Any company trying to make decisions, providing him the maximum profit, which depends on the cost of implementation and production.Naturally, the price of such products - a consequence of the interaction of supply and demand.The costs - a factor that generates costs.However, this is not such a simple concept as it might seem.Thus, the cost - what is this?
problems terminology
costs - it's part of the cost of production.They can either increase or decrease, depending on the amount of material and labor, production and prior art.The manufacturer may lead cost reduction.It should be understood that the difference between the concept and considered terms such as "expenses" and "costs", which are often cited in the regulations, and the economic literature, in fact, is not.
economic costs
If you look closely at these concepts, the "cost" is used mainly in the economic theory and the total expenditure of the company is to perform certain operations.This includes accounting, alternative and settlement costs.Estimated costs referred to actual spending, which caused the expenditure of different economic resources during production and circulation of goods, products and services.Alternative (they imputed) - loss of profit enterprise that it could get in the manufacture of other (alternative) the price of other goods, which would be produced in the alternative market.
economic costs and expenses
expenses - is the actual and calculated cost certain businesses.By expenditure is meant an increase in the debt of the enterprise in the course of his activities or decrease in equity.Consumption - is the use of the material, services, raw materials, which are recognized in the profit and loss statement as a link between the costs and the direct income from the items of income.In accounting income should be related to such items as the cost of production.
Cost Accounting
This concept from the perspective of accounting is seen on some points, such as separate accounts: "Amortization", "Calculations for payment", "materials", "Finished goods" and "Primary production".Expenses - non written on it through the implementation of a component of the report, which builds on the above accounts until such time as all related goods and services will not be completely implemented.
indicator of production costs
Performance of any enterprise can not do without such an option as the cost of production.The cost of labor, business, financial and operational performance is reflected in this indicator.The level of cost affects the amount of profit margins.The organization uses a more economical material, financial and human resources for the execution of works, services and manufacturing products, the efficiency of the process will be higher and more profit.
These different costs
of listed all the terms which form the cost of any product (or service work), you can see that they are not homogeneous either in composition or in value in the manufacturing process of the product, performance of servicesand works.There are the costs of production (raw materials, materials, manufacturing, wages for workers, and so on).There - in the management and maintenance (content administration), to maintain fixed assets in working condition.Still others types of expenses - those that are not directly related to the production process, but is still included in the value of finished products, even indirectly, and relate to deductions for raw and mineral base for social services and so on.
Organization of accounting
For efficient organization of production is necessary to justify the classification of costs on different grounds.This allows you to analyze and plan costs, identify relations among different species and count the degree of influence on the levels of profitability and the cost of the enterprise.The purpose of any classification of costs - is to assist managers in making informed and correct decisions, as well as to allocate part of, which can and should influence.
Classification Drury
According to this researcher, the expenditure - that is, information that has accumulated from the different categories: overheads, labor and material costs.Then Drury summarized in the direction of accounting classification:
- for evaluation and costing of manufactured products.
- for decision-making control and adequate planning.
- to regulate and control the process.
Today this classification limits the ability of management accounting, which is designed to help achieve the goals of the enterprise.That is why it became necessary to split the cost function for the goals, objectives, methods, techniques and methods to achieve.
generalized classification
Costing - a very important point for accounting in which to take certain decisions on tactics and strategy of the company.For this purpose, you can select a classification:
- alternative and explicit;
- irrelevant and relevant;
- inefficient and effective.
Management decisions are taken on the basis of explicit and implicit costs.Obvious called the estimated costs that are passed on to the company at the time of its commercial and industrial activity.Opportunity costs - a rejection of one kind of goods to the other (alternative).If no resource limits, then these costs will be zero, which is why they are called often optional.Relevant costs depend on the management decisions considered at the moment, that is, those that can be influenced.Effective called such spending in which income is derived from sales of products.Ineffective, respectively - losing.These include the loss in production from marriage, shortages, outages, damage to material and commodity values and more.
