) "future" product by other participants)

5) revenues, non-revenues: the launch of a self-produced installation (= "indirect" future incomes will create an inflow of value of this installation)

III. Exceptions in the movement of value flows of levels 3 and 4 are due to the asynchrony between the intra-periodic and inter-periodic production (main) activities of the enterprise and the difference between the main and associated activities of the enterprise:

7) expenses, not expenses: neutral expenses (= expenses of other periods, not production costs and extraordinarily high costs)

9) costs, not expenses: calculator costs (= write-offs, interest on equity, renting out the company's own real estate, owner's salary and risks)

8) income, non-productive income: neutral income (=income of other periods, non-productive income and unusually high income)

It was not possible to find production incomes that would not be incomes.

financial balance

Foundation of financial balance Any organization can be simplified to name the following three postulates:

1) In the short term: superiority (or compliance) of payments over payments.
2) In the medium term: the superiority (or matching) of income over costs.
3) In the long run: the superiority (or matching) of income over expenses.

Costs are the "core" of costs (the organization's main negative value stream). Production (basic) income can be attributed to the "core" of income (the main positive value stream of the organization), based on the concept of specialization (division of labor) of organizations in one or more types of activities in society or the economy.

Cost types

• Third-party company services
• Other

More detailed cost structuring is also possible.

Cost types

• Influence on the cost of the final product
  • indirect costs
• According to the relationship with the loading of production capacities
• Relative to the production process
  • Production costs
  • Non-manufacturing costs
• By constancy in time
  • time-fixed costs
  • episodic costs over time
• By type of cost accounting
  • accounting costs
  • calculator costs
• By subdivisional proximity to manufactured products
  • overhead costs
  • general business expenses
• By importance to product groups
  • group A costs
  • group B costs
• In terms of importance to manufactured products
  • product 1 costs
  • product 2 costs

• Importance for decision making
  • relevant costs
  • irrelevant costs
• By disposability
  • avoidable costs
  • fatal costs
• Adjustability
  • adjustable
  • unregulated costs
• Possible return
  • return costs
  • sunk costs
• By behavior of costs
  • incremental costs
  • marginal (marginal) costs
• Cost to quality ratio
  • corrective action costs
  • preventive action costs

Sources

• Kistner K.-P., Steven M.: Betriebswirtschaftlehre im Grundstudium II, Physica-Verlag Heidelberg, 1997

See also

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Synonyms:

Antonyms:

See what "Costs" are in other dictionaries:

costs- Expressed in value meters, the current costs of production (I. production) or its circulation (I. circulation). They are divided into full and single (per unit of production), as well as permanent (I. for the maintenance of equipment ... Technical Translator's Handbook

Costs- expressed in value, monetary meters, the current costs of production (cost, including depreciation of fixed capital) production costs, or for its circulation (including trade, transport, etc.) - ... ... Economic and Mathematical Dictionary

- (prime costs) Direct costs (direct costs) for the production of goods and services. Typically, this term refers to the cost of acquiring raw materials and work force needed to produce a unit of a good. See: overhead costs (oncosts); ... ... Glossary of business terms

In economics, costs are of various kinds; as a rule, the main component of the price. They differ in the sphere of formation (distribution costs, production costs, trade, transport, storage) and the way they are included in the price (in whole or in parts). Costs… … Big Encyclopedic Dictionary

Cash costs associated with spending different types economic resources (raw materials, materials, labor, fixed assets, services, financial resources) in the process of production and circulation of products, goods. General costs ... ... Economic dictionary

Monetary losses incurred by the holder of a bill upon receipt of execution on a bill (expenses on a protest, on sending notices, judicial, etc.). In English: Costs English synonyms: Charges See also: Bill payments Financial dictionary ... ... Financial vocabulary

- (Disbursements) 1. Collection of amounts from the recipient before the release of the cargo, which sometimes the shippers charge the shipowner. Such amounts are recorded in ship's documents and bills of lading as expenses. 2. Costs of the shipowner's agent for ... ... Marine Dictionary

Expenses, costs, expense, expense, consumption, waste; cost, protori. Ant. income, income, profit Dictionary of Russian synonyms. costs, see costs Dictionary of synonyms of the Russian language. Practical guide. M.: Russian language. Z. E... Synonym dictionary

COSTS- the costs expressed in monetary form, due to the expenditure of various types of economic resources (raw materials, materials, labor, fixed assets, services, financial resources) in the process of production and circulation of products, goods. General I. usually ... ... Legal Encyclopedia

2.3.1. Production costs in a market economy.

production costs - It is the monetary cost of acquiring the factors of production used. Most cost effective method production is considered to be the one at which production costs are minimized. Production costs are measured in terms of costs incurred.

production costs - costs that are directly related to the production of goods.

Distribution costs - costs associated with the sale of manufactured products.

The economic essence of costs is based on the problem of limited resources and alternative use, i.e. the use of resources in this production excludes the possibility of using it for another purpose.

The task of economists is to choose the most optimal variant of the use of factors of production and minimize costs.

Internal (implicit) costs - this is the cash income that the company donates, independently using its own resources, i.e. These are the returns that could be received by the firm for its own use of resources in the best possible way to use them. opportunity cost Lost Opportunity is the amount of money required to divert a specific resource from the production of good B and use it to produce good A.

Thus, the costs in cash that the company has carried out in favor of suppliers (labor, services, fuel, raw materials) is called external (explicit) costs.

The division of costs into explicit and implicit there are two approaches to understanding the nature of costs.

1. Accounting approach: production costs should include all real, actual costs in cash (wages, rent, opportunity costs, raw materials, fuel, depreciation, social security contributions).

2. Economic approach: production costs should include not only actual costs in cash, but also unpaid costs; related to the missed opportunity for the most optimal use of these resources.

short term(SR) - the length of time during which some factors of production are constant, while others are variable.

Constant factors - the total size of buildings, structures, the number of machines and equipment, the number of firms that operate in the industry. Therefore, the possibility of free access of firms in the industry in the short run is limited. Variables - raw materials, the number of workers.

Long term(LR) is the length of time during which all factors of production are variable. Those. during this period, you can change the size of buildings, equipment, the number of firms. In this period, the firm can change all production parameters.

Cost classification

fixed costs (FC) - costs, the value of which in the short term does not change with an increase or decrease in production volume, i.e. they do not depend on the volume of output.

Example: building rent, equipment maintenance, administration salary.

S is the cost.

The fixed cost graph is a straight line parallel to the x-axis.

