SISU-240 Lecture Notes - Lecture 4: Labour Power

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fuchsiacamel933

17 Jan 2016

School

American University

Department

SISU - INT'L SERVICE UNDERGRADUATE

Course

SISU-240

Professor

Nathan Paxton

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Document Summary

Wages are the sum of money paid for a labor time or output of labor. Worker sells their labor power (ability to work) Why does a worker sell his labor power. Labor = life activity = means to enable worker to exist. Worker considers his life to begin when the work ceases. Wages will be determined by the cost of production. Almost no training required = wages are the price os means of subsistence. Depreciation of the worker is taken into account. Capital consists of raw materials, instruments of labor, means of subsistence, etc Accumulated labor which serves as a means of new production is capital. Remains the same if we change commodities but keep the exchange value. Not all sums of exchange values is capital. It only becomes capital by maintaining and multiplying itself as an independent social power. Having exchange value for direct, living labor power. Changes according to changes in the industry as a whole.

Related Questions

1.) On January 31, Village Bank had 500,000 shares of $3 parvalue common stock outstanding. On that date, the company declareda 10% stock dividend when the market price of the stock was $62 pershare. The immediate effect of this dividend upon Village Bankwas:

A.)A reduction in cash of $3,794,500.

B.) A reduction in retained earnings of $3,100,000.

C.) A reduction in retained earnings of $150,000.

D.) A liability to the stockholders of $150,000.

2.) Mayfair Corporation has outstanding 70,000 shares of $1 parvalue common stock as well as 20,000 shares of 7%, $100 par valuecumulative preferred stock. At the beginning of the year, thebalance in retained earnings was $800,000, and one year's dividendswere in arrears. Net income for the current year is $580,000.Compute the balance in retained earnings at the end of the year ifMayfair Corporation pays a dividend of $3 per share on its commonstock this year.

A.)	$1,080,000.
B.)	$1,670,000.
C.)	$890,000.
D.)	$310,000.

3.) During the years 2009 through 2011, Powers, Inc., reportedthe following amounts of net income (dollars in thousands):

Relative to the prior year, the percentage change in netincome:

A.)	Was the same in 2010 and 2011.
B.)	Was larger in 2011 than in 2010.
C.)	Was smaller in 2011 than in 2010.
D.)	Cannot be determined without knowing how many shares of stockwere outstanding.

4.) Hines Cannery issued capital stock in 2009 for $700,000.During 2009 the company paid dividends of $250,000. What is theeffect of these events in Hines' statement of cash flows for2009?

A.)

$700,000 cash provided by investing activities, and $250,000cash disbursed for financing activities.

B.)

$700,000 cash provided by financing activities, and $250,000cash disbursed for investing activities.

C.)

$700,000 cash provided by financing activities, and $250,000cash disbursed for operating activities.

D.)

$450,000 net cash provided by financing activities

5.) Direct labor costs in a paint factory would include wages ofemployees who:

A.)	Supervise heavy equipment operators.
B.)	Operate paint-mixing machines.
C.)	Develop highly secret formulas for new products.
D.)	Paint the interior of the factory every two years.

6.) Which of the following is a characteristic of manufacturingoverhead in a job order cost system?

A.)	It is indirectly traceable to specific jobs or units.
B.)	It includes the cost of all labor relating to manufacturingoperations.
C.)	It is assigned to units produced by means of an overheadapplication rate.
D.)	It includes the cost of direct materials used and of indirectlabor.

7.) A job order cost system traces direct materials cost to aparticular job by means of:

A.)	Materials requisitions.
B.)	A production budget.
C.)	The Materials Inventory controlling account.
D.)	A debit to the job cost sheet for the job.

8.) Which of the following costing systems would always use jobcost sheets?

A.)	Job order costing.
B.)	Process costing.
C.)	Activity-based costing.
D.)	All three systems.

