A)MANAGERIAL automatically begin changes in budgeted outgoings in




We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Cost analysis is a comparison of costs.Cost analysis
is an economical method of calculating and evaluating the systematic
collection, classification and examination of the costs of goods and services
in an enterprise.Cost analysis is also the cost of a good or service
determination, analysis,calculation it is the process.Costs used to prepare
financial statements. It enables the 
grow by increasing its competitive power in company.Allows the company’s
profit to be uncovered.Determine the selling price of the produced
product,great guide.


The total value cost at which all kinds of factors
invested by businesses in order to obtain the goods or services entered into
the activity are expressed as money. Cost can be defined as the sacrifice made
to produce goods or services. It is a very important concept for businesses.The
cost is the sum of the production factors spent to obtain a unit of goods.Cost
is a vaue of the resourses used to produce a product or provide a service.Cost
is directly related the volume of goods and services.Cost used in any analysis
are relevant to production. costs are classified in economis according to their
relation with output.those costs which vary as output varies in a given
production period are referred to as variable costs.some cost remain constant
regardless of the level of output and are classified as fixed costs.


In economics, there are short-run and long-run costs.A
short-run decision is one in which the firm is constrained in regard to what
production decisions it can make. A long-run decision is a decision in which
the firm can choose among all possible production techniques.The Short-run cost
has the cost which  short-term inclusion
in the production process, these are used over a short range of output. These
are the cost incurred once and cannot be used again and again, such as payment
of wages, cost of raw materials.The firm can not expand its facilities or
change the production function in the short run. A new production function that
leads to a different cost output relationship.


Cost functions ensure
to learn; predict the cost that will be experienced at a specific activity
level.Cost functions are typically incorporated into company budgets,so that
modeled changes in sales and unit volumes will automatically begin changes in
budgeted outgoings in the budget model.Cost functions are used for determine
the sales level at which a business will begin to generate a profit.In
economics,the cost function is firstly used by businesses to determine which
investments to make with capital used in the short and long term.A cost
function meaning is a function of input prices and output quantity whose value
is the cost of making that output given those input prices.




Production cost refers
to the cost incurred by a business when manufacturing a good or providing a
service. Production costs include a type of outgoings including, but not
limited to, labor, raw materials and general overhead. Additionally, any taxes
levied by the government. cost of producing a product depends on the cost of
facilities and the volume of output.When the firm want to produce a product,
this firm must be buy a raw materials and need a labour. If this firm will be
produce good and services, they will be stand this cost.



order to perform a profitability analysis, all costs of an organisation have to
be allocated to output units by using intermediate allocation steps and
drivers. This process is called costing.
When the costs have been allocated, they can be deducted from the revenues per
output unit. The remainder shows the unit margin of a product, client,
location, channel or transaction.

calculating the profit per unit, managers or decision makers can use the
outcome to substantiate management decisions. Managers can decide to stop
selling loss making products, to reduce costs for loss making customers or to
increase sales in profitable locations.



Every firm has a objectives the main objectives of
firms are:profit maximization,sales maximization,increased market
share.Sometimes there is an overlap of objectives. For example, seeking to
increase market share, may lead to lower profits in the short-term, but enable
profit maximisation in the long run.It is generally assumed that business firms
always try to maximize their objectives by selecting the best alternative
course of action in their pursuit of profits and growth.Whatever the
constraints, management must decide which objective will best serve the
interests or goals of the firm by adjusting production and sales to that level
which yields maximum satisfaction. A firm, for example, may desire to maximize
revenue, provided a specified profit is realized.However, if demand is limited
the firm may have to settle for less.Maximization, therefore, implies that the
prevailing conditions would permit management to expand sales to a level where
desired objective is maximized.



Profit is a financial income that is achieve when the
amount of revenue gained from a business activity pass over the outgoing, costs
and taxes needed to continue the activity. Profit is describe in economics as
the firm’s prize for services rendered under risk and uncertainty. In
managerial economics, the objective function of the has been defined as that of
planning, obtaining, and convert capital, materials, and labor into products or
services be market at profit. In this sense profit can be expressed as the
difference between revenue and cost, revenue being the value obtained from the
sale of the firm’s output in a given period, and cost being the value of the
resources used in the production and sale of this output.



Revenue is the amount of
money that a company actually receives during a specific period, including
discounts and deductions for returned merchandise. It is the top line or gross
income figure from which costs are subtracted to determine net income.Revenue
is calculated by multiplying the price at which goods or services are sold by
the number of units or amount sold.Revenue is also known as sales on the income
is the amount of money  from the sale of
product and depends upon the price of a product and quantity of the product
that is actually sold. revenue is the income that a business has from its
normal business activities, usually from the sale of goods and services to
customers. Revenue is also referred to as sales or turnover. Some companies
receive revenue from interest, royalties, or other fees.


