There are a number of reasons that necessitate the use of such an enterprise cost calculation as calculating the cost of manufactured goods and services. It allows you to clearly track the data on the costs of the enterprise by type and cost items. Such cost accounting and costing are necessary for the formation of accounting and financial reporting, evaluation of performance and further planning. According to the cost data, the company forms its assortment and pricing policies.
Costing is carried out by several methods.
Process method
It is used mainly in enterprises with continuous operation. It is indispensable for cost accounting in enterprises producing consumer goods and meeting the following criteria:
- single product characteristic;
- short production cycle;
- limited range of goods;
- insignificant volumes of semi-finished products, work in progress or their complete absence.
This method is excellent for transport, energy, and extractive industries. The main criterion for its use is the final product. At such enterprises, the simplest calculation method is most often used - one-step. The cost of each unit of production is calculated by dividing the total amount of production costs for a certain period by the total number of units of production.
Alternate method
Such costing is used where, during the production cycle, the product goes through several stages of production. Such enterprises are characterized by a large volume of semi-finished products, so the cost is determined at each stage of the technological cycle. The accounting object, in this case, is a separate redistribution of production costs.
Custom method
Used for cost accounting in single or serial production. Most often used in enterprises where they produce unique products on special orders. It is typical for accounting in large aircraft, shipbuilding, machine-building concerns, and in small volumes - in the manufacture of furniture, piece goods or in the provision of a certain type of service.
In the calculation, direct costs are allocated to items of certain types of goods (orders), and indirect costs are allocated to orders at established distribution rates. A variety of custom-made type of calculation is the operational (batch) method. It is used to account for the costs of products that are executed as an order and undergoes several operations (stages of production) in the production process.
Functional method
It is used in enterprises producing a wide range of goods. Its essence lies in the fact that when calculating the ratio of costs to the specific functions carried out by the enterprise.
Cost accounting is carried out in a document of an established form called costing. The process of calculating this document is called costing.
In this calculation, all costs incurred by the enterprise are divided into separate components, called costing items. It always has a costing unit, which is the object by which the cost is calculated. The object of calculation may be goods, unfinished products or services.
Costing articles at all enterprises are almost the same:
- Raw materials spent on production.
- Components or semi-products purchased from third parties.
- Energy and fuel.
- Returnable waste.
- Wage.
- Contributions to funds.
- Operating costs.
- Preparatory expenses.
- Technological losses.
- Overhead costs (fixed and variable).
- Other manufacturing costs.
All listed articles (1-11) can be direct, complex or variable. - Administrative expenses.
- Distribution costs.
- Financial expenses.
The listed articles (12-14) are indirect, complex and permanent.
The calculation of all the above items is a calculation of the total cost.