Presentation on the topic "production costs and production costs." Fixed and variable costs Economic costs. External and internal costs. Normal profit as an element of costs
Production costs and production costs
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Lecture outline:
1. The concept of costs and production costs
2. Classification of production costs
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1. The concept of costs and production costs
Economic and production activities at any enterprise are associated with the consumption of raw materials, supplies, fuel, energy, the payment of wages, the deduction of payments for social and pension insurance of employees, the calculation of depreciation, as well as a number of other necessary costs. Through the circulation process, these costs are constantly reimbursed from the enterprise’s revenue from the sale of products (works, services), which ensures the continuity of the production process.
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Costs represent a monetary assessment of the cost of material, labor, financial, natural information and other types of resources for the production and sale of products for certain period of time .
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Based on the reproduced characteristics, enterprise costs are divided into three types:
- costs of production and sales of products that form its cost. These are current costs covered from proceeds from sales of products through the circulation of working capital;
- costs for expansion and renewal of production. As a rule, these are large one-time capital investments for new or modernized products.
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- costs for social, cultural, housing and other similar needs of the enterprise. They are not directly related to production and are financed from special funds formed mainly from distributed profits.
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Costs are a combination of various types of costs for the production and sale of products; This is the monetary expression of the costs of production factors necessary for the enterprise to carry out its production and commercial activities.
All costs are assumed to be opportunity costs, which means that the cost of any resource chosen for production is equal to its value in its best use. This is one of the most important principles of a market economy.
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2. Classification of production costs
Opportunity costs are divided into two groups:
Explicit (external, accounting)
Implicit (internal)
Explicit costs– direct payments to external (in relation to a given enterprise) suppliers of factors of production or opportunity costs, which take the form of cash payments to suppliers of factors of production and intermediate goods.
Explicit costs are fully reflected in the financial statements of the enterprise and, in accordance with current legislation, are included in the cost of production and in net (accounting) profit. Therefore, explicit costs are called accounting costs.
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On cost price products include the following types of costs:
Material
Labor costs
Rental fee
Contributions for social needs
On net profit enterprises include:
Financial assistance to employees
Costs of voluntary medical insurance, financial risk insurance
Interest on overdue loans
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Implicit costs- these are the opportunity costs of using resources that belong to the enterprise itself and are its property.
They reflect the use in production of resources belonging to the owners of the company: land, premises, their personal labor, intangible assets, etc., for which the company does not formally pay.
Implicit costs are determined by the cost of internal resources, i.e. resources owned by the firm.
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An example of an implicit cost for an entrepreneur would be the salary that he could receive as an employee. For the owner of capital property (machinery, equipment, buildings, etc.), previously incurred expenses for its acquisition cannot be attributed to the explicit costs of the present period. However, the owner incurs implicit costs, since he could sell this property and put the proceeds in the bank at interest, or rent it out to a third party and receive income.
Entrepreneurs actually bear these costs, but not explicitly, not in monetary form, which allows them to be included in economic costs.
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From the point of view of the dependence of costs on the volume of products produced, all economic costs are divided into two large groups - fixed and variable costs.
Fixed costs- these are costs that do not depend on the volume of output (costs of operating buildings, structures, equipment, administrative and management expenses, rent, payment of bank loans, social insurance contributions for managers, security pay, etc.)
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Variable costs- these are costs that change with changes in the volume of production and sales (costs of purchasing raw materials, materials, contributions to social insurance of employees, hourly wages, costs of electricity, fuel, etc.)
The sum of fixed and variable costs is total (gross) costs.
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There are:
- production costs are costs directly associated with the production of goods or services
- distribution costs - costs associated with the sale of manufactured products.
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Along with the concept of “costs”, the product cost indicator is used as an identical indicator.
Cost price products (works, services) is a valuation of the natural resources, raw materials, materials, fuel, energy, fixed assets, labor resources used in the production process of products (works, services), as well as other costs for its production and sale.
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Cost reflects the amount of current costs that are of a production, non-capital nature, ensuring the process of simple reproduction in the enterprise.