Average fixed costs (A F C) – fixed costs per unit of output and is determined by the formula: A.F.C. = FC/ Q

As Q increases, they decrease. This is called overhead allocation. They serve as an incentive for the firm to increase production.

The graph of average fixed costs is a curve that has a decreasing character, because as the volume of production increases, the total revenue grows, then the average fixed costs are an ever smaller amount that falls on a unit of products.

variable costs (VC) - costs, the value of which varies depending on the increase or decrease in the volume of production, i.e. they depend on the volume of output.

Example: the cost of raw materials, electricity, auxiliary materials, wages (workers). The bulk of the costs associated with the use of capital.

The graph is a curve proportional to the volume of output, which has an increasing character. But its nature can change. In the initial period, variable costs grow at a higher rate than the output. As you reach optimal sizes production (Q 1) there is a relative savings VC.

Average variable costs (AVC) – volume variable costs, which is per unit of output. They are determined by the following formula: by dividing VC by the volume of output: AVC = VC/Q. First, the curve falls, then it is horizontal and sharply increases.

A graph is a curve that does not start from the origin. The general character of the curve is increasing. The technologically optimal output size is reached when AVCs become minimal (p. Q - 1).

Total Costs (TC or C) - a set of fixed and variable costs of the firm, in connection with the production of products in the short run. They are determined by the formula: TC = FC + VC

Another formula (a function of the volume of production): TS = f (Q).

Depreciation and amortization

Wear is the gradual loss of value by capital resources.

Physical deterioration- loss of consumer qualities by means of labor, i.e. technical and production properties.

The decrease in the value of capital goods may not be associated with the loss of their consumer qualities, then they speak of obsolescence. It is due to an increase in the efficiency of production of capital goods, i.e. the emergence of similar, but cheaper new means of labor, performing similar functions, but more advanced.

Obsolescence is a consequence of scientific and technological progress, but for the company it turns into an increase in costs. Obsolescence refers to changes in fixed costs. Physical wear and tear - to variable costs. Capital goods last more than one year. Their cost is transferred to the finished product gradually as it wears out - this is called depreciation. Part of the proceeds for depreciation is formed in the depreciation fund.

Depreciation deductions:

Reflect the assessment of the amount of depreciation of capital resources, i.e. are one of the cost items;

Serves as a source of reproduction of capital goods.

The state legislates depreciation rates, i.e. the percentage of the value of capital goods by which they are considered depreciated in a year. It shows how many years the cost of fixed assets should be reimbursed.

Average total cost (ATC) – the sum of the total costs per unit of production:

ATC = TC/Q = (FC + VC)/Q = (FC/Q) + (VC/Q)

The curve is V-shaped. The output corresponding to the minimum average total cost is called the technological optimism point.

Marginal Cost (MC) – the increase in total costs caused by an increase in production by the next unit of output.

Determined by the following formula: MC = ∆TC/ ∆Q.

It can be seen that fixed costs do not affect the value of MC. And MC depends on the increment in VC associated with an increase or decrease in output (Q).

Marginal cost measures how much it will cost a firm to increase output per unit. They decisively influence the choice of the volume of production by the firm, since. this is exactly the indicator that the firm can influence.

The graph is similar to AVC. The MC curve intersects the ATC curve at the point corresponding to the minimum total cost.

In the short run, the company's costs are both fixed and variable. This follows from the fact that the company's production capacity remains unchanged and the dynamics of indicators is determined by the growth in equipment utilization.

Based on this graph, one can new schedule. Which allows you to visualize the capabilities of the company, maximize profits and view the boundaries of the existence of the company in general.

For the decision of the company, the most important characteristic is the average values, the average fixed costs fall as the volume of production increases.

Therefore, the dependence of variable costs on the function of production growth is considered.

At stage I, average variable costs decrease, and then begin to grow under the influence of economies of scale. For this period, it is necessary to determine the break-even point of production (TB).

TB is the level of physical volume of sales over the estimated period of time at which the proceeds from the sale of products coincide with production costs.

Point A - TB, where revenue (TR) = TC

Restrictions that must be observed when calculating TB

1. The volume of production is equal to the volume of sales.

2. Fixed costs are the same for any volume of production.

3. Variable costs change in proportion to the volume of production.

4. The price does not change during the period for which the TB is determined.

5. The price of a unit of production and the cost of a unit of resources remains constant.

Law of diminishing returns is not absolute, but relative, and it operates only in the short term, when at least one of the factors of production remains unchanged.

Law: with an increase in the use of one factor of production, while the rest remain unchanged, sooner or later a point is reached, starting from which the additional use of variable factors leads to a decrease in the increase in production.

The action of this law assumes the immutability of the state of technically and technologically production. And so technological progress can change the scope of this law.

The long run is characterized by the fact that the firm is able to change all the factors of production used. In this period variable nature of all applied factors of production allows the firm to use the most optimal options for their combination. This will be reflected in the magnitude and dynamics of average costs (costs per unit of output). If a firm decides to increase output, but initial stage(ATS) will first decrease, and then, when more and more new capacities are involved in production, they will begin to increase.

The graph of long-term total costs shows seven different options (1 - 7) for the behavior of ATS in the short term, since The long run is the sum of the short runs.

The long run cost curve consists of options called growth steps. In each stage (I - III) the firm operates in the short run. The dynamics of the long-run cost curve can be explained using scale effect. Change by the firm of the parameters of its activities, i.e. the transition from one version of the size of the enterprise to another is called change in the scale of production.

I - on this time interval, long-term costs decrease with an increase in the volume of output, i.e. there is economies of scale - a positive effect of scale (from 0 to Q 1).

II - (this is from Q 1 to Q 2), at this time interval of production, the long-term ATS does not react in any way to an increase in production volume, i.e. remains unchanged. And the firm will have constant returns to scale (constant returns to scale).

III - long-term ATS with an increase in output grow and there is a loss from the increase in the scale of production or negative scale effect(from Q 2 to Q 3).

3. V general view profit is defined as the difference between total revenue and total costs for a certain period of time:

SP = TR –TS

TR ( total revenue) - the amount of cash receipts by the company from the sale of a certain amount of goods:

TR = P* Q

AR(average revenue) is the amount of cash receipts per unit of products sold.

Average revenue is equal to the market price:

AR = TR/ Q = PQ/ Q = P

MR(marginal revenue) is the increase in revenue that arises from the sale of the next unit of production. Under perfect competition, it is equal to the market price:

MR = ∆ TR/∆ Q = ∆(PQ) /∆ Q =∆ P

In connection with the classification of costs into external (explicit) and internal (implicit) different concepts of profit are assumed.

