Costs of production - types and essence

By organizing production, institution, firm, anyentrepreneur, the leader usually uses the rule: invest in a minimum, get the most out of everything. But without costs, and to be more precise, no one costs anyone without the costs of production, the types of which we will consider in this article.

At different times, economists from different countriesclassified such costs according to their models. The most popular of them in the twentieth century was the concept of Karl Marx. He divided the costs of production, their types, to be more precise, on circulation and production. The latter included the costs of purchasing raw materials, materials, energy costs, as well as salary payments. The former carried all the costs associated with the sale of products.

Modern reality has made itsadjustments. And at the heart of economic analysis, to date, the costs of production, their types, structure differ both in quantity and form with content. So, expenses in general are united in one big group. It is called gross cost. They include two subgroups: constants and variables.

The essence and types of production costs can be explained,starting with fixed costs. So, any enterprise bears expenses for the maintenance, rent, repair of premises, constructions, buildings. This is not the only permanent factor. The interest of loans, the maintenance of the security staff or the payment of a contract for such a service, the purchase and maintenance of equipment - all this also need to be included in the amount of costs.

The main types of production costs include anda kind of variable costs. The latter depend on the volume of output and include raw materials, materials, employees' wages, energy carrier costs, and the like.

In order for the economic analysis of the enterprise to be conducted accurately and scrupulously, it is customary to derive the average indicators. By a fairly simple formula are calculated:

1. Average fixed costs. To obtain this indicator, it is necessary to find the quotient between the total constant costs and the quantity of output.
2. Average variable costs. The calculation algorithm is the same, only the variable of costs changes.

But economic analysis does not endthe above calculations. An important characteristic in it is the value of the maximum level of profit. To calculate it, a conclusion is needed about the greatest productivity of the enterprise. That is, the calculation of the maximum number of products produced in a certain period. There is such a thing as marginal costs of production, the types of which differ from the above. This is the overhead that is put into the production of additional products.

The costs of production, their types, are calculated inRussia and in Western countries by different methods. The thing is that the Russian Federation inherited from the USSR the concept of prime cost, which by and large includes not only costs associated with the basic output of products, but also over-standard. Western economists spend all additional costs on the basis of the main types of costs.