Commerce Forward

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

Business is a wide term. It includes all occupations in which people are busy in earning income either by production or purchase and sale or exchange of goods and services to satisfy the needs of other people with the main objective of earning profit. Definitions by different authors: “Business is a human activity directed towards producing or acquiring wealth through buying and selling goods”. -Lewis H. Honey                                                                                                  “Business is an activity in which different persons exchange something of value, whether goods or services for mutual gain or profit”. - Peterson and Plowman                                         “Business is sum total of those processes which are engaged in the removal of hindrances of person (trade), places (transport and insurances) and time (warehousing) in the exchange (banking) of commodities”. -James Stephenson                                              

cost accounting is a specialized branch of general accounting in which detailed and systematic information related to cost of goods or services are maintained in such a way as to obtain detailed  information about total and per unit cost and guidance for the analysis and control of cost. some of the definitions of cost accounting are as follows:  "cost accounting is the technique and process of ascertainment of cost".  "cost accounting is the provision of such analysis and classification of expenditure as will enable the total cost of any particular unit of production to be ascertained with reasonable degree of accuracy and at the same time to disclose exactly how such cost is constituted'. "cost accounts are accounts supplementary or subsidiary to financial accounts and are compiled for the purpose of giving additional information as to the detailed cost of working of an undertaking or any particular section thereof". "costing is the classif

1.        Price elasticity of demand is a measure of degree of responsiveness of demand for a commodity to change in its price. In other words, the price elasticity of demand quantifies the effect of a change in its own price on the quantity demanded. 2.        Formally, price elasticity of demand is defined as the ratio of the change in quantity demanded to a percentage change in price. It is expressed as: Price elasticity of demand= e d = % change in quantity demand/ %change in its own price = Δq/Δp . p/q The price elasticity of demand is always negative. 3.        Price elasticity of demand may be categorized as: (i)                   Greater than unitary elastic demand, (ii)                 Less than unitary elastic demand (iii)                Unitary elastic demand (iv)               Perfectly inelastic demand and (v)                 Perfectly elastic demand. 4.        Greater than unitary demand (or elastic demand) is one in which the percentage change in