Explicit costs (external) determined by the amount of expenses of the enterprise to pay for the purchased factors of production from the outside.

Implicit costs (internal) determined by the cost of resources owned by the enterprise.

If we subtract external costs from total revenue, we get accounting profit - takes into account external costs, but does not take into account internal ones.

If we subtract internal costs from accounting profit, we get economic profit.

Unlike accounting profit, economic profit takes into account both external and internal costs.

Normal profit appears in the case when the total revenue of an enterprise or firm is equal to the total costs, calculated as alternative. The minimum level of profitability is when it is profitable for an entrepreneur to do business. "0" - zero economic profit.

economic profit(net) - its presence means that resources are used more efficiently at this enterprise.

Accounting profit exceeds the economic one by the amount of implicit costs. Economic profit serves as a criterion for the success of the enterprise.

Its presence or absence is an incentive to attract additional resources or transfer them to other areas of use.

The purpose of the firm is to maximize profit, which is the difference between total revenue and total costs. Since both costs and income are a function of the volume of production, the main problem for the firm is to determine the optimal (best) volume of production. The firm will maximize profit at the level of output at which the difference between total revenue and total cost is greatest, or at the level at which marginal revenue equals marginal cost. If the firm's losses are less than its fixed costs, then the firm should continue to operate (in the short run), if the losses are greater than its fixed costs, then the firm should stop production.

Previous

Production costs are the costs associated with the creation of products. In fact, this is payment for various production factors. Costs directly affect both the cost and the cost of production.

Classification

Costs can be private or public. They will be private in the event that this indicator refers to a particular company. Social costs are an indicator that applies to the entire society. There are also the following basic forms of enterprise costs:

• Permanent. Costs within one production cycle. can be calculated for each production cycles, the length of which the company determines independently.
• Variables. The total cost transferred to the finished product.
• Are common. Costs within one production stage.

In order to find out the total indicator, you need to add the constant and variable indicators.

opportunity cost

This group includes a number of indicators.

Accounting and economic costs

Accounting costs (BI)- the cost of the resources used by the enterprise. When calculating, the actual prices at which the resources were purchased appear. BI equals explicit costs.
Economic Costs (EI) is the cost of products and services, formed at the most optimal alternative use of resources. EI is equal to the sum of explicit and implicit costs. BI and EI can be either equal or different.

Explicit and implicit costs

Explicit costs (IC) calculated on the basis of the company's spending on external resources. External resources are reserves that do not belong to the enterprise. For example, a firm has to purchase raw materials from a third-party supplier. The list of IEs includes:

• Employee salaries.
• Purchase or lease of equipment, premises.
• Transport expenses.
• Communal payments.
• Acquisition of resources.
• Depositing funds to banking institutions, insurance companies.

Implicit costs (NI) are costs that take into account the cost of internal resources. Basically, it's an opportunity cost. These may include:

• The profit that would be received by the enterprise with a more efficient use of internal resources.
• Profit that would have arisen from investing in another area.

The NI factor is no less important than the NI factor.

Refundable and sunk costs

There are two definitions of sunk costs: broad and narrow. In the first sense, these are expenses that the enterprise cannot recover at the end of the activity. For example, the company has invested in the registration and printing of flyers. All these costs cannot be returned, because the manager will not collect and sell leaflets to receive funds back. This indicator can be considered as the company's payment for entering the market. It is impossible to avoid them. In a narrow sense sunk costs is spending on resources that have no alternative use.

Return costs- these are expenses that can be partially or fully refunded. For example, a company at the beginning of its work acquired office space and office equipment. When the company ends its existence, all these objects can be sold. You can even get some profit from the sale of the premises.

Fixed and variable costs

Over the short term, one part of the resources will remain unchanged, while the other part will be adjusted in order to reduce or increase the total output. Short-term spending can be fixed or variable. fixed costs- these are expenses that are not affected by the volume of goods produced by the enterprise. These are the costs of fixed factors in the manufacture of products. They include the following costs:

• Payment on interest accrued as part of lending at a banking institution.
• Depreciation charges.
• Bond interest payments.
• Salary of the head of the enterprise.
• Payment for the rent of premises and equipment.
• Insurance charges.

variable costs These are expenses that depend on the volume of goods produced. They are considered variable costs. Includes the following costs:

• Employee salaries.
• Transport costs.
• The cost of electricity needed to run the business.
• The cost of raw materials and materials.

It is recommended to track the dynamics of variable costs, as they reflect the efficiency of the enterprise. For example, with an increase in the optimal scale of the company's activities, transportation costs increase. It is required to hire more carriers for the increased number of products. Raw materials must be promptly transported to the headquarters. All this increases the cost of transport, which immediately affects the indicator of variable costs.

General costs

General (they are gross) costs (OI)- these are expenses for the current period that are needed to manufacture the main product of the enterprise. They include the cost of all factors of production. The size of the OI will depend on the following factors:

• The quantity of products produced.
• The market value of the resources used.

At the very beginning of the operation of the enterprise (at the time of its launch), the size of the total costs is zero.

Cost planning

Analysis and planning of expected costs in without fail carried out by each company. Determining the amount of costs allows you to find ways to reduce costs, which is important to reduce, as well as the cost at which it is offered to buyers. Cost reduction is necessary to achieve such goals as:

• Increasing the attractiveness of the company's products.
• Increasing the competitiveness of the firm.
• Rational use of available resources.
• Increasing profit growth.
• Optimization of production processes.
• Increasing the profitability of the company.

You can reduce your business costs in the following ways:

• Downsizing.
• Optimization of work processes.
• The acquisition of new equipment that will make production less costly.
• Purchase of raw materials at a lower cost, search for profitable offers from suppliers.
• Transfer of a number of employees to freelance work.
• Relocation of the enterprise to a relatively small building with a lower cost of rent.

The purpose of cost reduction is to reduce the cost of production without compromising its quality. This rule is extremely important, since it is almost always possible to reduce costs by reducing the quality of the goods, but this will not benefit the enterprise.

IMPORTANT! It is necessary to plan costs taking into account the results of earlier calculations. The planned cost level should be realistic. It is pointless to set minimum values ​​that cannot be fulfilled. As an example, you need to take an approximate indicator of past periods.

Displaying costs in accounting documents

Information about expenses is recorded in the report "On losses" It is compiled according to Form No. 2. During the preparation of indicators for their fixation in the balance sheet, preliminary calculations can be divided into two categories: direct and indirect. Information should be entered into documents on a regular basis to analyze the activities of a large enterprise, to track efficiency.

