Firm(Enterprise) is a business link that realizes its own interests through the manufacture and sale of goods and services by planning combining factors of production.

All firms can be classified according to two main criteria: a form of ownership of Capital and the degree of capital concentration. In other words: who owns the firm and what is its value. For these two criteria, various organizational and economic forms of entrepreneurial activities are allocated. This includes public and private (sole, partnerships, joint-stock enterprises. According to the degree of production concentration, minor (up to 100 people), medium (up to 500 people) and large (more than 500 people) of the enterprise.

The determination of the value and structure of the cost of the enterprise (firm) for the production of products that would provide a sustainable (equilibrium) provision and prosperity on the market is the most important task of economic activities at the micro level.

Production costs - these are expenses, cash spending that must be implemented to create the goods. For an enterprise (firm), they act as payment of the acquired factors of production.

Most of the production costs is the use of production resources. If the latter are used in one place, they cannot be used in another, since they have such properties as rarity and limited. For example, the money spent on the purchase of a domain for the production of cast iron cannot simultaneously be spent on the production of ice cream. As a result, using some resource in a certain way, we lose the ability to use this resource in some other way.

By virtue of this circumstance, any decision on the production of something causes the need to refuse to use the same resources for the production of some other types of products. Thus, costs are alternative costs.

Alternative costs- These are the costs of the production of goods, rated from the point of view of the lost possibility of using the same resources for other purposes.

From the point of view of the economy, alternative costs can be divided into two groups: "obvious" and "implicit".

Explicit costs- These are alternative costs that make the form of cash payments to suppliers of factors of production and intermediate products.

In the number of explicit costs include: workers 'wages (cash payment to workers' production factor in labor); cash costs for the purchase or payment for renting machines, machinery, equipment, buildings, structures (cash payment suppliers of capital); payment of transportation costs; utility payments (light, gas, water); payment of services of banks, insurance companies; Payment of suppliers of material resources (raw materials, semi-finished products, components).

Implicit costs - these are alternative costs of using resources belonging to the company itself, i.e. Unpaid costs.

Implicit costs can be represented as:

1. Cash payments that could receive a firm with more beneficial use of resources belonging to it. This can also include lost profits ("costs of missed opportunities"); wages that an entrepreneur could get, working somewhere else; percentage of capital invested in securities; Rental payments to the ground.

2. Normal profits as a minimal remuneration to an entrepreneur holding it in the selected industry.

For example, an entrepreneur engaged in the release of the referral, considers it sufficient for himself to receive normal profits of 15% invested capital. And if the production of the author will give an entrepreneur less than normal profits, he will move its capital in the industry, giving at least normal profits.

3. For the capital owner, implicit costs is the profit, which he could receive, invested its capital not in this, but in some other business (enterprise). For a peasant-protection of the Earth - such impregnated costs will be the rent, which he could get by passing his land for rent. For an entrepreneur (including a person engaged in ordinary labor activity), this wage that he could receive in the same time, working on any firm or enterprise, will appear as implicit costs.

Thus, in the cost of production of Western economic theory, the income of the entrepreneur is included. At the same time, this income is considered as a risk fee that rewards the entrepreneur and stimulates it to keep its financial assets within this enterprise and not distract them for other purposes.

Production costs that include a normal or average profit are economic costs.

Economic or imputed costs in modern theory consider the expenses of the company implemented in the context of the best economic decision on the use of resources. This is the ideal to which the firm should strive. Of course, the real picture of the formation of common (gross) costs is somewhat different, as any ideal is difficult to achieve.

It must be said that economic costs are not equivalent to those that operate accounting. IN accounting costsentrepreneur's profit is not included at all.

The costs of production operate with the economic theory, compared with accounting, distinguishes the assessment of internal costs. The latter are related to the costs that are carried out through the use of their own products in the manufacturing process. For example, a part of the grown crop is used on sowing land of the company. Such grain firm uses for internal needs and does not pay it.

In accounting, internal costs are accounted for at cost. But from the standpoint of the formation of the price of a released product of this kind of costs should be assessed at the market price of the resource.

