The cost of production is the enterprise's expenses for the production and marketing of products.

Material costs;
labor costs;
contributions to social needs (pension fund, employment fund, health insurance, etc.);
depreciation of fixed assets;
other costs (travel, postage, taxes included in the cost, etc.).

The costing items include the following costs:

A) Direct:

1. Raw materials and materials.
2. Purchased finished products, semi-finished products.
3. Fuel and energy for technological needs.
4. Basic and additional wages of production workers.
5. Deductions for social needs from the basic and additional wages of production workers.
6. Expenses for development and preparation of production.
7. Special expenses.
8. Losses from marriage.

B) Indirect:

9. Expenses for maintenance and operation of equipment.
10. Shop expenses.
11. Factory expenses.
12. Non-production expenses.

According to the method of attributing costs to the cost of individual types of products, they are divided into direct and indirect.

Direct - directly related to the production of this type of product.

Indirect - relate to all manufactured products.

One of the most common methods of attribution to production costs is in proportion to the basic wages of production workers.

Depending on the volume of production, costs are divided into variable and fixed.

Variables - change in direct proportion to the change in production volume: all direct material costs, basic wages of production workers, costs of tools and motor energy, etc.

Fixed costs are expenses that do not change or change slightly when production volume changes. These include: depreciation, wages of support workers and administrative and management personnel.

The sum of variable and fixed costs forms total costs.

Unit costs

Production costs are the costs of purchasing economic resources consumed in the process of producing certain goods.

Any production of goods and services, as is known, is associated with the use of labor, capital and natural resources, which are factors of production, the value of which is determined by production costs.

Due to limited resources, the problem arises of how best to use them among all rejected alternatives.

Opportunity costs are the costs of producing goods, determined by the cost of the best lost opportunity to use production resources, ensuring maximum profit. The opportunity costs of a business are called economic costs. These costs must be distinguished from accounting costs.

Accounting costs differ from economic costs in that they do not include the cost of factors of production that are owned by the owners of firms. Accounting costs are less than economic costs by the amount of implicit earnings of the entrepreneur, his wife, implicit land rent and implicit interest on the owner’s equity capital. In other words, accounting costs are equal to economic costs minus all implicit costs.

The options for classifying production costs are varied. Let's start by distinguishing between explicit and implicit costs.

Explicit costs are opportunity costs that take the form of cash payments to the owners of production resources and semi-finished products. They are determined by the amount of company expenses to pay for purchased resources (raw materials, materials, fuel, labor, etc.).

Implicit (imputed) costs are the opportunity costs of using resources that belong to the firm and take the form of lost income from the use of resources that are the property of the firm. They are determined by the cost of resources owned by a given company.

The classification of production costs can be carried out taking into account the mobility of production factors. Fixed, variable and total costs are distinguished.

Fixed costs (FC) are costs whose value in the short run does not change depending on changes in production volume. These are sometimes called "overhead" or "sunk costs". Fixed costs include the cost of maintaining production buildings, purchasing equipment, rental payments, interest payments on debts, salaries of management personnel, etc. All these costs must be financed even when the company does not produce anything.

Variable costs (VC) are costs whose value changes depending on changes in production volume. If products are not produced, then they are equal to zero. Variable costs include the cost of purchasing raw materials, fuel, energy, transportation services, wages of workers and employees, etc. In supermarkets, payment for the services of supervisors is included in variable costs, since managers can adjust the volume of these services to the number of customers.

Total costs (TC) - the total costs of a company, equal to the sum of its fixed and variable costs, are determined by the formula:

TC = FC + VC.

Total costs increase as production volume increases.

Costs per unit of goods produced take the form of average fixed costs, average variable costs and average total costs.

Average fixed cost (AFC) is the total fixed cost per unit of output.

They are determined by dividing fixed costs (FC) by the corresponding quantity (volume) of products produced:

Since total fixed costs do not change, when divided by increasing production volume, average fixed costs will fall as the quantity of output increases, because a fixed amount of costs is distributed over more and more units of output. Conversely, as production volume decreases, average fixed costs will increase.

Average variable cost (AVC) is the total variable cost per unit of output.

They are determined by dividing variable costs by the corresponding quantity of output:

Average variable costs first fall, reaching their minimum, then begin to rise.

Average (total) costs (ATC) are the total production costs per unit of output.

They are defined in two ways:

A) by dividing the sum of total costs by the number of products produced:
ATC = TC/Q;
b) by summing average fixed costs and average variable costs:
ATC = AFC + AVC.

At the beginning, average (total) costs are high because the volume of output is small and fixed costs are high. As production volume increases, average (total) costs decrease and reach a minimum, and then begin to rise.

Marginal cost (MC) is the cost associated with producing an additional unit of output.

Marginal costs are equal to the change in total costs divided by the change in volume produced, that is, they reflect the change in costs depending on the quantity of output. Since fixed costs do not change, fixed marginal costs are always zero, i.e. MFC = 0. Therefore, marginal costs are always marginal variable costs, i.e. MVC = MC. It follows from this that increasing returns to variable factors reduce marginal costs, while decreasing returns, on the contrary, increase them.

Marginal costs show the amount of costs that a firm will incur when increasing production by the last unit of output, or the amount of money that it will save if production decreases by a given unit. When the additional cost of producing each additional unit of output is less than the average cost of the units already produced, producing that next unit will lower the average total cost. If the cost of the next additional unit is higher than average cost, its production will increase average total cost. The above applies to a short period.

In the practice of Russian enterprises and in statistics, the concept of “cost” is used, which is understood as the monetary expression of the current costs of production and sales of products. Costs included in cost include materials, overhead, wages, depreciation, etc.

The following types of costs are distinguished:

Basic - cost of the previous period;
- individual - the amount of costs for the manufacture of a specific type of product;
- transportation - costs of transporting goods (products);
- sold products, current - assessment of sold products at restored cost;
- technological - the amount of costs for organizing the technological process of manufacturing products and providing services;
- actual - based on actual costs for all cost items for a given period.

Cost of production cost

Certain types of resources in kind are spent on the production and sale of products: material, labor, information. In order to assess the efficiency of an enterprise, it is necessary to evaluate these costs in monetary terms (costs).

Costs are the costs of production factors in monetary terms necessary for an enterprise to conduct its commercial and production activities. They are expressed in product cost indicators, which characterize in monetary terms all material costs, labor costs and costs that are necessary for the production and sale of products.

Product cost is an economic indicator of the activities of industrial enterprises and associations, which expresses in monetary form all the costs of an enterprise associated with the production and sale of products.

Cost shows how much the products it produces cost the company. Cost includes:

1) costs of past labor transferred to products (depreciation of fixed assets, cost of raw materials, fuel and other material resources);
2) expenses for remuneration of employees of the enterprise (wages).

Cost is the lower limit of price; it determines the limit of possible maneuvering when implementing a particular pricing policy when their stimulating function is carried out.

The cost is determined for all products as a whole, for their individual types, components, parts, production processes, and for the work of departments, sections, and workshops.

There are indicators characterizing the cost of production:

1) the total amount of costs for all manufactured products and work performed by the enterprise for the planned (reporting) period - the cost of marketable products, comparable marketable products, sold products;
2) costs per unit of volume of work performed - the cost per unit of certain types of commercial products, semi-finished products and production services (products of auxiliary workshops), costs per 1 rub. commercial products, costs per 1 rub. regulatory clean products.

The total costs of production and sales of products can be calculated both according to actual expenses and standard ones.

Depending on the volume of costs taken into account, the following types of costs are distinguished:

1) technological cost - includes only direct production costs: raw materials, returnable waste (subtracted), fuel and energy for technological purposes, wages of main production workers;
2) shop cost - is formed by adding to the technological cost cost items formed at the shop level: additional wages of the main production workers, deductions for the social needs of the main production workers and general production expenses;
3) production cost (cost of finished products) - in addition to shop cost, includes factory overhead costs (administrative and general business costs) and auxiliary production costs;
4) total cost or cost of sold (shipped) products - an indicator that combines the production cost of products (work, services) and the costs of its sale (commercial costs, non-production costs).

There is also a distinction between planned and actual costs.

Planned cost is a cost determined at the beginning of the planned year based on planned expenditure rates and other planned indicators for this period.

Actual cost is the cost determined at the end of the reporting period based on accounting data on actual production costs.

The cost of production consists of costs that vary in their economic purpose. Therefore it is necessary to classify them. All costs are classified according to the criteria given in the table.

Cost classification:

1. By economic elements	Cost elements
2. By costing items	Costing items
3. In relation to the production process	Basic, invoices
4. By composition	Single element, complex
5. According to the method of attribution to cost	Direct, indirect
6. By role in the production process	Production, non-production
7. Where possible planning coverage	Planned, unplanned
8. In relation to production volume	Constants, variables
9. By frequency of occurrence	Current, one-time
10. In relation to finished products	Costs of finished goods and work in progress
11. In relation to time	Past, current and future
12. By place of origin	Costs by department

The main groupings of costs are groupings by “economic elements” and “by cost items”. Based on these groupings, documents such as production cost estimates, cost calculations for individual types of products, and preparation of reporting form No. 5-Z are developed.

There are 5 cost elements:

1) material costs minus the cost of returnable waste (raw materials and basic materials, including purchased semi-finished products, auxiliary materials, fuel and energy, etc.);
2) labor costs;
3) contributions for social needs;
5) other costs (interest payments, depreciation of intangible assets, travel expenses, entertainment expenses, advertising expenses, personnel training expenses).

Classification of costs by economic elements is necessary to determine tasks to reduce the cost of production, calculate the need for working capital, calculate cost estimates and for the economic justification of investments, as well as to calculate indicators of material intensity, wage intensity (labor intensity), capital intensity of products.