In a market economy, the cost of production is the most important indicator of the production and economic activity of an enterprise.
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In Russia, until 2002, there was a basic list of costs included in the cost of production, determined by federal law.
Based on the Tax Code of the Russian Federation and the Accounting Regulations, ministries, departments, intersectoral state associations, concerns and other organizations develop industry regulations on the composition of costs and methodological recommendations on planning, accounting and calculating the cost of products (works, services) for subordinate enterprises (firms) ).
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Based on the volume of costs taken into account (depending on the place of origin), the types of cost are:
- shop cost– includes the costs of producing products within the workshop - basic materials, taking into account the return of waste, depreciation of workshop equipment, wages of the main production workers of the workshop, social contributions, costs of maintaining and operating workshop equipment, general workshop expenses
- production cost(cost of finished products) – represents the sum of shop cost and general plant expenses (administrative and general business costs and auxiliary production costs)
- full cost(cost of sold, shipped products) – combines production cost and costs of its sale (non-production costs).
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Depending on the goals (accounting, planning, analysis) there are:
- planned cost- these are the maximum allowable costs that, given the level of technology and organization of production, are necessary for the enterprise. It is determined at the beginning of the planning period based on the planned standards for the use of the active part of fixed production assets, labor costs, consumption of material and energy resources and other planned indicators for this period.
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- estimated and project cost– used in feasibility studies of projects for the implementation of scientific and technological progress, when assessing the effectiveness of measures for the reconstruction and technical re-equipment of an enterprise, pricing, etc.
- actual cost– reflects the degree of fulfillment of planned targets to reduce costs based on a comparison of planned costs with actual ones. It is determined at the end of the reporting period based on accounting data.
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Actual costs may deviate from planned costs. Savings will be created if the use of fixed production assets, labor and material resources is improved. An excess of the actual cost over the planned one can be observed in the initial period of development of new products or when the performance of the enterprise deteriorates.
In addition, the cost of gross, marketable or sold products, the cost of comparable products, and the cost of a unit of production are also calculated.
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The cost structure is understood as the proportion of individual cost items to the total cost.
Their structure is formed under the influence of various factors: the nature of the products produced and the materials and raw materials consumed, the technical level of production, forms of its organization, location, etc.
Costs associated with production and sales are divided into:
- material costs;
- labor costs;
- contributions for social needs;
- the amount of accrued depreciation;
- other expenses.
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Material costs - the largest element of production costs, the share of which in the total costs can be 60-90%.
Material costs include fuel and energy spent on technological purposes and economic needs, purchased components and semi-finished products, costs of containers and packaging, spare parts, deductions, taxes and fees associated with the use of natural raw materials.
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Labor costs include wages of key production personnel, as well as non-staff employees related to core activities.
Remuneration includes wages calculated according to prices, tariff rates, official salaries in accordance with the remuneration systems adopted at the enterprise; the cost of products issued in the form of payment in kind, allowances and surcharges; bonuses for production results, payment for regular and additional vacations; cost of free services provided; one-time rewards for length of service.
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Contributions for social needs - mandatory deductions according to the standards established by the legislation of state social insurance, to the Social Insurance Fund of the Russian Federation, the Pension Fund of the Russian Federation, compulsory medical insurance funds from the costs of paying employees, included in the cost of products (works, services), under the element “Labor costs » (except for those types of payment for which insurance premiums are not charged).
- Depreciation of fixed assets for their complete restoration is included in the cost of production in amounts determined on the basis of the book value of funds and depreciation rates.
Part other costs includes: taxes and fees, deductions to special funds, payment of interest on loans, travel expenses, etc.
The grouping of costs by economic elements is also reflected in the cost estimate for the production and sale of products (works, services). This grouping of costs is important for the enterprise.
The estimated cost allows you to determine the total volume of various types of resources consumed by the enterprise. Based on the estimate, the sections of the enterprise’s production and financial plan are linked: for material and technical supplies, for labor, the need for working capital is determined, etc. Based on the cost estimate, the cost of marketable products is calculated.
