Each company wants the business it opened to bring maximum profit. To do this is not always easy, since any real opportunity is always limited by the demand for manufactured products and production costs. The main limitation of income is still costs. In turn, they also affect the number of offers. That is why, when considering prospects for the future, a firm must necessarily analyze the costs that have already taken place.
Costs of production and their types are the costs that each production will have to face in the process of activity, regardless of the money invested and the volume of production. These costs consist of material costs, expenses for the promotion and sale of goods, payment of interest on a loan, labor costs for workers and other additional costs.
Conventionally, all production costs are divided into "sedimentary" and actual. In the first case, they talk about those costs that have already completely left production and will never return. “Sedimentary” costs are no longer taken into account when making new decisions (considering options for the further development of production), and their accounting is mainly attributed to various insured events, for example, writing off bad debts. If we talk about actual costs, then they, in turn, are divided into explicit and implicit. Explicit - these are costs associated with cash costs for the purchase of necessary equipment, raw materials, payment of wages, rent of premises, etc. Implicit - this is the so-called one-time costs, for example, the costs associated with the manufacture of a bright sign, which will attract attention to the company.
Production costs and their types are divided into constants and variables. Fixed production costs are costs that always remain unchanged, regardless of a decrease or increase in production volumes. This includes the payment of rental premises, wages for workers, insurance premiums, equipment costs, etc. Fixed costs can be divided into starting and residual. Starting - these are the costs that arise with the start of production and sale of goods. Residual - these are the costs that the company or enterprise continues to bear even despite the fact that the production or sale of goods was stopped for an indefinite time.
Variable costs, on the contrary, are completely dependent on production volumes. They are mainly associated with the cost of purchasing the necessary raw materials and labor. There are three types of variable costs: proportional (vary in the same proportion as production, sales), progressive (change in a much larger proportion than production and sales), degressive (change in a much smaller proportion than sales and production). If the production costs and their types are the costs of a particular economic object, then public excerpts are the costs of materialized labor and all living things, which are reflected in the cost of manufactured products. Fixed and variable costs of production in total give total costs.
Thus, we can safely say that production costs and their types are an internal assessment of all those costs that the company makes in order to distract from the alternative application its necessary transformation factors. Such costs can be both internal and external. External is the assessment of those costs that are payments to labor suppliers. Internal, or unpaid, costs are costs associated with the missed opportunities for more rational use of the acquired economic resource.