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

Understanding the Production Plan

A production plan is a set of procedures designed to ensure our product, good, or service meets the objectives defined by the company. Each procedure is a process, and each process should have defined goals to contribute to overall objectives.

Key Objectives of a Production Plan

Some of the basic objectives that should feature in a production plan are:

1. Have the necessary production capacity to meet product sales.
2. Define the methodologies to achieve the objectives.
3. Describe the need for supplies.
4. Achieve the quality expected by customers.
5. Determine the characteristics of the infrastructure required for development activity.
6. Establish personal profiles, define tasks, and account for associated costs.

Estimating Production

The Corporation: Concept and Characteristics

A corporation is a company comprising one or more partners whose capital, with a minimum of €60,101.21, is divided into freely transferable titles called shares. The partners are not personally liable for the company's debts (limited partnership).

Features:

• It is a capitalist society; the identity of the partners is secondary to their capital contribution.
• The share capital must be fully subscribed at the time of incorporation. This means there must be a commitment from partners to cover the entire capital, with 25% paid upfront.

Social Capital = Nominal Number of Shares

Labor Society: Concept and Characteristics

A labor society is a type of corporation or limited liability company in which the majority... Continue reading "Understanding Corporate Structures and Financial Planning for Businesses" »

Company: Balance Sheet as of January 31, 2010

Company: Profit and Loss Statement

January

Imported Intermediate Inputs and Equivalent Imports

Imported intermediate inputs refer to the consumption of imported intermediate goods by productive sectors. Equivalent imports refer to the value of imports that are similar to goods and services produced within the sector.

The percentage of production in Sector X is obtained with inputs from internal sources.

The International Financial Crisis

The financial crisis that began in mid-2007 was one of the most serious and intense in recent times. It quickly spread to other U.S. markets and financial intermediaries, subsequently affecting the majority of the world's financial systems. It was, in fact, the first global financial crisis in history. Like all previous crises, this one resulted from a... Continue reading "Understanding the 2007 Global Financial Crisis" »

Economic Systems and Basic Decisions

An economic system is the way individuals organize a society to solve their basic economic problems: What, how, and for whom to produce?

Economic Doctrines and Economic Systems

A doctrine is the set of economic ideas and opinions of a group of leading economists. They are:

• Liberalism: Rests on market performance. According to Adam Smith, every citizen is the best judge of their own interest and should be given the freedom to satisfy it, as well as advance the common good.
• Marxism: Relies on state intervention and centralized planning. (Karl Marx)

Centralized Economy

A centralized or authoritarian economy is a mode of economic organization in which key economic functions are performed primarily by the state. In... Continue reading "Economic Systems: Centralized Economies" »

Request for Offers and Budget

The phase of bids and budget requests within the procurement process is a practice by firms in the following cases:

• When you first start the activity. The company is new and needs to find all types of providers. The first step is to study the market for suppliers of goods and services.
• When it is time to buy a new product. The first time we purchase an item, as in the previous case, we must first find suppliers that manufacture or sell the product.
• When we're not happy with the current vendors. The company wants to introduce some changes because it is not in accordance with suppliers or the business relationship with them.
• To expand the portfolio of suppliers. When the company works with a limited number of suppliers,

Location Factors

Market Access: Locations near consumer and foreign markets are decisive.

Communication Options: Easy market access and modern telecommunications are favored.

Labor Quality and Quantity: A well-prepared population offers advantages in technology and resource management.

Physical-Geographical Factors: Industrial centers locate near raw materials and advantageous geographical features like navigation channels.

Historical Factors: Early settlements and major population centers attract industrial locations.

Reserves

Currency deposits held by the Central Bank of Venezuela.

Trade

The result of population agglomeration and economic surplus.

Industrialization Stages

Import Substitution: Tax exemptions for domestic industries to supply growing... Continue reading "Venezuela's Economy: Industrialization, Trade, and Location Factors" »

Taxable Transactions

Summary Table

Taxable transactions:

• Sales of personal property.
• Provision or use of services.
• Construction contracts.
• First sale of property.
• Imports of goods.

Exemptions and Unaffected Transactions

Exemptions: (Appendix I - Appendix II)

Unaffected:

• Lease of movable and immovable property (only for natural persons with primary or secondary income).
• Re-transfer of business assets.
• Transfer of assets to educational institutions.
• Gambling.
• Imports of goods donated to religious institutions.
• Import of donated goods from abroad.

Birth of Tax Liability

In the sale of goods:

The date of issuing proof of payment or the date of delivery of the property, whichever occurs first.

The removal of property:

The date of retirement of the asset or the date... Continue reading "Tax Transactions: Liabilities, Calculation, and Payment" »

Labor Day

Time is measured in days, weeks, or months that the employee is engaged in work.

Duration of the Day

The duration of the day must be agreed upon in the collective agreements or employment contracts within the limits established by law. The working day is measured in hours.

• Daily Weekly: Maximum duration: 40 hours per week.
• Working day: According to the ET, it cannot exceed 9 hours.
• Special Days: Activities and characteristics of some sectors can make necessary additions or reductions in working hours.

Breaks

The minimum periods of rest established in the collective agreement and the ET must be respected.

• Rest in the day: More than 6 hours: minimum 15 minutes; up to 6 hours: not required. Under 18 years: at least 15 minutes.
• Minimum closing

Indirect Manufacturing Costs: A Detailed Breakdown

Concept: Indirect costs are expenses related to the production process that cannot be directly assigned to a specific product. These costs are not classified as direct materials or direct labor. The reasons for this indirect allocation include:

• Insignificant quantitative relation to total direct costs: The cost is too small to justify direct tracking.
• Minor consumption: Determining the exact amount consumed is more expensive than the benefit gained from the information.
• Theoretical impossibility: Common costs from joint production processes cannot be easily separated.
• Lack of explicit cause-effect relationship: These costs are necessary for production but cannot be directly linked to individual