What are the company's costs? Production costs and their types briefly. Fixed costs of the company

It is impossible for companies to carry out any activity without investing costs in the process of making a profit.

However, there are costs different types. Some operations during the operation of the enterprise require constant investments.

But there are also costs that are not fixed costs, i.e. refer to variables. How do they affect the production and sale of finished products?

The concept of fixed and variable costs and their differences

The main goal of the enterprise is the manufacture and sale of manufactured products to make a profit.

To produce products or provide services, you must first purchase materials, tools, machines, hire people, etc. This requires the investment of various amounts of money, which are called “costs” in economics.

Since monetary investment in production processes There are many different types, they are classified depending on the purpose of using the expenses.

In economics costs are shared according to the following properties:

Explicit is a type of direct cash costs for making payments, commission payments to trading companies, payment for banking services, transportation costs, etc.;
Implicit, which includes the cost of using the resources of the organization's owners, not provided for by contractual obligations for explicit payment.
Fixed investments are investments to ensure stable costs during the production process.
Variables are special costs that can be easily adjusted without affecting operations depending on changes in production volumes.
Irreversible - a special option for spending movable assets invested in production without return. These types of expenses occur at the beginning of the release of new products or reorientation of the enterprise. Once spent, funds can no longer be used to invest in other business processes.
Average are estimated costs that determine the amount of capital investment per unit of output. Based on this value, the unit price of the product is formed.
Marginal costs are the maximum amount of costs that cannot be increased due to the ineffectiveness of further investments in production.
Returns are the costs of delivering products to the buyer.

Of this list of costs, the most important are their fixed and variable types. Let's take a closer look at what they consist of.

Kinds

What should be classified as fixed and variable costs? There are some principles by which they differ from each other.

In economics characterize them as follows:

Fixed costs include the costs that need to be invested in the manufacture of products within one production cycle. For each enterprise they are individual, therefore they are taken into account by the organization independently based on an analysis of production processes. It should be noted that these costs will be characteristic and the same in each of the cycles during the manufacture of goods from the beginning to the sale of products.
variable costs that can change in each production cycle and are almost never repeated.

Fixed and variable costs make up the total costs, summed up after the end of one production cycle.

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What applies to them

The main characteristic of fixed costs is that they do not actually change over a period of time.

In this case, for an enterprise that decides to increase or decrease its output, such costs will remain unchanged.

Among them can be attributed the following cash costs:

communal payments;
building maintenance costs;
rent;
employee earnings, etc.

In this situation, you always need to understand that the constant amount of total costs invested in a certain period of time to produce products in one cycle will only be for the entire number of products produced. When calculating such costs individually, their value will decrease in direct proportion to the increase in production volumes. For all types of production this pattern is an established fact.

Variable costs depend on changes in the quantity or volume of products produced.

To them include the following expenses:

energy costs;
raw materials;
piecework wages.

These monetary investments are directly related to production volumes, and therefore change depending on the planned parameters of production.

Examples

In each production cycle there are cost amounts that do not change under any circumstances. But there are also costs that depend on production factors. Depending on such characteristics, economic costs for a certain, short period of time are called constant or variable.

For long-term planning, such characteristics are not relevant, because sooner or later all costs tend to change.

Fixed costs are costs that do not depend in the short term on how much the company produces. It is worth noting that they represent the costs of its constant factors of production, independent of the number of goods produced.

Depending on the type of production into fixed costs consumables include:

Any costs that are not related to production and are the same in the short term of the production cycle can be included in fixed costs. According to this definition, it can be stated that variable costs are those expenses invested directly in product output. Their value always depends on the volume of products or services produced.

Direct investment of assets depends on the planned quantity of production.

Based on this characteristic, to variable costs The following costs include:

raw material reserves;
payment of remuneration for the labor of workers involved in the manufacture of products;
delivery of raw materials and products;
energy resources;
tools and materials;
other direct costs of producing products or providing services.

