Cost is the monetary value of the costs necessary to carry out commercial or industrial activities for the production and sale of manufactured goods, the provision of services or the performance of work. The composition of these costs is regulated at the legislative level. This is due to the peculiarities of taxation and the need to classify the costs of entrepreneurs according to the sources of their reimbursement. In the Russian Federation, this process is regulated by Chapter 25 of the Tax Code. The methods of its calculation, the company has the right to establish at its discretion, based on the characteristics of its activities.
According to the volume of costs, such types of cost are distinguished as workshop, production (finished manufactured products) and full (already shipped products or goods).
Workshop cost is the cost of production within the workshop. These include direct costs of materials, depreciation of workshop equipment, workers' salaries, UST contributions, general workshop expenses, and equipment maintenance costs .
Production - this is the costs at the workshop level plus general factory expenses (costs for general and administrative needs), as well as costs of auxiliary production.
The full cost is the sum of all elements: the production cost of the products and the costs that accompany the process of its implementation.
Costs are also classified by cost periods. In this aspect, it can be planned and actual. Planned - is determined at the beginning of the period, based on the norms of expenses and other planned indicators. Actual - is calculated at the end of the production period according to the accounting data on the actually incurred costs of the processes of creating products and sales. The cost of production is the largest value in the price structure. Its change directly leads to an increase or decrease in profit.
The element classification of costs in the cost of production may include such elements as material costs, funds for labor, depreciation, other expenses. But such a grouping of costs does not always allow you to form a price for a product and does not make it possible to divide costs into conditionally constant (they practically do not change when production volumes fluctuate: heating, depreciation, salary, etc.) and conditionally variable (change directly in proportion to volumes production: materials, energy, fuel consumption).
Therefore, for certain types of goods, costs are determined using costing. In this case, cost is the sum of many elements. Moreover, the composition of expenses is determined by their focus (on the production of goods or servicing this process) and the place of occurrence (main and auxiliary production). Typical is the following nomenclature of articles: raw materials; purchased materials (semi-finished products), fuel and energy; components; returnable waste; the basic salary of workers; additional salary of workers; deductions to UST; production preparation costs; equipment maintenance costs; loss from marriage; shop and factory expenses; tool wear; non-manufacturing expenses; other production costs.
Costs for calculation items are divided into basic and invoices. The first group includes all expenses associated with the product creation process: materials, raw materials, workers' salaries, etc. To the second - the costs of management, organization, technical training of production.
The most important indicators of the cost of production are the costs incurred per 1 ruble of the product, the cost of all products created in the production, one unit of it.