The cost price of the enterprise's products

As you know, when manufacturing products, the company spends certain funds for the purchase of materials, raw materials, fuel and other. In the process of making products, machines and tools are used. Regular maintenance of equipment, its repair. Certain means are also spent on this. In addition, in the production process, people are taking part whose work is paid. The enterprise incurs some expenses in connection with the sale of its goods.

The sum of all the above expenses is the cost of production. When calculating (calculating), all costs are grouped. Thus, various items of expenditure are formed: on materials and raw materials, energy and fuel, on production (technological) needs, wages of the basic workers of production and so on.

Calculation allows you to calculate how much does product manufacturing not only in general at the enterprise, but in each division in particular. In addition, the calculations allow you to determine what costs are related to production directly, and which are related to the organization of management and maintenance. It is also determined which part of the costs goes to manufacturing and which part is spent selling the goods.

The concept of cost is used to determine the efficiency and quality of the enterprise.

When calculating all costs are divided into indirect and direct.

The second includes the cost of materials, raw materials, technological fuel, labor.

Indirect costs include maintenance (operation and maintenance) of machinery, equipment, tools, as well as non-production and general costs of the enterprise. These costs are associated with the whole production as a whole. At the same time, expenses for heating, lighting, maintenance of premises and equipment do not directly affect the cost of production. In this regard, the distribution of indirect costs is carried out in proportion to the costs of labor payment to workers or direct costs, or in accordance with other characteristics.

With a decrease in the cost of production, there is an accumulation of funds for the expansion of the enterprise. This is an important factor in increasing the profitability of the company.

The cost of production is considered to be one of the main qualitative indicators of the work of economic entities and structural subdivisions that make up their composition. This indicator affects the financial results of activities, the pace of expansion of enterprises.

The composition of costs, which are included in the cost of production, is determined by state standards, and the methods of calculation - directly by business entities.

To identify opportunities to increase the effectiveness of the use of resources in the production and sale of goods, all costs associated with these processes are analyzed.

There are provisional (preliminary), reporting and planned cost.

In the first case, accounting actual costs and data on the output of goods for a specific period of the year are taken into account. Also take into account the planned cost calculations and the expected output of products before the end of the reporting year. The indicators of the provisional cost are applied for the preliminary determination for the reporting year of the results of the work of the enterprise and the industry as a whole.

In the second case, the calculation is carried out in accordance with the accounting data. The reported cost reflects the actual costs of sales and production for the year.

In the latter case, the calculation is carried out for an estimated period in accordance with the progressive norms of labor costs and production assets. The planned cost price reflects the subsequent technical progress and improvement of the organization of labor and production.