Notes, summaries, assignments, exams, and problems for Economy

Product Cost

Acquisition

Purchase of primary materials and other resources + cost of the procurement function - Discounts, commissions, and development shopping.

Storage

Costs originating from holding stock in the warehouse.

Manufacturing

Costs generated at different levels of the manufacturing cycle (transforming primary materials into completed products).

Cost Imputation to Product

Direct Costs

Costs that can be identified with the specific product that caused them.

Indirect Costs

Common costs that are not attributed to any particular department or product.

Semidirect Costs

Costs that cannot be applied directly to a product but can be allocated to a shop, section, or department.

Cost by Level of Activity

Fixed Costs

Costs incurred to make the company operational.... Continue reading "Product Cost, Imputation, Activity Levels, and Order Points" »

NIC / State Cash Flow: Objective

This Standard requires companies to provide information about historical movements in cash and cash equivalents through a cash flow statement classified into operating, investing, and financing activities.

Scope

Companies must prepare a cash flow statement following this Standard's requirements, including it as part of their annual financial statements.

Benefits of Cash Flow Information

The cash flow statement, used with other financial statements, helps users evaluate changes in a company's net assets, financial structure (liquidity and solvency), and ability to adapt to changing circumstances by modifying receipts and payments. It is useful in assessing the company's overall financial health.

Definitions

• Cash comprises

Understanding Quality Costs: A Detailed Classification

Quality costs are expenditures incurred to ensure that products or services meet quality standards, or those that arise when they fail to do so. Understanding and categorizing these costs is crucial for effective quality management and overall business improvement. This classification breaks down quality costs into three primary categories: External Failure Costs, Appraisal Costs, and Prevention Costs.

External Failure Costs

These costs arise when products or services fail to meet quality standards and are detected after delivery to the customer. They directly impact customer satisfaction and brand reputation, often leading to significant financial losses.

Costs Related to Claims Processing

Economic Activity: Production, Distribution, and Consumption

Economic activity is the process by which we obtain products and services that cover human needs. It has three phases: production, distribution, and consumption. The economy is the science that studies the goods and services to be produced, the amount, and investment.

Economic Sectors

• Primary sector: Designed to obtain food and raw materials.
• Secondary sector: Transforms raw materials into processed products.
• Tertiary sector: Services.
• Quaternary sector: Includes research, management, and information processing.

Economic Concepts

• Profit: The difference between expenses and income.
• Good: An object that satisfies a need and has a value.
• Service: A provision intended to satisfy a need.
• Cost of

Market Exchange Mechanisms: Market and Money

Marketplace: A set of allowed activities for the sale and purchase of a product made to put the reach of a buyer. Money: Allows every person to specialize in specific tasks because a wage will allow them to buy other goods. Demand: Many defendants are willing to buy at a certain price.

Factors Conditioning Demand

• Price: The lower the price, the greater the product demand.
• Prices of related goods:
  • Complementary goods: Goods that are consumed jointly. An increase or decrease in price implies a variation in demand.
  • Substitute goods: Using one means leaving others that fulfill the same need.
• Disposable income or purchasing power: Determines the product quality and quantity that a consumer will demand.
• Types

5. How Should Quality Measures and Financial Metrics Align? Financial metrics assess the costs and benefits of inspection versus failure prevention. Non-financial measures identify areas for improvement and indicate long-term performance.

6. Understanding Customer Response Time, Costs, and Delays Customer response time is the duration between order receipt and delivery. Delays stem from: a) uncertainty regarding customer needs, and b) operational bottlenecks. Delay costs include reduced income and increased inventory expenses.

4. Identifying Relevant Costs and Benefits of Capital Improvements Relevant costs are the incremental operational costs of the quality program. Relevant benefits include cost savings and increased contribution margin from... Continue reading "Enhancing Quality: Cost Analysis and Improvement Strategies" »

Current Assets Explained

• Securities and Investment: This is the cash that the company should always have to cover not only living expenses but also unexpected costs. Currently, the country's commercial banks have diversified so that you can invest money with tight deadlines.
• Inventory: This refers to a model used to calculate the inventory of raw materials (economic lot).
• Accounts Receivable: This refers to the credit a company typically extends for the sale of its first products when it starts operations.

Understanding the Breakeven Point

The breakeven point is the level of production where sales profits are exactly equal to the sum of fixed and variable costs.

Purpose of Analyzing Results

The aim is to calculate the net income and net cash... Continue reading "Understanding Key Financial Concepts for Businesses" »

Understanding Microeconomic Policies & Government Roles

Defining Microeconomic Policy

Microeconomic Policy: A set of measures and actions undertaken by the government concerning microeconomics, examining how markets function.

Market Regulation and Competition Conditions

The state is responsible for:

• Guaranteeing Property Rights: Through laws, judicial systems, police, and defense.
• Defending Competition: Reducing market power and maximizing existing competition.
• Correcting Information Asymmetry: Setting minimum quality standards to improve market transparency.
• Correcting Externalities: For example, by setting maximum production limits.

Modifying Exchange Conditions

Government actions can alter market exchanges:

• Buyer Incentives: Granting aid or subsidies

Chapter 3: Municipal Sports Infrastructure Plan

This chapter outlines one of the municipality's major plans concerning sports development and infrastructure construction.

The Local Sports Infrastructure Plan

The Local Sports Infrastructure Plan (PALE) compiles the municipal census of existing sports facilities and spaces, along with the desired future state. It also includes privately owned sports facilities and those belonging to universities. The PALE is established in accordance with the guidelines of the Regional Master Plan for Sports Facilities and the General Urban Development Plan of each municipality.

Purpose

The PALE provides a physical support system for developing municipal sports. Its purpose is the effective management of sports infrastructure... Continue reading "Municipal Sports Infrastructure Plan: Development & Optimization" »

International Trade: Free Trade vs. Protectionism

Free Trade

Free trade is the doctrine that defends commercial transactions between two or more countries conducted without impediments. To boost international trade, governments use these tools to promote exports:

• Official bodies: They offer advice to exporters. In Spain, this is done by the Institute of Foreign Trade and Chambers of Commerce.
• Financial assistance: This is provided in the form of export loans.
• Grants: These support businesses.

Protectionism

Protectionism is an economic policy that supports the establishment of barriers to free trade among countries to safeguard national production. Protectionist measures aim to protect national industry and agriculture, which can be adversely affected... Continue reading "Understanding Free Trade, Protectionism, and Balance of Payments" »