The Cost Of Production Of The Enterprise

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2020-07-03 03:02:07

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The Cost of production enterprises, in fact, represents the entire amount of direct costs that are directly associated with the production, as well as all costs for the creation and implementation of products.

Production Costs the company includes direct costs of materials, employee salaries, and variable costs in the form of material costs, depreciation, wages of personnel, main and auxiliary, as well as overheads that are incurred in connection with the necessities of production and sales.

Distinguish between these types of costs as full production.

The Cost of production of the enterprise is one of the most significant and important performance indicators of the company. It is used in financial planning to calculate the profit and the profitability of different types of products and total sales.

Total cost all products, which is planned for release, is reflected in the estimate of expenses for production costs and sales. Thus the total cost is different from cost of products sold. The difference that exists between these indices is due to the fact of the presence of residues of the part of unsold goods, which remains at the beginning (end) of the planned period.

If the revenues you receive for the receipt of funds to the account of the manufacturer (or in cash Desk of the enterprise), the leftovers, which was not implemented at the beginning of the period, include funds in the calculations, the goods storage and finished goods located in warehouses.

To determine the full cost of these balances are accounted for at production cost during the reporting period in the amount of their actual availability.

The Cost of production of the enterprise in the form of money expresses the company's costs of production. Distinction is therefore made between the planned and actual costs.

When calculating the planned cost to include the highest possible costs that are provided for in the plan. the Actual cost of production is the size of resources actually spent on production.

The profit of the enterprise depends not only on the quality of technologies and industrial processes, perfect products and efficient management of the production processes, but also from the management level of costs. Therefore, Accounting of production costs is the center of attention of representatives of all schools of accounting.

The development of the economy as a whole is determined by the development of its individual units  - industrial enterprises. Their work and efficiency is determined by management, through which the company receives the economic independence and competitive position among other market entities.

Effectiveness of cost control is particularly relevant in terms of the need to adapt pretty quickly to changing conditions in the external environment.

The concept of «cost control" of today is not yet particularly widely recognized because more attention is paid to calculation and accounting aspects.

Under product cost management understand  the process of continuous accounting, planning, analysis and control, which are elaborated managerial decisions aimed at optimization and cost reduction.

 cost Management system includes measures to impact on specific aspects of the enterprise to increase efficiency and the maximum possible profit increase.  the Process of management consists of the functions of planning, motivation, organization and control. These control functions are combined by processes of communication and common decisions.

 


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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