Comparative analysis of fixed and working capital

As is known, the circulation of capital flows through the production process of manufacturing goods. Here productive capital is divided in two parts: fixed and working capital.

A comparative analysis of fixed and working capital.

Definition of depreciation

The rate of compensation is determined by the cost of capital depreciation rate.

Answer the following questions:

a) what is the rate of depreciation;

b) as calculated this figure.

4. By the terms of the left hand column find the appropriate definitions in the right column.

1. Cost depreciation	a. loss of the instruments of labor of its usefulness
2. working capital	b. part of the cost of capital, which is gradually transferred to the product readiness
3. depreciation rate	c. gradual loss of the value of the means of labor
4. physical deterioration	d. gradual loss of the cost of capital, which is returned to its owner in one circuit
5. fixed capital	e. compensation of wear on capital by transferring its value to the finished product
6. depreciation	f. set annual amount of depreciation

Independent work of the student

Questions for self-study:

1. Capital accumulation: the nature and types of

2. Depreciation of fixed assets

Form of control:

- Tests

- Tasks

Theme 8. Expenses and income of the company (the company)

(1 hour)

The seminars

The purpose of the lesson:

- To consider the classification of costs

- To consider the types of income and profit

Topics for discussion:

1. Costs. Types of costs.
2. Isocosts and isoquant. The Optimum producer.
3. Economies of scale of production.
4. Revenue producer.

Questions and tasks:

1.The table shows the total cost of production of the company. Calculated for each output common fixed costs, the average total cost, average fixed costs, marginal costs.

Output per unit of time (units)	Total costs (building units).

2. Wanting to start a business, a business he has invested in equity - 50 thousand units on. If he took that amount in the bank, he would have to pay at the rate of 12%. When, after years of operation businessman will calculate your income, it will deduct from the total revenue implicit costs. What are they?

3. The shop owner hires assistants with payment on 15 thousand units. year. Pays annually on six thousand units. rent for the premises. He invested in equity in the case of 30 thousand on u, giving up on three thousand units. per annum, which would have had a different room at the capital. Their entrepreneurial talent, he estimates at 10 thousand on units. year. Major trading firm offers him a place manager with a salary of 20 thousand units on. year. Calculate the value of the accounting and economic costs.

4. Because of the reduction of raw materials the company has reduced the volume of production. Fixed costs and average variable costs after that has not changed, and the average total costs rose by 30 in. units. / Pcs. The initial value of the average fixed cost was 120 d u / pc. By what percentage the firm should increase the price per unit that has remained unchanged revenues from sales of products?

5. Changing technology has led to a decrease in motorcycle average variable costs by 20%, after which the unit price has been reduced by 10%. Permanent and total costs have not changed. What became equal revenue motorcycle manufacturers, if it grows after changing technology was 37,500 ppm units.?

6. Earlier this year, the average fixed costs of production were 180 d u / pc. By the end, output fell by 20%, fixed costs increased by 5%, while the average total cost changed to 60 on U. / Pcs. What equal to the average variable cost the company at the end of the year?

7. Marginal product of labor: MPL = 100K - L, and the marginal product of capital: MPK = 100 L - K. What will be the maximum product, if the total cost of K and L is 1000 on u, and P = 5 d u, PL = 2 d u?

8. All the profit goes to a businessman?

It is widely believed that the owner is the private owner of a farm, sets up the profits. Do you agree?