9.) Edwards Auto Body uses a job order cost system. Overhead isapplied to jobs on the basis of direct labor hours. During thecurrent period, Job No. 337 was charged $425 in direct materials,$475 in direct labor, and $190 in overhead. If direct labor costsan average of $16 per hour, the company's overhead application rateis:

A.)	$7.27 per direct labor hour.
B.)	$6.40 per direct labor hour.
C.)	$17.50 per direct labor hour.
D.)	$40 per direct labor hour.

10.) Marty's Metal Shop uses a job order cost system. It appliesoverhead to jobs at a rate of 175% of direct labor costs. Job No.2617 required $800 in direct labor costs. The job was initiallybudgeted to require $850 in direct labor costs. Overhead applied toJob No. 2617 during the period amounted to:

A.)	$850.
B.)	$1,400.
C.)	$1,275.
D.)	Some other amount.

11.) In a job cost system, the Work-in-Process Inventorycontrolling account may be reconciled to the total of the:

A.)	Employee time cards.
B.)	Materials requisitions.
C.)	Work-in-Process Inventory records for each department orprocess.
D.)	Job cost sheets.

12.) For the month of December, its first month of operations,the Radcliffe Corporation completed and transferred 800 units ofproduct costing $80,000 to produce to Finished Goods Inventory. IfRadcliffe sold 650 units during the same month, how much was costof goods sold for the same period?

A.)	$80,000.
B.)	$8,000.
C.)	$6,500.
D.)	$65,000.

13.) The computation of equivalent full units is generally notnecessary when:

A.)	Beginning work-in-process inventories are significantly largerthan ending work-in-process inventories.
B.)	Beginning and ending work-in-process inventories differ onlyslightly.
C.)	The number of units in ending work-in-process exceeds the numberof units completed and transferred to finished goods during theperiod.
D.)	Per-unit costs become distorted as a result of not computingequivalent full units of production.

14.) During July, the equivalent full units of direct materialsadded to the product worked on by Department A amounted to a totalof 90,000 applied as follows: beginning inventory, 20,000 units;units started and completed in July, 60,000 units; and endinginventory, 10,000 units. Assuming that the cost of direct materialsrequisitioned by the department in July was $135,000; the amount ofthe materials cost to be assigned to the ending inventory wouldbe:

A.)	$16,875.
B.)	$54,000.
C.)	$15,000.
D.)	$18,000.

lemoncrocodile0

PLEASE ANSWER ALL PARTS OF ALL QUESTIONS THOUROUGHLY (WILL GIVE GOOD RATING-THANKS)

A. Consider an entrepreneur who has decided to follow through on a business venture. He has quit his job where he was employed as a Medical Assistant earning $2,500 a month, and has decided to run this new business venture alone as the sole proprietor. He approaches a bank with his business idea and obtains a loan for the startup and purchases the equipment and machinery that he would need for the business including the purchase of a web address and design for his business, he also takes out a 2 year lease on a building and adjoining property, with paid utilities at an excellent location and contracts with suppliers to provide him with raw materials on a six month basis at discounted bulk purchase rates. His total fixed costs on a monthly basis for this venture, which includes his forgone earnings from his previous job, are $7,500.

He now needs to hire workers to operate the machines, handle orders etc. and he needs at least 5 workers to begin production. Having taking ECON 2020 while in college, he computes the total product function for his business, on a monthly basis, given the quantity of other resources he has, in the short run as follows:

Quantity of Labor (Number of workers)	Total Product (Output)
5	200
10	450
15	800
20	1100
25	1300
30	1400

1. First, assume no other information on the profitability of this venture, what is the implied 'profit' expected by the entrepreneur each month? Explain

2. Obtain the marginal physical product of this business, graph the function and provide an intuitive explanation for the shape of the function.

