In the process of production, services and works and economic entity spent labor, material and financial resources.Costs for these items will eventually form the cost of goods.The value of this indicator has a significant effect on the final result of the organization, which can be either a profit or a loss.
costs of the enterprise must be properly taken into account.This ensures proper control over their effective use and allows to calculate the correct financial performance of a business entity.The costs of the company are an important component in determining the selling price of goods and are the basis of the analysis of the organization, which is necessary for the management and forecasting.
During his business entities committed financial and material costs, the purpose of which is both simple and extended reproduction of fixed and current assets, as well as manufacture and sale of products, and more.
have the greatest proportion of the cost of the release of goods.Enterprise also made the cost of product sales.These costs are commercial or non-productive.These include transport, packaging and storage of goods, advertising and much more.The totality of production costs and selling expenses comprise the total expenditure characterizing the cost of the enterprise.
reliable determination of this index is the basis for the following:
- carrying out marketing analysis and the decision to release a new product with a minimum cost;
- finding the impact of certain items of expenses for costs incurred during the production;
- pricing;
- reliable determination of the value of income and Taxes.
costs of the enterprise, to be included in the cost of products, services rendered and the work performed, is the valuation used in the production process of natural resources and raw materials, fuel and materials, energy and fixed assets, labor resources and many other necessary expenses.In addition, the business entity shall be costs that do not affect the release of the goods.These costs should not be included in production costs.
These include:
- work related to the modernization of towns and cities;
- helping the village;
- repair costs and amortization of cultural facilities that are on the balance sheet of a business entity;
- work performed for other organizations in order to help.
for proper planning, accounting and analysis of the cost of the enterprise and their classification (association in homogeneous categories) must be properly defined.It is these figures reflect the efficient use of financial, human and material resources.
The total cost of the enterprise are divided into the following types:
- included in the cost of production;
- miscellaneous (interest paid on loans, travel and entertainment expenses, and so on);
- directly attributable to the financial results (canceled orders, the cost of production, which has not given product, the content of dormant assets, and so on);
- produced by net profit (financial assistance, expenses incurred in excess of the norm, and so on).
Significantly, the analysis of costs and the right managerial decisions on the rational use of resources of the enterprise should lead to lower costs of a business entity that would be a significant indicator of the effectiveness of its operations and ensure the growth of income.