However, based on the elements of the estimate, it is impossible to determine the cost per unit of manufactured products in the amount of the entire assortment, as well as each item, group, and type. These problems are solved by classifying costs according to costing items.
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Systematic cost reduction is the main means of increasing the profitability of a company.
The following main directions for reducing production costs in all spheres of the national economy are identified:
- the use of scientific and technical progress achievements, on the one hand, in the more complete use of production capacities, raw materials and materials, including fuel and energy resources, and on the other, the creation of new efficient machines, equipment, and new technological processes.
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- improving the organization of production and labor - this process, along with cost savings by reducing losses, in almost all cases ensures an increase in labor productivity, i.e. saving labor costs.
- state regulation of economic processes through state programs in the field of scientific and technical progress and state standards.
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1. In-production reserves for reducing production costs.
An increase in production volume at a constant cost of material and labor resources can only be achieved as a result of cost reduction. The development of a plan of organizational and technical measures for the use of internal production reserves is based on the results of an analysis of their sources and factors. The most important sources are a reduction in material costs and an increase in labor productivity.
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2. Technical and economic factors for reducing production costs
Increasing the technical level is a process of changing the technical base, the increase in the level of which is achieved as a result of:
- improving means of labor (introduction of advanced technology, increasing the share of modern equipment), objects of labor (introduction of advanced types of raw materials, materials, energy resources);
- improving the use of raw materials;
- introduction of advanced technology, mechanization and automation of production processes.
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The introduction of more productive equipment provides wage savings (living labor) while increasing depreciation charges (past labor).
Improving the organization of production and labor affects the reduction of costs as a result of specialization of production, improved organization of labor, improved organization of production management, improved logistics and sales, better use of machine operators’ time, and reduction of unnecessary costs.
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Changes in production volumes affect semi-fixed costs, which per unit of output are reduced as production volume increases (for example, a reduction in depreciation charges per unit of output as production volume increases).
Reducing costs from technical and economic factors is based on reducing current production costs per unit of production before and after the implementation of a plan of organizational and technical measures.
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Thank you
Slide 1
FIXED AND VARIABLE COSTS
Social studies 11th grade Basic level
Codifier for social studies Chapter 2. Economics. Topic 2.5
The presentation was prepared by Olga Valerievna Uleva, teacher of history and social studies, School No. 1353
Slide 2
FIRM (enterprise) is a commercial organization that acquires economic resources for the production and sale of goods and services in order to make a profit. Firms are engaged in collective (organized) entrepreneurship.
ENTERPRISE is an economic agent that owns property, produces goods and services, and has income and expenses.
COLLECTIVE (LLC, JSC)
INDIVIDUAL (IPP, PBOYUL)
Slide 3
The company is a LEGAL ENTITY. SIGNS: must have constituent documents (usually a charter), location and executive body. has separate property (limited property liability, unlike an individual entrepreneur) is liable for its obligations with this property has property rights and obligations can be a plaintiff and defendant in court (as well as an individual) has an independent balance sheet (estimate) and its own current account
ENTITY
Slide 4
COMPANY ECONOMY
THE MAIN FUNCTION OF A FIRM is to produce goods and services to meet consumer demand. FACTORS OF PRODUCTION – resources necessary for the production of goods and services:
LABOR is expedient human activity to create economic benefits. CAPITAL (investment resources) – all the benefits created by a person’s past labor and used for business. Capital also includes raw materials (oil, gas, timber, etc.). LAND – all agricultural and urban land that is used for agriculture or industrial development. INFORMATION – any information necessary for organizing and conducting production. MANAGERIAL (entrepreneurial) abilities - the ability of an employee to use his knowledge to make the best decision in the given circumstances.
Slide 5
PRODUCTION COSTS -
costs of the manufacturer (firm owner) for the acquisition and use of production factors.
In what case will the company's activities be profitable?
