costs - this is certainly an important category in any organization, but before you start using it, is to determine what it is.The cost - a write-off of funds for the needs of production in a certain period of time.
Essence and classification costs are closely related, so knowing the nature of the costs, given better understanding of its classification.It is important to distinguish between such concepts as "cost", "costs" and "costs".All three concepts are different in nature.The costs to the costs that are directly linked to production, while, as the cost can both be anchored thereto, and be relatively free.For example, in the case where the raw material is acquired and then sent to the manufacturing process - that costs and expenses.
If the raw material is purchased in the reserve, it only costs occurred withdraw funds, that is, their reduction, but the production process untapped.In this case, the question of cost can not go.
If the raw material came from the warehouse to the shop for processing, but bought it was in the previous period, it is a question of the cost, not on costs, since in fact the raw material has already been paid, but now its value along with the other costs will be transferred to the cost ofproducts.
costs do not necessarily relate to the manufacturing process, they also include and other write-offs of cash, so the confusion in the use of concepts should not be.
Classification of costs in managerial accounting is a key element, because in accordance with it are many ways to manage this category, that is to seek the most effective way for the organization.
So, there is a classification of costs into direct and indirect.The composition and classification of costs on such grounds presupposes their separation, depending on the relationship to the manufactured product.Direct costs relate exclusively to the production of this product, and indirectly distributed among all.
For example, the company produces candy and cookies.Direct costs for sweets - a chocolate, sugar, electricity, labor costs for the production of chocolates.Direct costs for the cookies - it's sugar, flour, eggs, electricity, labor costs for the production of cookies.But where does include shipping costs for the work of the administrative staff or the transportation of the product to the place of sale?This will be the indirect costs.They are difficult to distinguish between the two types of products, so they are recognized at the amount that is on the final value of the costs.
Classification of costs in managerial accounting includes a fixed and variable costs.This division takes into consideration the costs that are always needed for production, and which can be varied.
For example, fixed costs for candy type A is chocolate, peanuts and nougat.Without any ingredient candy cane ceases to be type A. This will be fixed costs.The variables include the advertising promotion candy type A or labor costs for their production.Although the latter is to say that it is often difficult to determine variable costs, therefore introduces the concept of semi-variable costs, which are a percentage of relatively constant.That is, the labor costs can be 30% and 70% permanent variables.These values each company defines its own.
It should be noted that the classification of costs in managerial accounting is not limited.There are costs on the responsibility centers, places of origin, and others.Separation criteria, there are many, and the significance of this division on the face.
Classification of costs in managerial accounting allows you to more effectively manage the organization's activities, use different techniques that make it possible to reduce production costs, and consequently the increase in profits.
