Classification of costs
The main activity of the enterprise in the modernsector of the economy is the production of products, services and works. The goal of all these activities is to make a profit. To get the maximum profit, you need to optimize the ratio of volumes and production costs. Under the cost of production is understood the costs of social labor associated with the production and sale of products. In some countries, the concepts of "costs" and "costs" are treated differently, but in domestic practice, the term "production costs" is used to characterize costs.
Important for cost management is their classification. For planning, analysis, accounting and costing, there is the following classification of costs per element:
· Single-element and complex (by composition);
· Calculation items and economically homogeneous elements (by types);
· Principal and overhead (as directed);
· Constant and temporary (by the type of relation to the volume of production);
· Production and non-production (by nature of costs);
· Direct and indirect (by the way of attributing individual products to the cost price);
· Planned and not planned (in terms of coverage of the plan);
For the most convenient calculation of prime cost and profit, the following classification of costs is distinguished:
· Inbox - there are purchasedresources that are currently available. It is expected that such resources in the future should bring a good income. In the balance sheet such resources are displayed as assets of work in progress, production stocks, goods, finished goods.
• Expired - these are resources expended,of which the income has already been received, and which large ones will not be able to bring. In the balance sheet they are reflected in the form of expenses for the production of products sold, in other words, incoming costs are transferred to expired.
It should be noted that the classification of costs for incoming and expired is important for assessing the assets of the enterprise, calculating profits and losses.
For a convenient calculation of the cost price, the classification of costs for:
· Direct (the amount of costs is directly dependent on the volume of production) and indirect (costs that do not depend on the volume of production);
· Non-productive (not taken into accountwhen assessing reserves) and included in the cost of finished products (production costs associated with the incomplete production and production of finished products until the time of its implementation).
· Singleton (allocate materialcosts, deductions for special needs, labor costs, depreciation costs, other costs) and complex (consisting of several economic elements).
· Overhead (costs associated withservice and production management) and general production (costs associated with the maintenance of equipment, machinery production units, etc.).
At the choice of equipment, the structure of the assortment and the justification of prices for the purpose of making a decision, the following classification of costs is used:
• Constants and variables;
· Planned and not planned;
· Costs that are taken into account and not taken into account in the calculation of decision-making.
There is also the so-called classification of costs for quality. According to one of the most well-known costs are as follows:
· Preventive costs (incurred costs for output, which will meet the quality standards).
· Costs for quality assessment (costs incurred in order to ensure that the products manufactured meet customer requirements).
· Costs generated from internaldetection of inconsistencies in quality (costs incurred when identifying a defective component or product of the manufacturing process until the moment it goes on sale).
· Costs generated by an external detection of non-compliance in quality (expenses that arise when the defect was discovered by the buyer).