REVENUE FROM SALES OF PRODUCTS
COSTS OF ACQUISITION AND USE OF PRODUCTION FACTORS
REVENUE FROM SALES OF PRODUCTS
COSTS OF ACQUISITION AND USE OF PRODUCTION FACTORS
PROFIT
Slide 6
PLACE OF PROFIT IN THE STRUCTURE OF PRODUCT COST
PRODUCT COST (REVENUE)
COST LEVEL
PRICE LEVEL
the amount of social labor and time required to produce a given product. Consists of the value of constant capital, the value of variable capital and surplus value.
the amount of money in exchange for which the seller is willing to transfer (sell) a unit of goods. Essentially, price is the rate at which a particular product is exchanged for money.
COST OF GOODS -
THE PRICE OF THE PRODUCT -
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ECONOMIC AND ACCOUNTING COSTS
AN ECONOMIST AND AN ACCOUNTANT COUNT PROFIT DIFFERENTLY
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Production costs and profits Costs do not exist by themselves. They always appear when there is a desire to achieve a result. Therefore, it is not the absolute level of costs that is important, but the ratio between efforts and results obtained. Peter DruckerSlide 2
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Economy
Fixed and variable costs, sunk costs. Main sources of business financing. Stocks, bonds and other securities. Banking system. Financial institutions. Types, causes and consequences of inflation.
Rukavishnikova M.V., teacher of history and social studies. Social studies 10th grade basic level
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Fixed and variable costs.
Production costs and economic costs.
Internal and external.
Constants and variables.
Profit concept.
Economic profit.
Accounting profit.
Features of calculating the amount of costs and profits.
Accounting method.
Economic method.
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- Production costs- these are the costs of the manufacturer (owner of the company) for the acquisition and use of production factors.
- Economic costs- these are the payments that the company must make to suppliers of necessary resources (labor, material, energy, etc.) in order to divert these resources from use in other industries.
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Economic costs
Internal (implicit)
Permanent
Variables
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- Internal (or implicit)– the cost of one’s own resource – equal to the monetary payments that could be received for an independently used resource if its owner had invested it in someone else’s business – unpaid expenses for using one’s own resources. Resources belong to the company and are used for its own needs. Have the form of “lost income” (for example: office and warehouse premises) – rent (alternative use) would give a profit in monetary terms.
- External (explicit, accounting)– payments to suppliers of labor, raw materials, fuel, services, etc. – The amount of cash payments that the firm makes to pay for the necessary resources ( wages, purchase of raw materials and materials, transportation costs) are calculated on the basis of financial statements-accounting.
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- Fixed costs- that part of total costs that does not depend at a given time on the volume of output ( rent of the company for the premises, costs of maintaining the building, costs of training and retraining of personnel, salaries of management personnel, utility costs, depreciation ). Occur when production has not yet begun, because there must be a building, cars, etc. They are financed even when the enterprise stops.
- Variable costs- that part of the total costs, the value of which for a given period of time is directly dependent on the volume of production and sales of products ( purchase of raw materials, wages, energy, fuel, transport services, costs of containers and packaging, etc. . ).if the products are not produced, they are equal to zero.
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Profit
- Economic profit is the difference between the firm's total revenue and economic costs.
- Economic profit focuses the entrepreneur not just on generating income, but on comparing this income with that which could be obtained as a result of an alternative use of available resources.
- Accounting profit is the difference between total revenue and accounting costs.
- Different understandings of a company's profit by economists and accountants lead to different conclusions about the state of affairs at the enterprise.
- To calculate the actual value of costs and profits, the accounting method should be used. To make decisions about choosing one of the alternative options for investing resources, only the economic method of calculating costs is acceptable.
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Money- this is a special product that plays the role of a universal equivalent in the exchange of goods. Expresses the value of all goods and is an intermediary in their exchange.
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The main functions of money (the essence of money):
- measure of value– express price – the monetary form of the value of a product;
- medium of exchange– act as a fleeting intermediary in acts of purchase and sale of goods;
- store of value– money withdrawn from circulation is used as a store of value ( gold, securities, real estate, currency, etc.)