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COURSE WORK

Production costs and their types

production costs

Introduction

1. Costs and their types

1.2 Explicit and implicit costs

1.3 Fixed costs

1.4 Variable costs

1.5 Marginal cost

2. Estimates of the costs of the firm in the short and long run

2.1 Short term

2.2 Long term

Conclusion

Introduction

A large role in a market economy is played by firms - production units that use factors of production to create goods and services, and then sell them to other firms, households or the state. The main motive of any private enterprise is the possibility of making a profit, and the main principle of the activity of each firm is to achieve maximum profit. Theory market economy It is based on the premise that the only motive for the firm's activity is profit maximization. Any enterprise tries not only to sell its goods at a favorable high price, but also to reduce its costs for production and sale of products. If the first source of increasing the income of the enterprise largely depends on the external conditions of the enterprise, then the second - almost exclusively on the enterprise itself, more precisely, on the degree of efficiency of the organization of the production process and the subsequent sale of manufactured goods.

This term paper is the study of production costs, their nature and the impact of costs on profits. Production costs are now quite serious and topical issue today, because in the conditions of market relations the center economic activity moves to the main link of the entire economy - the enterprise. It is at this level that the needed by society products, necessary services are provided. The most qualified personnel are concentrated at the enterprise. Here the issues of economical expenditure of resources, the use of high-performance equipment and technology are solved. The enterprise seeks to reduce to a minimum the costs (costs) of production and sales of products.

Costs reflect how much and what resources were used by the firm. For example, the cost elements for the production of products (works, services) are raw materials and materials, wages, etc. The total amount of costs associated with the production and sale of products (works, services) is called the cost.

The cost of products (works, services) is one of the important generalizing indicators of the firm (enterprise), reflecting the efficiency of resource use; the results of the introduction of new equipment and progressive technology; improvement of the organization of labor, production and management.

Any firm seeks to obtain maximum profit at minimum total cost. Naturally, the minimum amount of total costs varies depending on the volume of production. However, the components of total costs respond differently to changes in output. This applies primarily to the cost of paying maintenance personnel and paying production workers.

The essence of the concept of economic rationalism lies in the assumption that economic entities, on the one hand, determine the benefits from their actions, and, on the other hand, the costs necessary to achieve these benefits, means and compare them in order to maximize the benefits at the given costs of the resources used (or minimize the costs necessary to obtain these benefits). Such a comparison of benefits and costs in making economic decisions makes it possible to determine the most optimal actions of a given economic entity under given conditions. In this case, the benefits are the benefits received by the given economic entity, and the costs are the benefits that the given economic entity loses during this action. The rationality of the behavior of economic entities will then consist in maximizing income from economic activity.

1. Costs and their types

Costs-a monetary expression of the costs of production factors necessary for the implementation of the company's production and marketing activities.

We say that the costs of production factors are calculated in money, since it is necessary to use a general criterion to describe various factors: working time, kg of raw materials, kW of electricity, etc. However, their monetary valuation sometimes has certain difficulties.

Difficulties may also arise in determining the volume of production factors expended in a given period. In some cases, it is almost impossible to calculate costs with absolute accuracy. How, for example, to determine what part of the equipment purchased a year ago and designed for several years of use will be spent (depreciated) in a given specific period of time?

Therefore, we have to state that there is a certain degree of inaccuracy in calculating the costs of an enterprise. This inaccuracy can be reduced if, when choosing a calculation method, its ultimate goal is kept in mind.

In conclusion, we note that the costs described here are understood as costs, in accordance with which we are talking about the cost method, and since the costs included in the reports of the enterprise are calculated according to this method, they are sometimes referred to as accounting costs.

1.1 Opportunity cost

Sometimes it is necessary to look at costs from a different angle, in which case they are defined as opportunity costs.

Opportunity costs are understood as the costs and loss of income that arise due to giving preference when there is a choice of one of the ways to carry out business operations while refusing another possible way.

Because opportunity costs involve a choice between two possibilities, they are also called opportunity costs (or opportunity costs).

At the planning stage of a firm's business activities, the problem often arises of choosing between two or more possibilities. In this case, it is necessary to plan the costs that will entail giving preference to each of these ways of doing business, i.e. It's about future costs. By giving preference to one of the possible ways, the firm will not only bear the costs associated with this way, but will also lose (refuse, lose) something by giving up the alternative option. Therefore, when calculating the costs as a result of the implementation of economic activities in an appropriate way, it is necessary to evaluate them in terms of the loss of other opportunities. Let us explain our reasoning with an example.

Example. The owner of the company planned for 20 ... the following results:

Budget (plan) for 20..., USD

Gross proceeds 5,000,000

Cost method 4 600,000 Profit 400,000 Equity (approximately) 1,500,000

The owner will have to decide whether he will continue his business or sell the enterprise and free up equity and his personal workforce. If we consider the costs of continuing business activities by the firm, then, in accordance with the cost method, their value will be, as indicated, $ 4,600,000.

From the point of view of lost opportunities, the costs of continuing economic activity by the firm will be, dollars:

Costs in accordance with the budget 4,600,000

Loss of income (forecast) due to the loss of the owner of 300,000 the opportunity to work in another firm

Losses possible receipt interest payments in connection with the loss of the opportunity to allocate equity capital of $1,500,000 in any other way (at the rate of 12% per annum)

The previously determined profit ($400,000) in fact - when calculating the costs in terms of lost opportunities - turns out not to be a profit, but a loss of $80,000: gross proceeds $5,000,000 - costs $5,080,000.

A significant part of the decisions made in enterprises consists in the choice of alternative possibilities. As follows from our example, in this case it is necessary to take into account lost opportunities. Lost opportunities become the determining factor, other things being equal. This is the literal meaning of such terms as "lost profits" in terms of lost opportunities, "lost opportunities costs", "opportunity costs" and so on.

1.2 Explicit and implicit costs

When a firm spends out-of-pocket money (i.e., withdraws money from its bank account) to pay for resources, it spends exactly as much as it takes a day to keep that resource at its disposal. Opportunity costs of this kind, which are associated with the payment of resources at the expense of the firm's cash, are called explicit costs. Often, explicit costs are divided into direct and indirect;

a) direct costs are directly related to the volume of output and change with the expansion or reduction of production. Such costs include the cost of hiring labor and purchasing raw materials, paying for electricity and heat, etc.;

b) indirect costs do not change depending on the volume of production. Indirect costs are overheads, rent payments, wages of the entrepreneur, deductions for insurance, etc.

implicit costs. The production process involves not only raw materials and labor, but also capital resources - machine tools, equipment, buildings of workshops and factories, as well as the entrepreneur's money. What are the costs of lost opportunities for capital resources?

