Snmek 1

Anglicky v odbornch pedmtech"Support of teaching technical subjects in EnglishTutorial:Business Academy

Topic: Economic aspect of business activity

Prepared by:Ing. Marcela Zlatnkov

Projekt Anglicky v odbornch pedmtech, CZ.1.07/1.3.09/04.0002je spolufinancovn Evropskm socilnm fondem a sttnm rozpotem esk republiky.

Business activity has two aspects tangible and economic.

TANGIBLE ASPECTBusiness inputs Business Outputsmaterial, raw materials, production productsWorkforce servicesFixed assets

ECONOMIC ASPECTCosts Business Profit sales, other income

They represent consumption of factors of production for a particular purpose expressed in monetary unitsIt is monetary expression of all business inputsWe must distinguish expenditures from costs, not every expense is costIt is necessary to monitor costs in the company because incurred costs reduce profitCosts

1.BY TYPESThey express structure of the necessary costs of entry into businessThey are used in the 5th account class of the accounting planThey include for example consumed purchases, services, personal costs, depreciations, financial costs

2. FOR PURPOSES OF FINDING OUT ECONOMY RESULTSOperating costsFinancial costsExtraordinary costs

Division of costs

3. BY RELIANCE ON CHANGE IN VOLUME OF PRODUCTIONpermanent (fixed) costs do not change with the change in volume of production, they change in a leap after some time, e. g. rentvariable (changing) costs vary with the change in volume of production. This involves further division:

proportional total costs vary directly with the change in volume of production, e.g. Consumption of basic material progressive total costs are rising faster than volume of production, e.g. increase in production causes pay of bonuses for work degressive total costs are rising more slowly than volume of production, e.g. Better use of factors of production, reduction of losses

4. PURPOSE ( CALCULATION ) DIVISIONdirect (unit) it can be determined directly on the calculation unit, such as consumption of basic materialindirect (overhead) they cannot be determined directly on the calculation unit, we have to divide them, such as energy consumption

5. IN TERMS OF DEVELOPMENTproduction those expended on production of certain productcirculation those expended on the sale of own products

They are sums expressed in monetary units, that the company received from its activitiesMain part of revenues are sales of own outputs and goodsAnother part of revenues are financial revenues, such as surplus in cash box in the case of stocktaking and extra revenuesCompany revenues are found out when the amount of output is multiplied by its priceWe must distinguish revenues from income, not every income is revenueRevenues

1. BY TYPES- these are revenues arranged in the 6th account class of the accounting plan, such as revenues from own outputs and goods, change in state of intercompany inventory, activation of assets developed by own activity, other operating revenues

2. FOR PURPOSES OF FINDING OUT ECONOMY RESULTS - operating revenues - financial revenues - extraordinary revenues

3. BY INTERCOMPANY DEPARTMENTS it is about assignment of revenues to individual intercompany departments, such as production revenues, management revenues, sales revenuesDivision of revenues

It expresses level of company management in crownsIt is found out by comparing costs and revenuesResult of efficiency is the most important indicator which characterizes company managementIt is detected: by non-accounting by use of profit and loss records by accounting with help of profit and loss accountRevenues Costs ProfitRevenues Costs Loss

Revenues Costs = Result of management (profit) Income tax

RESULT OF COMPANY MANAGEMENT

1/ Consider, whether the following costs belong to operational, financial or extraordinary:a/ interests of loanb/gross wages of employeesc/material damages due to floodd/ bank feese/ material consumptionf/ depreciation of DM

2/ Indicate which of the following revenues belong to operational, financial or extraordinary:a/ sales of selling goodsb/ credited interests on depositsc/sales for provided services

3/ The company has spent in the past period total costs on its activity 2 560 000,- crowns. 24 000 pieces of goods were sold in the sales price of 137,- crowns per piece. Find out the result of company management.

Tasks:

Biovec, K. Pehled uiva k maturitn zkouce z ekonomiky. Fortuna, 2004. ISBN 80-7168-747-2. varcov Jena, ing a kolektiv, Ekonomie, strun pehled. Ing. Jena varcov, Ph.D., CEED nakladatelstv a vydavatelstv, 2006. ISBN 80-903433-3-3.Klnsk Petr, Munch Otto, Ekonomika pro obchodn akademie a ostatn stedn koly 1-4. Fortuna, 2003, ISBN 80-7168-862-2.

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