fasseute

NAME-Rutya Pramod Kulkani

CLASS MBA DIVISTON
ROLL NO- 22360o C
SUBJ EC:Econamic
Analysis in Business decisicn-
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Assignment. NO- 13 Date 1

1 Num.ericcu

Given Apenson nninghis buainess includes

Sollowing CastS
Raw Matexiau Rs 200.000 month
Saldry 20000/ m.onth
Administratlan Expense Rs 1ogooj. month
Pxoposedent Hhat Cauld be Oaoo/ month
Tofined Accounting Cost dnd Econo.mic Cas+
Use appopiate formula and find the soluHon
Shcpi-udise in proper numevica foxmat
Formula

Accaunting Cost explicdt Cost (AL diect

Cost
o00o06 E 1O000H 2000o
AccouhHna (O S =Rs 2.3000 0/-

Econo mic Co s+ Explicity Cost+ amplicit

Cost
230000 0oo0
Ecanomic Cast Rs 240 0o o d
 Date:

2 DisHnguish betwee n
So.ci Cost
Private Cos and
Socia CosSt
Privdte Cas-

1)Meaning Socicu Costireso

ivate Costane the
i n c u z h e 10fa)Cos
es
Cost ohich are
Fed by buuiness Oz pesonSociey n accounL
unt
apaoduction_
Caho ane dixectiy iw-of
olved in economic CoansumpHon acHvisy
activity
2 Goal
Overall gaal 6f pziyatei oveall goo of social
Cost is increaue netCostisdhceau'e ecom
income -mic uuelIfa e .

)Chaise Gitention
Net Ananclal mekun Net benefits o Saciek
to theindividual enHs 0 a uuhole

Purp.ace
Indicate economic uorthsndicate economic ort
of an oaltenaHve to he to Saciety a cuhal
lentit
5 Benefi+ Value-
laillingness to pay
Picexeceived Lusually exceed pise
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Taxes pald
Jncluded ap CLCo.st Excluded authey care.a
xansfsrpauy.ment
1)eg
fa
persan daiing Tn ccs.e Of in.ess the
a cahelwill pay the pollutton Cxeated by the
Cost Ofpetz0, Cost offixmin Coe of pexSon
cax maintenance.eAc uhile daiving Ca he cont rib
-ute in 41a ffi congestian
pollutian uinq traf£ic
SignalS, eEc
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Date:/

.2
Long Run Cos+
b) Shax Run Co.s4
LongRun Cost
Shoxb Run Cos

Sbortxun is the Laxng un iShe pe d

peiod ohexe fixm tohexe allhe Sosts
Cth Vaxy its Output Can Vay
by Naying its Vaáable
Cost only

22 Bm Cannot change In lonq TubO.St period og

its fixed cost in shoztthe fixm Can incTeue i
Capaciy
B) Other oords we In 0thex woxds we Can
Can Sau hat in shor Sau +hat in Lonq u h
n Hhe pmducHion Cost all inpus are Vaiahe
Capacity is fixed it Hhexeis no fixed input
Cdnnot be yary in lona un

4)A penod of time that A penod of ime lona

is not enouah +o allowenouah for _all infor mat Han
change +o Cyeatlon Chalces to be avallable
econamic Condition fo a decision maker
hat a decisian mgke
mau face

S)CoSt hae ffzed factor Cost hane no fixed face

&vamables that împactof pxoduction
p'soduction.
 4)A pernod Of time that Apeiod of ime l0na
is not enouah to allaulenouah for all infor ma Han
change +o Cxeation *Chaices ta be qvallahle
econamic Conditian to a decision make
that a decision mgke
mau face

Cost haye f[xed facorCos- have no fixed facb

&vaiables that impactof pxoduction
p3oduction

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6) Shoxt Un cemdnd is Long rundemand

éas s that
h e demand wiHh its demand which uill ultima
immediateieacion Jo e l exist a a zeult
piceChang9esinCome Of the change in paicing
flucuations So on pxomoHon Ox product
improvement afier enough
ime 1s aliotned to leE
themaxlet cclus
14self Ho he given Solutlon

haxt run clecisian anelLong un delsisns dre

Cally reyersed not edily ENersed

A ime pemoduoben at The hme penod 1n

Jeat One input, such au_which all facio3 Ofprod-
plant Si2e annot be -UcHon can be different
changed
 Date: 1

AcounHing Cost- EcanamicCOs

Economic o.st
Accounting Cos

The economíc_Cot
)Accountlnq costs a e -
decfsion demand
actual also
nounn d g On
both he cast_Of he
esplicit CostsThis are
alteranaHon _Chosecond
Costs that involve
the
the benefit_that *he
aaneyheing Spent much
entutility bet alLecnaHVe woud
bills
a have pONided Chose
Intereg paumentS
economic Cost dhe differe
fYOm accounHng st betau
i includ OppaHuNL, Cath

AccoYhtng Cast xplhcitEconomicCast EXpliit

Cast (ost t Tmplict Cast

Accounting Cost heEconemic coSt include kath

Cost ahich ihclude allexplicit and implicit Catb
dixect ekpense 2elded ImpliciE Cosk is the
to the buine like OpparHunityCost in
Cost of kCLn ma teral, emsof exenue lost
Luaag@ elecinicity xpyfoxgoing he nese
adminlsitatioh expense,et bet alternoutive
Snceithexe are Implicit Costs_do naf-
exp.eniejforuhich bills appear On he sinancial
or zeceipts are avalahle statement and not d
Such Cocs Cah be 0bje not Vaiable.
-cy verified.
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AccounfantConstdexds. conomicCostde fDurd

Only explick cost for looleingsince they 1nclude
accountants puapose h a 1 Senai.o.