The main types of cost

Each product sold in the market, each service, we receive various firms and companies have their own costs.That it affects the difference in price between the products of one and the same direction, but made from raw materials of varying quality, with the involvement of the specialists of different skill levels.What is the cost price?


This term usually refers to the amount of the cash expenditures incurred by the producer of the goods for its manufacturing, packaging, transportation and marketing.The structure includes the cost of the cost of purchasing raw materials, all kinds of materials for future products, fuel, delivery of these materials, the purchase of the necessary equipment and machine equipment, compensation of employees, etc.They also include the cash costs of the implementation of manufactured products and the provision of a particular type of service.Calculate the cost of a number of important tasks.The first entrepreneur is important to know how much money he spends on the

production of a product, to form a base for the purpose of wholesale prices for their products.Furthermore, thanks to the calculation of the cost price and the level of possible margins, the manufacturer may identify the estimated profit from the sale of goods and services and the profitability of this activity.Due to the calculation of the cost of goods you can find out whether the company operates efficiently and how well it is using its resources.

production costs.Its composition and species

Cost of goods and services depends on many factors, including the availability of modern equipment in production, its quantity and quality, the amount of labor and the level of its training (depends on workers' wages), and so on.d.

It should be borne in mind that if a company decides to purchase new equipment or expand staff, it naturally will affect the price of products.In considering the classification of cost should be borne in mind that there are two such concepts as the cost of production and cost of sales of goods and services.Basically cost types are considered in terms of its composition.It has its own specific classification, that relies on experts in determining the price of finished products.

For example, the differences between these types of cost, as a general and individual?Total cost of all products, which the company produced, obtained by counting all the costs of the materials, their delivery and production process.While the cost of an individual is calculated separately for each item.

Technological cost of (or operational, aggregate) - is the sum of those costs that were necessary to perform certain specific operations.There are these types of cost as shops and production.The first reflects the cost it took to manufacture products in the shop.This includes depreciation of equipment, the cost of its maintenance operation and the shop workers' wages, including social security contributions.This form is used to determine the cost of planning and target prices in plant.Production costs - a broader concept.It includes the price and workshops, and miscellaneous expenses (works general, to support production).

Types cost also include the full, completely covering all the costs directly associated with the production and sale of products.Among other things, the full cost of non-production costs include: advertising goods or services, the cost of packaging and storage of goods, as well as its transportation from one point to another.There is another classification, which differ in the kinds of cost according to the methods of calculation.These include the following: routine, standard and actual cost.