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 that affect 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 total population all actual expenses associated with the business (purchase of raw materials, rent of premises, payment 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. They usually just add up mathematically when analyzed. economic indicators companies.

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.

This is usually associated with the purchase new technology 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.

There are many classifications of firm costs. It is important for us to divide the costs into external (explicit or accounting) and internal (implicit).

Explicit (accounting) costs– payments to resource providers external to the firm. These are the salaries of the company's employees, depreciation deductions for capital equipment (later we will consider this concept in more detail), interest on loans, the cost of raw materials and materials, rent of premises and offices.

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

For an enterprise (company) economic costs- these are the payments that the company must make to suppliers of the necessary resources (labor, material, energy, etc.) in order to divert these resources from use in other industries. These payments are divided into internal and external, and various approaches are used in their calculation.

Implicit (opportunity) costs- this is opportunity cost resources owned by the entrepreneur. The resources of an entrepreneur can be: labor, land, capital, entrepreneurial ability. Therefore, implicit costs usually include:

Lost wages (entrepreneur could have gone to work instead of starting a business)

Lost interest (the entrepreneur could not invest money in the start-up of production, but place it on a deposit in a bank)

Lost rent (entrepreneur could rent out his land, premises and offices, rather than doing business in them)

Normal profit (these are the implicit costs of such a resource as entrepreneurial ability. The entrepreneur could be engaged in another activity, and not this one. The profit from the best unchosen opportunity is the normal profit)

Explicit costs are usually visible, while implicit costs are hidden.. Depending on whether implicit costs are taken into account or not, there are accounting and economic approaches to determining costs.

Accounting costs = explicit costs.

TC boo =TC explicit

The accounting approach considers only external costs. The accountant is not interested in alternative uses of resources owned by the entrepreneur. Economic costs = explicit costs + implicit costs.

TC eq =TC explicit +TC implicit

The economic approach differs from the accounting one in that it takes into account the alternative possibilities of using the resources owned by the entrepreneur. As we can see, the most important economic concept - opportunity costs, finds a place in the theory of production.

Thus, economic costs exceed accounting costs by the amount of implicit costs, including normal profit. In general profit is defined as the difference between total revenue (total income) and total costs:

where TR - total revenue;

TC - total costs;

π - profit.

Accounting Profit = Total Revenue - External Costs

Economic Profit = Accounting Profit - Internal Costs.External costs These are the costs paid for resources that do not belong to the owner of the firm. Such expenses include expenses for the purchase of raw materials, materials, energy, wage hired workers (payment of labor resources).

Internal costs reflect the firm's unpaid expenses for the use of its own entrepreneurial resources. Their value is equal to the cash payments that can be received for the use of these resources in the best case.

For example, an entrepreneur uses his own office space. By renting this premises to another company, the entrepreneur could receive income equal to the rent. Therefore, in order not to lose this income, the entrepreneur includes it in internal costs, and hence in the price. By selling the products, the entrepreneur will reimburse himself for the cost of renting his own premises.

Often in private enterprises, entrepreneurs do not pay themselves wages, since they are not employees. They receive gross income (revenue) from the sale of their works or services. In this case, the entrepreneur will include as internal costs in the production costs the income that he would receive by working as an employee in another firm.

When making economic decisions, economic costs are taken into account. Here and in following topics, as well as in all tasks and tests, economic costs will be understood as costs (unless it is specifically indicated that you need to look for accounting costs)

Accounting and economic profit

The general formula for profit is simple: it is the difference between the firm's revenue and the firm's costs. economic profit (English economic profit) - this is profit, remaining at enterprises after subtracting all costs, including opportunity cost of distribution capital owner. Not to be confused with the term Net profit. In the case of a negative value of economic profit, the option of leaving the enterprise with market.

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

This approach to profit makes it possible to assess the possibility of the existence of the enterprise (whether the revenue covers not only external, accounting, but also internal costs, including normal profit). The excess of cash receipts of the sum of economic costs means that the enterprise has a net profit, its existence is justified, it can develop successfully.

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

Normal profit is the minimum wage required to keep an entrepreneur in the area.