The enterprise's costs are grouped by costing items in order to calculate the cost of individual types of products.

The following costing items are distinguished:

1) raw materials and supplies;
2) returnable waste (subtracted);
3) purchased products, semi-finished products and production services of third-party enterprises and organizations;
4) fuel and energy for technological purposes;
5) wages of production workers;
6) contributions for social needs;
7) expenses for preparation and development of production;
8) general production expenses;
9) general business expenses;
10) losses from marriage;
11) other production costs;
12) commercial expenses.

Commercial expenses - costs for containers and packaging; costs of transporting products; commission fees and deductions paid to sales enterprises and organizations in accordance with contracts; advertising costs; other sales expenses.

General production and general business expenses are classified as overhead expenses. General production overhead costs are the costs of maintenance and production management (costs of maintaining and operating equipment, shop management costs).

General business overhead costs or overhead costs for non-production purposes - these costs include several groups: administrative and managerial, general business, taxes, mandatory payments, etc.

Basic costs are costs directly related to the implementation of technological operations for the production of products (raw materials, workers' wages).

Overhead costs are expenses incurred in connection with the organization, maintenance and management of production (general production and general business expenses).

Direct costs are costs that are directly related to the production of individual products and are directly related to their cost.

Indirect costs are costs that are associated with the organization and management of production and are included in the cost price indirectly.

Current costs are expenses that occur frequently (consumption of raw materials and materials).

One-time costs are the costs of preparing and mastering the production of new types of products, costs associated with the launch of new production facilities.

Fixed costs are costs whose value does not change with changes in production volumes (depreciation, rental of buildings and equipment, insurance premiums, maintenance of the administrative and managerial apparatus).

Variable costs are costs, the total value of which is directly dependent on the volume of production and sales, as well as their structure in the production and sale of several types of products (raw materials, materials, fuel and energy for technological purposes, salaries of the main workers, transport services of the main production ).

Cost planning is one of the main components of technical and economic planning of an enterprise.

The purpose of cost planning (cost) is to optimize the current costs of an enterprise to ensure the required growth rates of profits and profitability based on the rational use of monetary, labor and material resources.

The enterprise cost plan includes the following sections:

1) calculation of reducing the cost of production due to the influence of technical and economic factors on it;
2) calculating the cost of types of products (works and services);
3) production cost estimate.

When planning product costs, the following methods are used:

1) Factorial method - determining the influence of technical and economic factors on production costs in the planned year compared to the previous year.
2) Estimate method - justification of each cost item using a special cost estimate.
3) Calculation method - justification of the cost of producing a unit of product, work, service or their structural elements, for example a part or assembly.
4) Normative method - the level of costs for the production and sale of products, works, services is calculated on the basis of pre-compiled norms and standards.

When planning product costs, the above methods are used in combination; they complement each other and make the cost planning process end-to-end.

In order to increase the efficiency of social production, it is of great importance to reduce production costs, which presupposes economical consumption of resources.

The importance of reducing product costs for an enterprise is as follows:

Increasing the profit that remains at the disposal of the enterprise, which allows for not only simple, but also expanded reproduction;
- the emergence of greater opportunities for solving social problems of the enterprise staff, as well as material incentives for workers;
- improving the financial condition of the enterprise;
- the emergence of the opportunity to reduce the selling price of their products, and this makes it possible to increase the competitiveness of products and increase sales volume.

Cost reduction factors are quantitatively comparable opportunities for cost savings.

Technical and economic factors can be combined into 4 groups, among which the main ones are:

1) increasing the technical level of production:
a) introduction of new and improvement of used equipment and technology;
b) expanding the scope of application of new equipment, technology, modernization and improvement of operation of existing equipment;
c) the use of new types and replacement of consumed raw materials, materials, fuel and energy, improving their use;
d) improving the quality of products, improving their characteristics;
2) improvement of management, organization of production and labor:
a) rationalization of production management;
b) improving the organization and maintenance of production;
c) improving the organization of work and the use of working time;
d) elimination of unnecessary costs and losses (including losses from defects);
3) change in the volume and structure of products, production structure:
a) relative change in semi-fixed costs as a consequence of changes in the volume of production;
b) relative change in depreciation charges;
c) change in the structure of products;
d) commissioning of new production facilities (and in associations also the commissioning of new enterprises);
e) development of new enterprises and preparation of production at existing enterprises;
4) change in business conditions:
a) changes in prices for manufactured products;
b) changes in prices for consumed raw materials, materials, components and semi-finished products, fuel, energy;
c) changes in wages in accordance with government decisions;
d) changes in tax conditions;
e) valuation of fixed assets and changes in depreciation rates.

Particularly important sources of reducing production costs include:

1) increase in production volume due to more complete use of production capacity, production space, improvement of technology, rational organization of repairs;
2) reduction in production costs is ensured by increasing labor productivity;
3) reducing costs through the economical use of raw materials, the use of substitutes, improving the range and structure of products, reducing unproductive costs and reducing defects;
4) reducing the cost of production maintenance and management also reduces the cost of production.

Costs and product price

The costs of production and sales of products represent the consumption of all factors of production (fixed assets, raw materials, materials, fuel, energy, labor resources), expressed in monetary form. This is the most important internal production indicator necessary for determining the supply price, as well as for developing an effective business policy.

An entrepreneur produces goods with the aim of making a profit; moreover, he tries to maximize the ratio between profit and costs. However, the ability of a particular seller to set prices in the market is limited by the type of market system, and, in addition, the price level is influenced by a number of factors. Therefore, for any manufacturer, the main, and sometimes the only source of increasing profits is reducing costs. Hence the main goal of market cost analysis is to identify the optimal relationship between costs and income, which is the most important condition for the survival and well-being of the company.

In the practice of pricing at an enterprise in market conditions, it is customary to distinguish between accounting and business (economic) costs.

Accounting costs for the production and sale of products, attributable to the cost of production, are formed in accordance with the Regulations on the composition of costs for the production and sale of products (works, services), approved by the Government of the Russian Federation. Costs include the following elements: material costs, labor costs, social contributions, depreciation of fixed assets, and other costs.

However, in order to carry out its activities in the market, the enterprise must bear, and therefore take into account when determining the supply price, other, larger expenses associated with simple and expanded reproduction. These costs are called entrepreneurial costs, and essentially they determine the supply price.

Business costs include:

Accounting costs;
- normal business profit, which should serve as a source of financing capital investments in fixed assets and a source of increase in working capital, R&D costs, social needs, payments of dividends on shares and deductions of taxes paid from profits;
- value added tax (VAT), if it is charged above the price of the enterprise, and excise taxes, if the goods of the enterprise are excisable;
- customs duties on the company’s export goods if it carries out foreign economic activity;
- alternative (opportunity) costs are monetary losses associated with missed opportunities for the best use of the company's resources.

Indeed, the basis for economic decision-making is the fact that an economic entity is faced with limited resources and must make a choice between alternative ways of using these resources. In other words, the producer must bear in mind that certain resources can be used in alternative ways, and therefore the expected benefits from these alternatives must be weighed. By deciding to use resources in this production, the entrepreneur refuses to produce other goods and services, i.e. sacrifices the value of alternative opportunities.

From this point of view, it can be argued that the costs that should be taken into account when making economic decisions are always opportunity costs.

The Austrian scientist Friedrich Wieser, the founder of the theory of costs, which takes into account the principle of scarcity of resources, formulated the law of costs as follows: “The real cost of any thing is the lost utility of other things that could have been produced with the help of the resources that went into the production of this thing.” According to Wieser, production costs are nothing more than lost (including potential) utilities: “Whoever thinks about “utility”, forgetting about “costs,” simply thinks about the utility of only one production, forgetting about the utility of others.” .

Thus, all costs in the economy are associated with the refusal of the possibility of producing alternative goods; in other words, all costs are alternative, and therefore must be taken into account when making decisions in business.

Considering opportunity costs from the perspective of an enterprise, we can say that they have an explicit (external) or implicit (internal) nature.

Explicit costs are opportunity costs that take the form of direct cash payments from the enterprise for purchased resources (salaries of workers, payment for raw materials, fuel, energy, transport services, etc.). In Western practice, these costs are called external.

Implicit are the opportunity costs of using resources that belong to the owners of the company themselves as legal entities. These costs are not provided for in the contract, are not obligatory payments and remain uncollected. These include the salary of the owner of the company if he works along with hired workers (and could earn money by working at another enterprise), and the cost of operating buildings owned by the company (if the company refuses the opportunity to rent out its premises and receive the appropriate payment) . Implicit costs are often hidden, but they must always be taken into account when making economic decisions. Another thing is with sunk costs, which are usually visible, but they are always ignored when making management decisions.

Sunk costs (otherwise known as lost value) are costs that were made in the past and cannot be changed by any present or future actions. It is precisely because of their irreplaceability that they should not influence the company’s decisions. This category of expenses includes, for example, the purchase of specialized machinery designed to order by the enterprise, which can be used exclusively for the production of new products. It cannot be reconstructed for other purposes; it cannot even be sold at the cost of scrap metal. The capital expenditure on such equipment is therefore a sunk cost, and the opportunity cost of alternative use is zero. Sunk costs also include costs for R&D, marketing research, etc.

In contrast to sunk costs, when making economic decisions, an entrepreneur should take into account avoidable ones, i.e. costs that have not yet been incurred, which can be easily and without losses avoided. For example, advertising “promotion” of a new product in the media is a preventable expenditure of capital.

Product sales costs

The cost of products (works, services) is a valuation of the natural resources, raw materials, supplies, fuel, energy, fixed assets, labor resources used in the production process, as well as other costs for its production and sale.

