How to keep records of production costs

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The accounting system of formation of production costs is one of the main mechanisms in any enterprise.That is the correct distribution of funds depends on the profitability of future production and income from production.Accounting for production costs at the forefront of calculating the cost of manufactured goods.In view of the fact that the company's management determines the market value of their products, the calculation of costs and production costs, especially the correct technique, are active growth of the company and its profitability.When

keep records of the costs of production, the company's management, as well as, first and foremost, an accountant can set how high the level of costs, calculated the cost price and later, and the final price of goods on the market.After analyzing all the data obtained, it is possible to say how much the company is promising and what is the expected profit.

Some elements of the account is strictly controlled by government regulations for further registration tax on the profits of the enterprise.To understand what is keeping production costs, it is necessary to consider the basic principles of accounting of these same costs.

main goal of each company is in constant growth of profit and independent enterprises in the market among the other competitors.This is the main reason why keep records of production costs.That is, an accountant carefully observes all the costs that are directly or indirectly affect the cost of goods.This purchase of raw materials, fuel and electricity costs, workers' wages and other production facilities.In addition, these may include VAT costs, depreciation of equipment, payments to the Deposit Insurance Fund, rent and other variable cost elements.

is worth noting that the cost of production affects only documented account of all costs incurred in the production process.Themselves expenses are divided into two separate units: it is the direct costs of production and sale of goods and other expenses.

In order to determine how much money the company may need to production, accountant conducting primary accounting costs.We calculate the approximate cost per unit and the average value of projected costs.This is called the planned and actual costs.

accounting cost of production is carried out in several ways: as mentioned earlier, is made standard cost estimate for a certain period of time, as well as estimated - on the one-off production, if any.Then, at the end of the reporting period, to sum up, the actual accounting production costs, which are credited and unplanned expenses for a month.

Also included in the cost accounting depreciation of fixed equipment involved in the production process.Since the equipment over the years, starts to break down, the company's management is obliged to take care of its replacement and the purchase of new equipment - these are new costs.Therefore, to have the company had the means to purchase equipment, provided by the state to include depreciation expense in cost of goods.

All other company expenses not related to the production of goods are recorded on other items of financial statements.Thus, the report identifies indicators that point to a general income and expenses are deducted from this income.