Costs are classified according to theirdestination. In theory and in practice, their clear distinction serves as a determining factor for the effectiveness of the work. At all stages of management, costs are grouped, the cost of goods is created. At the same time, appropriate sources of funds are identified. Let us further consider what the present costs of the enterprise are.
Expenses of the economic entity are divided into three categories. In particular, they distinguish:
Immediately with the release and marketing of productsassociated capital and current costs. They have different effects on the activities of the economic entity, but they are equally important for achieving the set goals.
The costs of this category constitute the largest shareof all costs of the subject. They include funds aimed at material and raw materials, financing of fixed assets, labor and so on. Current costs are returned at the end of the cycle of production and marketing of products and are included in the revenue.
Current production costs are reflected in accounting documents. The key objectives of cost accounting are:
Current costs are accounted for based on a number ofbasic provisions. First of all, the reflection of information must correspond to the goals of improving the activities of the subject. To ensure comparability of different costs, a single nomenclature of articles is being developed. It provides an opportunity to cover various current costs. The production of products, their sale, the purchase of materials, raw materials, etc., are thus reflected using common designations that are understandable for all divisions. The nomenclature of articles is also used in the distribution of costs by classification groups.
Each economic entity must evaluateefficiency of current costs. The assessment is carried out in terms of rationality and the availability of opportunities for savings in this and forthcoming periods. Current costs will be optimal if they contribute to improving the final result - a continuous increase in turnover and profit. To implement this task it is necessary:
This classification has an important practicalvalue. Variable current costs are reduced or increased in proportion to the volume of output. They ensure the purchase of materials and raw materials, energy consumption, transportation, trade commission and other costs. Constant current costs from the dynamics of the production volume do not depend. This category includes depreciation charges, interest on the loan, rental fees, utilities, administrative costs, and so on. There is also a separate category of conditionally-constant (variable) costs. Their change is not directly proportional to the volume of output.
Unit cost canbe calculated by the absorption method. It involves the addition of all production costs. Information on cost is the basis for determining the amount of work in progress, the financial result, the volume of inventory. It allows you to analyze the profitability of individual products, their groups, as well as the productivity of the units. In accordance with the results, a decision is made on the expediency of the subsequent release or work. The cost index is also used in the pricing process, especially when determining the regulated cost.
Earlier, the absorption method was widely useddistributed in a planned economy. With its help, management decisions were made with full capacity utilization and lack of price competition. Now the situation has changed. In particular, the capacity utilization of an enterprise is determined by the demand for products. It, in turn, largely depends on the price. Determine the cost value for a given volume of production can be only after the end of the reporting period. Meanwhile, the manager needs this indicator already at the planning stage of the assortment.
From what has been said above, it follows that asThe key drawback of the calculation by full absorption is the lack of a link between the size of costs and the volume of production. In addition, we can distinguish the following disadvantages:
These shortcomings can be completely avoided,if the method of separation of costs into fixed and variable is applied. In this case, the cost of stocks will only include the last. At the same time, fixed costs are included in the expenses of the period. As a result, profits are derived from the dependence on changes in the volume of stocks.
The costs that form the cost price are divided depending on the economic content of:
The structure of these groups depends on various factors. In particular, it affects the nature of the products and materials used and raw materials, technical level, forms of organization, location of production, conditions of supply and sale of goods.
In all economic sectors, these costsconstitute the bulk of the cost price. The material stocks include semi-finished products, raw materials, energy, fuel and so on. Some of these objects are processed or assembled. This, in particular, refers to the semi-finished products and materials purchased from third parties. The allocation of energy and fuel in the resources is conditioned by their economic importance. To material costs also include the cost of packaging, packaging, parts, tools. The estimation of resources is carried out proceeding from the purchase price (without VAT), surcharges, commissions to foreign trade, supply and intermediary subjects, customs duties and some other indicators. From the material costs, the cost of residual heat carriers, semi-finished products, raw materials that are formed during the production of products and partially or completely lose their consumer properties and therefore can not be used can be excluded from material costs.
The costs reflect the participation of living labor information of the cost price. These costs include the salary of the main staff, as well as workers who are not in the state, but participate in the production of products. Remuneration consists of:
Deductions to soc. Needs are a form of redistribution of national income to finance social needs. The funds are directed to the relevant extra-budgetary funds and have a designated purpose. Depreciation is included in the cost of production in amounts that are calculated in accordance with the carrying amount of property, plant and equipment and current standards. Depreciation is charged to both own facilities and leased (unless otherwise specified in the agreement). As part of other costs, there are a variety of costs. These include, in particular, fees and taxes, deductions to funds, insurance premiums, payments for pollution of nature, payment of interest for the use of credit, representation and travel expenses, payment for work related to certification, remuneration for rationalization, invention and so on .