The graphical representation of variable costs displays a wavy line that smoothly rises upward. Moreover, with an increase in production volumes, it first rises in proportion to the increase in the number of products produced, until it reaches point “A”.

Then cost savings occur during mass production, and therefore the line rushes upward at no less speed (section “A-B”). After the violation of the optimal expenditure of funds in variable costs after point “B”, the line again takes a more vertical position.
The growth of variable costs can be affected by the irrational use of funds for transport needs or excessive accumulation of raw materials and volumes of finished products during a decrease in consumer demand.

Calculation procedure

Let's give an example of calculating fixed and variable costs. The production is engaged in the manufacture of shoes. The annual production volume is 2000 pairs of boots.

The enterprise has the following types of expenses per calendar year:

Payment for renting the premises in the amount of 25,000 rubles.
Interest payment 11,000 rubles. for a loan.

Production costs goods:

for labor costs for the production of 1 pair 20 rubles.
for raw materials and materials 12 rubles.

It is necessary to determine the size of total, fixed and variable costs, as well as how much money is spent on making 1 pair of shoes.

As we can see from the example, only rent and interest on the loan can be considered fixed or fixed costs.

Due to fixed costs do not change their value when production volumes change, then they will amount to the following amount:

25000+11000=36000 rubles.

The cost of making 1 pair of shoes is considered a variable cost. For 1 pair of shoes total costs amount to the following:

20+12= 32 rubles.

Per year with the release of 2000 pairs variable costs in total are:

32x2000=64000 rubles.

Total costs are calculated as the sum of fixed and variable costs:

36000+64000=100000 rubles.

Let's define average of total costs, which the company spends on sewing one pair of boots:

100000/2000=50 rubles.

Cost analysis and planning

Each enterprise must calculate, analyze and plan costs for production activities.

Analyzing the amount of expenses, options for saving funds invested in production are considered for the purpose of their rational use. This allows the company to reduce production and, accordingly, set a cheaper price for finished products. Such actions, in turn, allow the company to successfully compete in the market and ensure constant growth.

Any enterprise should strive to save production costs and optimize all processes. The success of the development of the enterprise depends on this. Thanks to the reduction in costs, the company's income increases significantly, which makes it possible to successfully invest money in the development of production.

Costs are planned taking into account calculations of previous periods. Depending on the volume of products produced, an increase or decrease in variable costs for the manufacture of products is planned.

Display in the balance sheet

IN financial statements All information about the costs of the enterprise is entered into (Form No. 2).

Preliminary calculations during the preparation of indicators for entry can be divided into direct and indirect costs. If these values are shown separately, then we can assume that indirect costs will be indicators of fixed costs, and direct costs will be variable, respectively.

It is worth considering that the balance sheet does not contain data on costs, since it reflects only assets and liabilities, and not expenses and income.

To learn what fixed and variable costs are and what applies to them, see the following video:

Fixed and variable costs are the costs that a company incurs to produce goods, work or services. Their planning allows for more efficient use of available resources, as well as forecasting activities for the future.

Download and use it:

Fixed costs remain unchanged if the organization reduces production volume. In this case, the share of fixed costs per unit of production will increase. And vice versa - with an increase in production volumes, the share of fixed costs per unit of production will decrease. This indicator is average fixed costs (AFC).

Graphically, fixed costs can be represented as a straight line, since they remain unchanged with any changes in production (Fig. 1). Cm. .

Picture 1. Direct Cost Schedule

Variable costs

Variable costs depend on increases or decreases in production volumes. If an organization increases the number of products produced, the costs of materials and resources required for this increase accordingly.

Examples of variable costs:

Wages of workers with a piece-rate wage system.
Costs of raw materials and materials.
Transportation costs for delivering products to the consumer.
Electricity costs, etc.

More on the topic:

How it will help: Find out which expenses should be cut. It will tell you how to audit business processes and inventory costs, and how to motivate employees to save.

