Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Production, Costs, and Profits - Admission/Application Essay Example

Comments (0) Cite this document
Production costs and profit 1. Give a brief summary of economic costs (i.e. how are they different from accounting costs). In the short-run, why might a firm still operate even when there is a loss. Economists and accountants differ in their treatment of costs…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.4% of users find it useful
Production, Costs, and Profits
Read Text Preview

Extract of sample "Production, Costs, and Profits"

Download file to see previous pages Explicit costs are those incurred in the operation of the business and recorded by the bookkeeper in the books of account. Implicit costs are foregone opportunity when one chooses another option. Let us take a simple assumption to prove the difference of economic and accounting costs. When you are employed and you want to go into business, you give up your job that gives you an annual salary of $25,000. You also give up the apartment earnings of $12,000 a year and instead use it in the beauty shop business and an investment that earns for you $5,000 a year. A projection of your accounting costs for one year of operation show the following: Total revenue $145,000.00 Cost of sales $75,000.00 Employees wages 20,000.00 Cost of utilities 5,000.00 Taxes 6,000.00 Advertising 7,000.00 Total explicit costs 113,000.00 Net Profit 32,000.00 It would seem here that the company is profitable, but we are forgetting the opportunity cost or the implicit side of the economic cost. Remember, you lost income in getting into the beauty shop business which are Salary $25,000 Rent 12,000 Interest on investment 5,000 Total implicit cost P42,000 Economic loss $10,000 As shown, the operation is not economically profitable because the profit does not consider the implicit costs of the owner. ...
Maquiladoras: Impact on Texas Border Cities” apply the marginal decision rule to the problem of choosing the mix of factors or production (capital intensive vs. labor intensive methods of production)? How do maquiladoras benefit the U.S. economy In making a marginal decision, let us not forget that the firm always seeks to produce products at the lowest cost as possible. In this context, the maquiladora should decide what mix of capital or labor it should use in its operations. As an example, the maquiladora may think of spending an additional $1 for capital and $1 less for labor. In considering marginal decisions, the rule says that “a firm will shift spending among factors as long as the marginal benefit of such a shift exceeds the marginal cost”( The equation that explains marginal decision for maquiladora is that if intensive capital and labor intensive production are of equal benefit to the firm, then it will choose the cheaper alternative. If however, the two choices are of the same price, the choice is the one that will provide the higher benefit. The maquiladoras in Mexico arrived at a marginal decision of using both the capital and labor intensive mix factors of production ( The maquiladoras used it both ways because they employed the capital intensive process of production in the United States and then shipped the unfinished products to Mexico for final processing. For example, many U.S. companies produce cloth through high speed processes then send it to Mexico for final finishing of workers using ordinary sewing machine. Plastic injection moulding requires highly skilled labor and has to be done in U.S. It is later sent back to Mexico for incorporation in cars and computers. The benefits of maquiladora to U.S. Most ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
(“Production, Costs, and Profits Admission/Application Essay”, n.d.)
Production, Costs, and Profits Admission/Application Essay. Retrieved from
(Production, Costs, and Profits Admission/Application Essay)
Production, Costs, and Profits Admission/Application Essay.
“Production, Costs, and Profits Admission/Application Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Production, Costs, and Profits

Decision Making For Management - Linearity of Variable Costs within the Relevant Range

Keeping aside the fixed costs which have to be borne irrespective of the sales revenue, the remaining costs which are directly proportional to units sold can be minimized to manage cash flows in a better way. They can cut on their variable costs by having a look at the contribution margins of their company and their products.

The contribution of sales to before-tax profits, or gross profits, over and above the break-even is exactly the contribution margin as there are no fixed costs any more. The amount after the deduction of variable costs from the revenues will be added to the profits.

CVP graphs help the manager and the reader to have a better figure of the relationship between the profits, sales and volum...
7 Pages (1750 words) Assignment

Marketing, Financial and Production Analysis of Vail Resorts

Finally, in 1966, the town of Vail was established. By 1985, George Gillett purchased Vail Associates and high-speed quad chairlifts were established to help the skiers get to higher elevations on the mountain. In 1992 Apollo Partners purchased Vail Associates, which in turn became Vail Resorts Inc., which was followed by the acquisition of ski resorts Keystone and Breckenridge. The acquisition of these ski resorts was a major change that helped Vail succeed in the long run by appealing to a broader market. Both Keystone and Breckenridge have lower prices than Vail Mountain and attract more single- and college-aged customers (Vail Resorts).