Internal costs - these are related to the use of its own products, which turns into a resource for further production of the company.

External costs - these are the costs of money that is carried out to acquire resources that are the property of those who do not apply to the owners of the company.

Production costs that are carried out in the production of goods can be classified not only depending on what resources are used, whether the resources of the company or resources for which they had to pay. Another classification of costs is possible.

Permanent, variables and total costs

The costs that the firm carries in the production of a given volume of products depend on the possibility of changing the number of all employed resources.

Permanent costs (FC, Fixed Costs)- These are the costs that are independent in the short term because how much the company produces products. They represent the costs of its constant factors of production.

Permanent costs are associated with the existence of the company's production equipment and should therefore be paid, and if the firm does not produce anything. The company can avoid costs associated with its permanent production factors, only fully ceased to operate.

Variable costs (Us, Variable Costs)- These are the costs that depend on the volume of production of the company. They represent the costs of variable factors manufactured by the company.

These include raw materials, fuel, energy, transportation services, etc. Most of the variable costs, as a rule, falls on the cost of labor and materials. Since the costs of variable factors increase as product production increases, then the costs are increasing with increasing release.

General (gross) costson the amount of goods produced is all the costs at the moment you need to produce a particular product.

In order to more clearly determine the possible production volumes in which the company guarantees itself from excessive increase in production costs, the dynamics of average costs are investigated.

Distinguish medium permanent (AFC).medium variables (AVC)PI Middle General (PBX)costs.

Middle permanent costs (AFS)represent the ratio of permanent costs (FC)to the volume of release:

AFC \u003d FC / Q.

Medium variable costs (AVQ.represent the ratio of variable costs (VC)to the volume of release:

AVC \u003d VC / Q.

Medium total costs (PBX)represent relations of common costs (TC)

to the volume of release:

PBX= TC / Q \u003d AVC + AFC,

as TC= VC + FC.

The average costs are used in solving the question of whether these products are made at all. In particular, if the price, which is an average income per unit of output, less than AVC,that firm will reduce its losses by suspending its activities in the short term. If the price is lower PBX,then the firm gets negative economic; Profit and she should consider the possibilities of final closure. Graphically, this position can be depicted as follows.

If the average costs below the market price, the firm can work profitable.

To understand whether the production of an additional unit of products is favorable, it is necessary to compare with each other for this change in income with the limiting costs of production.

Limit costs (MS, MARGINAL COSTS) -these are the costs associated with the production of an additional unit of products.

In other words, limit costs are an increase TC,to which the company should go for the sake of production of another unit of products:

Ms.\u003d Changes B. TC/ Changes in Q (MS \u003d TC / Q).

The concept of limiting costs is of strategic importance, since it allows you to determine the costs, the value of which the firm can be controlled directly.

The equilibrium point of the company and maximum profit is achieved in the event of equality of marginal income and limit costs.

When the firm reached such a relationship, it will no longer increase production, the issue will become stable, hence the name is the equilibrium of the company.

Costs (Cost) - the cost of everything, from which it is necessary to refuse to the seller for the production of goods.

To carry out its activities, the company bears certain costs associated with the acquisition of the necessary production factors and the sale of manufactured products. The valuation of these costs is the cost of the company. The most cost-effective method of producing and implementing any product is considered to be such in which the minimization of the company's costs occurs.

The concept of costs has several values.

Classification of costs

• Individual - Costs of the company itself;
• Public - The cumulative costs of society on the production of a product that include not only purely production, but also all the costs: environmental protection, training of qualified personnel, etc.;
• Production costs - these are the costs directly related to the production of goods and services;
• Cost of circulation - related to the sale of manufactured products.

Classification of costs of circulation

• Additional costsappeals include the cost of bringing products to the end user (storage, packaging, packaging, product transportation), which increase the final cost of the goods.
• Clean costs of circulation - These are the costs associated exclusively with the acts of purchase and sale (remuneration of trade workers, maintaining trade operations, advertising costs, etc.) that do not form a new value and subtracted from the cost of goods.