How it will help: prepare a report in Excel on the expenses of a group of companies in the required detail - by business units, areas, items and periods

Variable costs change depending on changes in production volumes. With an increase in the number of products produced, variable costs will increase and, conversely, with a decrease in the number of products produced, they will decrease. Cm. .

The variable costs schedule looks like this - Fig. 2.

Figure 2. Variable cost schedule

At the initial stage, the growth of variable costs is directly related to the number of products produced. Gradually, the growth of variable costs is slowing down, which is associated with cost savings in mass production.

General costs

The sum of all costs, fixed and variable, that an organization spends on the production of goods or provision of services is called total costs (TC – total costs). They depend on the number of production volumes and the cost of resources spent on production. Graphically, total costs (TC) look like this - Fig. 3.

Figure 3.Graph of fixed, variable and total costs

An example of calculating fixed and variable costs

The company OJSC "Sewing Master" is engaged in sewing and selling clothes wholesale and retail. At the beginning of the year, the organization won the tender and entered into a long-term contract for a period of 1 year - a large order for sewing workwear for medical workers in the amount of 5,000 units per year. The organization incurred the following costs during the year (see table).

Table. Company costs

Type of costs	Amount, rub.
Rent of a sewing workshop	50,000 rub. per month
Depreciation charges according to accounting data	48,000 rub. in a year
Interest on a loan for the purchase of sewing equipment and necessary materials(fabrics, threads, sewing accessories, etc.)	84,000 rub. in a year
Utility costs for electricity, water supply	18,500 rub. per month
Cost of materials for sewing workwear (fabrics, threads, buttons and other accessories)
Remuneration of workers (workshop staff amounted to 12 people) with an average salary of 30,000 rubles.	360,000 rub. per month
Remuneration of administrative personnel (3 people) with an average salary of 45,000 rubles.	135,000 rub. per month
Cost of sewing equipment

Fixed costs include:

rent for a sewing workshop;
depreciation deductions;
payment of interest on a loan for the purchase of equipment;
the cost of the sewing equipment itself;
administration salaries.

Calculation of fixed costs:

FC = 50,000 * 12 + 48,000 + 84,000 + 500,000 = 1,232,000 rubles per year.

Let's calculate average fixed costs:

Variable costs include the cost of raw materials and materials, wages for workers in the sewing workshop and payment for utility costs.

VC = 200,000 + 360,000 + 18,500 * 12 = 782,000 rubles.

Average variable costs will be:

The sum of fixed and variable costs will give total costs:

TC = 1232000 + 782000 = 20,140,00 rubles.

Average total costs are calculated using the formula:

Results

The organization has just started sewing production: it rents a workshop and purchased sewing equipment on credit. The amount of fixed costs at the initial stage is significant. The fact that production volume is still low - 5,000 units - also plays a role. Therefore, fixed costs still prevail over variable ones.

As production volumes increase, fixed costs will remain unchanged, but variable costs will increase.

Analysis and planning

Cost planning allows an organization to use existing resources rationally and more efficiently, as well as to predict its activities for the future (applies to the short-term period). Analysis is also necessary in order to determine where the most costly items of expenditure are and how savings can be made on the production of goods.

Saving on fixed and variable costs reduces the cost of production - an organization can set a lower price for its products than before, which increases the competitiveness of products in the market and increases attractiveness in the eyes of consumers (

Hello, dear readers of the blog site. If you want to learn to understand economics in order to open or expand your business (or simply for self-education), then this article will add some information to your knowledge bank.

Let's talk about costs today. Let's find out what they are, what they are, and how they are calculated.

Costs are...

In classical fiction You can often find an expression of this type: “He overspent on the trip, and therefore was forced to return home.” After reading the phrase, we understand that the person spent all or almost all the money on the trip.

Here is a simple explanation of the word “costs” - this is expenses, expenses.

In economics and accounting“cost” is a term that defines the expenses incurred in the production of any product or in the provision of any service.