The company then added the Real Estate segment which comprised 6 percent of the...
9 Pages (2250 words) Case Study

Costs, Benefits and Risks of MerloniS Current Distribution System

Each supply-chain risk to forecasts, information systems, intellectual property, procurement, inventory, and capacity has its own drivers and effective mitigation strategies. To avoid lost sales, increased costs or both, managers need to tailor proven risk-reduction strategies to their organizations.” (Sodhi)

Distribution systems play an important role in the overall functioning of the supply chain management system of an organization. Any good distribution system requires that all the associated activities are coordinated in such a way that they facilitate the whole flow of organizational resources from one point to another. This is important because of the fact that a swift and smooth flow of organizational reso...
10 Pages (2500 words) Case Study

Global Warming and Food Production

The carbon fertilization effect of increased carbon dioxide concentration in the atmosphere has an impact on plant growth, which benefits plant growth by facilitating photosynthesis, cannot balance the complex impact of increased temperatures around the world. Thus, although some regions will benefit from global warming, a total reduction in global agricultural production will result. This essay presents a discussion about the impact of global warming on agriculture and food production around the world.
Although the history of the planet earth suggests that for the last million years ice ages have been interspersed with warmer periods, evidence suggests that the average rate of global warming within the recent past has accele...
14 Pages (3500 words) Assignment

Production of Lustre Painted Ceramics During the Fatimid Period

Glazed ceramics represent a very small percentage of the total ceramic production during the medieval Muslim world. The majority of domestic earthenware comprised unglazed storage and transport jars for items such as grain, oil and water, and unglazed bowls, platters and receptacles, which were made for the kitchens, pharmacy or the market shop. However, glazed and painted ceramics were highly sought commodities in urban as well as courtly settings2.

Medieval sources refer to pottery or ceramics as Khazar, fakhkhar, and chadar, and the generic term sini is used particularly for fine glazed ceramics. The term sini is derived from the Arabic word for China – al-Sin – since both potters and consumers of the med...
10 Pages (2500 words) Case Study

Female Gender in a Production of The Country Wife

...How would a Restoration Comedy Production Stage Female Gender in a production of The Country Wife? The proliferation of restoration comedies symbolised the English renaissance, marking the liberation from puritanical censorship of public stage performances towards the increased sexuality and prurience in plays through satirised depictions of marital relationships and society. This in turn marked an important change in the portrayal of female gender. Indeed, Copeland highlights the point that: “gender roles and their lengthy production histories were central components of the comedies and their pre-twentieth century history. They were staged during a time of dramatically changing gender roles and lengthy production histories subsequently...
23 Pages (5750 words) Assignment

Drug Abuse Costs

... the costs, both covert and explicit, that accompanies addiction in terms of decreased productivity and unemployment, future healthcare costs, and increased demands on the criminal justice and social services systems. Alternately, cost-effectiveness analyses “compare two or more treatments by determining the cost of a given desirable outcome using each treatment” (Langenbucher, 1996, p. 2). A disclaimer however on this framework: Langenbucher’s analysis also compares the cost of treatment to the benefits that accrue, that is, the success that can be measured after the treatment. While there is a general consensus that successful treatment is economically viable when compared to the costs of continued addiction, there is little consensus...
6 Pages (1500 words) Term Paper

Production of Monoclonal Antibodies

Though it was Paul Ehrlich who proposed about monoclonal antibodies as early as the beginning of 20th century, it was in1975, that Kohler and Milstein combined the unlimited growth potential of myeloma cells with the predetermined antibody specificity of normal immune spleen cells to produce monoclonal antibodies (Kimball, 2007). In this essay, the production of monoclonal antibodies for the diagnostic and therapeutic purpose will be discussed with reference to Molecule A secreted by leukemic cells.
To produce monoclonal antibodies for medical use, the vertebrate, usually a mouse, is challenged many times with molecule-A against which monoclonal antibodies are to be produced. After this, from the principal organs for B cell...
6 Pages (1500 words) Coursework

Impacts of Climate Change on Food Production over the Next 50 Years

...Impacts of Climate Change on Food Production over the Next 50 Years Impacts of Climate Change on Food Production over the Next 50 Years Climate Change The paper explores issues related to the impacts of climate changes on food production over the next fifty years, and this will involve an analysis of the global food production and the risk of food shortages associated with climate conditions. This paper will begin by a discussion of causes of climatic changes, thereby setting a pace for discussion on potential impacts of changes in climate on global food production. This discussion will associate the growth in the world’s population and economic development that have influenced the climate change, and expected responses on agriculture...
6 Pages (1500 words) Term Paper

Production of Knowledge

...Production of knowledge Introduction Knowledge refers to the awareness or understanding that one develops with his or her environment. Ever since time immemorial, humans have always wanted to understand their environment and the people living around them. The desire to understand the environment motivates human to investigate and question the existing facts around the same. This enhances the growth of knowledge since investigation reveals intricate features about the environment and the things existing in the environment. Education and experience are the most cost effective ways of acquiring knowledge1. The two processes entail a series of experiments and observations of the various features of the environment. This validates the argument...
7 Pages (1750 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Admission/Application Essay on topic Production, Costs, and Profits for FREE!

Contact Us