The essence of costs from the standpoint of accounting and economic approaches

• Accounting costs - This is the valuation of the resources used in the actual prices of their implementation. The costs of the enterprise in accounting and statistical reporting are in the form of the cost of products.
• Economic understanding of costs Based on the problem of limited resources and the possibility of their alternative use. Essentially, all costs are alternative costs. The task of an economist is to choose the most optimal use of resources. The economic costs of the resource chosen for the production of goods are equal to its value (values) for the best (of all possible) options.

If an accountant is mainly interested in assessing the company's activities in the past, then an economist, in addition, is interested in the current and especially projected assessment of the company's activities, find the most optimal use of available resources. Economic costs usually more accounting is cumulative alternative costs.

Economic costs, depending on whether the firm is paid by the resources applied. Explicit and implicit costs

• External costs (explicit)- These are the costs of money, which the company carries out in favor of suppliers of labor services, fuel, raw materials, auxiliary materials, transport and other services. In this case, resource suppliers are not the owners of this company. Since such costs are reflected in the balance sheet and the report of the firm, they are essentially accounting costs.
• Internal costs (implicit)- These are the costs of your own and independently used resource. The firm considers them as the equivalent of those cash payments that would be obtained for their own resource used in its most optimal application.

Let us give an example. You are the owner of a small store, which is located in a premises that your property. If you had no store, you could take this room for rent, say, for $ 100 per month. This is internal costs. An example can be continued. Working in your store, you use your own work, not receiving, naturally, for him there is no payment. With an alternative use of their work, you would have a certain earnings.

The question is normal: What keeps you as the owner of this store? Some profit. The minimum fee needed to support someone's activities in this business is called normal profit. Incomprehensible income from the use of their own resources and normal profits in the amount form internal costs. So, from the standpoint of an economic approach in production costs, all costs should be taken into account - both external and internal, including in recent and normal profits.

Implicit costs cannot be identified with the so-called irretrievable costs. Permanent costs- These are the costs that are carried out by the firm once and cannot be returned under any circumstances. If, for example, the owner of the enterprise suffered certain cash to ensure that the wall of this enterprise is made an inscription with his name and acquittal of activities, then selling such an enterprise, its owner is ready to incur certain losses related to the cost of the inscription.

There are also such criteria for the classification of costs, as time intervals, during which they take place. The costs that the company carry out the specified volume of products, depend not only on the prices of the production factors used, but also from what kind of production factors are applied and in what quantity. Therefore, they allocate briefly and long-term periods in the activities of the company.

2.3.1. Costs of production in a market economy.

Production costs -these are the cash costs for the acquisition of the factors of production used. Most economically efficient method Production is considered to be such a minimization of production costs. Production costs are measured in value terms at costs.

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

Costs of circulation -costs associated with the sale of manufactured products.

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

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

Internal (implicit) costs -these are money incomes that the company sacrifice, independently using resources belonging to it, i.e. These are such income that could be obtained by the firm for independently used resources with the best possible ways to use. Alternative costs of missed opportunities - the amount of money that is necessary to distract a particular resource from the production of goods in and use it for the production of goods A.

Thus, the costs in cash, which the company fell in favor of suppliers (work, services, fuel, raw materials) is called external (explicit) costs.

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

1. Accounting approach:the production costs should include all real, actual cash costs (salary, rental, alternative costs, raw materials, fuel, depreciation, deductions for social needs).

2. Economic approach: The costs of production should include not only the actual costs in monetary form, but also unpaid costs; associated with the impression of the most optimal application of these resources.

Short-term period (SR) - Segment of time, during which some factors of production are permanent, and others - variables.

Permanent factors - the total size of buildings, structures, the number of machinery and equipment, the number of firms that work in the industry. Therefore, the possibility of free access to firms in the industry in the short-term period is limited. Variables - raw materials, number of workers.

Long-term period(LR) - Segment of time during which all production factors are variables. Those. During this period, you can resize buildings, equipment, number of firms. In this period, the company can change all production parameters.

