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Update: 06-01-2021

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After the company’s plant, equipment and other fixed as […]

After the company’s plant, equipment and other fixed assets are purchased, that is, once the scale of production is determined, the manufacturer can only determine daily, monthly, or daily, monthly, or monthly basis based on the existing production capacity, price changes in the high-frequency welding machine market and the production factor market. The actual output in each quarter to maximize profit. If after a period of production, an enterprise finds that its enterprise scale is not suitable, and when it wants to adjust its scale, the enterprise faces long-term cost analysis. 2. Short-term cost analysis Short-term cost refers to the expenditure of various production activities in the short-term. Costs that can be adjusted in the short term are called variable costs, and costs that cannot be adjusted in the short term are called fixed costs. (1) Classification of short-term costs 1. Short-term total cost (STC short-term total cost is the sum of costs required to produce a certain number of products in a short period of time. Short-term total cost is divided into fixed costs and short-term variable costs.

(1) Fixed cost refers to the cost of production factors that cannot be adjusted that manufacturers must pay in the short term. These costs do not change with changes in output, and are fixed. It mainly includes the depreciation of plant and equipment and the salary of management personnel.

(2) Short-term variable cost refers to the cost of adjustable production factors that manufacturers must pay to produce a certain number of products in the short term. These costs vary with changes in output and are variable. It mainly includes the expenditure of raw materials, fuels, auxiliary materials and the wages of production workers. 1. Fixed costs, variable costs, and short-term total costs. Fixed costs are fixed in the short term and do not change with changes in output. Even when output is zero, there are still fixed costs. Variable costs are subject to changes in output. The law of change is: Initially, when the output of high-frequency welding machines began to increase, the efficiency of fixed production factors and variable production factors was not fully utilized. Therefore, the increase rate of variable costs was greater than the growth rate of output. In the future, with the increase in output, the efficiency of fixed factors of production and variable factors of production will be fully utilized. The rate of increase of variable costs is less than the rate of increase of output. Finally, due to the law of diminishing marginal revenue, the rate of increase of variable costs is again Greater than the rate of increase in production.

The total short-term cost is the sum of fixed costs and variable costs. Fixed costs will not equal zero, so the total cost must be greater than zero. Moreover, because the total cost includes variable costs, the change rule of total cost is the same as variable cost, which changes with the change of output. The horizontal axis 0Q represents output, the vertical axis 0C represents cost, and FC represents the fixed cost curve. , It is parallel to the horizontal axis, which means that it does not change with the change of output. It is a fixed number F.VC is a variable cost curve. It starts from the origin and means that there is no variable cost when there is no output of high-frequency welding machine. The curve slopes to the upper right, indicating that it changes in the same direction as the output changes. In particular, it should be noted that it is relatively steep at first, indicating that the increase rate of variable costs is greater than the increase rate of output. Then flatter means that the rate of increase in variable costs is less than the rate of increase in output. The short-term total cost and fixed cost are relatively steep in the end, indicating that the increase rate of variable costs is large and the relationship between variable costs and the increase rate of output is graphed. STC is the short-term total cost curve. It does not start from the origin, but from the fixed cost point F, which means that the total cost without output is not zero, and the minimum total cost is also equal to the fixed cost.

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