The cost includes the following types of costs:

1) costs directly related to the production of products, determined by the technology and organization of production, including costs for quality assurance;
2) costs of servicing the production process;
3) costs associated with production management;
4) costs associated with improving technology and production organization, improving the quality and reliability of products, invention and innovation;
5) costs of maintaining and operating environmental structures;
6) costs of ensuring normal working conditions and safety precautions;
7) costs associated with training and retraining of personnel;
8) payments provided for by labor legislation;
9) deductions from salary expenses;
10) payments for mandatory (statutory) types of insurance and bank loans;
11) contributions to special funds;
12) costs of reproduction of fixed production assets (depreciation);
13) depreciation of intangible assets;
14) taxes, fees, payments and other mandatory deductions provided for by law;
15) Other types of costs in accordance with the procedure established by law.

In addition, the actual cost reflects:

A) losses from marriage;
b) costs for warranty repairs and maintenance;
c) losses from downtime due to internal production reasons;
d) shortages in the absence of perpetrators;
e) cash benefits in the manner prescribed by law.

Production costs are included in the cost of the reporting period to which they relate, regardless of the time of payment.

Costs can be classified according to the following criteria:

1) according to the method of attributing costs to the cost of a unit of production:
a) direct (related to the production of specific types of products, they can be directly included in the cost of a unit of production);
b) indirect or overhead (costs associated not with the production of a certain type of product, but with production in general);
2) according to the homogeneity of the cost composition:
a) simple - economically homogeneous (for example, material costs of the same purpose);
b) complex - economically heterogeneous costs, but the same purpose (for example, for the maintenance and operation of equipment);
3) by type of expense:
a) by economic elements (the classification is based on the economic homogeneity of costs, regardless of where the costs arise and the direction of use (for example, wages);
b) by costing items (the place of origin and direction of use are taken into account);
4) by the nature of the connection with the volume of production:
a) conditionally constant, they usually include such costs, the value of which does not change with changes in the degree of utilization of production capacity or changes in production volume;
b) conditionally variable, these include costs that change depending on changes in production volume.

The costs that form the cost of production are grouped in accordance with their economic content into the following elements:

1) material costs (minus the cost of returnable waste). Returnable waste is the remnants of material resources generated during the production process, which have lost completely or partially the consumer qualities of the original resource and, therefore, are used at increased costs or are not used at all for their intended purpose;
2) labor costs;
3) deductions from labor costs (for example, for social needs);
4) depreciation of fixed assets;
5) other costs.

Using this classification, you can determine the total costs of production and sales of products (make an estimate of production costs).

Calculation of unit cost of production includes grouping costs by item:

1) raw materials and basic materials, taking into account transportation and procurement costs;
2) purchased products, semi-finished products and production services of third-party organizations;
3) returnable waste (subtracted);
4) auxiliary materials;
5) fuel and energy for technological purposes;
6) basic wages of production workers;
7) additional wages for production workers;
8) contributions for social needs (additional wages are set, as a rule, as a percentage of the basic salary. Contributions for social needs include contributions to: the pension fund, compulsory health insurance fund, employment fund, social insurance fund. Contributions for social needs are made from the amount of basic and additional wages);
9) expenses for preparation and development of production (costs are incurred in accordance with the Regulations on the composition of costs included in the cost);
10) expenses for maintenance and operation of equipment;
11) shop expenses;
12) general plant expenses;
13) losses from marriage;
14) other production costs;
15) non-production expenses (commercial expenses).

Cost grouping:

Direct material costs	Direct labor costs	General shop expenses	General and water expenses	Non-production expenses
Technological cost
Workshop cost
Production cost
Full cost

When calculating the cost per unit of production, the following are used:

1) specifications for raw materials, materials, purchased semi-finished products and components;
2) technological maps with operational time standards and prices;
3) the system of norms and standards in force at the enterprise;
4) estimates of overhead costs.

Composition of costs for operation and maintenance of equipment:

1) depreciation of equipment and vehicles;
2) costs of operating equipment (fuel, energy, etc.);
3) repair costs;
4) wear and tear of low-value and fast-wearing items and devices.

Composition of workshop expenses:

1) maintenance of the workshop management apparatus;
2) maintenance of other personnel;
3) depreciation of buildings, structures, equipment;
4) costs of maintaining buildings, structures, equipment;
5) repairs;
6) testing, innovation, invention;
7) labor protection costs;
8) wear and tear of low-value, fast-wearing equipment and other non-production expenses.

Composition of factory overhead expenses:

1) costs associated with managing the enterprise;
2) personnel training;
3) fees and deductions;
4) other expenses are similar to shop expenses.

The following can be used as a basis for the distribution of indirect costs:

A) the basic salary of production workers (minus additional payments for various bonus systems);
b) estimated rates calculated on the basis of machine-hour ratios;
c) direct material costs.

Costs and production costs

In modern accounting practice, the overwhelming majority of enterprises and firms use the category “cost” instead of the “cost” category, which in its content differs significantly from the “cost” category. Costs, expenses, cost are the most important economic categories. Their level largely determines the amount of profit and profitability of the enterprise, the efficiency of its economic activities. Reducing and optimizing costs are one of the main directions for improving the economic activity of each enterprise.

Cost is denoted as the valuation of natural resources, raw materials, fuel, materials, energy, fixed assets, labor resources used in the production process of a product, as well as other costs for its production and execution.

Achieving the best effect at lower costs, saving labor and financial resources depend on how the organization solves the problem of reducing production costs. The main objectives of the analysis are: checking the consistency of the plan in terms of cost, the progressiveness of cost measures, analyzing the implementation of the plan and studying the source of deviations from it, finding ways to mobilize them.

In general, production and sales costs (cost of products, works, services) represent a cost measure of the natural resources, raw materials, materials, fuel, energy, fixed assets, labor resources used in the process of manufacturing products, as well as other costs for its production and implementation .

The costs of production and sales of products include costs associated with the development of products, organization of production, use of natural materials, improvement of production technologies, payment for consulting and information services, entertainment expenses associated with the commercial activities of enterprises, firms and training of workers, relying on state and non-state public insurance and pension provision, to the State Employment Fund, transfer of compulsory health insurance.

In modern accounting practice, the overwhelming majority of organizations and enterprises use the category “cost” instead of the “cost” category, which in its content is very different from the “cost” category.

Cost represents the total costs of manufacturing and selling products. They can be calculated both according to real expenses and according to standard ones. In Russia, at state-owned enterprises, indicators are of a sectoral nature. But in many situations, standards do not play the role of an incentive to reduce the costs of organizations for manufacturing products. Based on practice, we can say that they are often industry averages. Enterprises have the opportunity to prove that they operate in special conditions and industry standards are unacceptable to them.

Modern economic theory is based on rarely used resources and the possibility of their alternative production. Alternative production means, for example, the possibility of manufacturing building materials, paper, and furniture from wood. Therefore, when an organization decides to produce a specific product, for example, furniture from wood, it thereby refuses to produce wooden blocks for country houses. Hence the conclusion is drawn that the economic costs of a certain resource that is used in a given production are equal to its cost in the most optimal way of using it for the manufacture of products. Thus, economic costs are the payment to the supplier made by the firm, or the income of the resource supplier provided by the firm, as well as the internal costs of ensuring that the resources are used by this particular firm and for a particular production option.

So, we can conclude that production costs at any time are equal to the cost of the resources that are used to produce goods and services sold during this period. The income of an enterprise depends on the price of the product and the cost of its production. The price of products on the market is a consequence of the interaction of supply and demand. Here, the price changes under the influence of the laws of market pricing, and costs can increase or decrease depending on the volume of labor or financial resources used. The most important ways to reduce production costs is to determine the optimal amount of purchased resources and launched products consumed in production - labor and material. As well as reducing the labor intensity of products and increasing productivity. The basic principles of modern economics about production costs are as follows: in order to obtain more of any good, we need to provide potential producers and suppliers of this good with a certain incentive that would encourage them to transfer resources from the sphere of their current use to the production of what we want. Costs are always the result of supply and demand. An increase in demand for any good will increase the cost of purchasing this good only insofar as it does not cause an increase in the quantity of supply.

Variable costs per unit

Variable and fixed costs are the two main types of costs. Each of them is determined depending on whether the resulting costs change in response to fluctuations in the selected cost type.

Variable costs are costs whose size varies in proportion to changes in the volume of production. Variable costs include: raw materials and materials, wages of production workers, purchased products and semi-finished products, fuel and electricity for production needs, etc. In addition to direct production costs, some types of indirect costs are considered variable, such as: costs of tools, auxiliary materials, etc. .Per unit of output, variable costs remain constant despite changes in production volume.

Example: With a production volume of 1000 rubles. with a cost per unit of production of 10 rubles, variable costs amounted to 300 rubles, that is, based on the cost of a unit of production they amounted to 6 rubles. (300 rub. / 100 pcs. = 3 rub.). As a result of doubling production volume, variable costs increased to 600 rubles, but calculated on the cost of a unit of production they still amount to 6 rubles. (600 rub. / 200 pcs. = 3 rub.).

Fixed costs are costs whose value is almost independent of changes in the volume of production. Fixed costs include: salaries of management personnel, communication services, depreciation of fixed assets, rental payments, etc. Per unit of production, fixed costs change in parallel with changes in production volume.

Example: With a production volume of 1000 rubles. with a cost per unit of production of 10 rubles, fixed costs amounted to 200 rubles, that is, based on the cost of a unit of production they amounted to 2 rubles. (200 rub. / 100 pcs. = 2 rub.). As a result of doubling production volume, fixed costs remained at the same level, but based on the cost of a unit of production they now amount to 1 rub. (2000 rub. / 200 pcs. = 1 rub.).