A simple example: a farmer keeps quails to sell quail eggs. In the course of his activities, he buys food for birds, pays a hired worker for cleaning the poultry house, a female worker for feeding the birds, and pays for the electricity spent on heating the premises.

All these expenses are either (“self” and “cost”, i.e. real cost). Typically, costs are calculated per unit of production. In our example - by 1 quail egg. Let's say the cost of 1 egg = 1 rub.

The farmer sells his produce to the store for 3 rubles. a piece. That is, it costs 2 rubles per egg, but these are details. We have determined the main thing: costs = cost.

Conclusion: costs are the material costs of producing a unit of goods (providing a service), expressed in monetary terms.

Why do you need to calculate costs?

Everything is very simple: as we have already discussed, the selling price of the goods = the cost of the goods + the manufacturer’s profit.

Consequently: production costs are minimized → production costs are reduced (at the same selling price of the goods) → profits increase! And this is exactly what everyone involved in commercial activities strives for.

Conclusion: by calculating costs and minimizing them, you can increase profits.

How to minimize production costs?

Without going into the intricacies of economics and accounting, the algorithm is as follows:

you should break down costs into expense items, and then try to understand what and how much can be reduced.

Let's remember our example with the farmer. The cost of an egg was 1 ruble. We break down the costs incurred into individual items:

feed = 0.3 rub.;
poultry house rental = 0.1 rub.;
electricity payment = 0.1 rub.;
fuel for transportation = 0.1 rub.;
car depreciation = 0.1 rub.
wages to employees = 0.3 rub.

We analyze the costs and come to the conclusion that it is possible to minimize one of the most expensive expense items – feed. It can be purchased cheaper from other suppliers. Then we will save 0.1 rub. costs for 1 egg.

Consequently: the cost of an egg will decrease and will not be 1 ruble, but 0.9 rubles. → profit (at the same selling price) will not be 2 rubles. for 1 egg, and 2.1 rub. A farmer delivers 30 thousand eggs to the store per month, which means his profit will increase by 3,000 rubles. per month. This is some useful arithmetic.

Types of production costs - constant and variable

All production costs can be divided into 2 groups:

Fixed costs (direct). These include costs that do not depend on the volume of products produced. This:
1. the cost of renting an office and production premises;
2. salaries of managers, leading specialists and accounting departments;
3. depreciation deductions;
4. repayment of loans.
In this example with a farmer, fixed costs include the cost of renting a poultry house with utility rooms and depreciation of a car. The amount of the rent does not depend on how many birds the entrepreneur keeps (even if the poultry house is empty, the rent still needs to be paid).
Variable costs (indirect). These are the costs that the manufacturer incurs directly in the production of its products:
1. purchase of raw materials;
2. wages of workers involved in the production process;
3. payment for energy resources, water, etc.
In our example with a farmer, variable costs include the cost of purchasing feed, the salary of two workers, paying for electricity, and fuel for a car.

General (cumulative) costs of an enterprise (campaign, organization) = Fixed costs + variable costs.

Marginal cost is a measure of production efficiency.

Economic analysis is the most effective way to improve the efficiency of a company's business activities. One of the important tools for this analysis is the calculation of marginal cost (MC).

Marginal cost is the increase in the cost of producing an additional unit of output in monetary terms.

This indicator shows how much the company will pay for the production of an additional unit of goods. Manufacturing an additional unit of product does not increase fixed costs, so only variable costs per unit are used in the analysis.

What conclusions can be drawn from the value of marginal costs (MC):

if PI
if PI > variable costs per unit of production, then producing an additional unit increases total costs;
if PI = variable costs per unit of production, then the production of an additional unit has virtually no effect on the size of total costs.

In addition, marginal costs show how much marginal (additional) profit (or marginal loss) a company can receive by producing an additional unit of output.

Maximum profit as long as PI ≤ variable costs per unit of production. It can be formulated differently:

as long as the income from selling an additional unit of a product exceeds the additional costs of producing it, profits will increase.

As soon as these indicators are equal, the profit will reach the maximum possible limit.