- instrument of payment– used to pay off various obligations ( wages, payment of taxes, etc.);
- world money - used for settlements on the world market ( gold, dollar, euro, pound sterling, yen, ruble) as a universal means of payment and purchasing, and also as a universal materialization of wealth.
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Cash(paper money and small change) - a form of cash payments and settlements in which banknotes are physically transferred from the buyer to the seller when paying for goods or when making other payments.
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Non-cash funds(credit money, check, bill of exchange, banknotes, electronic money) - a form of making cash payments and settlements in which the physical transfer of banknotes does not occur, but entries are made in special documents
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- credit money- these are debt obligations, the appearance of which is associated with the development of credit relations;
- check- a written order from a person who has a current account for the bank to pay a sum of money or transfer it to another account;
- bill of exchange- a written promissory note, which indicates the amount of money and the timing of its payment by the debtor; It is in circulation as money.
- banknotes- bank notes - banknotes issued for circulation by central banks of issue. They differ from paper money in that: they have double security - credit (commercial bill) and metal (bank gold reserves); are issued not by the state, but by the central bank of issue; serve as a means of payment.
- electronic money is a system of non-cash payments made through the use of electronic technology, covering banks, retail trade enterprises, consumer services, etc. Smart cards have appeared, which are an electronic checkbook
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The financial market consists of a number of sectors
- Credit market. This is an economic space where relationships are organized based on the movement of free money between borrowers and lenders on the terms of repayment and payment ( Central Bank-commercial bank, commercial banks, banks and individuals and legal entities, Russian and foreign banks).
- Currency market. A system of economic relations between banks, as well as between banks and their clients regarding the purchase and sale of foreign currency.
- Securities market (stock market). The market where the issue (issue) and purchase and sale of securities, shares, bonds and securities derived from them are carried out.
- Market of insurance and pension products. This is a special system for organizing relationship insurance, in which the purchase and sale of insurance services as a product occurs, supply and demand for them are formed. The insurer and the policyholder regulate insurance economic relations with a special agreement - a policy.
- Investment market (investment market). This is a set of economic relations that develop between sellers and buyers of investment goods and services. The goods are objects of investment activity ( real estate, new construction, artistic treasures, precious metals and products, deposits, government obligations).
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Stock Exchange is an organized market where transactions with securities and other financial instruments are carried out and whose activities are controlled by the state.
Functions of the stock exchange
- Mobilization of funds for long-term investments in the economy and financing of government programs.
- Purchasing and selling shares, bonds of joint-stock companies, government bonds and other securities.
- Establishment during trading of the exchange rate of securities traded on the stock exchange.
- Dissemination of information on securities quotes and the state of the financial market as a whole.
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Bank(Italian bench) is a financial organization that has concentrated temporarily free funds of enterprises and citizens for the purpose of subsequently providing them as debt or credit for a certain fee.
Bank functions
- acceptance and storage of deposits (money or securities deposited in the bank) by depositors;
- issuing funds from accounts and performing settlements between clients;
- placement of collected funds by issuing loans or providing credits;
- purchase and sale of securities, currency;
- regulation of monetary circulation in the country, including the release (issue) of new money (a function of the Central Bank only).
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Central State Bank– pursues state policy in the field of emissions, credit, and money circulation. The main credit institution of the country is owned by the Russian Federation. Operates on the basis of the law of the Russian Federation.
Commercial banks– carry out financial and credit operations on a commercial basis.
- According to the form of ownership, they are divided into state, municipal, private, joint-stock, and mixed.
- By territorial basis they are divided into local, regional, national and international.
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Functions of the Central Bank
- The emission center of the country (only it has the right to issue money and banknotes into circulation).
- Regulates the economy through monetary policy.
- It concentrates the minimum reserves of commercial banks, which gives it the opportunity to control their activities.
- He is the government's banker (he gives all profits in excess of certain norms to the treasury and is an intermediary in all payments, therefore he occupies the main position in the country's banking system).