If a firm owns some kind of capital resource (for example, a truck), then it always has an alternative to renting this resource to other firms. The largest missed opportunity to provide the capital resource in this case will be the opportunity cost of the capital resource (truck). Consequently, if the company "Vega" has a truck that gives it revenue of 1 million rubles during the year, and at the company "Orion" the same truck brings 1.1 million rubles. revenue, then when using a truck at the Vega company, the opportunity to earn 0.1 million rubles is missed. (This could be done by leasing the truck to Orion). In this regard, 0.1 million rubles. must be attributed to the costs of lost opportunities of the company "Vega".

The above example shows that only the entrepreneur himself can assess the true costs of the lost opportunity to use a machine or other capital equipment owned by the firm. To do this, he must determine whether there was a more profitable alternative to the use of capital, as well as the maximum possible, from his point of view, "missed" return on capital to be taken into account as the cost of a missed opportunity. Since such costs are internal in nature, they are not related to the payment of money from the company's account and are not taken into account in the accounting reports, they are called implicit costs.

1.3 Fixed costs

Fixed costs are understood as such costs, the amount of which in a given period of time does not directly depend on the size and structure of production and sales.

Salaries of employees 600000 Rental of premises 75000 Miscellaneous 125000 Depreciation 200000 Total 10000000

V specified period It is planned to produce and sell 10,000 units of this product.

Fixed costs can be divided into two groups: residual and start-up.

Residual costs include that part of the fixed costs that the enterprise continues to incur, despite the fact that production and sales have been completely stopped for some time.

Start-up costs include that part of the fixed costs that arise with the resumption of production and sales.

There is no clear distinction between residual and start-up costs. Whether to refer this species costs to a particular group, mainly affects the period for which production and sales are stopped. How longer period business interruption, the lower the residual costs will be, as opportunities to get rid of various contracts (eg, employment contracts and space rental contracts) increase.

For example, if the fixed costs of $ 1,500,000 are divided into residual - $ 1,100,000 and starting - $ 400,000, then this ratio can be graphically illustrated as follows (Fig. 1):

The distinction between residual and start-up costs may be of interest only in the case when the question of the expediency of a complete cessation of economic activity is being considered.

A certain amount of fixed costs is an expression of the fact that a certain potential has been created, allowing to achieve a certain volume of production and sales. If economic activity carried out within a given volume, fixed costs will remain unchanged. Expanding capacity, for example in the form of more machinery, more staff and more space, will increase fixed costs (depreciation, salaries and rent). This growth will take the form of leaps, for the enumerated factors of production can only be acquired in definite—indivisible—quantities.

If we are talking, for example, about staff reductions due to the curtailment of production, then this will be possible after a certain time has passed, corresponding, among other things, to the deadline for issuing notices of dismissal. Such costs - in our case for the payment of salaries - will be called reversible.

The situation is different with the reduction of that part of the fixed costs that is associated with the fixed assets of the enterprise, for example, depreciation of machinery and equipment. Of course, you can sell part of the machine park. However, it often happens that when one firm in an industry has excess production capacity, other firms have the same capacity, which would otherwise be theirs. potential buyers. This situation leads to the fact that prices are very low, and this entails large losses for the company selling them in the form of extraordinary write-offs (amortization). Such costs - in this case, depreciation of machines, etc. - are called (by and large) irreversible. If the expansion of the firm's capacity leads to an increase in sunk costs, then this is much more risky than if these costs were reversible.

1.4 Variable costs

Variable costs are understood as costs, the total value of which for a given period of time is directly dependent on the volume of production and sales, as well as their structure in the production and sale of several types of products.

Examples of variable costs for manufacturing plant are the costs of acquiring raw materials, labor and energy needed in the production process.

In commercial enterprises, the most significant variable costs are the costs of acquiring goods. Other variable costs may include packaging costs and seller commissions.

Proportional variable costs are variable costs that vary in relatively the same proportion as production and sales.

Digressive variable costs are understood as variable costs that change in a relatively smaller proportion than production and sales.

Progressive variable costs are understood as variable costs that change in a relatively larger proportion than production and sales.

Table 1. Progressive variable costs

Under the gross costs of the enterprise is understood the sum of its fixed and variable costs.

1.5 Marginal cost

At enterprises, the question often arises of how much expansion or reduction in production and sales can justify itself. In addressing these issues, it is important to be able to calculate the growth costs of expanding economic activity and, accordingly, the contraction costs of curtailing it. Such growth and contraction costs are expressed by the general concept of "intrinsic marginal cost" (SPRIZ).

Under the actual marginal costs is understood as a change in the value of gross costs that occurred as a result of a change in the value of production and sales by 1 unit.

Often, cost changes are planned to match much larger changes in production and sales volumes. In such cases, it is not possible to calculate the actual marginal cost. Nevertheless, it is possible to calculate a value approaching the actual marginal cost, the so-called average marginal cost (hereinafter marginal cost).

Marginal cost is understood as the average value of incremental or contraction costs per unit of output arising as a result of a change in production and sales volumes by more than 1 unit.

2. Estimation of the firm's costs in the short and long run

In carrying out his activities, an entrepreneur has to make a lot of decisions: how much to buy raw materials, how many workers to hire, which technological process to choose, etc. All these decisions can be conditionally combined into three groups:

1) how in the best possible way organize production at existing production facilities;

2) what new production capacities and technological processes to choose, taking into account the achieved level of development of science and technology;

3) how best to adapt to the discoveries and inventions that make a breakthrough in technical progress.

The period of time during which the firm solves the first group of issues, in economics called the short-term period, the second - long-term, the third - very long-term. The use of these terms should not be associated with a specific period of time. In a number of industries, let's say energy, the short-term period lasts many years, in another, for example, aerospace, the long-term period may take only a few years. The "length" of the period is determined only by the relevant group of issues to be resolved.

The behavior of the company is fundamentally different depending on which of the listed periods it operates. In the short run, the individual factors of production do not change; they are called constant (fixed) factors. These usually include resources such as industrial building, machines, equipment. However, it can also be land, the services of managers and qualified personnel. Economic resources that change during the production process are considered variable factors. In the long run, all input factors of production can change, but basic technologies remain unchanged. In the course of a very long period, the underlying technologies may also change.

Let us dwell on the activities of the company in the short run.

