Costs of the enterprise
In the process of production, servicesand performance of works, the subject of managing the labor, material and financial resources. The costs of these items ultimately form the cost of goods. The magnitude of this indicator has a significant effect on the final result of the organization's activities, which can be either profit or loss.
The costs of the enterprise must be properly taken into account. This will ensure proper control over their effective use and allow to correctly calculate the financial result of the business entity. The costs of the enterprise are an important component in determining the selling value of the goods and are the basis for analyzing the work of the organization, which is necessary for management and forecasting.
In the course of its activities, the entityeconomic management, monetary and material expenditures are made, the purpose of which is both simple and extended reproduction of non-current and circulating assets, as well as the production and sale of products and much more.
The greatest specific weight is the cost ofrelease of goods. The enterprise also produces costs for the sale of products. These costs are commercial or non-productive. These include transportation, packaging and storage of goods, advertising and much more. The totality of the cost of production and commercial expenses is the total amount of expenses that characterizes the costs of the enterprise.
A reliable definition of this indicator is the basis for the following:
- Conducting marketing analysis and making decisions on the release of a new product with a minimum cost;
- finding the degree to which certain items of expenditure affect the costs incurred in the course of output;
- Price formation;
- reliable determination of the amount of income and the correct calculation of taxes.
The costs of the enterprise, which must be included in thecost of products, services provided and work performed, are a valuation of the natural resources and raw materials used, fuel and materials, energy and fixed assets, labor resources and many other necessary expenses used during the production process. In addition, the business entity bears costs that do not affect the release of goods. These costs should not be included in the cost of production.
- work related to the improvement of towns and cities;
- rendering assistance to the village;
- expenses for repair and amortization of cultural and household objects that are on the balance sheet of the business entity;
- work done for other organizations in order to help.
For proper activity planning, accountingand the analysis of the costs of the enterprise and their classification (merging into homogeneous categories) should be correctly determined. It is these indicators that reflect the rational use of financial, labor and material resources.
The total costs of an enterprise are divided into the following types:
- included in the cost of production;
- mixed (interest paid for credit, travel and entertainment expenses, etc.);
- attributable directly to financial results (canceled orders, production costs, which did not produce products, the content of canned production assets, and so on);
- produced at the expense of net profit (material assistance, expenses incurred in excess of the standard, and so on).
Reliable cost analysis and correctthe adopted managerial decisions on the rational use of the enterprise's resources should lead to a reduction in the expenditure level of the business entity, which will be a significant indicator of the effectiveness of its activities and will ensure the growth of income.