Question

Please find the video titled “These robots and machines are revolutionizing the agriculture industry.” by Engineering cha Kida and answer the following question:
Automation is implemented in many industries today. In this video, do you think the machine costs should be included as part of the cost of the products. If so, how would you allocate the costs (this should be more than 50 words, but less than 100 words).

Answer 1

After seeing the video,i am of the view that rapid spread of technology in agriculture is there, farmers are required to face a severe competition, particularly when the farm produce is to be exported. It can be clearly stated that, the machinery cost should be included as part of the cost of the product but not as a direct expense but rather as an indirect expense, Machinery cost has to be allocated as fixed cost while calculating income of organizations engaged in agriculture and farm bussiness.

Mostly, the costs are divided into 2 broad categories viz. Fixed costs and variable costs.

Fixed costs: - These are fixed. In agriculture, land is a fixed capital. The other important items of fixed costs are implements and tools, machinery, farm buildings, work animals etc.

Variable costs: - These costs vary with the production. One can increase or decrease their use. In agriculture, cost of seed, manure’s and fertilizers, irrigation, labour are the variable costs.