Normal profit is the income that the owners of the enterprise give up in favor of the use of resources in their enterprise, but which they could receive by investing their resources in other areas of activity outside the enterprise. So, internal costs also include normal profit, which is necessary in order to attract and retain resources within the limits of a given production.

For the owner of the company, all costs - explicit and implicit - are alternative, as there are alternative options for using the funds invested by him in the company.

Explicit costs are the expenses of the enterprise aimed at acquiring the necessary production resources. Accounting costs include only explicit costs. Economic (opportunity) costs cover explicit and implicit costs. In other words, economic costs are payments to all owners of economic resources sufficient to divert those resources away from alternative uses.

Economic costs = accounting costs + implicit costs.

Focusing on economic costs, the owner of the company decides on the expediency of the company's activities in this area. In what follows, under the total costs of the firm, we will understand only economic costs. It is on them, and not on accounting costs, that the company should be guided by, calculating its production volumes, and hence the proposals. Accordingly, the profit of the company will be the excess of its income over economic (alternative) costs.

Each company maintains documentation and calculates its profit differently. Some resort to old methods, while others use new technology, such as apple laptops, and software to keep statistics of your company.

As we found out, accounting and economic costs differ from each other. Therefore, accounting profit and economic profit do not match.

At the beginning of any course economic theory great attention is paid to the study of costs. This is due to the high importance of this element of the enterprise. In the long run, all resources are variable. In the short run, part of the resources remains unchanged, and part changes to reduce or increase output.

In this regard, it is customary to distinguish two types of costs: fixed and variable. Their sum is called total costs and is most often used in various calculations.

fixed costs

They are independent of the final release. That is, no matter what the company does, no matter how many customers it has, these costs will always have same value. On the chart, they are in the form of a straight horizontal line and are designated FC (from English Fixed Cost).

Fixed costs include:

Insurance payments;
- salaries of management personnel;
- depreciation deductions;
- payment of interest on bank loans;
- payment of interest on bonds;
- rent etc.

variable costs

They directly depend on the amount of products produced. It is not a fact that the maximum use of resources will allow the company to get the maximum profit, so the issue of studying variable costs is always relevant. On the chart, they are depicted as a curved line and are denoted by VC (from the English Variable Cost).

Variable costs include:

Raw material costs;
- the cost of materials;
- electricity costs;
- fare;
- etc.

Other types of costs

Explicit (accounting) costs are all costs associated with the purchase of resources that are not owned by a particular firm. For example, labor, fuel, materials, etc. Implicit costs is the cost of all the resources that are used in production and that the firm already owns. An example is the salary of an entrepreneur, which he could receive by working for hire.

There are also return costs. Recoverable costs are costs whose value can be recovered in the course of the company's activities. The company cannot receive irrevocable even if it completely ceases its activities. For example, the costs associated with registering a company. In a narrower sense, sunk costs are costs that have no opportunity cost. For example, a machine that was custom-made specifically for this company.

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High production costs in Norway and additional expenses distance mentioned above also encourage SMEs to charge as high prices as possible.

Other an important factor possible failures of the enterprise are high production costs. It consists in reducing all unproductive and unproductive costs. Ways to reduce them are also well known to practitioners and studied in the literature, although for each enterprise these ways will be special.

However, the problem of using these energy sources is still limited by the high costs of GTL production and landscape reclamation in the course of developing these resources. As for the first, in 1978 prices they amounted to 22-66 dollars for bituminous sands. It is clear that so far these costs are much higher than the costs of oil production even in the North Sea and northern Alaska, not to mention other areas. In addition, the initial investment in the production of GTL from these energy sources is incredibly high. For tar sands, they are $260 - $550.

Concerning concern corporate organizations with regard to excessive risk, high production costs and overexertion, the best move on the part of management would be openness and involvement of staff. Internationalization is a complex process and difficult to study, especially for those people whose daily activities are related to the internal market. Before discussions begin, balanced information and even training may be required. And only after that, the opinion of the leadership can be submitted for general discussion. As a result of this, all hidden causes of anxiety will be identified and, if possible, eliminated. Workers directly involved in internationalization, including workers' and employees' representatives, should take part in the preparatory work. And as this process progresses, the organization must be informed of everything that is not a secret. Well, what if there is still active resistance at the time of the final decision. In such a case, management may be forced to rely on their own judgment and force them to proceed with internationalization.