2.1 Short term

Total costs (total cost - TC) - the total cost of producing a certain volume of products. Since in the short run a number of input factors of production (primarily capital) do not change, some part of the total costs also does not depend on the number of units of the variable resource used and on the volume of output of goods and services. Total costs that do not change as production increases in the short run are called total fixed costs (total fixed cost - TFC); total costs, which change their value with an increase or decrease in output, are total variable costs (total variable cost - TVC). Therefore, for any production volume Q, the total costs are the sum of the total fixed and total variable costs:

Fixed costs are mainly explicit indirect costs:

interest on loans taken, depreciation, insurance premiums, rent, salaries for managers. For example: when a building is built or rented, when equipment is bought, the entrepreneur assumes that they will serve him for a certain number of years before they need to be replaced with new ones. So, if it is known that the building lasts an average of 40 years, then every year 1/40 of the cost of the building is charged as fixed costs of the company. This type of cost is called depreciation and is used to cover the depreciation of the building. If it is known that this type of equipment lasts 10 years, then every year the entrepreneur charges 1/10 of the cost of the equipment as fixed costs of the company. Equipment depreciation costs are also used to cover depreciation of equipment.

The service life of machinery and equipment depends more on the rate of technological progress than on actual physical wear and tear.

If the industry is experiencing rapid development and the technology in it is changing rapidly, the fixed capital becomes obsolete and needs to be upgraded significantly. ahead of schedule its physical deterioration, i.e. obsolescence is observed.

Such costs will be present even if the company for some reason stops producing goods (the rent for the used premises or the debt to the bank must be paid in any case, regardless of whether the company produces products or not).

Variable costs are usually calculated per unit of output. This type of cost is also called direct or "optional" costs. Variable costs are the costs of paying employees, raw materials, auxiliary materials, fuel, electricity, etc.

The firm, wishing to achieve maximum profit, seeks to reduce costs per unit of output. In this regard, it is important to introduce the concept of average costs. Average costs (average total cost - ATC or simply average cost - AC) is the amount of total costs per unit of output. If Q is the quantity of goods produced by the firm, then

Average fixed (AFC) and average variable (AVC) costs are calculated using the formulas:

AFC = TFC / Q AVC = TVC / Q

Obviously ATC=AFC+AVC. Great importance have marginal costs.

Marginal cost (MC) is a value that shows the increment in total costs when the volume of output changes by one additional unit:

Since fixed costs do not change and do not depend on the value of Q, the change in total costs, i.e. TC is determined by changes only in variable costs:

TC = TVC and MS = TVC / Q.

2.1.1 Cost curves in the short run

Knowing the prices of resources and the dependence of production volumes on the amount of resources used, it is possible to calculate production costs. Let's assume that in the considered example TFC = 1 million rubles, and the salary of one worker is 100 thousand rubles. Substituting these values ​​in the table, we find the values ​​of TC, TVC, ATC, AVC, AFC and MC and build the corresponding graphs.

This follows from the fact that

Since the release of an additional unit of goods is associated with an increase in total costs, the TC curve always has an "ascending" character for any value of Q.

The average and marginal cost curves have a different character (see Fig. 2). At the initial level (up to qa, point, a of the MC curve), marginal cost values ​​decrease and then begin to grow steadily. This is due to the law of diminishing returns.

As long as marginal cost is less than average variable cost, the latter will fall, and when MC exceeds AVC, average cost will rise. Since fixed costs do not change, the total costs of ATC decrease as long as MC is less than ATC, but they begin to rise as soon as MC exceeds ATC. Consequently, the MC line intersects the AVC and ATC curves at their minimum points. As for the average fixed cost curve, since AFC=TFC/Q, TFC=const, the ATC values ​​are constantly decreasing with increasing Q, and the AFC curve has the form of a hyperbola.

2.2 Long term

As we have already noted, any firm seeking to maximize profits must organize production in such a way that the cost per unit of output is minimal. This means that the long-term decision to be made should be guided by the task of minimizing costs. We will, as in the case of the short run, assume that prices for economic resources remain unchanged. In addition, for simplicity, we will assume that only two factors are used in production - labor and capital, and in the long run both of them are variables. Let's make one more assumption: first we fix a certain volume of production and try to find the optimal ratio of labor and capital for a given volume of production. When we understand the algorithm for optimizing the use of two factors for a certain volume of production, we can find the principle of minimizing costs for any volume of output.

So, a certain volume of output q is produced for a given ratio of labor and capital. Our task is to figure out how to replace one factor of production with another in order to minimize the cost per unit of output. The firm will replace labor with capital (or vice versa) until the value of the marginal product of labor per one ruble spent on the acquisition of this factor becomes equal to the ratio of the marginal product of capital to the price of a unit of capital, that is:

mpk/pk=mpl/pl (2)

where MPl and MRC is the marginal product obtained as a result of attracting an additional unit of labor or capital to the production, Pk and Pl are the prices of a unit of capital and labor.

To understand the validity of this statement, let's consider this with an example: a unit of labor costs 250 rubles, and a unit of capital costs 100 rubles. (per month). Let the addition of one unit of capital increase the total output by 10 units (i.e., the marginal product of capital MPk = 10), and the marginal product of labor is 5 units. Then in equality (2) the left side becomes larger than the right:

It follows from this that if the entrepreneur refuses two

units of labor, he will reduce production by 10 units and release 500 rubles. With this money, he can hire one additional unit of capital (spend 100 rubles on this), which will compensate for the loss of production (will give 10 units of production). This means that by replacing two units of labor with one unit of capital (for a certain volume of output), the firm can reduce total costs by 400 rubles. However, it should be taken into account that a decrease in the volume of labor will invariably lead to an increase in the marginal product of labor (in accordance with the law of diminishing returns), and an increase in the amount of capital used, on the contrary, will cause a fall in the MRC. As a result, the left and right parts of equality (2) will become equal.

Equality (2) can be written in the following form:

MRK / mpl= RK / pl (3)

Since the prices for input factors of production do not change according to our conditions, then for the example considered above Рк I pl = 0.4

Then the ratio MRC / MPl should be equal to 0.4 for the selected volume of output.

In the long run, at a given output, the firm achieves an equilibrium in the use of input factors of production and minimizes costs, when any replacement of one factor by another does not lead to a decrease in unit costs. This happens when equality (2) or its equivalent (3) is satisfied.

Equality (2) and (3) allows us to determine the actions of the firm if the relative prices of resources begin to change. If, suppose, the relative price of labor increases, then the left side of (2) will become larger than the right one, and this will force the firm to use less of the more expensive resource - labor (which will cause an increase in MPl) and more of the relatively cheap resource - capital (thus reducing MRC ) * As a result, equality (2) will be satisfied again.

