Factors of Production, Economic Agents, and Systems
Factors of Production
Production factors (inputs) are the set of resources that can be used to produce goods and services (outputs). Traditionally, these resources are classified into three categories: labor, land, and capital (machinery, computers, vehicles, raw materials, etc.).
The capital employed in production can be classified into fixed capital and working capital.
- Fixed Capital: All the elements of a company that are in it for a long time (machinery, computer equipment, etc.).
- Working Capital:
Understanding Capital and Revenue Expenditure
Capital Expenditure
Capital Expenditure
Capital Expenditure is expenditure that results in the acquisition or construction of a fixed asset (land, building, vehicle, furniture, or equipment) or enhancement of an existing fixed asset. To be considered a development, the work undertaken must either:
- Substantially lengthen the useful life of the asset.
- Substantially increase the market value of the asset – if the asset were valued after the works, it would be valued at a higher value than before the
Manufacturing Cost Accounting: Statements & Calculations
State of Manufactured Articles
- Initial inventory of raw materials
- + Net purchases of raw materials
- Ready to process raw materials
- – Inventory end of raw materials (xxx)
- Processed raw materials
- + Direct labor
- + Plant overhead
- Processed product cost
- + Initial inventory of products in process
- Total cost of products in process
- – Final product inventory in process
- Cost of goods manufactured =
State of the Articles Sold
- Cost of goods manufactured
- + Initial inventory of finished products
- Total cost of finished goods
- –
Understanding Income Tax, Public Expenditure, and Fiscal Policy
Understanding Key Economic Concepts
Income Tax
Income tax: Taxation (mandatory payments required of families and businesses in order to meet public expenditure).
Types of Taxes:
- Fees (Tasas): Charges levied by the state for the provision of services by the public administration.
- Contributions: Taxes collected by the state from citizens for a work or service that provides a specific benefit.
- Tax (Impuesto): A charge that does not correspond to a specific payment for a service. Examples include:
- Income tax
Key Macroeconomic Concepts and Definitions
Key Macroeconomic Concepts
Externalities: Positive or negative effects on third persons not included in the costs of the company without compensation.
Macroeconomics: The study of the economy as a whole for all economic agents in the country. The CPI, GDP, GNP, aggregate spending, consumption, investment, unemployment are the magnitudes of the variables.
Instruments:
- State/Fiscal Policy: Using the state budget.
- Monetary Policy: The amount used and the price of money (interest rates). Managed by the Spanish
Labor Companies: Structure, Benefits, and Constitution
Labor Companies
For a Sociedad Anónima Laboral (SAL) or Sociedad de Responsabilidad Limitada Laboral (SLL), it is considered necessary that most of its capital, at least 51%, is owned by workers associated with the company under a work contract.
No member may hold shares or units (depending on whether it’s a SAL or SLL) representing over one-third of the capital. The law allows this to increase to 49% if the partner is a public entity.
If partners are not employees, there will be two classes of shares:
Read More