Two enterprises - Randfontein Estates and East Champ d'Or - had the highest production costs in the country: at the first of them, 1 kg of uranium oxide cost $ 11 8. The plant, owned by Randfontein Estates, processed ore containing 0,054% uranium oxide, and received 839 tons of uranium concentrate, the East Champ d Or plant received ore with a content of 0 050% uranium oxide and made 52 tons of uranium concentrate from it.

To do this, first of all, one must learn to scrupulously count money, because one of the main problems of investment activity is high production costs that prevent products from entering the market and overcoming competitors. To do this, it is necessary to fundamentally change the account, more and more adapting to Western standards.

Products of the textile industry, petrochemical, pulp and paper, aluminum, plywood production, aircraft industry are oriented almost entirely to the needs of the domestic market. They are uncompetitive on the world market due to high production costs, in which the prevailing items are the cost of imported raw materials and low-skilled labor. In these industries, the technological level of production is low, there is no advanced technology and product differentiation is extremely difficult. In the global market, Japanese firms usually use the tactic of gradual, patient expansion. market share and creating a long-term technological advantage. However, in addition to achieving high efficiency production oriented production High Quality, Japanese firms strictly adhere to the principle that the characteristics of the product (shape, color, material, reliability) should strictly reflect the consumer utility of the product as a whole. Japanese firms attach great importance to design as a means of meeting the comprehensive, and mainly aesthetic, needs of the buyer.

Products of the textile industry, petrochemical, pulp and paper, aluminum, plywood production, aircraft industry are oriented almost entirely to the needs of the domestic market. They are uncompetitive on the world market due to high production costs, in which the prevailing items are the cost of imported raw materials and low-skilled labor. In these industries, the technological level of production is low, there is no advanced technology, and product differentiation is extremely difficult. In the global marketplace, Japanese firms typically use the tactic of incremental, patient expansion of market share and the creation of a long-term technological advantage. At the same time, in addition to achieving high production efficiency, focused on the production of high quality products, Japanese firms strictly adhere to the principle that the characteristics of the product (shape, color, material, reliability) must strictly reflect the consumer utility of the product as a whole. Japanese firms attach great importance to design as a means of meeting the comprehensive, and mainly aesthetic, needs of the buyer.

President of Westinghouse Electric Company Mark Cresap noted: The results of 1958 should please us all. They are the result of a business organization that helped to overcome difficulties and successfully deal with the problem of high production costs and overheads that arose in 1958.

There are statements in the Japanese press that fast growth oil production and natural gas in other capitalist countries led to a slowdown in the development of nuclear energy in these countries. As for Japan, the need for the development of nuclear energy in this country is increasing due to the limited resources of solid, liquid and gaseous fossil fuels, the high costs of generating electricity at thermal power plants and hydroelectric power plants compared to a number of other countries; all this increases the competitiveness of electricity generated at nuclear power plants.

Serious problems in the oil refining industry are clearly formulated in the Greeting of the President of the Republic of Bashkortostan M. G. Rakhimov to the participants of the III Congress of Oil and Gas Industrialists of Russia. The most characteristic of them in relation to the conditions of Bashkortostan are underutilization of capacities and insufficient depth of refining, incomplete loading of oil refineries increase the already high production costs, reduce the competitiveness of products, and hinder the renewal and development of the industry. The low yield of the most valuable oil products also reduces the efficiency of oil refiners and leads to the import of products, often made from Russian oil.

The technological superiority of the United States was too great. Despite high production costs associated with US wage levels, American industry remained more competitive.

So, for the first pilot batch of 100 machines of new models combine harvester Don-1500 set the wholesale price of 27 thousand rubles, which is 25 times higher than the level of economically justified production costs of these combines, calculated in relation to the combines of the SK-5M Niva model. As a result, the high production costs of new harvesters will be covered by the established wholesale price. Prices and efficiency / Economic newspaper.

