Cost reflects the full totality of all costs incurred by the enterprise for the production and further sale of its products. The cost structure is its composition according to costing items or cost elements, taking into account the share of each element (or component) in the total cost of production.
There are two ways in which you can calculate the cost:
1) by cost elements (combined into separate groups according to economic content);
2) by calculation item (in this case, emphasis is placed on sharing costs according to their role, purpose and place of occurrence).
Under the elements of costs understand:
• material costs;
• depreciation;
• payment of salaries to employees;
• deductions to social funds;
• other expenses.
The cost is calculated in several stages:
1. First, its production value is determined;
2. By adjusting the production indicator to change the balances of expenses for future periods, the cost of gross output is calculated;
3. The cost of commercial products (those products that are planned for release and sales for a certain period) is calculated by adjusting the gross to change the balances of production in progress;
4. The indicator of the cost of goods sold (the cost of products planned for delivery to the customer with its simultaneous payment during the planned period) is determined by adjusting the previous indicator for changes in the balances of manufactured 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. On this basis, labor-intensive enterprises are distinguished (in which a large share of the prime cost is paid to employees), material-intensive (require large material costs), capital-intensive (substantial depreciation), energy-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 share of living labor and, accordingly, increasing materialized labor (that is, not creating the value of the goods, but being a 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 bank loan interest rates.
The cost structure is characterized by such indicators as:
• share of each item (or costing item) in total costs;
• the ratio of living labor (people's activities, the costs of their mental and physical energy to produce or perform work) and materialized (labor that was previously spent on the extraction of raw materials, the creation of appliances, the production of materials, the construction of a building, etc. It is embodied in themselves means of production and characterizes the technological potential of the enterprise);
• ratio of fixed costs and variables; fixed and overhead, production and commercial, direct and indirect costs, etc.
The cost structure is constantly analyzed to streamline cost management in order to minimize them.
The structure and types of cost are interconnected. It is the composition of costs that allows us to distinguish the types of production costs: technological, workshop (includes technological and general production expenses), production (includes workshop, general economic expenses and possible losses from marriage), full (includes production and commercial expenses). Thus, the total cost is a reflection of all the costs and production, and its implementation.
The company is engaged in the calculation of the unit cost of each type of product; commodity, gross, sold, finished products and work in progress. They distinguish between the planned, actual and regulatory costs.