What does the company’s costs include?

The cost of an enterprise includes production costs and enterprise expenses.

Production cost (manufacturing cost): mainly refers to the raw and auxiliary materials used to produce products, coal, water and electricity, machine depreciation, worker wages, and waste loss generated during production;

Enterprise expenses: refers to the sales expenses, management expenses, and financial expenses incurred during the production and operation period;

The costs and expenses of commodity circulation enterprises include: commodity purchase price and commodity circulation fees.

1. The purchase price of goods refers to the original purchase price of the goods purchased by the enterprise and the taxes paid during the purchase process;

2. The commodity circulation fee refers to the cost of the goods purchased by the enterprise. Expenses incurred in the process of importing, allocating, storing, selling activities or providing labor services;

3. In addition, some loss of goods in storage and circulation should also be considered. Therefore, the cost of goods is not simply the cost of purchasing goods.

How to calculate company costs

1. Set up a detailed account of materials and classify them according to main materials and auxiliary materials;

2. Determine the labor time unit consumption;

3. Input materials according to the production plan or job order;

4. Summarize direct costs and allocate costs according to working hours;

5. Carry forward completion according to the quantity of completed product varieties Cost;

Production in progress at the beginning of the period + production in the current period - completion in the current period = production in progress in the current period (debit balance of production costs)

Cost accounting refers to the calculation of the costs incurred by the enterprise in the production and operation process. Various costs are allocated and aggregated according to certain objects to calculate the total cost and unit cost. Cost accounting is usually based on accounting and uses currency as the unit of calculation.

The six commonly used methods of enterprise cost management are:

1. Cost management methods based on experience,

2. Cost control methods based on historical data< /p>

3. Target cost control method based on budget

4. Target cost control method based on benchmark

5. Target cost control method based on market demand

6. Cost control method based on value analysis.

In the process of product value formation, enterprises must strictly distinguish between value-added operations and value-non-value-added operations, and should minimize value-non-value-added operations to reduce enterprise production costs. Under the traditional manual management model, an enterprise's cost control is affected by many factors, and it is often difficult or impossible to achieve optimal control of each link. Modern cost management requires a comprehensive integrated system that can coordinately plan, monitor and manage various costs incurred by the enterprise, thereby assisting all business activities of the enterprise to operate in a market-oriented manner.

Legal Basis

"Accounting Standards for Business Enterprises - Basic Standards"

Article 35 Attributable losses incurred by an enterprise for producing products, providing labor services, etc. Expenses such as product costs, labor costs, etc. shall be included in the current profit and loss when the product sales revenue, labor service revenue, etc. are recognized.

Article 42 Accounting measurement attributes mainly include: (1) Historical cost. Under historical cost measurement, assets are measured according to the amount of cash or cash equivalents paid when acquiring the asset, or according to the fair value of the consideration paid when acquiring the asset. Liabilities are measured based on the amount of money or assets actually received for assuming current obligations, or the contract amount for assuming current obligations, or based on the amount of cash or cash equivalents expected to be paid to repay liabilities in daily activities.