Classification of costs

Permanent costs (FC.) - costs whose magnitude in the short term does not change with an increase or reduction of production volume, i.e. They do not depend on the volume of products.

Example: Rent a building, equipment service, payroll administration.

C - the sum of costs.

The schedule of permanent costs is a straight parallel axis Oh.

Medium permanent costs (A. F. C.) – permanent costs that fall per unit of products and is determined by the formula: AFC. = FC./ Q.

With increasing q, they decrease. This is called the distribution of overhead costs. They serve for a firm incentive to increase production.

The graph of medium permanent costs is a curve having a decreasing character, because With an increase in the volume of production, the overall revenue is growing, then the average constant costs are an increasing value that falls per unit of products.

Variable costs (VC.) - costs whose value varies depending on the increase or decrease in production volume, i.e. They depend on the volume of products.

Example: raw material costs, electricity, auxiliary materials, wages (workers). The main share of costs are associated with the use of capital.

The schedule is a curve proportional to the volume of products that have an increasing nature. But its character can change. The initial period variable costs grow higher rates than manufactured products. As the optimal production sizes are achieved (Q 1), the relative savings of the VC occurs.

Medium cost variables (AVC.) – The amount of variable costs, which comes from the unit of products. They are determined by the following formula: by dividing VC on the volume of products: AVC \u003d VC / Q. First the curve drops, then it is horizontal and increases sharply.

The schedule is a curve that starts not from the start of coordinates. The overall nature of the curve is increasing. Technologically optimal release size is achieved when AVC becomes minimal (T.Q - 1).

General costs (TC or C) -the combination of permanent and variable costs of the company, due to the production of products in the short term. They are determined by the formula: TC \u003d FC + VC

Another formula (function from the volume of production products): TC \u003d F (Q).

Wear and amortization

Wear - This is a gradual loss by capital resources of its value.

Physical deterioration - Loss of labor means of their consumer qualities, i.e. Technical and production properties.

A decrease in the value of capital bonds may not be associated with the loss of consumer qualities, then they talk about moral wear. It is due to the increase in the efficiency of the production of capital goods, i.e. The emergence of similar, but cheaper new wages performing similar functions, but more perfect.

Moral wear is a consequence of scientific and technological progress, but for the company it turns into the growth of costs. Moral wear belongs to a change in constant costs. Physical wear - to variable costs. Capital benefits serve more than one year. Their cost is transferred to finished products gradually as wear - this is called shock absorption. Part of the revenue for depreciation is formed in the depreciation fund.

Depreciation deductions:

Reflect the estimate of the value of the wear of capital resources, i.e. are one of the cost articles;

Serves as a source of reproduction of capital benefits.

The state is legally established depreciation norms. The percentage of the cost of capital benefits to which they are considered to be worn in the year. It shows how many years the cost of fixed assets should be reimbursed.

Medium total costs (PBX) -the sum of total costs that are per unit of production products:

PBX \u003d TC / Q \u003d (FC + VC) / Q \u003d (FC / Q) + (VC / Q)

The curve has a V-shaped form. The volume of production corresponding to the minimum average total costs is called a point of technological optimism.

Limit costs (MS) -the increment of total costs caused by an increase in production to the next unit of products.

Determined by the following formula: MS \u003d ΔTs / ΔQ.

It can be seen that constant costs do not affect the value of MS. And MS depends on the increment of VC associated with an increase or decrease in production volume (q).

Limit costs show how much the company will cost an increase in the volume of output per unit. They decisively affect the choice of production by production, because This is exactly the indicator to which the firm can affect.

The schedule is similar to AVC. The MC curve crosses the ATC curve at a point corresponding to the minimum value of total costs.

In the stroke period costs of the company, these are constant and variables. This follows from the fact that the company's production facilities remain unchanged and the dynamics of indicators are determined by the growth of equipment loading.

Based on this graph, you can build a new schedule. Which makes it possible to clearly present the capabilities of the company, maximizing profits and view the boundaries of the company at all.

To make a decision of the company, the highest important characteristic is the average values, the average constant costs as the production volume increases.

