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What is Rucker Plan?
A Rucker Plan is a type of gain-sharing plan. It works in this manner: a firm has costs for producing it's service or product. If a firm is able to keep those costs under control, it's profitability will increase. Employee input into how to better decrease costs/improve efficiency is actively encouraged. Resultant costs savings from employee input that increase profitability are shared with employees in some form of bonus.
What do capacity costs allow a firm to do?
Capacity costs (committed costs) give a firm the capability to produce or to sell,
Definition of private cost in economics?
These are costs that are incurred to an individual or firm when they are carrying out the activities of consumption or production. They are the costs that those individuals or firms have to pay themselves.
External economies of scale?
Infrastructure (Ex: Access to educated workforce/available roads etc.) It is simply the factors which a firm does not have a control over but that can make a firm more efficient. Roads can reduce transportation costs meaning that the firm is more efficient.
Describe the effects of expected costs of agency and bankruptcy on the value of the firm in the context of the theory of capital structure.?
The firm is just one of those cases that is important, and that necessitates trained assistance regarding
What categories of costs combine to create a firm's total cost?
A firm adds its fixed costs and capable costs to determine its todal cost at each level of output.
The costs of a firm that are paid directly in money are called?
Explicit costs!
Firm A one firm in a competitive industry faces higher costs of production As a result conusmers end up paying higher prices Discuss?
If a firm is having higher costs than another in the same industry, they will pass the costs to the consumer. That has to happen if the firm is supposed to make any profits.
How would you describe fully absorbed costs?
Fully absorbed costs refer to costs where the firm has allocated fixed manufacturing costs to products produced or divisions within the firm as required by generally accepted accounting principles.
What organizational architecture a transnational firm might adopt to reduce the costs of control?
A transnational firm might adopt a matrix organizational architecture to reduce costs of control by enabling flexibility and responsiveness across its global operations. This structure allows for dual reporting relationships, balancing global integration with local responsiveness, thus facilitating efficient resource allocation and decision-making. By leveraging cross-functional teams, the firm can enhance collaboration and knowledge sharing while minimizing redundant oversight, ultimately lowering control costs. Additionally, empowering local managers with decision-making authority can streamline operations and reduce the need for extensive centralized control mechanisms.
What is a cost structure?
The expenses that a firm must take into account when manufacturing a product or providing a service. Types of cost structures include transaction costs, sunk costs, marginal costs and fixed costs. The cost structure of the firm is the ratio of fixed costs to variable costs.
When a firm's revenues rise more quickly than its costs?
Hopefully, the firm makes a profit.