At the same time, while remaining independent of changes in production volume, fixed costs can change under the influence of other (often external) factors, such as rising prices, etc. However, such changes usually do not have a noticeable impact on the amount of general business expenses, therefore, when planning, in accounting and control, general business expenses are accepted as constant. It should also be noted that some of the general expenses may still vary depending on the volume of production. Thus, as a result of an increase in production volume, the salaries of managers and their technical equipment (corporate communications, transport, etc.) may increase.

Types of production costs

Explicit costs are opportunity costs that take the form of direct (cash) payments to suppliers of factors of production and intermediate goods. Explicit costs include wages paid to workers, management salaries, commissions paid to trading firms, payments to banks and other financial service providers, legal fees, travel expenses, etc.

There are also implicit costs. These include the opportunity costs of using resources owned by the owners of the firm (or owned by the firm as a legal entity). These costs are not provided for in contracts that require explicit payments, and therefore remain uncollected (in monetary form).

There are external and internal production costs.

External costs are payments for resources to suppliers who do not belong to the owners of the company.

Internal costs are the costs of own, unpaid resources.

These include: depreciation for the restoration of fixed assets, remuneration of company owners, etc.

“Total production costs are the sum of all external and internal costs necessary to attract and retain resources within the limits that ensure the economically sound functioning of the company.”

Production costs have a complex structure, which determines the nature and conditions of use in the production process.

Another important method for classifying costs is based on taking into account the time horizons over which certain production decisions are made.

There are fixed and variable production costs.

Constant costs are those whose value does not change depending on the volume of production, the adjustment and regulation of which requires a lot of time, and they also determine the size of the company and the parameters of its production capacity. These include the costs of acquiring, maintaining and maintaining land, buildings and structures, and equipment. Variables are costs, the value of which depends on production volumes. The value of variable costs varies with the volume of production, increasing or decreasing with this volume.

Variable costs include the costs of purchasing raw materials, labor, transport, heat and energy resources, etc.

Total costs are the sum of fixed and variable costs. For the analysis and management of the state of the company, average and unit costs, as well as marginal production costs, are also of great importance.

Average and unit costs are the costs of producing a unit of finished product. There are average total, average fixed and average variable costs.

Marginal costs are the additional costs associated with producing one more (additional) unit of output.

“The sum of fixed and variable costs, as well as the value of unit and marginal costs, constitute a technological set of production costs, determined by the level of technology and organization of production and the equation of market prices for resources or factors of production.” Therefore, according to the method of attribution to the cost of production, a distinction is made between direct and indirect costs, which can be distinguished by grouping costs by costing items.

Direct costs are directly dependent on the volume of production or on the time spent on its production and can be directly and directly attributed to its cost: raw materials and basic materials, losses from defects and some others. This type of cost is directly related to the manufacture of products and is accounted for directly by its individual types.

There are three groups of direct costs:

Direct materials costs are the costs of those materials that actually form part of the manufactured product (raw materials, fuel for technological purposes);
- Direct labor costs are the wages paid to the worker for the actual work performed on processing a certain product;
- Direct overhead costs are those costs, the value of which is directly dependent on the number of products produced or on the time spent on their production (these include the cost of electricity required to operate the machines).

Indirect costs cannot be attributed directly to the cost of individual types of products and are distributed indirectly, using conditional calculations, for example, in proportion to the wages of production workers: general production, general, non-production expenses, etc. They are necessary for the overall implementation of the production process of a given type of product at the enterprise.

They are also divided into three groups:

Indirect costs of materials are the costs of various incidental but necessary materials used in the production process (lubricating oils, stationery, spare parts, etc.);
- Indirect labor costs are wages paid to auxiliary workers, equipment maintenance workers, storekeepers, clerical workers, etc. They also include downtime of main production workers and the cost of overtime work;
- Indirect overhead costs are salaries of management, commercial, administrative employees, rental costs, transportation costs, costs of developing new products.

Items that combine indirect costs are called complex. The sum of all direct costs is the production cost of the product. The sum of all direct and indirect costs gives the cost of goods sold. The division of costs into direct and indirect depends on industry characteristics, the organization of production, and the adopted method for calculating product costs, for example, in the coal industry, where only one type of product is produced, all costs are direct.

Based on the frequency of occurrence, expenses are divided into current and one-time expenses. Current expenses have frequent frequency (consumption of raw materials and materials). One-time (one-time) – expenses for the preparation and development of the production of new types of products.

There are also proportional costs, the value of which does not change due to changes in production volumes, and disproportionate costs, i.e. those that change in a progressive or depressive manner when production volumes change.

For planning, accounting and analysis, the production costs of an enterprise are combined into homogeneous groups according to many characteristics:

1. By type of expense. Grouping by types of expenses is generally accepted in economics and includes two classifications: by economic elements of costs and by costing items of expenses.

The first of them (according to economic elements) is used when setting costs for the enterprise as a whole and includes five main groups of expenses:

Material costs;
- labor costs;
- contributions for social needs;
- depreciation of fixed assets;
- other costs.

The second group of costs (according to costing items) is used when drawing up calculations (calculating the cost of a unit of production), which makes it possible to determine how much a unit of each type of product costs the enterprise, the cost of certain types of work and services. The need for this classification is due to the fact that calculating the cost of the above cost elements does not allow us to take into account where and in connection with what the costs were incurred, as well as their nature. At the same time, determining costs by calculation as a way of grouping them relative to a specific unit of production allows you to track each component of the cost of products (works, services) at any level.

By expense items, costs are grouped depending on the place and purpose (purpose) of their occurrence and are attributed to each type of product directly or indirectly. This classification is specific to each industry, so the composition of expenses in each industry is different.

As a rule, the following items of expenditure are distinguished:

A) raw materials and materials;
b) fuel and energy;
c) basic and additional wages of production workers;
d) social insurance contributions;
e) expenses for preparation and development of production;
f) costs of maintaining and operating equipment;
g) shop expenses;
h) general plant expenses;
i) other production costs;
j) non-production (commercial) expenses, etc.

2. By the nature of participation in the creation of products (works, services). The main costs directly related to the process of manufacturing products are identified, in particular, the costs of raw materials, basic materials and components, fuel and energy, wages of production workers, etc., as well as overhead costs, i.e. costs of production management and maintenance - workshop, general plant, non-production (commercial), losses from defects.

3. By variability depending on production volumes. Costs that change (increase or decrease) in proportion to changes in production volume are called conditionally variable. Costs that remain unchanged and their value is not associated with an increase in production reduction are called conditionally constant. This classification of costs is necessary when planning production, as well as when analyzing the financial and economic activities of an enterprise.

4. By the method of assignment to production. Very often, when calculating product costs, it is impossible to accurately determine to what extent certain costs can be attributed to one or another type of product. In this regard, all costs of the enterprise are divided into direct, which can be directly attributed to a given type of product (work, service), and indirect, which are associated with the production of many products, as a rule, these are all other costs of the enterprise.

The essence of production costs, their composition and structure

The essence and composition of production costs.

the firm must use a production process that, at the same level of output, would allow the use of the least amount of input factors of production, i.e. would be the most effective. Therefore, the company must use a production process in which the same volume of finished goods is provided with the lowest cost of input factors of production.

The costs of acquiring input factors of production or economic resources are called production costs. This means that the most cost-effective method of production of any product is one that minimizes production costs.

To evaluate a company's activities, the category of opportunity costs is of decisive importance. “The cost of using a resource, measured in terms of the benefits “lost” by not using that resource in the best alternative way, is called opportunity cost (opportunity cost).”

To calculate a firm's opportunity costs, it is necessary for each input factor of production to estimate in monetary terms the benefit that the firm missed by using the resource in this way rather than in the best alternative way.

Maximizing profits and minimizing the costs of organizing production determine the behavior of the manager and are the main active motive for the economic activity of a company or individual entrepreneur.

Production costs form the lower price limit. To ensure a rational pricing policy, it is necessary to compare the cost structure with planned production volumes and calculate short-term average costs (per unit of production). As output increases, unit costs initially decrease until a certain volume of production is achieved. However, if you increase production further, then additional costs arise due to overloading of equipment, additional repairs, disruptions in production rhythm, downtime, etc., and therefore, in order to avoid losses from increasing production costs, there is a production cost management system operating at enterprises as in foreign and domestic practice in a market economy system.

Production cost structure.

The main indicator characterizing the degree of economic efficiency of a company’s activities is the “cost-output” ratio.

The production of products, like any product, requires the expenditure of economic resources, which have certain prices.

The quantity of resources consumed and their market value constitute production costs (costs).

Resources used in production are limited. An enterprise, determining its ability to produce goods, tries to choose the most effective combination of resources that provides the least amount of cash costs.

The costs of manufactured goods are called economic costs of production.

There are external and internal production costs.

External costs are payments for resources to suppliers who do not belong to the owners of the company.

Internal costs are the costs of own, unpaid resources.

These include: depreciation for the restoration of fixed assets, remuneration of company owners, etc.

“Total production costs are the sum of all external and internal costs necessary to attract and retain resources within the limits that ensure the economically sound functioning of the company.”

Production costs have a complex structure, which determines the nature and conditions of use in the production process.

There are fixed and variable production costs.

Fixed costs are those costs that do not change depending on the volume of production. These include the costs of acquiring, maintaining and maintaining land, buildings and structures, and equipment. Variables are costs, the value of which depends on production volumes. The value of variable costs varies with the volume of production, increasing or decreasing with this volume.

Variable costs include the costs of purchasing raw materials, labor, transport, heat and energy resources, etc.