So, we know how to minimize the cost per unit of output for a given volume of production. When will the firm increase or decrease output? finished products? If resource prices are given and remain unchanged, then for each volume of production, using equalities (2) and (3), we can find the optimal combination of labor and capital in terms of minimizing average costs. Let's plot on the graph (Fig. 3) along the x-axis the volumes of output under consideration, and along the y-axis the values ​​of average costs. For each volume of production, we indicate a point on the coordinate plane, the ordinate of which is equal to the average costs with the optimal ratio of labor and capital for a given volume of capital "(points A, B, C). If we connect all these points with one line, we get the curve of average costs in the long run period (LRAC).

As can be seen from fig. 3, the LRAC curve in the section from 0 to A decreases (i.e., with an increase in output, average costs fall), and then, with a further increase in output, average costs begin to increase again. If we assume that the prices of economic resources remain unchanged, then the initial decrease in average costs in the long run is explained by the fact that with the expansion of production, the growth rate of finished products begins to outstrip the growth rate of costs for input production factors.

This is due to the so-called economies of scale effect. Its essence lies in the fact that at the initial stage, an increase in the number of input factors of production makes it possible to increase the possibility of specialization of production and the distribution of labor. A decrease in average costs can also be caused by the use of more productive equipment, a decrease in the number of employees.

However, further expansion of production will invariably lead to the need for additional management structures (heads of departments, shifts, workshops), increased costs for the administrative apparatus, it will be more difficult to manage production, and failures will become more frequent. This will cause an increase in production costs, and the LRAC curve will increase.

The LRAC curve divides the coordinate plane into two parts: for all points below the LRAC curve (for example, point m), the corresponding output qm for the firm is unattainable at current input prices (i.e., the firm can never achieve that the value of average cost at output qm was equal to Cm). For points above the LRAC curve (point n), the volume qn is achievable (but will require a large average cost).

How are the average cost curves related in the short run and long run? Consider point C on the LRAC curve. As we just said, at this point the lowest costs Cc per unit of output (i.e., the optimal ratio of labor and capital) are achieved with a production volume of qc units. To move along the LRAC curve from point C to point B, the firm must increase the amount of capital, and it takes time for economies of scale to kick in. But after all, at some interval of its activity, the company does not change machine tools and equipment, that is, we can assume that it operates in the short term. Let the firm fix its capacity and the amount of capital (in the short run it becomes a constant factor) corresponds to point C of the LRAC curve. Having one fixed factor of production and acting in the short run (SRAC1 curve), the firm can more effectively use the potential for economies of scale - quickly dispose of variable factors of production, implement a progressive division of labor faster, improve firm management. As a result, a firm with the same production capacity can increase its output to qD while reducing average costs to Cd, i.e., act more efficiently.

However, when planning activities for the future, the entrepreneur must assess the potential for expanding production. If he takes the risk and increases the amount of capital, so that the new optimal ratio of labor and capital will be reached at point B, then he may experience losses at first - the volume of production will be reduced to qb. But then, using the potential economies of scale in the next short run (SRAC2 curve), the firm will achieve an increase in production to the level qe while reducing average variable costs.

This is where the opportunity costs associated with entrepreneurial risk manifest themselves: the entrepreneur who was afraid to take a risk and expand production missed a benefit equal to (qe - qD) x (CD - Ce), i.e., the product of the magnitude of the resulting increase in production (qe - qd) and the amount of reduction in average costs (Cd-Cе).

The entrepreneur should always take risks and expand production when he is sure that the potential for expansion effects can reduce average costs while increasing production. At point A, a global minimum occurs, where both the corresponding SRAC3 curve and the LRAC curve itself reach their lowest values. Any attempt by the firm to simultaneously increase production and reduce average costs will fail. The opportunities for economies of scale will run out, and the entrepreneur who takes the risk of further expansion of production will fail. Hence, at point A, the firm optimizes its activities in the long run.

Conclusion

Any market consists of buyers who want to buy goods and suppliers who want to sell goods. Each of these parties seeks to satisfy their own needs as fully as possible at any price set for the product, however, each of them is at the mercy of its own constraint: buyers are constrained by the limitations of their budget, and suppliers are constrained by the limitations of their technological capabilities.

The presence of these constraining factors leads to the fact that, with all other conditions unchanged, but with a change in the price of a product, supply and demand will change. The characteristic demand curve, which reflects the dependence of the quantity of a good that buyers are willing to buy on the price of this good, is decreasing. The characteristic supply curve, which reflects the dependence of the quantity of goods that suppliers are willing to sell on the price of this product, is increasing. The specific position of the demand curve and the supply curve in the axes (price, quantity) is determined by a number of non-price demand parameters and non-price supply parameters. The degree of sensitivity of changes in supply and demand to changes in the price of a product or any non-price parameter is usually described by the elasticity coefficient. If the existing market price for a given product is lower or higher than the price for which the volume of demand coincides with the volume of supply, then a shortage or surplus of the product is formed on the market, respectively, in the presence of which the tracking by buyers and suppliers of their interests to satisfy their needs as completely as possible leads to a change existing price in the direction of the equilibrium price, which does not exclude the possibility of fluctuations in the price of goods around the equilibrium value with too large adjustments to the original price.

In this work, due to the limited nature of the topic, many specific situations have remained behind the scenes in which the interaction and structure of supply and demand naturally have their own characteristics. For example, for the market of resources used to produce another product, the principal is the profit from subsequent deliveries finished products, and it is advisable to increase the consumption of resources (i.e., the value of demand for them) only as long as the increase in their total cost due to the purchase of an additional unit of the resource is less than the increase in income from the sale of an additional amount of finished goods supplied thanks to this additional unit of the purchased resource. To find out how the market (industry) long-term supply curve will behave, the influence of the growth of an industry on the prices of the resources used in this industry becomes fundamental; if, thanks to its increased size, the industry is able to acquire the necessary resources at a higher price. low prices, then the curve

long-term industry supply will be decreasing. Or, for example, when determining the nature of the aggregate demand curve, i.e. volumes of national production that all consumers of the country are ready to buy at different aggregate price levels, the influence of changes in the price level in the country on interest rates, inflationary expectations of consumers and demand for imported goods becomes fundamental. When determining the nature of the aggregate supply curve, the presence in the country of free resources for additional use becomes decisive.

