Economic Analysis of Teas Stall

In: Business and Management

Submitted By Anmol16
Words 1004
Pages 5
Chapter 6
Economics analysis of data
Variable cost A corporate expense that varies with production output. Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases. Variable costs differ from fixed costs such as rent, advertising, insurance and office supplies, which tend to remain the same regardless of production output. Fixed costs and variable costs comprise total cost. According to our analysis the fixed cost of the raw materials is as follows:

INPUT | COST | Gas Cylinder: | 2800 | Milk | 9600 | Water | 750 | Transportation | 300 | Light | 200 | Matchstick | 675 | Tea | 3600 | Suger | 1710 | Ginger | 120 | Disposal | 300 | Glass | 12 | Biscuit | 1620 | Cigarette | 9990 | Beedi | 9825 | Tobacco & Chocolates | 4800 | Total Variable Cost | 46302 |

Fixed Cost A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost.

One Time Investment | Cost | Stove | 550 | Shop | 11000 | Cylinder | 4500 | Tea Container | 300 | Milk Container | 350 | Hut | 5000 | Stool | 780 | Total Cost | 22430 |

Implicit Cost A cost that is represented by lost opportunity in the use of a company's own resources, excluding cash. The implicit cost for a firm can be thought of as the opportunity cost related to undertaking a certain project or decision, such as the loss of interest income on funds, or depreciation of machinery used for a capital project.
In economic study of tea stall we have found that total money he invested in his business is equal to the fixed cost because his fixed cost…...

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