In the process of production at the plant there are costs that are not directly related to a specific facility costs.They relate to overhead costs.In addition to the cost of managing shops (departments, sections) of main and auxiliary facilities, they include those for the operation and maintenance of machinery and equipment of general-purpose.
Production costs include:
1. Costs for controlling production:
- the salary of the management areas, shops, structural divisions;
- contributions for health insurance, social activities;
- to pay for business trips of employees sites and shops.
2. Depreciation and amortization district and workshop purposes.
3. Maintenance costs of assets of general-purpose:
- repairs and maintenance;
- operating leases;
- insurance.
4. Costs for the organization of production and the improvement of production technology:
- wage workers;
- contributions to social funds;
- expenditures intended to improve production, improve its reliability and other performance;
- fees and work of other organizations.
5. Costs intended for the maintenance of production facilities (lighting, heating, drainage and water supply and other utilities), and the production process (general-staff wages, deductions for health insurance and social activities).
6. The costs of safety, process control, environmental protection and labor.
7. Other costs:
- shortage of work in progress, from damage and loss of property;
- the cost of moving materials, raw materials within the enterprise;
- payment delays.
overhead cost distribution has some peculiarities.Since these costs are attributed to indirect costs, economically feasible, and to distribute them being attached to such a concept, as a normal power.Under this concept refers to the expected average volume of production activity achieved under normal activities within a few operating cycles or years.This takes into account and the planned volume of production facilities.Normal capacity is determined by the organization itself.Production costs are calculated on the basis of the regulatory power it.They are divided into variables and constants.The composition and the list of these indicators, the company establishes its own.
Variable costs - is the cost of management and maintenance of production, changes in proportion to adjustments in production volumes.They are distributed on all the objects selected with the help of cost allocation base (output, wages, hours of work) Based on the actual capacity of the company in the reporting period.Thus, they are fully included in the cost of goods manufactured.
Fixed costs - is the cost of management and maintenance of production, which are stable enough (despite changes in production).They are allocated to cost objects using the special base (output, wages, hours of work), calculated based on the normal capacity of the enterprise.Unallocated fixed costs included in cost of goods manufactured in the period when they arise.The cost of products sold included the difference between the actual fixed costs and amount calculated on normal operating capacity.If you have multiple divisions or departments in the company overhead expenses are allocated in their section.
Accounting for overhead cost is based on:
- selected based cost allocation;
- calculated the normal power;
- the total value of the planned overhead cost to their broken down into fixed and variable.
carried out on the basis of their balance account 25 "General Expenses".