Therefore, the dependence of variable costs will solve the dependence of the production growth function.

At the stage of the 9th stage, the average cost variables decrease, and then begin to grow under the effect of the scales effect. At this period, it is necessary to determine the break-even point of production (TB).

TB is the level of physical sales over the estimated period of time, in which the revenue from the sale of products coincides with the costs of production.

Point A - TB, in which revenue (TR) \u003d TC

Restrictions to be respected when calculating TB

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

2. Permanent costs are the same for any production volume.

3. Cost variables change in proportion to the volume of production.

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

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

The law of descending limit return It is not absolute, but relative in nature and is valid only in the short term, when, at least one of the factors of production remains unchanged.

Law: With an increase in the use of someone's production factor with the rest of the rest, it is sooner or later such a point is achieved, starting with which the additional use of variable factors leads to a decrease in product growth.

The effect of this law implies the immutability of the state of technically and technologically production. And therefore, technical progress can change the boundaries of this law.

The long-term period is characterized by the fact that the firm is able to change all the factors used. In this period A variable character All the factors applied by production allows the company to use the most optimal options for their combination. This will affect the magnitude and dynamics of medium costs (cost per unit of products). If the company decided to increase the volume of production, but at the initial stage (PBX) will first decline, and then, when all new and new capacities are involved in production, they will start increasing.

On the schedule of long-term total costs, seven different options (1 - 7) of the PBX behavior in short-term periods are presented, since The long-term period is the sum of short-term periods.

Long-term cost curve consists of options called Growth steps.In each stage (I - III), the firm functions in the short term. The dynamics of the long-term cost curve can be explained by scale effect. Changes in the company's parameters of its activities, i.e. The transition from one version of the size of the enterprise to another was called change on production.

I - at this time interval, long-term costs are reduced with an increase in the volume of products, i.e. There is a savings from the growth of scale - the positive effect of scale (from 0 to Q 1).

II - (this is from Q 1 to Q 2), at this time interval of production, long-term PBX does not seem to be reacting to an increase in the volume of production, i.e. It remains unchanged. And the firm will have a constant effect from changes to the scale of production (constant return on scale growth).

III - long-term PBX with an increase in the volume of production grow and there is damage to the growth of production or negative scale effect (from Q 2 to Q 3).

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

SP \u003d T.R. -The

Tr (cumulative revenue) - the amount of monetary revenues by the company from the sale of a certain number of goods:

Tr = P.* Q.

AR (Medium revenue) is the amount of money revenues that fall per unit of products sold.

The average revenue is equal to the market price:

AR = Tr/ Q. = PQ./ Q. = P.

Mr. (Limit revenue) is the increment of revenue, which occurs due to the sale of another unit of products. In the condition of perfect competition, it is equal to the market price:

Mr. = ∆ Tr/∆ Q. = ∆(PQ.) /∆ Q. =∆ P.

In connection with the classification of costs of external (explicit) and internal (implicit), various concepts of profits are assumed.

Explicit costs (external) Determined by the amount of the expenses of the enterprise to pay for the purchased factors of production by the part.

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

If the cumulative revenue of deducting external costs, we get accounting Profit - Considers external costs, but does not take into account internal.

If the accounting profit is deducted internal costs, we will get economic profit.

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

Normal profits It appears in the case when the general revenue of the enterprise or firm is equal to the total costs calculated as alternative. The minimum level of profitability is when the entrepreneur is profitable to conduct business. "0" - zero economic profit.

Economic profit(Pure) - Its presence means that at this enterprise, resources are used more efficiently.

Accounting profitexceeds the economic for 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 transition to other areas of use.

The objectives of the company - the maximization of profits, which represents the difference between the cumulative income and cumulative costs. Since both costs and income are a function of production, then for the company the main problem becomes the definition of the optimal (best) production volume. The company will maximize profits at the exhaust volume, in which the difference between the total income and total costs is the highest, or at a volume in which the income tax is equal. If the losses of the company are less than its constant costs, then the firm should continue to work (in the short term), if the losses are more permanent costs, the company should stop production.

