Commerce Forward

Public finance deals with the problem of adjustments of income and expenditure of the government. Public finance is a field of inquiry that treat the income and outgo of government. In the modern times, public finance includes mainly five divisions- public revenue, public expenditure, public debt, financial administration and economic stabilization. The point to be noted is that the subject matter of public finance is changing day by day due to the change in the concept and functions of government. The economic role of the government is not only confined to allocation and distribution of resources besides that it also makes effort to achieve stability, full employment and higher economic growth. Broadly we categorized the scope or subject matter of public finance in following headings: 1.        Public revenue: In the study of public finance, public revenue plays an important role. It includes the study of all those methods which a government earns revenue. It studies the method

Meaning of public finance Public finance is concerned with the study of revenue and expenditure of the “public authorities” the word; public authorities refers all sorts of government operating within a country; that is central government at the center, the state governments at the respective states and the local government like municipalities at the local level. In public finance , the word ‘public’ means a group of people which represent by the government or we can say that the word ‘public’ is used to signify government. The word finance refers to monetary resources. Thus, public finance means the financial resources or income and expenditure of the government of a country. Definitions of public finance “Public finance is that part of political economics which discuses the way in which government obtain revenues and manage them.” - Chapman “Public finance deals with the income and expenditure of public authorities and with the manner in which the one is adjusted to t

1.        Cost refers to the total expenses incurred in the production of a commodity. Costs are studied separately in the short run as well as in the long run. 2.        Types of short run costs are: total cost, total variable cost, total fixed cost, SAC (ATC),AFC,AVC and SMC 3.        The total cost of a firm is the sum of total fixed cost and total variable cost, i.e., TC=TFC+TVC. fig. graphical representation of relationship between total costs, variable costs, fixed costs 4.        Fixed costs are those that do not vary with the level of output. These are also called overhead costs. Examples of fixed costs are: rent for factory building, minimum telephone bill, wages to permanent staff, interest on capital etc. fixed costs are formally called TFC (total fixed cost). Tc ate zero level of output is TFC. 5.        Variable costs are those that change with the level of output. These are also called prime cost. E xamples of variable costs are: labor costs and costs of r

"The techniques and process of ascertaining costs is known as costing." Costing relates to the determination of cost of a product manufactured or service rendered in order to ascertain cost, it involves system, methods and techniques of accumulation, classification and analysis of cost. The techniques refers to principles and rules which are applied for ascertaining cost. There are various techniques of ascertaining costs, such as historical or absorption costing, marginal costing, standard costing, uniform costing, etc., which can be applied for specific purposes. The process of ascertaining cost includes the day to day routine of determining cost through the process related to allocation, apportionment and absorption of costs, besides the presentation of statement of cost, showing how the costs have been arrived at. Cost allocation: allocation is the process whereby cost items are charged direct to a cost unit or cost center, i.e, a cost can be specifically identifi

Job costing method is a system of costing in which costs are ascertained in terms of specific jobs or orders which are not comparable with each other and non-repetitive in nature. This method applied where work is undertaken on the request of customers special requirements and each order is comparatively of shorter time period and work is usually carried out within the factory premises or workshop and moves through activities, processes and operations as a continuously identifiable unit. However,sometimes, the job may be performed outside the factory premises depending upon the nature of job, e.g., plumber job, sanitary job, fitting job,etc. job costing methods are applicable where the unit of manufacture is one and complete in itself. They include printers, job foundries, tool manufactures, contractors, etc. In job costing, the quantity to produce and its requirement is first estimated and thereafter the expenses are determined as per the nature, size or specification of job.   

1.        Production requires use of certain inputs like land, labour, capital, raw materials, etc. these inputs are classified as: (i)                   Factor inputs and (ii)                 Non-factor inputs Factor inputs include factors of production such as land, labour, capital and enterprise, whereas non-factor inputs include raw material and fuels. These inputs are further classified as (i)                   Fixed inputs and (ii)                 Variable inputs A fixed input is one whose supply cannot be increased in the short run such as, land whereas a variable input is one whose supply can be increased in the short run, such as labour. 2.        A production function expresses the technical relationship between inputs and output of a firm. It tells the maximum quantity of output that can be produced with any given quantities of inputs. If there are two factor inputs : labour (l) and capital (k), then the production function can be written as