Making a decision on the advisability of opening a new production, any entrepreneur not only calculates the cost of acquiring equipment, but also draws up such a document as an estimate of production costs. In a general sense, this is a set of consumable items broken down into several items.
The estimated cost of production is a set of planned costs, expressed in cost terms and associated mainly with the execution of work and production of products corresponding to the production program of the company. As a rule, the estimate is developed on the basis of a single nomenclature of economic elements. The compilation of these documents is of great importance in the process of production planning. When preparing such an important document as an estimate of the cost of production, you need to consider not only the principle of minimum cost. This point is significant, since in most enterprises, in order to succeed, a coordinated work of production and marketing structures is needed. Professionals involved in the implementation should know what the consumer wants more at a particular point in time in a particular market segment, which is preferred over price or quality. Based on these data, a production program should be formed . The costs of implementing such a program should be included in the cost estimate for production. Such close cooperation in the work of individual enterprise structures can significantly reduce production costs per unit of output.
When planning production, one should rely not only on the cost of production, but also on the need for it, since with proper demand, it is possible to increase sales volumes, thereby reducing production costs over time, which, without a doubt, will be reflected in the estimate.
In most cases, the estimated cost of production is a summary document of a consolidated type. Therein lie the negative aspects of making estimates, since often such summary calculations are very arbitrary and far from always accurate. In the best case, the real cost of costs will vary slightly with their estimated cost. On the basis of estimates establish the level of costs for production, as well as the sale of goods from the list of enterprises.
Using cost estimates, the cost of sales of commodity and gross output is calculated, and the movement of work in progress balances is also recorded . Among other things, taking this document into account, expenses are written off to non-production accounts and the size of profit from sales is established. For the analysis of production costs, the estimated section makes it possible to see the total consumption for each type of resource, as well as to determine the level of need for current assets. Basically, the estimate is based on economic elements, the composition and list of which are homogeneous. This production cost accounting system has not exhausted its relevance over time, since it can easily be used to monitor changes in the cost structure.
In the preparation of estimates, auxiliary production sites are initially taken into account, since their products are included in the cost of primary production. Having available estimates of this type, they are moving to estimates of production costs in relation to the main production workshops. As a result, it can be noted that the preparation of costly estimates in the production process leaves its mark on the final cost of a unit of production.