Previous

Any business implies costs. If they are not, then there is no product supplied to the market. To make something, you need to spend on something. Of course, the smaller the costs, the more cost-effective business.

However, following this simple rule requires an entrepreneur to take into account a large number of nuances reflecting the diversity of factors affecting the success of the company. What are the most notable aspects that reveal the essence and varieties of production costs? What does business efficiency depend on?

A bit of theory

Production costs, according to the common interpretation in the Russian economists, are the costs of an enterprise related to the acquisition of the so-called "production factors" (resources without which the goods cannot be released). What they are lower, the economically cost-effective business.

The costs of production are measured, as a rule, correlate with the total volume of the cost of the enterprise. In particular, the individual spending class can go those related to the sale of released products. However, it all depends on the methodology used in the cost classification. What options can be here? Among the most common in the Russian marketing school of their two: the "accounting" methodology, and the one, which is called "economic".

According to the first approach, production costs is a common set of all the actual costs associated with business (the purchase of raw materials, rental of premises, payment of utilities, compensation for the labor of personnel, etc.). The "economic" methodology implies the inclusion of also those costs whose value is directly related to the company's affected profit.

In accordance with the popular theories that Russian marketers adhere to, production costs are divided into permanent and variables. Those belong to the first type, as a rule, do not change (if we talk about short-term time periods), depending on the growth or reduction of the rate of production.

Costs permanent type

Permanent production costs are, most often, such expense articles such as rental of premises, remuneration of administrative personnel (managers, managers), obligations to pay some 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 products.

As a rule, enterprises are calculated by the average production costs of those belong to constant. They are calculated, based on the volume of cost per unit of goods produced. Usually as the volume of production of goods "schedule" of average costs is descended. That is, as a rule, the larger the productivity of the factory, the cheaper the unit product.

Variable costs

The costs of the production of an enterprise related to variables, in turn, are very susceptible to changes in the volume of production. These include the cost of purchasing raw materials, payment of electricity, labor compensation for personnel at the level of specialists. It is clear: more material is required, energy is spent, new frames are needed. The graph that displays the dynamics of variable costs is usually non-permanent. If the company is just beginning to release something, then these costs usually grow active in comparison with the rate of increasing production.

But as soon as the factory comes to sufficiently intensive speeds, then variable costs are usually growing so actively. As in the case of constant costs, the average cost is often calculated in the second type of costs - again, correlate with the release of a unit of products. The aggregate of constant and variable costs is the total costs of production. Usually they simply mathematically add up when analyzing the company's economic indicators.

Costs and depreciation

Such a phenomenon as depreciation and the term "wear" term and closely associated with it are directly related to production costs. Through what mechanisms?

First we define what wear is. This, according to the interpretation common in the Russian economists, reducing the value of production resources into force. Wearing can be physical (when, for example, the machine or other equipment simply fails or cannot withstand the previous rate of production of goods), or moral (if the means of production used by the enterprise, say, is greatly inferior on the efficiency of what is used in competing factories ).

A number of modern economists converge that moral wear is the constant costs of production. Physical - variables. The costs associated with maintaining the volume of production of goods under the condition of equipment wear, form the most depreciation deductions.

As a rule, this is due to the purchase of new techniques or investments in the repair of the current. Sometimes - with a change in technological processes (for example, if the bicycle factory fails, the machine producing spokes for the wheels, then their release can be treated temporarily or on an indefinite-based basis on "outsourcing", which, as a rule, increases the cost of release of finished products).

Thus, timely modernization and purchase of high-quality equipment is a factor, which is largely affecting a decrease in production costs. A newer and modern technique in many cases implies smaller depreciation costs. Sometimes personnel qualifications are also affected on the costs associated with equipment wear.

As a rule, more experienced masters treat equipment more careful than newcomers, and therefore it may make sense to spend money on an invitation of expensive having a high qualifications of specialists (or invest in teaching young). These costs may be lower than investments in the depreciation of equipment that has fallen under the intensive operation of inexperienced newcomers.