Conclusion: Marginal cost analysis allows campaign management () to quickly make decisions about increasing or decreasing production volume in order to optimize its profitability.

Opportunity Costs as a Decision Making Method

In the process of economic activity of any campaign, situations arise when it is necessary to choose one or another option for the possible use of resources.

For example, it is necessary to determine in which of two types of activities it is optimal to invest free cash, or the farmer needs to choose what type of poultry farming to engage in.

How to solve these dilemmas? It's very simple: you need to calculate lost profits when choosing an alternative option, i.e. define alternative costs.

Using an example, it looks like this: a farmer choosing a type of poultry farming needs to calculate the amount of profit that he can lose when choosing the quail direction, and then carry out the same calculations for the chicken direction of the business.

Then you need to compare the obtained values and choose the option whose lost income is higher or whose opportunity costs are lower.

This article touches only on the main generalized points of the topic “Production Costs”. In economics, all this is calculated using special formulas and complex graphs.

Read our blog and you will know a little more than others.

Good luck to you! See you soon on the pages of the blog site

Direct and indirect costs

The presented classification of a company's costs is used when considering the issue of attributing them to a certain type of product or to a certain division (shop) of the enterprise. As a result, costs are divided into direct and indirect.

Basic and characteristic difference between direct and indirect costs is that direct costs are directly related to the production of a specific product or product, so they can easily be included in the cost.

Indirect costs are associated with the production of several types of products at the same time, so it is impossible to directly isolate that part of the costs that falls on a specific type of product.

In order to estimate the cost of one individual type of product in the general product range of an enterprise, indirect costs must be distributed among types of products using some principle. This distribution is conditional, because such a distribution cannot be made in detail due to the complexity and stochasticity of the process of formation of total costs. But in any case, this problem must be solved, since, otherwise, it will not be possible to establish the cost of the commodity item.

The table clearly shows which cost items can be classified as direct and indirect costs.

Figure 2. Cost items of direct and indirect costs of the enterprise

In order to understand how important costs are in the activities of an enterprise, let us recall one simple goal of business - profit. And costs are directly those costs through which this goal is achieved.

From the division of costs into alternative and accounting costs follows the classification of costs into explicit and implicit.

Explicit costs are determined by the amount of expenses of the enterprise to pay for external resources, i.e. resources not owned by the firm. For example, raw materials, materials, fuel, labor, etc. Implicit costs are determined by the cost internal resources, i.e. resources owned by the firm.

Implicit costs, which are part of the economic costs, should always be taken into account when making current decisions. Explicit costs are opportunity costs that take the form of cash payments to suppliers of factors of production and intermediate goods.

Explicit costs include:

workers' wages
cash costs for the purchase and rental of machines, equipment, buildings, structures
payment of transportation costs
communal payments
payment to suppliers of material resources
payment for services of banks, insurance companies

Definition 3

Implicit costs- these are the opportunity costs of using resources owned by the company itself, i.e. unpaid expenses.

Implicit costs can be represented as:

cash payments that the company could receive if it used its resources more profitably;
for the owner of capital, implicit costs are the profit that he could have received by investing his capital not in this, but in some other business (enterprise).

Any company operates to generate income, and its work is impossible without money spent. Exist different kinds such expenses. There are types of activities that require constant financial investments. But some of the costs are not regular, and their impact on the progress of the product and its sales must also be taken into account.

So, the main point of any company is to release a product and generate income from it. To start this activity, you first need to purchase raw materials, production tools, and hire labor. Certain funds are spent on this; in economics they are called costs.