Since the purpose of this work was a general description of the economic content of demand, supply and their interaction, the study of demand, supply and their interaction was carried out on the example of the most general simplest situation, and the above and other specific situations can be the subject of a separate study.

List of used literature

1. Civil Code of the Russian Federation, part I of November 30, 1994 No. 51-FZ (as amended federal laws dated 20.02.1996 N 18-FZ, dated 12.08.1996 N 111-FZ, dated 08.07.1999 N 138 FZ, dated 16.04.2001 N 45-FZ, dated 15.05.2001 N 54-FZ).

2. The Civil Code of the Russian Federation, Part II of January 26, 1996 No. 14-FZ (as amended by the Federal Laws of August 12, 1996 N 110-FZ, of October 24, 1997 N 133-FZ, of December 17, 1999 N 213 FZ).

3. The Tax Code of the Russian Federation, part I of July 31, 1998 No. 146-FZ (as amended by Federal Laws of July 9, 1999 N 154-FZ, of January 2, 2000 N 13-FZ, of August 5, 2000 N 118-FZ (as amended by 03/24/2001)).

4. The Tax Code of the Russian Federation, part II of August 5, 2000 No. 117-FZ (as amended by Federal Laws of December 29, 2000 N 166-FZ, of May 30, 2001 N 71-FZ, of August 7, 2001 N 118 FZ).

5. Abryutina M.S., Grachev A.V. Analysis of the financial and economic activity of the enterprise: Educational and practical guide. Moscow: Delo i Service Publishing House, 2001.

6. Betge Jörg. Balance science: Per. from German / Scientific editor V. D. Novodvorsky. M.: Accounting, 2000.

7. http://lib.vvsu.ru/books/Bakalavr02/page0089.asp

8. www.ido.edu.ru/ffec/econ/ec5.html

9. Bykardov L.V., Alekseev P.D. Financial and economic state of the enterprise: A practical guide. - M. PRIOR Publishing House, 2000.

10. The use of computer technology in accounting: Proc. allowance / M.V. Drutskaya, A.V. Ostroukhov, V.I. Ostroukhov; Ros. in absentia in-t textile. and light industry. - M., 2000.

12. Kondrakov N.P. Accounting: Tutorial. INFRA - M, 2002.

13. Russian Statistical Yearbook, 2001.

14. Management of the organization: Textbook / Ed. A.G. Porshneva, Z.P. Rumyantseva, N.A. Solomatina. - M.: INFRA-M, 2000.

15. Finance, money circulation and credit: Textbook / Ed. prof. N.F. Samsonova. - M.: INFRA-M, 2001

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Every business has costs. If they are not there, then there is no product to be put on the market. To produce something, you need to spend money on something. Of course, the lower the costs, the more profitable the business.

However, following this simple rule requires the entrepreneur to take into account a large number of nuances that reflect the variety of factors affecting the success of the company. What are the most remarkable aspects that reveal the essence and varieties of production costs? What determines business efficiency?

A bit of theory

Production costs, according to a common interpretation among Russian economists, are the costs of an enterprise associated with the acquisition of so-called "factors of production" (resources without which it is impossible to produce a product). The lower they are, the more economically profitable the business is.

Production costs are measured, as a rule, in relation to the total cost of the enterprise. In particular, a separate class of expenses may be those associated with the sale of manufactured products. However, it all depends on the methodology used in classifying costs. What are the options here? Among the most common in the Russian marketing school there are two of them: the methodology of the "accounting" type, and the one that is called "economic".

According to the first approach, production costs are the total set of all actual expenses associated with the business (purchase of raw materials, rent of premises, payment of utilities, staff compensation, etc.). "Economic" methodology involves the inclusion of those costs, the value of which is directly related to the lost profits of the company.

In accordance with popular theories, which Russian marketers adhere to, production costs are divided into fixed and variable. Those that belong to the first type, as a rule, do not change (if we talk about short-term time periods) depending on the increase or decrease in the rate of output of the goods.

fixed type costs

Fixed production costs are, most often, such items of expenditure as rent of premises, remuneration of administrative personnel (managers, leaders), obligations to pay certain types of contributions to social funds. If they are presented in the form of a graph, it will be a curve that is directly dependent on the volume of production.

As a rule, business economists calculate the average costs of production from those that are fixed. They are calculated based on the volume of costs per unit of manufactured goods. Usually, as the volume of output of goods increases, the "schedule" of average costs descends. That is, as a rule, the greater the productivity of the factory, the cheaper the unit product.

variable costs

The production costs of the enterprise, which are related to variables, in turn, are very susceptible to changes in the volume of output. These include the cost of purchasing raw materials, paying for electricity, and compensating staff at the level of specialists. It is understandable: more material is needed, energy is wasted, new personnel are needed. A graph showing the dynamics of variable costs is usually unstable. If a company is just starting to produce something, then these costs usually increase more actively in comparison with the rate of increase in production.

But as soon as the factory reaches a sufficiently intensive turnover, then the variable costs, as a rule, do not grow so actively. As in the case of fixed costs, the second type of cost is often calculated as an average - again, relative to the output of a unit of output. The total of fixed and variable costs is the total cost of production. Usually they just add up mathematically when analyzing the economic performance of a company.

Costs and depreciation

Such phenomena as depreciation and the closely related term "wear and tear" are directly related to production costs. Through what mechanisms?

First, let's define what wear is. This, according to the interpretation common among Russian economists, is a decrease in the value of production resources in force. Depreciation can be physical (when, for example, a machine or other equipment simply breaks down or cannot withstand the previous rates of output of goods), or moral (if the means of production used by the enterprise, say, are much inferior in efficiency to those used in competing factories ).

A number of modern economists agree that obsolescence is a fixed cost of production. Physical - variables. The costs associated with maintaining the volume of output of goods, subject to wear and tear of equipment, form the same depreciation charges.

As a rule, this is due to the purchase of new equipment or investments in the repair of the current one. Sometimes - with change technological processes(For example, if a wheel spoke machine breaks down in a bicycle factory, the spokes may be temporarily or indefinitely "outsourced", which tends to increase the cost of the finished product).

Thus, timely modernization and purchase of high-quality equipment is a factor that significantly affects the reduction of production costs. Newer and more modern technology in many cases involves lower depreciation costs. Sometimes the costs associated with the wear and tear of equipment are also affected by the qualifications of the personnel.

As a rule, more experienced craftsmen handle technology more carefully than beginners, and so it may make sense to invest in inviting expensive, highly qualified specialists (or invest in training young ones). These costs may be lower than the investment in depreciation of equipment heavily exploited by inexperienced newcomers.