3. Now suppose each worker hired is paid $10/hr in wages and works 150 hours each month. Obtain the monthly total variable, total fixed and total cost functions for this business if it produces at the various output levels in the table above (i.e. fill out the table below, and show all necessary work below)

Output (Q)	Total Fixed Cost	Total Variable Cost	Total Cost
200
450
800
1100
1300
1400

4. The entrepreneur knows that his business is producing in an environment of perfect competition and as a result the market determined price after his entry into the business is $37.50 for each unit of the product that he sells. Determine the firm's monthly profit maximizing (or loss minimizing) output level , using the profit maximizing rule

5. From (4), is this firm making any excess (economic) profits in the short run? Explain. Compute the firm's monthly profits (or losses) at the profit maximizing output level

6. What should we expect to happen in the long run in this industry as a result of the correct answers given in part (5)? Explain.

blushcamel945

We ^[49] have seen that the capitalist process of production is a historically determined form of the social process of production in general. The latter is as much a production process of material conditions of human life as a process taking place under specific historical and economic production relations, producing and reproducing these production relations themselves, and thereby also the bearers of this process, their material conditions of existence and their mutual relations, i.e., their particular socio-economic form. For the aggregate of these relations, in which the agents of this production stand with respect to Nature and to one another, and in which they produce, is precisely society, considered from the standpoint of its economic structure. Like all its predecessors, the capitalist process of production proceeds under definite material conditions, which are, however, simultaneously the bearers of definite social relations entered into by individuals in the process of reproducing their life. Those conditions, like these relations, are on the one hand prerequisites, on the other hand, results and creations of the capitalist process of production; they are produced and reproduced by it. We saw also that capital â and the capitalist is merely capital personified and functions in the process of production solely as the agent of capital â in its corresponding social process of production, pumps a definite quantity of surplus-labour out of the direct producers, or labourers; capital obtains this surplus-labour without an equivalent, and in essence, it always remains forced labour â no matter how much it may seem to result from the free contractual agreement. This surplus-labour appears as surplus-value, and this surplus-value exists as a surplus-product. Surplus-labour in general, as labour performed over and above the given requirements, must always remain. In the capitalist as well as in the slave system, etc., it merely assumes an antagonistic form and is supplemented by complete idleness of a stratum of society. A definite quantity of surplus-labour is required as insurance against accidents and by the necessary and progressive expansion of the process of reproduction in keeping with the development of the needs and the growth of population, which is called accumulation from the viewpoint of the capitalist. It is one of the civilising aspects of capital that it enforces this surplus-labour in a manner and under conditions which are more advantageous to the development of the productive forces, social relations, and the creation of the elements for a new and higher form than under the preceding forms of slavery, serfdom, etc. Thus it gives rise to a stage, on the one hand, in which coercion and monopolisation of social development (including its material and intellectual advantages) by one portion of society at the expense of the other are eliminated; on the other hand, it creates the material means and embryonic conditions, making it possible in a higher form of society to combine this surplus-labour with a greater reduction of time devoted to material labour in general. For, depending on the development of labour productivity, surplus-labour may be large in a small total working-day, and relatively small in a large total working-day. If the necessary labour-time = 3 and the surplus-labour = 3, then the total working-day = 6 and the rate of surplus-labour = 100%. If the necessary labour = 9 and the surplus-labour = 3, then the total working-day = 12 and the rate of surplus-labour only = 33â %. In that case, it depends upon the labour productivity how much use-value shall be produced in a definite time, hence also in a definite surplus labour-time. The actual wealth of society, and the possibility of constantly expanding its reproduction process, therefore, do not depend upon the duration of surplus-labour, but upon its productivity and the more or less copious conditions of production under which it is performed. In fact, the realm of freedom actually begins only where labour which is determined by necessity and mundane considerations ceases; thus in the very nature of things, it lies beyond the sphere of actual material production. Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilised man, and he must do so in all social formations and under all possible modes of production. With his development this realm of physical necessity expands as a result of his wants; but, at the same time, the forces of production which satisfy these wants also increase. Freedom in this field can only consist in socialised man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favourable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the true realm of freedom, which, however, can blossom forth only with this realm of necessity as its basis. The shortening of the working-day is its basic prerequisite.

What does the reading say? What are the key concepts in the reading? Write a paragraph summarizing the reading.

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SISU-240 Lecture Notes - Lecture 4: Labour Power

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