People invest money in productive activities for a variety of purposes. In accordance with this, a classification of expenses was adopted. Cost categories (depending on properties):

Explicit. Such costs are incurred directly for the payment of wages to employees, commissions to other organizations, payment for the activities of banks and transport.
Implicit. Costs for the needs of company managers that are not specified in contracts.
Permanent. Means that ensure continuous production processes.
Variables. Costs that can be easily adjusted while maintaining the same level of product output.
Non-refundable. Expenses of movable assets that are invested in the company's activities free of charge. Characteristic of the initial period of production or re-profiling of an organization. These funds can no longer be spent on other organizations.
Average. Costs obtained during calculations that characterize investments in each unit of product. This indicator contributes to the pricing of the product.
Limit. This is the largest cost that cannot be increased due to the low efficiency of capital investments in the company.
Appeals. Costs of delivering goods from manufacturer to consumer.

Application of fixed and variable costs

Let's consider the differences between fixed costs and variable costs and their economic characteristics.

The first type of costs (fixed) designed for investment in the manufacture of a product in a separate production cycle. In each organization, their size is individual, so the enterprise considers them separately, taking into account the analysis of the release process. Please note that such costs will not differ from the initial production stage to the sale of products to the consumer.

Second type of costs (variables) changes in each production cycle, with virtually no repetitions of this indicator.

The two types of costs together make up the total costs, which are calculated at the end of the production process.

Simply put, fixed costs - those that remain unchanged over a certain period of time. What can be attributed to them?

Payment utilities;
Costs of operating premises;
Payment of rent;
Salaries of staff;

It must be taken into account that the constant level of total costs used in a specific time period of production, during one cycle, relates only to the total number of units produced. If such costs are calculated for each unit, their size will decrease in accordance with the increase in output. This fact applies to all types of production.

Variable costs are proportional to the changing quantity or volume of goods produced. These include:

Energy costs;
Material costs;
Negotiated wages.

This type of cost is closely related to the volume of product output, as a result of which it changes according to the production indicators of this product.

Examples of costs:

Each production cycle corresponds to a specific amount of costs that remain unchanged under any conditions. There are other costs that depend on production resources. As was previously established, costs over a short period of time can be variable or constant.

Such characteristics are not suitable for a long time, because the costs will vary in this case.

Examples of fixed costs

Fixed costs remain at the same level for any volume of product output, in a short time period. These are costs for the company's stable factors that are not proportional to the number of units of the product. Examples of such expenses are:

payment of interest on a bank loan;
depreciation expenses;
payment of interest on bonds;
salaries for managers at the enterprise;
insurance costs.

All costs independent of the production of a product, which are constant in a short period of the production cycle, can be called constant.

Variable Cost Examples

Variable costs, on the contrary, are essentially investments in the production of goods, and therefore depend on its volume. The amount of investment is directly proportional to the quantity of goods produced. Examples could include costs for:

for raw material reserves;
payment of bonuses to employees producing products;
delivery of materials and the product itself;
energetic resources;
equipment;
other expenses for the production of goods or provision of services.

Consider the variable cost graph, which is a curve. (Figure 1.)

Fig. 1 - graph of variable costs

The path of this line from the origin to point A depicts the increase in costs as the quantity of goods produced increases. Section AB: more rapid increase in costs in conditions of mass production. Variable costs may be affected by disproportionate costs for transport services or consumables, improper use of released goods with reduced demand for it.

Example of calculating production costs:

Let's consider the calculation of fixed and variable costs for specific example. Let's say a shoe company produces 2,000 pairs of boots per year. During this time, the factory spends funds on the following needs:

rent – 25,000 rub.;
interest on a bank loan - 11,000 rubles;
payment for the production of one pair of shoes - 20 rubles;
raw materials for the production of a pair of boots - 12 rubles.

Our task: to calculate variable, fixed costs, as well as the funds spent on each pair of shoes.

In this case, only rent and loan payments can be called fixed costs. Such expenses are unchangeable, depending on production volumes, so they are easy to calculate: 25,000 + 11,000 = 36,000 rubles.

The cost of producing one pair of shoes is variable costs: 20+12=32 rubles.

Consequently, annual variable costs are calculated as follows: 2000 * 32 = 64,000 rubles.

General costs– this is the sum of variables and constants: 36000+64000=100000 rubles.

