Each enterprise in the manufacture of products or the provision of services expends certain resources. All his expenses are divided into direct and indirect. Direct costs include expenses directly related to the manufacturing process of a product or the provision of a service and related to the prime cost using the direct method. Like other production costs, they are grouped by place of occurrence (sites, workshops, other structural units), cost carriers (type of product or service) and type of expense (economically homogeneous elements).
There is a generally accepted classification of expenses. Direct costs consist of:
- material costs ;
- labor costs;
- payroll deductions;
- depreciation;
- other expenses associated with the main activity.
Let us consider in more detail what these economic elements include. Material costs include the entire cost of the materials spent (except for products of own production):
- basic materials, raw materials;
- purchased semi-finished products, components;
- fuel, electricity;
- spare parts;
- building materials;
- container;
- auxiliary materials.
Direct costs of material resources are reduced by the sum of the cost of all return waste (residues of raw materials, material resources arising from the production of goods or services).
Labor costs include all salary payments at tariffs and salaries, incentives, bonuses, vacation pay and unworked time.
Direct deduction costs include social insurance deductions.
Depreciation deductions include the amount of depreciation of fixed assets, intangible assets, other intangible assets (temporary structures, inventory) directly involved in the production.
Other direct costs include: communication services, travel expenses, payment of settlement and cash services, etc.
At those enterprises or workshops where production specializes in one type of product, almost all expenses are direct.
Direct costs at most industrial enterprises are taken into account on the basis of progressive spending standards for different types of resources. Depending on the type of management tasks, the classification of costs can be very diverse. Key management tasks:
- calculation of cost;
- calculation of estimated profit;
- planning;
- control and regulation of production.
To solve each of the above problems, there is a classification of expenses.
Accounting for direct costs of production makes it easy to calculate the cost of production. The growth of part of these costs in the total cost increases the accuracy of cost calculation.
The following methods of accounting for production costs are available: custom, normative, process.
The custom method is used when a unit of product has characteristic properties and the product is manufactured in separate batches. The object of accounting in this case are specific orders for a batch or unit of products.
Cost accounting based on the calculation of individual processes is carried out as follows:
1. The cost per unit of production is determined for each process (redistribution).
2. Summarizes the cost of all units of production and calculates the total cost of the final product.
The normative method is based on the creation of a system of norms and standards. Based on them, costing of the standard cost is made and those costs are taken into account that are associated with a deviation from the established standards. Actual cost is determined by adjusting the standard cost for all cost items.