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Main instruments of state monetary policy
- Open market operations(government loan)
- Discount rate policy
- Change in required reserve ratio
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- Internal. External.
- Internal.
- External.
Internal sources of financing.
- Profit of the company. Depreciation.
- Profit of the company.
- Depreciation.
- Bank loan. Conversion of a sole proprietorship into a partnership. Transformation of a partnership into a closed joint-stock company. Using funds from various funds to support small businesses.
- Bank loan.
- Conversion of a sole proprietorship into a partnership.
- Transformation of a partnership into a closed joint-stock company.
- Using funds from various funds to support small businesses.
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All sources of financing in business can be divided into internal and external.
- – sources that the company itself has. This is the company's profit + depreciation.
- External - bank loans + funds from various financial institutions and investment companies, pension funds + state and regional funds for supporting small businesses.
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Internal sources of financing
Profit- the main internal source of financing for the company.
Company profit is the difference between income and its costs or the cost of the product.
The amount of profit depends
- From prices of goods .
- From unit costs .
- From the volume of product sales .
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- Gross or total profit– the difference between income and product cost. Part of it goes to pay taxes, and may be paid to the bank in the form of interest.
- Residual or net profit– the amount remaining after subtracting the listed payments from the gross profit.
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Depreciation (from Latin amortisatio - repayment) –1) depreciation of fixed assets calculated in monetary terms in the process of their application, production use.
2) It is at the same time a means, a way of transferring the value of worn-out means of labor to the product produced with their help.
3) the institution of compensation for depreciation of fixed assets is depreciation charges in the form of money aimed at repairs or construction, production of new fixed assets.
Sinking fund– funds intended for reproduction, reconstruction of worn-out fixed assets. The amount of ready depreciation charges for an enterprise or organization is determined as a share of the initial cost of objects representing fixed assets. The standard value of this share is called the depreciation rate.
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External sources of funding
- Other companies.
- Sale of shares
- Banks
- Credit
- Trade(or commodity) credit
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State
- The government allocates funds to public sector enterprises in the form of direct capital investments .
- The state can also provide firms with its funds in the form of subsidies .
- The main difference between government financing and a bank loan is that the company receives funds from the government free of charge and irrevocably. This means that the company does not have to return the amount received from the government and does not have to pay interest on it.
- Government order .
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Homework
§ 12, test, notes in notebooks. Block “Financial institutions” complex plan
Accounting costs - the value of expended resources in the actual prices of their acquisition Economic costs - as the value of other benefits that could be obtained with the most profitable of all possible alternative uses of the same resources
Accounting profit is the difference between the firm's gross income (revenue) and its explicit costs. This profit is indicated in the financial documents of the company. Economic profit is the difference between gross income and a firm's economic costs. This income received in excess of normal profit shows the interest of the entrepreneur in this area of \u200b\u200bthe company's activities. 1. Cost concept
Calculation of accounting and economic profit (thousand rubles) Accounting calculation Economic calculation 1. Revenue 2. Explicit costs Including: a) raw materials b) fuel and energy c) wages d) interest on borrowed funds (1000) at market interest rate Implicit costs Including: a) alternative value of the entrepreneur's time b) alternative value of equity capital (2000) at an annual interest rate Accounting profit (1-2) 5. Economic (net) profit (1-2-3)
1. Concept of costs According to their economic role in the production process, costs can be divided into: Basic - costs associated directly with the technological process, as well as with the maintenance and operation of tools. Overheads – costs for maintenance and management of the production process, sales of finished products.
1. Concept of costs According to the method of attributing costs to the production of a specific product, there are: Direct - these are costs associated with the production of only this type of product and attributable directly to the cost of this type of product. Indirect costs in the presence of several types of products cannot be attributed directly to any of them and must be distributed indirectly.
A short-term period is considered to be a period of time when an enterprise cannot change its production capacity, but can change the degree of intensity of loading of these capacities. A long-term period is a period sufficient to change the volume of all resources used in production, including production capacity.