In economics, profit
maximization is  by which a firm may
determine the price, input, and output levels that lead to the capacity  profit. The primary objective of the firm is maximization of profit. To
reach this objective management probably will marshal all of its resources to
expand output and sales to a level where marginal revenue is equal to marginal
over this point, an additional unit produced and sold will cost more than the
extra revenue that it will bring to the firm.



Revenue maximisation is a
theoretical objective of a firm which attempt to sell at a price which achieves
the greatest sales revenue. This would occur at the point where the extra
revenue from selling the last marginal unit (i.e. the marginal revenue, MR,
equals zero). If marginal revenue is positive, an extra unit sold must add to
total revenue and revenue maximisation will not have been reached. Only when
marginal revenue is zero will total revenue have been maximised.

Stopping short of this
quantity means that an opportunity for more revenue has been lost, whereas
increasing sales beyond this quantity means that MR becomes negative and TR
falls. This can be seen in the following graph, with revenue maximisation at
output Q, and at point A on the AR curve.

The profit maximizing
condition assumes that the firm’s objective is satisfied when output and sales
have reached the point of maximum profit. It is possible, of course, that the
maximum feasible profit is less than the minimum profit required by a firm, in
which case management may have to discontinue producing this product or lower
its minimum profit requirements. Another alternative to profit maximization is
revenue maximization.




The fiscal policy is policies that the state uses to finance the
economy to ensure that the economy reaches full employment, to minimize
economic fluctuations, and to create a fair wealth and income distribution. It
forms the economic policy together with the monetary policy. It is the policies that the state implements
using tools such as taxes and public expenditures, to ensure that the economy
reaches full employment and to ensure a fair distribution of income. The effectiveness of fiscal policy depends on
two main factors: the sensitivity of investment expenditures to interest rates.The
sensitivity of the amount of money requested to interest rates.

budget deficits may result from unanticipated spending increases
in the budget period, and budgets may be clarified at the beginning of the
period. In this case, how to open the door is also shown. For example, it can
go from borrowing from the state, from financial institutions, or from foreign
countries. Due to the difficulty of finding resources, it is usually not possible
for the budget to be open for long periods of time. However, it may be possible
for the public budget to give a few years of deficit, even in terms of economic
theory. Because, according to Keynes’s Theorem, budget deficits and surpluses
are among the main tools that can be used to prevent economic instability. In
the case of an economic instability, the equivalent budgetary practice leads to
further instability.

Demand-side economy, efficient use of resources in the
economy,economic growth and development, a fair income and wealth distribution
and the economic stability of the state to ensure the “total economic
thought that suggests guiding decisions on “demand”.The theoretical
foundations of demand-side economics are described in J.M. Keynes published in
1936, “Employment, Interest and Money in General Theory “.

Supply-side policies are policies that aim to increase the
capacity of the economy to produce. However, it is also possible for fiscal
policy to act on the level of supply and government will often use fiscal
policy as one of their key supply-side policy tools.Income tax may have an
effect on people’s incentives to work. This will be true at most income levels.
If income tax at low income levels is too high, people may choose not to work
but to remain on social security instead. If income tax on high levels of
income is too high, people may choose not to work so hard and take risks.
Ultimately they could make the choice to leave the country if taxes elsewhere
are much lower.


Monetary policy refers to the course of action a
central bank or government agency takes to control the money supply and
interest rates in the national economy. Effective monetary policy supports
actions that lead to the best possible standards of living for a nation’s
populace. This means attempting to control interest rates, levels of inflation
and employment levels. monetary policy is to lower the exchange rate, weaken
the financial account and strengthen the current account. A restrictive
monetary policy would be expected to result in the opposite: a higher exchange
rate, a stronger financial account and a weaker current account .


Inflation is a situation in which the general level of prices increases
continuously and is felt. 1 Another definition is the nominal national
income, which is the increase in the amount of goods purchased with this income
(actual national income), ie, the swelling. Deflation is the opposite.Two
conditions are mentioned in the first definition The price is not the first
price but the general level indicator.Secondly, it is emphasized that the title
of the increase is constant one or more times.The general level of prices is
the monetary value of a selected set of goods and services in the economy
(basket). Prices are based on the balance between goods and services and the
amount of money in circulation. If the emission is balanced by the increase in
the amount of goods and services (growth), the overall level of prices will not
change. But if one of them is produced more than the other, it becomes less

The so-called increase  and
decrease in the real production volume of the economy are called conjuncture.
The conjuncture expresses the alternating growth and contraction periods of the
economy. The conjuncture period has four stages: peak, contraction, bottom and
expansion.Economists often use deprecation or depression phrases to describe
much longer periods of time and much more severe shrinkage, while gross national
product refers to shrinkage or stagnation that lasts at least six months.