The average size total expenses for one pair of shoes: 100000/20=50

Production cost planning

It is important for each company to correctly calculate, plan and analyze production costs.

In the process of cost analysis, options for the economical use of finances are considered, which are invested in production and must be distributed correctly. This leads to a reduction in production costs, and hence the final price of the manufactured product, as well as an increase in the company’s competitiveness and an increase in its income.

The task of each company is to save as much as possible on production and optimize this process so that the enterprise develops and becomes more successful. As a result of these measures, the profitability of the organization increases, which means there are more opportunities to invest in it.

To plan production costs, you need to take into account their sizes in previous cycles. In accordance with the volume of goods produced, a decision is made to reduce or increase production costs.

Balance Sheet and Costs

Among the accounting documentation of each company there is a “Profit and Loss Statement”. All information about expenses is recorded there.

A little more about this document. This report does not characterize the property status of the enterprise in general, but provides information about its activities for the selected time period. In accordance with OKUD, the profit and loss statement has form 2. In it, income and expense indicators are recorded progressively from the beginning to the end of the year. The report includes a table in which line 020 displays the organization's main expenses, line 029 shows the difference between profit and costs, line 040 shows expenses included in account 26. The latter represent travel costs, payment for premises and labor protection, and employee benefits. Line 070 shows the company's interest on loan obligations.

The initial calculation results (when reporting) are divided into direct and indirect costs. If we consider these indicators separately, then direct costs can be considered fixed costs, and indirect costs - variable.

The balance sheet does not record costs directly; it only shows the assets and financial liabilities of the business.

Accounting costs (otherwise known as explicit costs)- This is payment in monetary terms for any transactions. They have a close relationship with the economic costs and income of the company. Let's subtract explicit costs from the company's profit, and if we get zero, then the organization has used its resources in the most correct way.

Example of cost calculation

Let's consider an example of calculating accounting and economic costs and profits. The owner of a recently opened laundry planned to receive an income of 120,000 rubles a year. To do this, he will have to cover the costs:

rental of premises - 30,000 rubles;
salary for administrators - 20,000 rubles;
purchase of equipment - 60,000 rubles;
other small expenses - 15,000 rubles;

Loan payments – 30%, deposit – 25%.

The head of the enterprise purchased the equipment at his own expense. Washing machines subject to breakdown after some time. Taking this into account, you need to create a depreciation fund, into which 6,000 rubles will be transferred every year. All of the above are obvious expenses. Economic costs are the possible profit of the laundry owner if a deposit is purchased. To pay the initial expenses, he will have to use a bank loan. Loan in the amount of 45,000 rubles. will cost him 13,500 rubles.

Thus, we calculate the explicit costs: 30+2*20+6+15+13.5=104.5 thousand rubles. Implicit (deposit interest): 60*0.25=15 thousand rubles.

Accounting income: 120-104.5=15.5 thousand rubles.

Economic income: 15.5-15=0.5 thousand rubles.

Accounting and economic costs differ from each other, but they are usually considered together.

The value of production costs

Production costs form the law of economic demand: with an increase in the price of a product, the level of its market supply increases, and with a decrease, the supply also decreases, while other conditions remain the same. The essence of the law is that each manufacturer wants to offer the maximum quantity of goods at the highest price, which is the most profitable.

For the buyer, the cost of the product is a limiting factor. The high price of a product forces the consumer to buy less of it; and accordingly, cheaper products are purchased in larger volumes. The manufacturer receives a profit for the released product, so he strives to produce it in order to acquire revenue from each unit of the product, in the form of its price.

What is the main role of production costs? Let's consider it using the example of a manufacturing industrial enterprise. Over a certain period of time, production costs increase. To compensate for them, you need to raise the price of the product. The increase in costs is due to the fact that it is impossible to quickly expand the production area. The equipment is overloaded, which reduces the efficiency of the enterprise. Thus, to produce a product at the highest cost, the firm must set a higher price for it. Price and supply level are directly related.