Vegetable producers make decisions based on profitability based on real costs, that is, in the calculation of profit, in addition to economic-monetary or quantifiable costs, others that also influence decision-making are included. Production costs would be defined as the monetary amount of the resources used to obtain a product, increasing the social value of the well defined, reflected in its sale price. These resources would be seeds, inputs, labor, and indirect production costs.
Explanation:
The vegetable producer is the one who sows and harvests an item on the farms of his production unit and is also the one who manages his financial resources, he must carry out production calculations, whose objective is to obtain success and the maximization of benefits measured on the basis of quantifiable and non-quantifiable economic terms. In this sense, conventional financial profitability is identified as the benefit obtained from an investment in the management of a company or business dedicated to any economic activity. Profitability is "the relationship between income and costs, generated by current and fixed assets used in the production process." Consequently, in the vegetable business, to calculate the profitability of the production of a certain item, it is necessary to establish the difference between income and costs, resulting in a profit. The cost elements, the first element corresponds to the material and other direct inputs, which “can be identified, both from the logical point of view and from a practical point of view, with the product ”. For example, potato seeds, within the potato crop. From an economic point of view, a material is used in the production of the item not only when it is physically incorporated into it, but also when it is wasted or loses value due to its use in the production process. For example, in the fumigation of plants, the pesticide that is spread through the air during this process is a waste whose cost is charged to the final product. The second includes the remuneration of all the labor that works in production. For example, the salary of the producer who waters the seed, as well as the farmer who fertilizes the plants, who collect the harvest; and a third component is made up of indirect production costs, which are related to the cost object (products in process and then harvested products), but which cannot be assigned to that cost object in an economically feasible way. For example, the cost of renting the plot, the cost of depreciating equipment, such as the tractor; the salary of the crop supervision staff. With this information, a true profitability can be calculated, which allows the producer to plan, control and just make appropriate decisions for the development of his future harvest.