Switzerland does not have its own coal, oil and metal. Swiss industrialists, in an effort to compensate for the high costs of production, exploited their workers especially cruelly: the working hours here were long, and wages were lower than in England or France.

The process of emergence and receipt of average profit in the non-monopolized sphere of the economy is more obvious. Here the market prices of goods fluctuate, as a rule, around the price of production. Many capitalists who are not part of the monopoly, because of the high costs of production, cannot withstand competition and go bankrupt. But the profits of those capitalists who withstand competition tends to average profit. Therefore, in order to have a real idea of ​​the size of the average profit in the entire economy of some imperialist country, it is necessary to study the sectoral rates of profit over a number of years in its non-monotalized sector.

3. Medium and marginal cost production

For entrepreneurs, it is important to measure the average cost of production.

Aggregate, or gross average costs -АТС - (average total costs) - gross costs per unit of output:

Similarly calculated average constants (AFC) and average variable (AVC) costs:

AFC=FC/Q; AVC=VC/Q; ATC=AFC+AVC

Figure 23. Graphs of curves of average gross, average variable and average fixed costs.

Average fixed costs (AFC) decrease as the supply of products increases, since with an increase in production per unit of output, their value will fall. The average fixed cost curve is a hyperbole.

Average variable costs, initially quite high, begin to decline with an increase in production volumes and reach their minimum at a certain volume, starting from which they grow due to the law of diminishing returns. Therefore, the average variable cost curve is a U-shaped line.

The average gross costs depend on the average constants and variables. Initially, they, representing the sum of two decreasing functions, also decrease, but, starting from a certain volume (greater than the one at which the minimum of average variable costs is reached), the decrease in average fixed costs begins to overlap with an increase in average variable costs, that is, the total average costs also are starting to increase. The average gross cost curve is a U-shaped line above the average variable cost curve.

To make decisions about optimal volume used category marginal costs.

Marginal cost MC Marginal costs are the additional costs required to produce an additional unit of output.

Figure 24. Graph of marginal cost curves

The marginal cost curve, like the two average cost curves described above, is U-shaped. When reading the chart, pay attention to the following:

marginal cost is less than average cost as long as the latter decrease;

marginal costs are greater than average costs as soon as the latter begin to rise;

marginal costs are equal to the average at the volumes of production that provide a minimum of the corresponding average costs.

4. Entrepreneurial capital.

Entrepreneurial capital.

Capital, various interpretations, essences and forms.

Both in everyday life and in economic theory, the concept

"capital" is ambiguous.

various methodological approaches

different contexts

Exploring capital, K. Marx differentiated such concepts as:

constant capital - the means of production; that is, means and objects of labor;

variable capital - funds used to attract labor;

money - money capital;

goods - commodity capital.

According to Marx, essence of capital determined by the following key points:

capital is not a thing, but certain public attitude, the relation between the owner of the means of production and the wage-workers (in a single case) or (in a broader sense) the relation between capitalists and wage-workers;

capital is in constant movement only then money or

material objects are converted into capital;

capital is self-increasing cost that is, money that brings in additional money.

Most economists consider capital as an economic resource(factor of production), meanwhile, they mean, first of all, its natural form, the so-called physical capital. It is understood as: machine tools, machines, buildings, structures, stocks of materials and raw materials, semi-finished products, etc.

In financial markets under capital understand money capital, that is, money that earns interest in the form of interest.

For the implementation of entrepreneurial activity, it is necessary to invest capital. So to start a business you need

start-up capital, which is the sum of the initially invested physical and monetary capital and the current costs at the initial stage of production.

Sources starting capital and entrepreneurial capital in the general case can be own and borrowed funds.

Own funds are authorized capital, profit from core activities, profit from financial transactions, depreciation fund, customer debt for shipped goods, proceeds from the sale of retired property, etc.

Authorized capital- this is the initial amount of capital of firms, provided for by the charter or agreement on their foundation.

Borrowed funds are loans and advances.

Any national economic system includes a set of, on the one hand, isolated, on the other hand, interconnected firms that carry out individual reproduction.

