Costing is the definition of costs (in monetary terms) for the production of a group of units (or one unit) of products or for individual types of industries. The counting process allows you to form the actual or planned cost of the product. Costing is the basis for costing. In some companies, valuation and calculation are used for accounting objects in cash.
In the system of organizing the cost of production in firms, different types of costing are used.
In accordance with the time of compilation, the calculations can be subsequent and preliminary. The latter include forecast, planned, design, regulatory and estimated costing. Such calculations are carried out before the start of the manufacture of goods, the provision of services or the performance of work. Subsequent costing is an actual calculation. It is carried out after the manufacture of goods (provision of services or performance of work).
Design costing is used in the economic justification for the expansion or reconstruction of an existing enterprise, workshops and industries, the release of new goods. Such calculations justify new construction, equipment modernization, rationalization proposals, the introduction of innovations. Design estimates are made in accordance with a relatively small amount of data used in calculating the cost of production. In particular, the calculations are based on the release of goods, equipment productivity, forecast prices, specific norms for the consumption of material resources. Costing is based on the estimated number of employees, the estimated cost of fixed assets. In accordance with these conditions, the nomenclature of cost elements is determined, as well as methods for their calculation.
The planned costing is compiled in accordance with the forecast, progressive acceptable standards and economic quarterly standards for the year. Such calculations represent a specific task for departments and the enterprise as a whole for the marginal cost of producing the corresponding types of goods, services, and work.
Estimated costing is a planned subtype. Estimated calculations are made for work and products produced in a single order. Such a calculation is used in setting prices, making settlements with customers, as well as in justifying the costs of manufacturing goods (carrying out work, rendering services).
Regulatory estimates reflect the cost in accordance with the applicable at the beginning of the month standards and norms for expenses. Unlike planned, this calculation is an expression of the level of cost of goods at the time of its compilation. In normative calculations, standards and norms for expenses are used, reflecting the level of technology, technology, organization of labor and production that has been achieved.
This type of calculation is used in the analysis, control, management of production processes, to identify deviations from the established standards for costs, perpetrators, causes and places of occurrence of these deviations. In addition, these calculations make it possible to evaluate the effectiveness of the implemented measures of the organizational and technical plan.
Actual costing is called the compilation of the actual cost of production. This calculation is carried out in accordance with the accounting data on the costs of the articles provided by the plan. The calculation reflects losses and expenses that are not provided for in the planned estimates. In addition, the actual costing is a means of controlling the level of cost of goods, allows you to evaluate the progressiveness of existing and forecast standards for resource consumption.