The concept and classification of costs of the enterprise at the moment play an important role in its activities. Costs that are directly related to the production and marketing of finished products may be considered as costs or assets. Costs are costs that do not bring future economic benefits. The concept of costs and their classification is used at all levels of management, as well as the formation of the cost of production, as well as constantly identifying all sources of financing.
Classification of enterprise costs occurs on 3 grounds. The first is expenses that are closely related to making a profit. This includes costs not only for production, but also for the sale of services, works, products, as well as investments. The costs of the sale and production of various products are the costs that are directly related to the creation of the goods, and after its sale the company will come to a financial result in the form of loss or profit. Investments are nothing but capital investments, their goal is to maximize the expansion of production volumes and, of course, to generate income in the stock and financial markets.
The second group - expenses that are not associated with the extraction of any kind of profit. We are talking about the costs of social support for employees, consumption, charity and other humanitarian goals.
The third group is compulsory expenses. We are talking about tax payments and taxes. social security contributions, economic sanctions and so on.
At the time of the preparation of the Statement of Losses and Incomes, the classification of expenses of the enterprise looks like this:
- expenses for ordinary activities. They are associated first with the manufacture, and then with the sale of products, the sale and purchase of various goods. In addition, these include expenses that are incurred during the provision of various services and work.
- operating expenses. This group is associated with the provision for temporary use for a fee of the assets of the enterprise, rights that arise from patents and other intellectual property. This includes expenses that are associated with participation in various authorized capitals of other organizations, as well as interest paid by the company for providing funds for use.
- non-operating expenses. These include penalties, fines, penalties for various violations of the terms of contracts, exchange differences, losses for previous years and so on.
- extraordinary expenses. They are the consequences of natural disasters, fire accidents and other emergency situations.
The classification of costs of the enterprise for the production of its products, as well as its implementation is as follows:
- material costs ;
- costs that are closely related to the management of the entire production process;
- the cost of paying for labor;
- the value of non-current assets that were used in the production process.
Classification of enterprise costs in relation to the total volume of production divides them into constant (their value does not depend on production volumes) and variables (costs of materials, fuel, raw materials, energy, maintenance and repair of equipment). Recent costs are directly dependent on output growth.
There is a classification of enterprise costs by the way they are allocated to the cost of objects. In this case, we are talking about direct and indirect costs. Recent costs can not be correlated in any particular type of product, in contrast to the first group.
There are also such costs as complex and elementary expenses. Elementary are a whole set of costs, not taking into account where they occurred. A complex accurately show the place of occurrence, as well as the cause.