Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average‚ expressing the total output divided by the total input. Productivity is a measure of output from a production process‚ per unit of input. At the national level‚ productivity growth raises living standards because more real income improves people’s ability to purchase goods and services‚ enjoy leisure‚ improve housing
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What is Productivity? “A measure of the efficiency of a person‚ machine‚ factory‚ system‚ etc.‚ in converting inputs into useful outputs.” How to increase business productivity? Management can take following steps to increase business productivity. Reduce cost of production: By reducing cost of production we can increase productivity of our business. We can sell our goods at low price that will increase our sales that leads to high profitability. Increase production: Increase production will
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Profit in business is a financial gain earned when marginal revenue exceeds marginal cost to produce a particular product or provide a service. Basically profit is the amount of money left after a business has paid all cost associated with doing business for a certain period of time from the total revenue taken in during that same period of time. All for profit business want to maximize their profits. Without making a profit a business cannot stay open without additional investment by the business
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MARGINAL COSTING Introduction Even a school-going student knows that profit is a balancing figure of sales over costs‚ i.e. Sales - Cost = Profit. This knowledge is not sufficient for management for discharging the functions of planning and control‚ etc. The cost is further divided according to its behavior‚ i.e.‚ fixed cost and variable cost. The age-old equation can be written as: Sales - Cost = Profit or Sales - (Fixed cost + Variable Cost) = Profit. The relevance of segregating costs
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Marginal Costing Introduction The Cost of a product of comprises of materials‚ labour‚ and over heads. On the basis of variability they can be broadly classified as fixed and variable costs. Fixed costs are those costs which remain constant at all levels of production within a given period of time. In other words‚ a cost that does not change in total but become. Progressively smaller per unit when the volume of production increases is known as fixed cost. it is also called period cost eg. Rent
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a signal from buyers to sellers‚ and the price seen by fi rms signals the marginal benefi t of consumers in the market. If the price consumers pay for a product is greater than the marginal cost to fi rms of producing it‚ then the message being sent to producers is that more output is demanded. In the pursuit of profi ts‚ more resources will be allocated towards the production of the product until the marginal cost and the price are equal. At the P=MC point fi rms maximize their profi
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Marginal and absorption costing Topic list 1 Marginal cost and marginal costing 2 The principles of marginal costing 3 Marginal costing and absorption costing and the calculation of profit 4 Reconciling profits 5 Marginal costing versus absorption costing Syllabus reference D4 (a) D4 (a) D4 (b)‚ (c) D4 (d) D4 (e) Introduction This chapter defines marginal costing and compares it with absorption costing. Whereas absorption costing recognises fixed costs (usually fixed production costs) as
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SD – MBA 2 Personal Report Name: Thuy Anh Nguyen November 6‚2012 1. Conditions for profit maximization are: a) Difference between total revenue (TR) and total cost (TC) is maximized; b) Marginal revenue (MR) should be equal to marginal cost (MC) Explanations: If we assume that the company is facing a downward – sloping curve and it produces just one single product a) Profit = TR – TC. Profit will increase if TR increases and TC decreases. If company wants profit maximization‚ it
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If marginal utility is negative‚ we can infer that Question 1 answers | | total utility is increasing by smaller and smaller amounts | | | total utility has fallen | | | total utility is also negative / | | | the product is an inferior good | A utility-maximising consumer changes their expenditures until Question 2 answers | | MUX = MUY for all pairs of goods / | | | TUX/PX = TUY/PY for all pairs of
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Relationship between marginal cost and marginal product. Marginal cost is the additional cost attributed to an additional unit produced. Marginal product is the increase in the total product due to an additional resource allocation. The marginal cost and marginal return have an inverse relationship and can almost be represented as mirror images of each other. The peak of the marginal product corresponds with the lowest point of the marginal cost. Thus as marginal product increases
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