Principles of Planning Branch Profitability

All existing views on the question of the structure of prices and profitability may be reduced to three basic conceptions. S. Strumilin and Ia. Kronrod suggest that profitability in the individual branches of industry be established in proportion to the wage fund â either to the actual fund or with certain calculated corrections; this scheme is provisionally called the setting of prices "according to value." Others â Z. Atlas, L. Vaag and I. Malyshev â think that net income, profitability, should be calculated in proportion to the value of fixed and circulating production assets â the scheme of "prices of production." The third proposal, which is reflected in the works of D. Kondrashov, involves the establishment of profitability in the form of an identical percentage of planned production cost for all branches â the scheme of "averaged value."