Total costs are the sum of fixed and variable costs.

For the analysis and management of the state of the company, average and unit costs, as well as marginal production costs, are also of great importance.

Average and unit costs are the costs of producing a unit of finished product. There are average total, average fixed and average variable costs.

Marginal costs are the additional costs associated with producing one more (additional) unit of output.

COURSE WORK

In the discipline "Economics of an organization (enterprise)"

Topic: “Production and sales costs”

Introduction

1 Economic essence of costs (costs) of production and sales of products

1.1 Types of costs (expenses)

1.2 Composition of enterprise costs

1.3 Cost of goods sold and production costs

2. Cost structure using the example of the enterprise ZAO Kulikovskoye

2.1 Main indicators of the enterprise’s production activities

2.2 Production cost structure

2.3 Importance and ways to reduce production costs

Conclusion

List of used literature

Application

Introduction

The production process at an enterprise is a continuous interaction of three main factors: labor resources and means of production, which in turn are divided into means of labor and objects of labor. The totality of the costs of living and embodied labor represents production costs, which are a necessary condition for the implementation of economic activity.
The concept of “costs” is one of the most general economic categories that can be used for different methods of production in any conditions of economic activity.

The economic essence of the concept of “costs” can be viewed in different ways, depending on the specific goals and objectives of the study.
Thus, “cost” is often defined as a measure in monetary terms of the amount of resources used to achieve a certain goal. The concept of “costs” is also used to solve a wider range of problems, primarily to justify management decisions. For tax purposes, “costs” are the amount by which the amount of income subject to taxation, etc. is reduced.
Sometimes the terms “expenses” and “costs” are used to define various aspects of the economic essence of “costs”.
In enterprise economics, these concepts are considered identical, and costs are understood as the monetary expression of the use of production factors, as a result of which the production and sale of products is carried out.

The purpose of the course work is: to consider the theoretical foundations of the concept of “costs”, expenses”, “cost”, to reveal the composition and structure of the cost of production using the example of the enterprise JSC “Kulikovskoe”, to outline the main directions for reducing the costs of the enterprise.

1. The economic essence of costs (costs) of production and sales of products

1.1. Types of costs(costs)

Costs are the monetary expression of the costs of production factors necessary for an enterprise to carry out its production activities.

In countries with developed market relations, there are two approaches to estimating costs: accounting and economic.

Accounting costs represent the cost of resources expended, measured in actual acquisition prices. These are costs presented in the form of payments for purchased resources (raw materials, materials, depreciation, labor, etc.).

However, to make decisions about whether to continue operating their business, owners must consider the economic costs.

Economic cost is the amount (cost) of other products that must be given up or sacrificed in order to obtain a certain amount of a given product.

The domestic economy is characterized by an accounting approach to cost estimation. If we take this into account, the terms “costs” and “expenses” can be considered synonymous.

For accounting purposes, costs are classified according to various criteria.

Based on their economic role in the production process, costs can be divided into basic and overhead.

The main ones include costs associated directly with the technological process, as well as with the maintenance and operation of labor tools.

Overheads – costs for maintenance and management of the production process, sales of finished products.

According to the method of attributing costs to the production of a specific product, direct and indirect costs are distinguished.

Direct costs are costs associated with the production of only this type of product and attributable directly to the cost of this type of product.

Indirect costs in the presence of several types of products cannot be attributed directly to any of them and must be distributed indirectly.

In relation to the volume of production, costs are divided into variable and fixed.

Variable costs are costs, the total value of which for a given period of time is directly dependent on the volume of production and sales.

Fixed costs are understood as those costs, the amount of which in a given period of time does not directly depend on the volume and structure of production and sales.

Variables usually include costs of raw materials, fuel, energy, transport services, part of labor resources, i.e. those costs whose level changes with changes in production volume.

Fixed costs include deductions for depreciation, rent, salaries of management personnel and other costs that occur even if the enterprise does not produce products.

As for average fixed costs (per unit of output), they decrease as production volume increases and increase as production volume decreases.

The sum of fixed and variable costs constitutes the gross costs of the enterprise. With an increase in the volume of production and sales of products, gross costs per unit of production are reduced due to a decrease in fixed costs.

1.2. Composition of enterprise costs

The formation of enterprise costs is carried out at five levels (Fig. 1):

1. at the level of costs of the enterprise as a whole;

2. at the level of costs associated with ordinary activities;

3. at the cost level of operating activities;

4. at the level of cost of goods and products sold;

5. at the level of production cost of production.

At the first level, from the totality of the enterprise’s costs, costs that are directly and directly related to the normal activities of the enterprise and costs associated with extraordinary events are distinguished. The magnitude and share of the latter indicate the degree of influence of unplanned and uncontrollable events on the activities of the enterprise in the reporting period. This distinction makes it possible to immediately distinguish from the composition of the enterprise’s costs expenses that cannot be taken into account when assessing the effectiveness of business activities.

At the second level, the costs of ordinary activities primarily include costs associated with operating and financial activities. In general, it is difficult to identify any criteria for the rationality of the cost ratio at this level. However, a significant share of the costs of financial activities may indicate a wide variety of activities of the enterprise, the combination of which within one legal entity is not always appropriate and may require its division.

The amount of “other costs” (this group primarily includes costs associated with the maintenance of the social sphere) also indicates the presence in the enterprise of cost objects not related to the main activity, and, as a consequence, the main source of cost recovery.
At the third to fifth levels, the cost structure of operating activities is studied by economic elements and costing items.
Operating costs include all enterprise expenses associated with the production or sale of products (goods, works, services). The difference between the costs of core and operating activities is that the former do not include current costs of investing or financing activities.
The main indicator reflecting the cost structure of an enterprise's operating activities is the ratio of material, energy costs and wage costs. Costs for these elements determine the total amount of consumption of all main types of resources necessary to maintain normal economic activities of the enterprise.

Products in which material costs predominate (for raw materials and supplies) are called material-intensive, fuel and energy products are called energy-intensive, and labor costs are called labor-intensive.

In the process of analyzing the costs of operating activities by economic elements, the share of each element in the total amount of costs for the planned volume of operating activities is determined. Then, by comparing the share of actual costs for the relevant elements with planned indicators or indicators for previous periods, deviations and the reasons that caused them are identified.

When studying the structure and dynamics of costs by item, one should not confuse “cost items” with “costing items.”

In the first case, we are talking about grouping the costs of operating activities according to various accounting objects (production of products or services; management of the enterprise as a whole, commercial and sales activities for the sale of manufactured products or services); trade (resale) of goods). In this case, the objects of accounting are the various stages of operating activities, and costs are grouped according to the homogeneity of their purpose (by analogy: economic elements - the homogeneous essence of the costs themselves; cost items - their homogeneous purpose).
In the second case, costs, which will be only part of the costs of operating activities, are grouped under one accounting object - by product or service. At the same time, earlier (before the adoption of NP(S)BU) in accounting and reporting, there was an automatic combination of expenses that were economically heterogeneous in purpose:

For the production of specific products;

For the sale of products;

To manage an enterprise.

Thus, operating costs, in turn, include:

Cost of products or services sold;

Costs associated with operating activities;

Cost of goods sold

Operating costs include:

Administrative costs,

Sales costs;

Other operating costs.

When analyzing costs associated with operating activities, an assessment is made of the total value and structure of costs of this group, their share in the costs of operating activities and the costs of the enterprise as a whole, and qualitative conclusions are drawn about the significance and feasibility of costs for this item. In addition, actual data is compared with planned indicators, deviations are identified and their causes are clarified. Of particular importance for determining the feasibility of expenses for this item is a comparison of the rate of change in expenses with the rate of change in the volume of operating activities (for example, the rate of growth in sales costs with the rate of growth in product sales volumes). The optimal situation for an enterprise is when these indicators change proportionally.

1.3. Cost of goods sold and production cost

The concept of “enterprise costs” is closely related to the concept of “cost”. Cost plays a leading role in the general system of indicators characterizing the efficiency of the economic activities of an enterprise and its structural divisions.

Cost is a general indicator of the use of all types of enterprise resources. Cost also provides for the replacement of these resources, which is necessary to continue the production process. The level and dynamics of cost allow us to assess the feasibility and rationality of using the resources that are at the disposal of the enterprise. The cost of production reflects the technical level and organization of production, and the efficiency of management in general.
The economic essence of cost is that, firstly, it reflects the costs of material and monetary resources in the form of wages necessary for the production of goods. Secondly, the cost ensures reimbursement of expended resources in the process of circulation of production assets, since the cost itself participates in this circulation and is its integral part.
According to NP (C) BU No. 16, for goods and services participating in the economic turnover of an enterprise, three types of cost can be distinguished:

1. cost of goods;

2. cost of products sold;

3. production cost.

The cost of goods is determined in accordance with NP(C)BU 9 “Inventories”.

The production cost of products (works, services) that were sold during the reporting period includes only direct costs. Thus, the production cost of products includes only those general production costs that can be distributed among all types of products (works, services).

Cost of products sold includes:

- production cost;

- excess costs;

- unallocated general production costs.

The cost of production represents the current costs of enterprises expressed in monetary terms for the production and sale of products (works, services).

The cost of production is a qualitative indicator, since it characterizes the level of use of all resources at the disposal of the enterprise.

The cost of production of a particular enterprise is determined by the conditions in which it operates. This cost is called individual cost.

If, based on the individual cost of enterprises, the weighted average value of costs for the industry is determined, such a cost will be called the industry average. The average industry cost is closer to socially necessary labor costs.

The main document that guides the formation of the cost of production at an enterprise is the Regulation on the composition of costs for the production and sale of products (works, services) and on the procedure for generating financial results taken into account when taxing profits.

