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Research Reports |
| Title: | Basic Theory of Calculating Costs: Applications to Trucking |
| Authors: | Ken L. Casavant |
| Publication Date: | Sep 1993 |
| Report #: | SP-118 |
| TRID #: | 00737580 |
| Keywords: | cost control, demand, economic efficiency, economics, pricing, productivity, profitability, supply, theory, trucking |
| Type: | Research Report – Staff Papers |
Knowledge and control of costs is fundamental to any business enterprise. Understanding the structure of costs allows managers to achieve various goals within their organization. Costs knowledge has implications for pricing and for efficiency gains, both actions of which increase the potential profitability of the firm. Pricing of the output of the firm service, has to be based on knowledge of the costs of providing that service as well as an understanding of the market demanding the service. Additionally, improvements in internal cost structure and effective cost containment increase the potential for profit, even in a stagnant market situation.
The basic conceptual theory of costs will be presented in this report, emphasizing definitions of costs as they are applied to business situations. These costs' concepts will then be evaluated relative to differing firm characteristics that have specific impacts on those costs. Such items as measures of utilization and market situations will receive specific attention, then an approach to economic-engineering, or internal firm determination of costs, will be provided. Finally, the report will conclude with a brief section on how to determine and evaluate productivity of the resources used in producing service as a firm.
Casavant, Ken L. Basic Theory of Calculating Costs: Applications to Trucking, SP-118. North Dakota State University, Fargo: Upper Great Plains Transportation Institute, 1993.
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