Fixed costs (FC) are costs that do not depend on the volume of production. Variable costs (VC) are costs that change with changes in production volume. Gross total production costs (total cost – TC) are equal to the sum of fixed and variable costs: TC = FC + VC. 2. Fixed and variable costs
Average costs (AC - average cost) are calculated by dividing costs by the volume of products produced (Q - quantity). Thus, you can calculate average constants (AFC - average fixed cost), average variables (AVC - average variable cost) and average total (ATC - average total cost) costs:,.
Marginal cost and marginal productivity. The shape of the MC curve is a reflection and consequence of the law of diminishing returns. Marginal cost falls as the productivity of each unit of a variable resource increases, and rises as the productivity of each additional unit of the resource decreases. 3. Average and marginal costs
The relationship between average and marginal costs. The functions of marginal and average costs are closely related. The MC curve (Fig. 4) intersects the AVC and AC curves at the points of their minimum values (points A and B). 3. Average and marginal costs Fig. 4. Marginal and average costs
Average costs (ATC) of a boiler room for one apartment in a 100-apartment building: One house - TC = rub., ATC 1 = 500 rub.; Two houses - TS = rub., ATS 2 = 300 rub. Three houses - TS = rub., ATS 2 = 220 rub. Connecting these houses requires increasing costs, but the number of apartments is growing to a greater extent; Six houses TS = rub., ATS 3 = 240 rub. For this building, the cost growth is faster than the increase in the number of apartments.
Positive economies of scale: as the size of the enterprise increases, average costs decrease. The positive effect of scale is due to: -increasing the size of the enterprise increases the possibilities of using specialists in production and management; –large enterprises can use highly productive and expensive equipment; – a large enterprise can develop by-product and auxiliary production, produce products from waste from the main production. 4. Economies of scale
Diseconomies of scale: As the size of an enterprise increases, average costs increase. Negative economies of scale arise: – when the efficiency of interaction between divisions of the company decreases; – due to a decrease in the quality of control over the implementation of decisions of the company’s management; – due to the sharp increase in costs for transmitting and processing information; – due to possible differences in the interests of the company’s divisions and the overall development strategy of the company. 4. Economies of scale
Positive and negative effects of scale of production are factors that determine the structure of each industry. Industries where long-term AC reach a minimum with a very large volume of output (LAC 1) are natural monopoly industries. In industries where positive economies of scale are small and negative ones arise quickly, the efficient size of the enterprise is determined by a small volume of production (LAC 2) - an industry of perfect competition. 4. Economies of scale
Industries in which the positive scale effect is exhausted quickly enough, and the negative one does not come into effect until significant scale of production is achieved (LAC 3) may include both small and large firms - industries of imperfect competition.. 4. Economies of scale Questions and tasks for self-control 1. The total income of the company Butter and Cheese is 90 million rubles. in year. Costs for raw materials and materials are equal to 40 million rubles. The salary of employees is 30 million rubles. The salary of the company's managers (director, chief accountant and chief economist) is 60 thousand rubles. per month for each. Normal profit - 12 million rubles. Find the firm's accounting and net income. The bonus to each manager at the end of the year is equal to 10% of net profit.
Questions and tasks for self-control 2. Let's say an enterprise produced 50 units of products to order at a price of 2800 rubles, and 20 units of products for a store at a price of 3250 rubles. Draw a graph of the firm's total revenue. What will determine the angle of inclination TR? An urgent order was received for 20 units at a price of 2,700 rubles, equal to the cost of production. Is this order profitable if renting a store costs 7,000 rubles, but we can sublet it for 4,000 rubles?
3. If AVC decreases as production volume increases, then: a) MC should decrease; b) FC should be reduced; c) TS should be reduced; d) ATC must be lower than AVC; e) MC should be lower than AVC. 4. Which of the following expressions represents total costs: a) ; b) VC - FC; c) FC + VC; d) AFC + AVC; d). Questions and tasks for self-control