For the purpose of analysis, accounting and planning of the entire variety of costs included in the cost of production, two complementary classifications are used: element-by-element and calculation.

When grouping costs by elements, the costs of the enterprise as a whole are determined, without taking into account its internal structure and without identifying types of products. A document that presents costs by element is a production cost estimate. Cost estimates are drawn up to calculate the total needs of the enterprise in material and monetary resources. The cost amount for each item is determined based on supplier invoices, payroll records, and depreciation.

Cost elements are the costs of all services and workshops that are homogeneous in nature for production and economic needs.

The costs that form the cost of products (works, services) are grouped in accordance with their economic content into the following elements:

Material costs (minus the cost of returnable waste);

Labor costs;

Contributions for social needs;

Depreciation of fixed assets;

Other expenses.

Material costs reflect the cost of raw materials purchased from outside; cost of purchased materials; the cost of purchased components and semi-finished products; the cost of production work and services paid to third parties; cost of natural raw materials; the cost of fuel of all types purchased from outside, used for technological purposes, production of all types of energy, heating of buildings, transport work; the cost of purchased energy of all types, spent on technological, energy, propulsion and other needs.

The cost of material resources included in the cost of production excludes the cost of sold waste.

Industrial waste refers to the remains of raw materials, materials, semi-finished products, coolants and other types of material resources generated during the production process, which have lost completely or partially the consumer qualities of the original resource. They are sold at a reduced or full price of the material resource, depending on their use.

Labor costs reflect the costs of remunerating the main production personnel of the enterprise, including bonuses to workers and employees for production results, incentives and compensation payments.

Until recently, contributions for social needs reflected mandatory deductions from the costs of paying employees, included in the cost of products (works, services). These deductions were made in accordance with the norms established by law to the state social insurance, Pension Fund, state employment and health insurance funds.

From January 1 2001 All contributions to social extra-budgetary funds were replaced by a single social tax.

Depreciation of fixed assets reflects the amount of depreciation charges for the complete restoration of fixed assets.

Other costs are taxes, fees, deductions to extra-budgetary funds, loan payments within the limits of rates, costs of business trips, training and retraining of personnel, rent, depreciation of intangible assets, repair fund, payments for compulsory property insurance, etc. d.

Grouping costs by economic elements does not allow accounting for individual divisions and types of products; this requires accounting by costing items.

Costing is the calculation of the cost of a unit of products or services according to expense items. Unlike elements of cost estimates, costing items combine costs taking into account their specific purpose and place of formation.

There is a standard nomenclature of costs for costing items, but ministries and departments can make changes to it depending on industry characteristics.

Typical nomenclature includes the following articles:

1. Raw materials and materials.

2. Returnable waste (subtracted).

3. Purchased products, semi-finished products and production services of third-party enterprises and organizations.

4. Fuel and energy for technological purposes.

5. Wages of production workers.

6. Contributions for social needs.

7. Expenses for preparation and development of production.

8. General production expenses

9. General business expenses.

10. Losses from marriage.

11. Other production costs.

12. Selling expenses.

The total of the first 9 items forms the workshop cost, the total of 11 items forms the production cost, and the total of all 12 items forms the total cost.

Shop cost represents the costs of the production unit of an enterprise for the production of products.

Production costs, in addition to workshop costs, include general enterprise costs.

The total cost includes the costs of both production and sales of products.

Manufacturing overhead is the cost of maintaining and managing production. They include the costs of maintaining and operating equipment and shop expenses.

General business expenses are expenses associated with managing the enterprise as a whole: administrative and managerial, general business expenses, taxes, mandatory payments, etc.

Commercial expenses include costs for containers and packaging, transportation costs, advertising costs, and other sales costs.

Cost items included in the calculation are divided into simple and complex. Simple ones consist of one economic element (wages). Complex items include several cost elements and can be broken down into simple components (general production costs, general business expenses...).

Cost accounting is necessary to determine the financial results of an enterprise.

2. Cost structure using the example of JSC Kulikovskoe

2.1 Main indicators of the enterprise’s production activities

Closed joint-stock company "Kulikovsky" is an agricultural enterprise; it was formed in 1993 through the reorganization of the state farm "Kulikovsky" by the decision of its founders, who contributed their land and property shares as payment for the shares.

JSC "Kulikovskoye" is located 8 km away. From the regional center of Kalachinsk and at a distance of 80 km from the regional city of Omsk.

The main activities are production, sales and processing of agricultural products. The economy develops two main sectors:

production of commercial grain in crop production;

production of milk and meat in livestock farming.

The main financial and economic indicators of the activities of CJSC Kulikovskoye for 2006-2007 are shown in Table 1.

Table 1. Main technical and economic indicators of the activities of JSC Kulikovskoye

Indicators			Deviation 2007 by 2006
			Absolute in thousand rubles
1. Revenue (net) from the sale of goods, products, works, services (excluding VAT), thousand rubles.
2. Cost of goods, products, works, services sold, thousand rubles.
3. Net profit, thousand rubles.
4. Product profitability, % (item 3/item 1)
5. Fixed production assets, thousand rubles.
6. Capital productivity, thousand rubles.
7. Working capital, thousand rubles. (p1 /1.7)
8. Average headcount, people.

From the data in Table 1, it is clear that in 2007, CJSC Kulikovskoye reduced sales of its products compared to 2006 (69.1%). Costs (cost price) decreased in 2007 (76.1%), product profitability in 2007 decreased to 2.6%, compared to the level of 2006 (50.9%).

Based on the company’s indicators, there is a decrease in sales revenue, but due to excess costs, net profit decreased by 1,470 thousand rubles. and the level of product profitability is very low - 2.6%.

2.2. Production cost structure

Based on the grouping of costs by economic elements, the structure of product costs can be characterized.

Let's consider the structure of production costs for

a specific example: the enterprise CJSC Kulikovskoye.

Let's determine the level and structure of production costs compared to the previous year (Table 2)

Table 2. Production costs by element

Indicators	Previous 2006		Reporting 2007
	Sum, thousand rub.	Ud. weight, % To total costs	Sum, thousand rub.	Ud. weight, % To total costs
1. Volume of products (works, services) in current prices (excluding VAT and excise taxes)
2. Production costs
Including:
3. Material costs, of which:
raw materials and materials
4. Labor costs
5. Social contributions
6. Depreciation of fixed assets
7. Other expenses
8. Of the total production costs includes to non-production accounts
9.Increase (+) or decrease (-) account balance "Future expenses"
10. Increase (+) or decrease (-) in the account balance “Reserve for future expenses and payments”
11. Increase (+) or decrease (-) in the balance of work in progress, semi-finished products, tools not included in the price of products
12. Cost of commercial products (works, services) (page 2 - page 8 ± page 9 ± page 10 ± page 11)

Analysis of production costs is carried out by comparing the share of actual costs by element with planned data or with data for the previous (reporting) period. From the above data it is clear that actual production costs are less than the costs of the previous year: 19221-25118 = -5897 thousand rubles ., or -23.5%. Such a reduction in costs could be caused by various reasons - a decrease in production costs, a decrease in the volume of manufactured products, a change in its assortment, etc.

For the reporting year, of the total costs, 19,221 thousand rubles. the production cost of commercial products (works and services) accounts for 18,858 thousand rubles. Thus, the share of the cost of products (works, services) in all costs was 98.1% (18858: 19221×100%).

From the table 2 also shows that the main share (37.9%) of production costs is the cost of raw materials and supplies, as well as labor costs (32.8%). Consequently, this production is material-intensive and the most important direction for reducing production costs will be the search for reserves to reduce these costs. As you know, the source of saving materials is their rational use.

During the period under review, the share of labor costs increased from 28.4 to 32.8%. This suggests that the rate of decline in production costs outpaced the expected decline in wage costs. The share of contributions for social needs also increased – from 11.2 to 13.1%. However, in this case, the correctness of social contributions should be verified by comparison. To do this, the amount of contributions for social needs must be divided by the amount of labor costs for both periods, respectively. In our case, 39.8% (2510: 6310×100) were allocated for social needs in the reporting year, and 39.5% (2813:7124×100) in the previous year. The deviation is insignificant, but it is still necessary to clarify why it occurred.

An increase in the share of depreciation in both costs and product costs indicates a decrease in capital productivity. A decrease in the share of energy costs indicates a decrease in the energy intensity of products, but fuel consumption has increased, which indicates an imbalance in fuel and energy prices.

The increase in the share of other costs is caused by a change in their structure: the share of interest on bank loans, rent, and taxes included in the cost has increased.

When analyzing production costs, the costs of materialized labor should be separated from the costs of living labor (Table 3).

The costs of materialized labor represent raw materials, supplies, fuel, energy, depreciation of fixed assets and two-thirds of other expenses.

Table 3. Production cost structure

From the table 3 shows that the share of materialized labor costs in the reporting year decreased compared to the previous year by 57.7-50.7 = 7.0% with an increase in living labor costs. This change is characterized by a decrease in material costs for production and an increase in costs, primarily for labor costs. Thus, data analysis shows that in the analyzed company there has been a deterioration in the structure of production costs, which is caused by an increase in the share of living labor costs and a decrease in material costs.

Grouping costs by economic elements is the basis for calculating net output (NP): NP = Q-MZ. Thus, net production in the previous year amounted to 10,627 thousand rubles, in the reporting year – 9,482 thousand rubles.

