cost price can be defined as the costs of the enterprise for the production of a product.The technological process of even the simplest products usually requires a wide variety of expenses.In addition to the raw materials from which a particular product is produced directly, it is also, of course, payment of human labor, rent, taxes, insurance, etc.In connection with this cost analysis is a complex process that involves the study of the mass of the various factors that influence the final result, with a view to reduce it.
In general, all costs can be divided into direct and indirect.It includes all direct costs that are directly attributable to a particular product, such as labor workers producing specific details.In this case, fairly easy to determine exactly where company expenses can be reduced.Analyzing the process of production of a particular part, we can determine whether it is possible to make the transition to cheaper raw materials, reduce energy costs, optimize labor activity of workers of the enterprise, reduce their number, etc.Each situation is dealt with separately and a decision on the implementation of certain measures in this direction, and then also held a general analysis of the cost of production and to verify how different factors interact.For example, it does not hurt you reduce the cost of electricity on the quality of workers.
However, not all cases, the scheme is applicable.For example, the analysis of the cost of livestock production so that we can not carry out.In this case, the impact on the cost price by adjusting direct costs is difficult, since the life expectancy of the animal is a factor slightly predictable, and therefore, to solve the problem solely by the mathematical approach would be unwise.
therefore likely company to optimize not the direct costs and indirect.These include the costs that are not directly associated with the production process, but indirectly affect it.The most typical example is the cost of maintaining office and payroll manager of the enterprise.Quite often the indirect costs are a major reason for the high cost.Especially they should pay attention to when the value of the fixed costs (also called indirect costs) exceeds the variable costs (direct).In this case, the company is faced with a threat to suffer significant losses if sales drop.
Analyzing the cost of your product, analyzes each item of expenditure, defining the economic effect of the costs.For example, if you spend a cost analysis of crop production, and cost items you listed rent of warehouses for storage of ready-to-sell crops, then you need to get ahead, whether they are loaded at its maximum storage, or a substantial portion of the space remains free.In the latter case, you must get rid of the space.The same applies to any other type of costs.
This is particularly careful not to overdo it.Remember that the cost of production analysis only shows the weaknesses of the process and does not guarantee absolutely the right decision.After all, it is essential to decrease the cost of not losing as a product, as well as not to lose customers because of the failure of a marketing policy.Each decision must be made on the basis of comprehensive analysis of all "for" and "against."
