Every company in the normal course of business shall be indirect costs.These include costs which are the direct assignment to a specific position range of products possible.
indirect (overhead) costs accompany the main activities of any organization, but do not involve her directly.They are not included in the cost of materials and labor.Indirect costs associated with the operation and maintenance of plant and equipment, organization and management, its maintenance, travel expenses, professional training of employees and non-productive losses (spoilage of raw materials, loss of downtime).
Indirect costs also contain costs of telephone, internet, rent for office space.They are complex and are costs that, when calculating the total cost of production of certain products conditional on certain types of distributed and units.Calculation and allocation of indirect costs is the basis for the adoption of certain production decisions setting prices for products, calculate the profitability of all types of products.
Some indirect costs are changed, others remain stable for some time, with the decrease in certain types of products they do not reduce.
Each company develops the procedure for allocation of this type of expenditure.To include the cost of some products direct and indirect costs, developed a whole system of compliance.For the distribution of overheads (indirect) costs of developing appropriate estimates called budgets.They record all the costs associated with the production of various kinds of commercial products.Such estimates up by economic articles and tied to different periods.
Indirect costs while calculating the total cost of certain types of output are included in it by proportional conditional distribution costs accepted in the enterprise database distribution.For them often choose the following parameters:
- the basic salaries of employees (without additional payments and bonuses);
- regulations (estimated) rate of equipment and operations;
- of man-hours;
- released by the volume of production;
- some direct costs.
basic principle of choosing the method of distribution of these costs find their best match results in the distribution of the actual costs of production of particular positions of the nomenclature of products.The vast majority of enterprises in the base takes the basic salary of industrial workers.
According to the existing practices and norms of the current law, each company distributes its indirect costs primarily in areas (types) of activity, and the second - in certain activities or types of output.Thus, the rational allocation of these costs determines the accuracy of the calculation of the cost of production for each production line and all kinds of products.
in management accounting often is a mixture of concepts such as indirect and periodic (semi-permanent) costs.These categories of costs necessary to clearly distinguish between them.Indirect costs - is a variable rate, as they are always directly related to the volume of products.In other words, the entire production process determines the type of spending.It carried out on the basis of their collectively-distribution of accounts 25 "General expenses".At the end of each month to the account the amount of indirect expenses charged to the following:
- cq.20 "Primary production";
- cq.23 "Auxiliary production".