When considering production costs by element, it is necessary to keep in mind that indicators for the previous period are taken without recalculation to the volume and range of products actually produced in the reporting period at current prices. Therefore, it is not possible to calculate savings or cost overruns in the reporting period compared to the previous one. However, such a comparison makes it possible to establish the magnitude of the deviation of actual costs in general for the production of products from the planned ones or from those that took place in the previous period for economically homogeneous elements, to identify changes in their structure and to outline the main directions for a more in-depth analysis.

Currently, enterprises are independently developing tasks to reduce the cost of certain types of products and reduce production costs.

Having data on the cost per unit of product for the previous period (Z 0), according to planned calculations (Z pl) and for the reporting period (Z 1), it is possible to give a general description of the degree of implementation of the planned target for reducing cost and its dynamics, as well as determine the absolute amount savings or overruns as a result of changes in costs.

Let's look at these calculations using an example. Let us assume that the production of 1 centner of flour should cost, according to planned calculations, 120 thousand rubles, in fact it costs 129 thousand rubles, in the previous period - 125 thousand rubles; Actually 250 quintals of flour were produced, 300 quintals were planned. We determine individual cost indices.

Planned task index:

those. a reduction of 4% is planned.

Plan task completion index:

those. above-plan growth of 7.5%.

Dynamics index:

those. actual growth of 3.2%.

The listed indices are interrelated:

(in our example 1.032=1.075x0.96).

Thus, with the planned target of reducing the cost of one hundredweight of flour by 4%, it actually increased by 3.2%. As a result, an overexpenditure was obtained based on the entire quantity of manufactured products - flour in the amount of 1,000 thousand rubles.

The total amount of overexpenditure (savings) from changes in product costs is determined by the formula

(in our example (129-125)×250=1,000 thousand rubles).

Subtracting the planned savings from the actual savings, we obtain above-plan savings (overspending):

Consideration of the cost of products, works and services by cost elements allows us to find out the trends in this indicator, the implementation of the plan according to its level, determine the influence of factors on its growth and, on this basis, assess the enterprise’s work in using opportunities and establish reserves for reducing the cost of production.

2.3. Ways to reduce production costs

The decisive condition for reducing costs is continuous technical progress. The introduction of new technology, comprehensive mechanization and automation of production processes, improvement of technology, and the introduction of advanced types of materials can significantly reduce the cost of production.

A serious reserve for reducing production costs is the expansion of specialization and cooperation. In specialized enterprises with mass production, the cost of production is significantly lower than in enterprises producing the same products in small quantities. The development of specialization requires the establishment of the most rational cooperative ties between enterprises.

Reducing production costs is achieved, first of all, by increasing labor productivity. With an increase in labor productivity, labor costs per unit of production are reduced, and consequently, the share of wages in the cost structure decreases.

The success of the struggle to reduce costs ensures, first of all, an increase in the productivity of workers, which, under certain conditions, ensures savings on wages or an increase in output, reducing the share of semi-fixed costs in the cost of a unit of production.

The most important importance in the struggle to reduce production costs is compliance with the strictest savings regime in all areas of the enterprise’s production and economic activities. The consistent implementation of the economy regime at enterprises is manifested primarily in reducing the cost of material resources per unit of production, reducing production maintenance and management costs, and eliminating losses from defects and other unproductive expenses.

Material costs, as is known, in most industries occupy a large share in the structure of product costs, so even a slight saving of raw materials, materials, fuel and energy in the production of each unit of production for the entire enterprise has a major effect.

The enterprise has the opportunity to influence the amount of material resource costs, starting with their procurement. Raw materials and materials are included in the cost price at their purchase price, taking into account transportation costs, so the correct choice of material suppliers affects the cost of production. It is important to ensure the supply of materials from suppliers who are located a short distance from the enterprise, as well as to transport goods using the cheapest mode of transport. When concluding contracts for the supply of material resources, it is necessary to order materials that, in size and quality, exactly correspond to the planned specification for materials, strive to use cheaper materials, without at the same time reducing the quality of the product.

The main condition for reducing the cost of raw materials and materials per unit of production is improving product designs and improving production technology, the use of advanced types of materials, and the introduction of technically sound standards for the consumption of material assets.

Reducing production maintenance and management costs also reduces production costs. The size of these costs per unit of production depends not only on the volume of output, but also on their absolute amount. The lower the amount of workshop and general plant expenses for the enterprise as a whole, the lower, other things being equal, the lower the cost of each product.

The reserves for reducing shop and general plant costs lie, first of all, in simplifying and reducing the cost of the management apparatus and saving on management costs. The composition of shop and general plant expenses also largely includes the wages of auxiliary and auxiliary workers. Carrying out measures to mechanize auxiliary and auxiliary work leads to a reduction in the number of workers employed in these works, and, consequently, to savings in workshop and general plant expenses.

The reduction of workshop and general plant costs is also facilitated by the economical use of auxiliary materials used in the operation of equipment and for other economic needs.

Significant reserves for reducing costs are contained in reducing losses from defects and other unproductive expenses. Studying the causes of defects and identifying its culprit makes it possible to implement measures to eliminate losses from defects, reduce and use production waste in the most rational way.

In the context of the transition to a market economy, the role and importance of reducing production costs at an enterprise increases sharply.

From an economic and social point of view, the importance of reducing production costs for an enterprise is as follows:

- in increasing the profit remaining at the disposal of the enterprise, and, consequently, in the emergence of opportunities not only in simple, but also in expanded production;

– in the emergence of opportunities for material incentives for workers and solving many social problems of the enterprise staff;

– improving the financial condition of the enterprise and reducing the risk of bankruptcy;

– the possibility of reducing the selling price of its products, which can significantly increase the competitiveness of products and increase sales volume;

In reducing the cost of production in joint-stock companies, which is a good prerequisite for paying dividends and increasing their rates.

Conclusion

1. Costs, expenses, cost are the most important economic categories. Their level mainly determines the amount of profit and profitability and underlies the system of production efficiency indicators.

2. Costs for production and sales of products are current non-capital costs financed from proceeds from sales of products through the turnover of working capital. The production costs of foreign firms consist of accounting and economic costs, which include standard profit.

3. The cost of production includes: material costs, labor costs, social contributions, depreciation and other expenses.

4. Grouping costs by budget elements reflects the generality of their economic content and determines the total volume of various types of resources consumed by the enterprise according to their natural purpose.

5. Classification of costs by costing items unites them according to areas of use and place of origin. It allows you to determine the cost per unit of production, distribute costs across product groups, and identify reserves for their reduction.

6. There are planned, normative, estimated and actual calculations. When calculating the cost of a unit of production, direct costs are included based on established norms, prices and tariffs, and indirect costs are distributed in accordance with the selected base.

7. Enterprises develop two options for product costs: for accounting purposes and for tax purposes.

8. A company's costs are classified into fixed, variable, gross, average and marginal. The marginal cost curve intersects the lines of average variable cost and average total cost at their lowest points. At the point where the average cost curve reaches a minimum, the firm optimizes output in terms of minimizing costs.

List of used literature

1. Enterprise economics: Course of lectures. Volkov O.I., Sklyarenko V.K. (2006, 280 pp.)

2. Economics of an enterprise (firm). (Textbook) Ed. Volkova O.I., Devyatkina O.V. (2007, 3rd ed., 601 p.)

3. Enterprise economics. (Textbook) Ed. Gorfinkel V.Ya., Shvandar V.A. (2007, 4th ed., 670 pp.)

4. Enterprise economics. (Tutorial) Ed. Ilyina A.I., Volkova V.P. (2003, 677 pp.)

5. Enterprise Economics (textbook) Safronov N.A., Moscow. Publishing house LAWYER, (2002, 425 pp.)

6. Enterprise economics. (Textbook) Sklyarenko V.K., Prudnikov V.M. (2006, 528 pp.)

7. Enterprise economics. (Textbook) Titov V.I. (2008, 416 pp.)

8. Economics of enterprise (lecture notes), Frolova T.A., Taganrog. Publishing House TRTU, 2005

9. Enterprise Economics (Tutorial) Hungureeva I.P., Shabykova N.E., Ungaeva I.Yu. (2004 - 240 pp.)

10. Economics of the company. (Tutorial) Chechevitsyna L.N., Chuev I.N. (2006, 400 pp.)

3. Basic economic elements and performance indicators of manufacturing enterprises (firms)

The structure of business as a system. In Fig. Figure 3.1 shows the structure of a business as a closed system, within which the interaction of decisions in the investment, economic and financial spheres of the company’s activities takes place, as well as the expanded reproduction of invested resources.

Rice. 3.1. Business structure as a system

The diagram shows how new investments, added to the total amount of previously invested funds, enter the economic sphere of activity. In the process of economic activity, as a result of a combination of production factors and interaction between categories such as prices, volumes of production and sales of products and various types of costs, gross profit is formed as the difference between the price of a product and its cost (costs of production and sales). In the financial sphere of activity, this profit is distributed between the owners (in the form of dividends), creditors (as a percentage) and the budget (in the form of taxes). Part of the retained earnings is reinvested for the development of production and, together with the attracted capital, constitutes the financing potential of the enterprise, which again enters economic activity in the form of new investments. Let's look at the concepts involved in more detail.

3.1. Costs of production and sales of products

The cost of products (works, services) is a valuation of the natural resources, raw materials, supplies, fuel, energy, fixed assets, labor resources used in the production process, as well as other costs for its production and sale. The cost includes the following types of costs:
1) costs directly related to the production of products, determined by the technology and organization of production, including costs for quality assurance;
2) costs of servicing the production process;
3) costs associated with production management;
4) costs associated with improving technology and production organization, improving the quality and reliability of products, invention and innovation;
5) costs of maintaining and operating environmental structures;
6) costs of ensuring normal working conditions and safety precautions;
7) costs associated with training and retraining of personnel;
8) payments provided for by labor legislation;
9) deductions from salary expenses;
10) payments for mandatory (statutory) types of insurance and bank loans;
11) contributions to special funds;
12) costs of reproduction of fixed production assets (depreciation);
13) depreciation of intangible assets;
14) taxes, fees, payments and other mandatory deductions provided for by law;
15) Other types of costs in accordance with the procedure established by law.

