Average Cost

Discussion in 'Growing and Managing a Business' started by A-L-I-E-N, Jul 14, 2010.

  1. A-L-I-E-N

    A-L-I-E-N
    uix_expand uix_collapse
    New Member

    Joined:
    Jul 14, 2010
    Messages:
    9
    Likes Received:
    0
    Recently, I was thinking about the calculation of the average value of fixed working capital...

    And came up with a this formula:

    [​IMG]

    where:
    Фо - cost of basic production means early in the year;

    Фвв, Фвд - cost of input and outgoing fixed means (Correspondingly);

    tр, tнр - number of months during which the basic production means "worked" and "not worked".


    The letters here are conditional. Write those what invented it.


    What do you think about this formula. This formula is correct?
     
  2. Fergal

    Fergal
    uix_expand uix_collapse
    Premium Member
    Premium Member

    Joined:
    Nov 18, 2007
    Messages:
    10,575
    Likes Received:
    1,164
    The text book definition of working capital is current assets minus current liabilities. Hence, it is the amount of money that a company has available at any one time. I'm not sure how your formula, fits in with that definition?
     
  3. A-L-I-E-N

    A-L-I-E-N
    uix_expand uix_collapse
    New Member

    Joined:
    Jul 14, 2010
    Messages:
    9
    Likes Received:
    0
    Sorry... I'm probably wrong words. In fact, I mixed up) formula deduced for one, and drew attention to the other %)

    And this formula is correct for the average cost of basic production means. Now I understood why did not fit one another) Thank you!

    A production means - the main part of the assets of the enterprise. Who are "the main production" and "negotiable".
     
  4. jacoby161

    jacoby161
    uix_expand uix_collapse
    New Member

    Joined:
    Jul 6, 2010
    Messages:
    7
    Likes Received:
    0
    The difference between the average cost and the sales price does determine the profits per unit once the profit maximizing quantity is determined, but the profit maximizing quantity generally does not maximize profits per unit.:dunno:
     
  5. A-L-I-E-N

    A-L-I-E-N
    uix_expand uix_collapse
    New Member

    Joined:
    Jul 14, 2010
    Messages:
    9
    Likes Received:
    0
    Thanx jacoby161, but your message has nothing to do with the issue described in the topic =)
     
  6. humberto913

    humberto913
    uix_expand uix_collapse
    New Member

    Joined:
    Jul 31, 2010
    Messages:
    4
    Likes Received:
    0
    The difference between the average cost and the sales price does determine the profits per unit once the profit maximizing quantity is determined, but the profit maximizing quantity generally does not maximize profits per unit.
     

Share This Page