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Function cost analysis (FСА) (sometimes called function value analysis (FVA)) is a method of technical and economic research of the systems for purpose to optimize a parity between system's (as product or service) consumer functions or properties (also known as value) and expenses to achieve those functions or properties.
Simple models may use standard spreadsheet products. Models typically function through the input of parameters that describe the attributes of the product or project in question, and possibly physical resource requirements. The model then provides as output various resources requirements in cost and time.
RPR = (amount of known resource) / (amount used per year) This ratio is used by companies and government agencies in forecasting the future availability of a resource to determine project life, future income, employment, etc., and to determine whether more exploration must be undertaken to ensure continued supply of the resource.
When a company sells more than one type of product, the product mix (the ratio of each product to total sales) will remain constant. The components of CVP analysis are: Level or volume of activity. Unit selling prices; Variable cost per unit; Total fixed costs; Manpower Cost Direct and indirect
A ratio's values may be distorted as account balances change from the beginning to the end of an accounting period. Use average values for such accounts whenever possible. Financial ratios are no more objective than the accounting methods employed. Changes in accounting policies or choices can yield drastically different ratio values. [6]
Cost function. In economics, the cost curve, expressing production costs in terms of the amount produced. In mathematical optimization, the loss function, ...
Conditional on producing the amount of output consistent with, say, the middle isoquant, the lowest cost can be obtained by using amounts of labor and capital such that the point on the given isoquant is on the lowest possible isocost curve—that is, at the point of tangency between the given isoquant and one of the cost curves.
In economics, a cost function represents the minimum cost of producing a quantity of some good. The long-run cost curve is a cost function that models this minimum cost over time, meaning inputs are not fixed. Using the long-run cost curve, firms can scale their means of production to reduce the costs of producing the good. [1]