In addition, the actual cost reflects:
a) losses from marriage;
b) costs for warranty repairs and maintenance;
c) losses from downtime due to internal production reasons;
d) shortages in the absence of perpetrators;
e) cash benefits in the manner prescribed by law.

Production costs are included in the cost of the reporting period to which they relate, regardless of the time of payment.

Cost classification

Costs can be classified according to the following criteria:
1) according to the method of attributing costs to the cost of a unit of production:
a) direct (related to the production of specific types of products, they can be directly included in the cost of a unit of production);
b) indirect or overhead (costs associated not with the production of a certain type of product, but with production in general);
2) according to the homogeneity of the cost composition:
a) simple - economically homogeneous (for example, material costs of the same purpose);
b) complex - economically heterogeneous costs, but the same purpose (for example, for the maintenance and operation of equipment);
3) by type of expense:
a) by economic elements (the classification is based on the economic homogeneity of costs, regardless of where the costs arise and the direction of use (for example, wages);
b) by costing items (place of origin and direction of use are taken into account);
4) by the nature of the connection with the volume of production:
a) conditionally constant, they usually include such costs, the value of which does not change with changes in the degree of utilization of production capacity or changes in production volume;
b) conditionally variable, these include costs that change depending on changes in production volume.

Classification of costs by economic elements

The costs that form the cost of production are grouped in accordance with their economic content into the following elements:
1) material costs (minus the cost of returnable waste). Returnable waste is the remnants of material resources generated during the production process, which have lost completely or partially the consumer qualities of the original resource and, therefore, are used at increased costs or are not used at all for their intended purpose;
2) labor costs;
3) deductions from labor costs (for example, for social needs);
4) depreciation of fixed assets;
5) other costs.

Using this classification, you can determine the total costs of production and sales of products (make an estimate of production costs).

Calculation of the cost per unit of production includes a grouping of costs (Table 3.1) according to the following items:
1) raw materials and basic materials, taking into account transportation and procurement costs;
2) purchased products, semi-finished products and production services of third-party organizations;
3) returnable waste (subtracted);
4) auxiliary materials;
5) fuel and energy for technological purposes;
6) basic wages of production workers;
7) additional wages for production workers;
8) contributions for social needs (additional wages are set, as a rule, as a percentage of the basic salary. Contributions for social needs include contributions to: the pension fund, compulsory health insurance fund, employment fund, social insurance fund. Contributions for social needs are made from the amount of basic and additional wages);
9) expenses for preparation and development of production (costs are incurred in accordance with the Regulations on the composition of costs included in the cost);
10) expenses for maintenance and operation of equipment;
11) shop expenses;
12) general plant expenses;
13) losses from marriage;
14) other production costs;
15) non-production expenses (commercial expenses).

Table 3.1

Cost grouping

Direct material costs	Direct labor costs	General shop expenses	General and water expenses	Non-production expenses
Technological cost
Workshop cost
Production cost
Full cost

When calculating the cost per unit of production, the following are used:
1) specifications for raw materials, materials, purchased semi-finished products and components;
2) technological maps with operational time standards and prices;
3) the system of norms and standards in force at the enterprise;
4) estimates of overhead costs.

Composition of costs for operation and maintenance of equipment:
1) depreciation of equipment and vehicles;
2) costs of operating equipment (fuel, energy, etc.);
3) repair costs;
4) wear and tear of low-value and fast-wearing items and devices.

Composition of workshop expenses:
1) maintenance of the workshop management apparatus;
2) maintenance of other personnel;
3) depreciation of buildings, structures, equipment;
4) costs of maintaining buildings, structures, equipment;
5) repairs;
6) testing, innovation, invention;
7) labor protection costs;
8) wear and tear of low-value, fast-wearing equipment and other non-production expenses.

Composition of factory overhead expenses:
1) costs associated with managing the enterprise;
2) personnel training;
3) fees and deductions;
4) other expenses are similar to shop expenses.

Allocation of indirect costs

The following can be used as a basis for the distribution of indirect costs:
a) the basic salary of production workers (minus additional payments for various bonus systems);
b) estimated rates calculated on the basis of machine-hour ratios;
c) direct material costs.

The method of attributing indirect costs to cost is proportional to the basic wages of production workers (Table 3.2).

Indirect cost distribution coefficient

Table 3.2

Determining the amount of indirect (overhead) costs

Previous

Costs are costs expressed in monetary terms, caused by the expenditure of various types of economic resources (material, labor, land, financial) in the process of production and circulation of goods. They include the costs of living and materialized (past) labor embodied in the means of production. Costs are divided into production costs and distribution costs.

Production costs represent the costs of consumed resources in the production cycle of the circulation of funds.

Distribution costs are costs associated with the acquisition of production resources, the sale of finished products and their promotion in the sphere of circulation.

The main part of the total costs are production costs, which include labor costs with deductions for social needs, material costs, depreciation charges, etc. Production costs are divided into public and individual (private).

Social costs production represents the costs incurred to produce products from the perspective of the entire national economy, i.e. costs to society. They characterize the cost of a product and show how much the product costs to society.

Individual (private) costs reflect the costs of a particular enterprise for the production of products. They determine the cost of production.

Production costs are divided into constant (fixed) and variable.

Fixed costs - costs, the value of which does not depend on the volume of products produced. They exist from year to year at the same level until the enterprise changes its assets (cash property) and the number of employees. These include depreciation of fixed assets, certain types of taxes levied on the enterprise; insurance of fixed assets; costs of repairing fixed assets; interest rates for loans; advertising costs; overhead costs, etc.

Variable costs depend on production volume. These include wages, costs of feed, fertilizers, production materials (diesel fuel, lubricants, etc.), energy, auxiliary materials, insurance against adverse weather conditions (hail, drought), costs of selling products. The distribution of costs into fixed and variable ones is of great importance when analyzing the activities of an enterprise, as well as for simplifying the calculations of standard costs and more flexible adjustment of them in connection with changes in specified parameters.

There are economic and accounting costs of production.

Economic costs - this is the cost of other benefits (goods, services) that could be obtained with the most profitable possible alternative use of production resources. Economic costs include accounting and opportunity costs.

Alternative (imputed) costs - lost profits from alternative use of production resources. For example, in agriculture, where resources are limited, the expansion of one industry will limit the development of other industries that use the same resources, i.e. there is lost profit from the reduction of other industries. Lost profits act as opportunity costs and are additional alternative costs that are not reflected in accounting (financial) accounting, but can be calculated in the management accounting system when determining the economic efficiency of production.

Accounting costs represent production costs, i.e. the cost of consumed (spent) production resources. These costs are obvious.

The individual costs of an enterprise represent the cost of production.

Cost - current costs, calculated in monetary terms and caused by the use of land, labor, material and financial resources for the production and sale of products.

Cost is an economic category that shows how much it costs each enterprise to produce and sell its products. A certain amount of means of production and living labor of workers are spent on the production of products. Spent means of production represent past labor embodied in means of production, which act as enterprise costs for seeds, fuel, fertilizers, electricity, fixed assets (depreciation), etc. Living labor is accounted for by actual payment.

Cost is one of the most important economic indicators of the activities of agricultural enterprises, since it reveals the qualitative aspects of their work, the degree of rational use of means of production and labor resources. Increasing the economic efficiency of production is ultimately determined by increasing the production of high-quality products while reducing their cost. Consequently, the level of cost serves as a criterion for the location and specialization of agricultural production. In addition, cost calculation makes it possible to determine the profitability of production.

The purpose of accounting for the cost of products (works, services) is a timely, complete and reliable reflection of the actual costs of its production, as well as control over the use of material, labor, land and other production resources.

In agriculture, the cost of gross output and unit of production is calculated.

Cost of gross output represents the sum of all production costs of the enterprise. Production costs consist of costs associated with the use of natural, material, labor and financial resources in the production process.

Unit cost is determined by dividing production costs by the volume of gross output in physical terms.

In addition to the cost of production, the cost of a unit of work is also determined (1 conventional floor hectare, 1 tkm, 1 horse-day, etc.), as well as the cost of cultivating 1 hectare of crops, raising 1 head of livestock.

Depending on the volume of included costs, the cost price is divided into production and full (commercial). Production cost includes costs associated with the production of products. Commercial (full) cost - These are the costs of production and sales of products.

Depending on the data source, actual, planned and preliminary (provisional) costs are distinguished.

Actual cost calculated at the end of the year based on the results of economic activities based on accounting data. It allows you to evaluate the performance of individual production departments. By determining the actual cost of production, you can outline specific ways to reduce it, compare the current year's indicators with the previous period or with the planned cost.

Planned cost calculated on the basis of standard indicators taking into account the actual cost for the previous year. Calculations of production costs are carried out based on technically sound standards for the consumption of material resources (seeds, fertilizers, pesticides, pesticides, fuel, energy, etc.), production and maintenance standards and other standards, taking into account recommendations for the rational use of land, as well as the expected economic effect . Calculations are made on the basis of technological maps for cultivating agricultural crops and raising various types of livestock and poultry. When calculating the planned cost, measures are planned to reduce material, labor and monetary costs, general business expenses, as well as the fullest use of agricultural production reserves.

Preliminary (provisional) cost determined before the end of the business year (usually October 1) based on actual costs incurred for 9 months (three quarters) and expected indicators for the fourth quarter using standards.