CPT Chapter Theory of Cost
With Bharat Galani.Duration:2hrs 22min
| Theory of Cost | Duration (min:sec) |
| Cost concept | |
| {modal https://www.youtube.com/embed/TS3VOZLLW14?autoplay=1;rel=0|width=780|height=439|title=Introduction}Introduction{/modal} | 01:45 |
| {modal https://www.youtube.com/embed/V9qDwVpk_4Y?autoplay=1;rel=0|width=780|height=439|title=Types of Cost}Types of Cost{/modal} | 24:00 |
| {modal https://www.youtube.com/embed/LdHEmxDzcoc?autoplay=1;rel=0|width=780|height=439|title=Summary Cost concept}Summary Cost concept{/modal} | 04:51 |
| {modal https://www.youtube.com/embed/nYFO5lMTBYM?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} | 06:47 |
| Cost Curves | |
| {modal https://www.youtube.com/embed/TFR0fJcRGvw?autoplay=1;rel=0|width=780|height=439|title=Cost Function}Cost Function{/modal} | 03:02 |
| {modal https://www.youtube.com/embed/MaxxSOxy--o?autoplay=1;rel=0|width=780|height=439|title=Short run total cost (Fixed Cost, Variable Cost, Semi variable Cost, Step up cost)}Short run total cost (Fixed Cost, Variable Cost, Semi variable Cost, Step up cost){/modal} | 23:59 |
| {modal https://www.youtube.com/embed/yOCYYowZwu8?autoplay=1;rel=0|width=780|height=439|title=Total Cost Curve}Total Cost Curve{/modal} | 03:55 |
| {modal https://www.youtube.com/embed/fObTaU3Kb7o?autoplay=1;rel=0|width=780|height=439|title=Average & Marginal Cost}Average & Marginal Cost{/modal} | 03:12 |
| {modal https://www.youtube.com/embed/CtpgArv9mrU?autoplay=1;rel=0|width=780|height=439|title=Cost Curves}Cost Curves{/modal} | 20:35 |
| {modal https://www.youtube.com/embed/XSsrd0uANjY?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} | 18:54 |
| {modal https://www.youtube.com/embed/Oyyxv4j5gfo?autoplay=1;rel=0|width=780|height=439|title=Long run Total Cost Curve}Long run Total Cost Curve{/modal} | 17:52 |
| {modal https://www.youtube.com/embed/8ppbK60pDUU?autoplay=1;rel=0|width=780|height=439|title=LAC Reasoning}LAC Reasoning{/modal} | 08:56 |
| {modal https://www.youtube.com/embed/22mEg3yr9FY?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} | 02:31 |
| {modal https://www.youtube.com/embed/0XLWjs9CQCQ?autoplay=1;rel=0|width=780|height=439|title=Conclusion}Conclusion{/modal} | 01:36 |
| Total | 2:21:55 |
Few MCQ Questions-
Which of the following is known as Envelope curve?
(a) MC curve
(b) AFC curve
(c) LAC curve
(d) TFC curve
In the long run all factors are
(a) Fixed
(b) Variable
(c) All factors remain unchanged
(d) None.
A firm will close down in the short period if its average is less than its:
(a) Average cost
(b) Average variable cost
(c) Marginal cost
(d) Average fixed cost
Implicit cost may be defined as the:
(a) Costs which do not change over a period of time
(b) Costs which the firm incurs but doesn't disclose
(c) Payment to the non owners of the firm for the resources
(d) Money payment which the self employed resources could have earned in their best alternative employment
Payment made to outsiders for their goods and services are called:
(a) Opportunity cost
(b) Real cost
(c) Explicit cost
(d) Implicit cost
In which of the following cases opportunity cost concept applies?
(a) Resources have alternative uses
(b) Resources have limited uses
(c) Resources have no use
(d) None of the above.
Fixed cost is known as ____ cost
(a) Prime
(b) Supplementary
(c) Overhead
(d) Direct
Notes
Index
Cost analysis
Types of cost
Short run cost
Long run cost
Cost concepts
Accounting cost and Economics cost
Outlay costs & Opportunity costs
Direct or traceable costs & Indirect or non- traceable cost
Fixed & variable cost
Accounting Cost vs Economics Cost
Accounting cost (Explicit cost)
Salary paid to workers , Rent paid
Cash outflow
Implicit cost
Owner {Capital Invested + Self time invested}
No cash outflow
Economic cost = Accounting cost + Implicit cost
Economics Profit = Revenue- Economics cost .
Accounting Profit vs Economics Profit
Outlay cost vs opportunity cost
Outlay cost= expenditure of funds. recorded in books.
Opportunity cost = cost of forgone opportunity.Not recorded in books.
Example- Cost of education
Direct vs Indirect Cost
Direct or traceable cost
traceable with product
Ex-Raw Material , direct wages
Indirect or non-traceable cost
Not traceable with product
Ex- Office Rent, Marketing expense, Travel bills
Fixed vs Variable cost
Fixed or constant cost
Vary not with output but capacity level.
Unavoidable
programed fixed cost
Ex- Rent,Interest on loan
Variable cost
vary with output
Ex-Raw material, wages etc
Short run cost
Variable cost = can be changed with output.
dependent on output
Ex-direct labour, raw material
variable cost is fixed per unit
Fixed cost = cannot be changed with output
independent of output
Ex- Rent,Salary to manager
Semi variable cost
Fixed cost is variable per unit
Longrun cost
All the factors can be changed
Select the plant size for given output for minimum cost
Short run curve - plant curve
Long run curve- planning curve
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