Economicsis referred to as a general study of choices that are made byindividuals who are habitually faced with the issue of scarcity.Scarcity aspect is a circumstance in which resources are thought tobe limited and can be used in various ways, but one must sacrificeone resource for another resource (Biondi, & Zambon, 2013).
Differencebetween economic and accounting concepts of cost
Economiccost is a further inclusive idea of the accounting costs. Accountingcosts solitary contain what some economists conceive to be the"explicit costs." They are the aggregates that a businessessentially wages out to additional persons in the course ofgenerating their produce. If one operates a business vendingcosmetics from home, the accounting charges will comprise aspectssuch as the value of the cosmetics the cash one spends on marketingand publicity (Manger, 2014). The cost standard entails thatproperties should be verified at the currency quantity at the periodthat a benefit is attained.
Inthe management of the costs associated with a value-creationactivity, I will ensure that enough funds are allocated to theactivity in order to promote its growth. However, I would invest morein the activity to ensure that maximum utility of the opportunity isalso realized. I will have to perform some consultations concerningthe management of the project in which I would request my colleaguesto share with me the ways on how to manage the activity effectively(Hill, Cronk, & Wickramasekera, 2014). I will involve somemotivation to the employees to ensure that there is high competitionin the performance hence resulting in the generally betterperformance of the activity. I will encourage accountability andtransparency in the performance among the employees through promotingopenness and trust in the bid to promote customer satisfaction(Menger, 2014). I would also employ some new production systems topromote diversity and be keen on the market trends to ensure I offerquality services and goods to the consumers. I will have to embracecreativity and work efficiently in the competition. I will have toconsider the current and the future market speculations to ensure Iprovide the services and the goods according to the market trends.
Thecost of operations determines the level of the operation of thecompany especially concerning the costs of the operations in theproduction process. The development strategies of the company,therefore, are highly dependent on the available resources of thecompany hence determine the cost of the future strategies of thecompany. The plans have to lie within the economic stability of thecompany, therefore the cost of the strategized projects has to bewith the economic ability which is the operational costs.
Theconnection between the cost of operations and some other businessfunctions is equally significant. The goal of the cost of operationpurpose is to produce some goods and the services prerequisite byconsumers at the same time as handling assets as professionally aspossible. The practice helps to omit the challenges at theorganization through the equitable utilization of the resources(Byrne& Willis, 2014). Clashes between operations and selling occupations are expected tobe the hub on the need to market to guarantee actions to concentrateon the satisfaction of the customers. The operation costs, therefore,function to ensure that the organization produces the goods and theservice in line with the available resource while also ensuring thatthe resources are well utilized. This practice, however, is possibleto result in the demands to create superior capacities, morediversity, higher eminence and a quicker reaction, which are expectedresult into less competent operations. Struggles in the setups andaccounting and the finance functions, instead, are probably to becentered on the need for the accounting and the finance to requirethe operations to manage the resources efficiently effectively. Thepractice is predicted to jerk the operation (Biondi, & Zambon,2013). The operation costs lie at the core of every institute andrelate with entirely the other commitments of the group. The practicehelps in achieving contract on what choice parts lies in theresponsibility of actions, and what must be the foundation ofadministrative within the operations that is a vital part ofsafeguarding the constancy of achievement over a period needed for apositive administrative strategy.
Pricesunder different market structures
Inperfect competition, the prices of the goods are determined by thedemands and the supply of the commodity and more specifically on thequality of the goods. In a perfect competition among the buyers andthe sellers, asymmetry value would be determined at the point wherethe amount required is equivalent to the obtainable supply. That is,the equilibrium charge will be recognized at the level where thedescending sloping demand curve meets the perpendicular the supplycurve (Hill et al. 2013). Therefore, the operations of theorganizations are still constant due to the independence of themarket factors. The supply and the demands of the goods are notaffected due to the presence of many producers and the suppliers onthe market.
ToyotaCompany is a manufacturing company that deals in the motor vehicleand spares products. It is an international company that has itsheadquarters in Japan. The company is known for its high qualitymotor vehicles globally. Some other firms in the same industryinclude Volkswagen, Roll and Royce, Ford and Aston Martin. Thecompany falls under a perfect market in which it has many othercompetitive companies operating in the same location with the samecapacity. The company is not, therefore, a monopoly but operatesunder the perfect competition.
Thedemand and the supply curve of the market determine the prices of thecompany’s produce. The company’s prices range with the set marketprices determined by the demand and the supply of the other firms(Menger, 2014). Therefore the company has no control over the pricesof the goods but works with the speculations of the market trends toeffectively produce within the market speculations.
Biondi,Y., & Zambon, S. (Eds.). (2013). Accountingand business economics: Insights from
Byrne,M., & Willis, P. (2014). The role of prior accounting educationand work experience
RoutledgeCompanion to Accounting Education(pp. 145-162). New York.
Hill,C. W., Cronk, T., & Wickramasekera, R. (2013). Globalbusiness today.McGraw-Hill
Menger,P.-M. (2014). Theeconomics of creativity: Art and achievement under uncertainty.