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Explain why a firm needs to know its short run production function to be able to calculate the costs of production?
Wiki User
∙ 16y ago
In the fhort-run production, a firm can produce and various its quantities of inputs to maximize its profit in a period of time frame. Variable cost, fixed cost, total average cost, marginal cost ....profit.
Wiki User
∙ 16y ago
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What is the formula to calculate direct costs?
there is no specific formula to calculate direct cost but direct cost are all those costs which are directly related to production of goods and separately identifiable.
What is a hidden production function?
In the field of economics, a production function is a calculation that explains the relationship between what it costs to produce goods and the actual quantity of goods you were able to produce. An example of a "hidden" production function would be money transfers at banks.
What are production costs?
Production costs are costs to produce
What is the formula to calculate directivity?
there is no specific formula to calculate direct cost but direct cost are all those costs which are directly related to production of goods and separately identifiable.
What things do variable costs include?
Variable costs vary depending on a company's production. Production, or output, and costs are included in variable costs. Production and costs are directly related.
How do you explain fixed costs really being variable when the more you produce the less they become?
The basic point is that fixed costs, even though they stay the same, become less in relation to the increased production.
Why it is necessary to calculate equivalent units of production in a process costing environment?
Because unit costs are computed by departments or processes at fixed time intervals.
What is an engineering cost curves?
The engineering cost curve are derived with the help of engineering production function .The productionfunction specified the techniques of production, the embodiment of laborand capital etc. It means that each production method is divided into sub activitiescorresponding to the various physical and technical phases of production for the particularcommodity. Engineering production method/function are characterised by a limitednumber of methods of production. The production iso-quants are kinked reflecting that thefactor subsititutablity is limited. It means that the factor of production can be substitutedis only possible at kinked of iso-quants. b. The engineering cost curve is derived with the help of engineering productionfunction. The production function specified the techniques of production, the epitomeof labor and capital etc. it means that in respectively technique of production suchactivates operates which are concerned with the physical and controlled situation of nay product. In physical and technical state of affairs the quantities of factors of production are assessed. Then on the idea of factor prices the cost of each techniqueof production are evaluated. If we sum the cost of production of different techniquesthe total costs of the firm are attained. It is told that such estimates are made on thebasis of sizes of exciting and available plants. Then the production function isassessed and finally the short run and long run cost curves are derived.The engineering production function and engineering cost curve are concerned nextto the production costs. They have nothing to do with the clerical costs. Theengineering production function is confined to some techniques of production whichstate that the factor of the production can be substituted up to a specific limit. In other words the engineering production function is kinked with Isoquant which sate thatfactor of production are substitutable in the range of kinked part of Isoquant
Which ratio shows an organizations effectiveness in minimizing production costs?
There are two measures of production costs: total costs and marginal costs. The relevant ratio depends on which of these is being minimised.
What is an example of lower production costs brought about by the use of technology?
what is an example of lower production costs brought about by technology
Briefly explain the direct expenses?
Direct expenses increase or decrease based on the rate of production. For example raw material costs increase as more products are made.
Explain why an organization controls it stock?
1. To ensure that costs level are low. 2. To improve efficiency. 3. To ensure high production. 4. To prevent theft.
