A competently calculated prime cost is a guarantee of future profit

The cost price is a monetary expression of the costs necessary to carry out commercial or production activities for the production and sale of manufactured goods, the provision of services or the performance of work. The composition of these costs is regulated at the legislative level. This is due to the peculiarities of taxation and the need to classify the costs of entrepreneurs on the sources of their reimbursement. In Russia, this process is regulated by Chapter 25 of the Tax Code. The methods of its calculation of an enterprise may be set at its own discretion, based on the characteristics of its activities.

In terms of costs, such types of prime cost as workshop, production (finished products) and complete (already shipped products or goods) are allotted.

Shop floor cost - this is the cost of production within the shop. These include direct materials costs , depreciation of workshop equipment, workers' salaries, UST deductions, general workshop costs, equipment maintenance costs .

Production - is the costs at the level of the shop plus plant costs (costs for general and administrative and management needs), as well as the costs of auxiliary production.

The total cost price is the sum of all elements: the production cost of the products and the costs that accompany the process of its implementation.

The cost price is also classified according to the periods of costs. In this aspect it can be planned and actual. Planned - is determined at the beginning of the period, based on the norms of costs and other planned indicators. Actual - is calculated at the end of the production period according to the accounting data on actually incurred costs for the processes of product creation and sale. The cost of production is the largest value in the price structure. Its change directly leads to an increase or decrease in the amount of profit.

Elemental classification of costs in cost can include such elements as material costs, funds for wages, depreciation, other expenses. But such a grouping of costs does not always make it possible to form a price for the goods and does not make it possible to divide expenses into conditionally-constant ones (they practically do not change when the production volumes fluctuate: heating, depreciation, wages, etc.) and conditionally variable (vary directly with the volumes Production: materials, energy, fuel consumption).

Therefore, for certain types of goods, costs are determined through the calculation. In this case, the prime cost is the sum of many elements. At the same time, the composition of expenditures is determined by their focus (on the production of products or servicing this process) and the place of origin (production of basic and auxiliary). Typical is the nomenclature of articles: raw materials; Purchased materials (semi-finished products), fuel and energy; Accessories; Recyclable waste; The basic salary of workers; Additional salary of workers; Deductions to UST; Costs for the preparation of production; Equipment maintenance costs; Loss from marriage; Workshop and general factory expenses; Wear of tools; Out-of-production expenses; Other production costs.

The cost of calculating items are divided into basic and invoices. The first group includes all costs associated with the process of creating products: materials, raw materials, wages of workers, etc. The second - the cost of management, organization, training of production.

The most important indicators of the cost of production are the costs incurred per 1 ruble of products, the cost of all the products created in the production, one unit.