Individual reproduction- this is a continuously repeating process of productive connection of economic resources in order to create goods and services and generate income.

The basis of individual reproduction is the circulation of capital.

Circulation of capital is a successive change of its capital functional forms: monetary, productive and commodity.

The circulation of capital can be described by the following formula:

RS

D-T............P...........T"-D"

1st stage 2nd stage 3rd stage

Each stage of the circuit performs a specific function.

At stage 1, they form production conditions.

At stage 2, production goods and services.

At stage 3 there is implementation goods and services and making a profit.

In one circuit, as a rule, not the entire value of the invested capital is returned. In this regard, the concept of capital turnover is introduced.

The turnover of capital is a set of circuits continuously replacing each other, for which all the advanced capital is returned to the entrepreneur in the form of money.

The turnover of various elements of capital takes place over different time periods. For this reason, capital is divided into fixed

and revolving.

Working capital - this is a part of the economic assets of the enterprise, the value of which is transferred to the finished product in one production cycle (circulation). Working capital is

raw materials, materials and costs for labor force. The costs of these elements of capital are repaid in one production cycle.

Basic capital is buildings, structures, etc. price

fixed capital is transferred to the finished product piecemeal, over several cycles of capital (fixed capital is only consumed in a certain part in one production cycle).

The concepts of fixed and working capital given above reflect the understanding of these categories in the domestic economy. They are also used in foreign economic theory and practice, but their interpretation is somewhat different from ours. This is due to the peculiarities of financial statements adopted in various countries.

So, in the book "The Economics of the Firm" by the Danish authors Worst and Reventlow, it is indicated: "The fixed capital - These are assets that are expected to be used by the enterprise over an extended period of time. .. Working capital is called those assets that, during normal economic activity, change their forms in a relatively short term(less than 1 year)...

main capital;

intangible assets;

tangible assets;

financial assets;

working capital;

inventory;

accounts receivable;

securities and other short-term financial investments; cash" 22 .

The process of transferring the value of fixed capital as it wears out during its service life to the finished product is called depreciation.

Depreciation is related to the depreciation of fixed capital. Distinguish between physical and moral depreciation.

Physical deterioration- this is the process by which the fixed capital becomes physically unusable for its further use. Physical deterioration means destruction, breakage, etc. phenomena. It occurs both as a result of the productive use of fixed capital, and during its downtime.

Moral wear - it is a process of depreciation of fixed capital due to obsolescence. Obsolescence can occur for two main reasons:

due to the creation of similar, but cheaper means of labor;

by producing more productive means of labor at the same price.

The cost of depreciation of fixed capital, which is reimbursed in installments, is accumulated in depreciation fund. Depreciation deductions are intended for the repair or replacement of worn-out means of work.

Under the conditions of modern high-tech production, it is extremely important to neutralize the obsolescence factor. In this regard, in economically developed countries, a policy of so-called accelerated depreciation is applied.

Before introducing the concept of accelerated depreciation, we point out that depreciation rate - is the ratio of annual depreciation to the cost of fixed capital.

Example: To the main \u003d 1 million rubles, A \u003d 200 thousand rubles.

A’=------´100=20%

accelerated depreciation - this is an increase in depreciation rates and an accelerated transfer of the cost of labor instruments to produced goods and services in order to quickly update the production apparatus and neutralize the obsolescence factor.

Accelerated depreciation is one of the most important means of state regulation of the economy. Read more about accelerated depreciation in the textbook "Economics" ed. Bulatova A.S.. M.: VEK, 1996. S.274-277

In conclusion, consider the most important indicators of the use of fixed and working capital.

A general indicator of the use of fixed capital is the return on assets (RO):

FD = ------ ,where

P - product cost;

To the main - cost of fixed production assets (fixed capital).

A growing return on capital is desirable both for an individual entrepreneurial firm and for the national economy as a whole.

The use of working capital reflects the indicator of material intensity (ME):

ME= ------- , where

K about. - the cost of circulating production assets (working capital).

Desirable both for an individual entrepreneurial firm and for the national economy as a whole is decreasing material consumption.