Cost structure


The cost price reflects a complete set of allproduced by the enterprise the cost of production and the further sale of its products. The structure of the cost price is its composition by costing items or cost elements, taking into account the share of each element (or component) in the total production cost of the products.

There are two ways in which you can calculate the cost price:

1) by cost elements (combined into separate groups by economic content);

2) for costing articles (in this case, emphasis is placed on the division of costs by their role, purpose and place of origin).

By cost elements understand:

• material costs;

• depreciation;

• payment of salaries to employees;

• deductions to social funds;

• Other costs.

The cost is calculated in several stages:

1. First, its production value is determined;

2. By adjusting the production indicator for the change in the balances of expenditures for future periods, the prime cost of the gross output is calculated;

3.The prime cost of commodity output (that production which is planned for release and realization for the certain period) is calculated by correction of gross on change of the rests of manufacture of not completed;

4.The indicator of the cost price of the sold products (the cost of the products planned for delivery to the customer with its simultaneous payment over the planned period) is determined by adjusting the previous indicator for changes in the leftover products.

The cost structure is not static, it is in constant motion. The dynamics of the cost structure is determined by many factors, which include:

1. The specifics of the enterprise.Labor-intensive enterprises (which account for a large share in the cost of wages for employees), material-intensive (require large material costs), capital-intensive (significant amortization), energy-intensive (labor-intensive production requires a large share of fuel and energy);

2.The factor of acceleration of technical and scientific progress, which determines the possibility of reducing the proportion of labor of the living and, correspondingly, increasing the labor of materialized (that is, not creating the value of the commodity, but being the condition for its creation);

3) Geographical location (location) of the enterprise;

4) The level of specialization, combination, concentration, cooperation and diversification of production;

5) Inflation combined with possible changes in interest rates of bank loans.

The cost structure is characterized by such indicators as:

• the proportion of each item (or costing item) at full cost;

• the ratio of living labor (people's activities,the costs of their mental and physical energy for the production or performance of work) and materialized (labor that was previously spent on the extraction of raw materials, the creation of devices, the production of materials, the construction of a structure, etc. It is embodied in the means of production themselves and characterizes the technological potential of the enterprise) ;

• the ratio of fixed costs and variables; basic and overhead, production and commercial, direct and indirect costs, etc.

The structure of the cost price is constantly subjected to analysis for the rationalization of cost management with a view to minimizing them.

The structure and types of costs are interrelated.It is the composition of costs that makes it possible to distinguish the types of production costs: technological, shop (includes technological and general production costs), production (includes shop floor, general economic expenses and possible losses from marriage), complete (includes production and commercial costs). Thus, the total cost of production is a reflection of all costs and production, and its implementation.

The enterprise is engaged in calculations of the cost priceunits of output of each type; commodity, gross, realized, finished products and work in progress. Distinguish the prime cost, the actual, and the normative.

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