Costing is the calculation of the cost of production or sale of a product unit (group of units, work, services), determined in the form of value. In order for the enterprise to work effectively, it is necessary to take the pricing process seriously.
At the same time, costing is perhaps its main element and the most important stage in calculating the financial result of an enterprise.
A well-formed cost estimate will help determine an important figure - the break-even point. This, in turn, will bring some clarity about how competitive the product is on the market, as well as provide an opportunity to navigate the profitability, margins and calculate the expected profit.
It is quite simple to draw up such a document at an enterprise that produces homogeneous products. At the same time, if the manufacturing process does not usesemi-finished products and at the end of the period there is no work in progress, it is enough to collect all production costs. Unit costing in this case includes costs calculated by simply dividing all costs by the total number of items.
In general, the general items of the statement are as follows: basic materials and raw materials, semi-finished products of their production, auxiliary materials, fuel and energy costs, wage costs for production workers, deductions from payroll for social needs, production development costs, the cost of operating machinery, equipment, as well as general production costs. This is an example of what shop floor costing includes.
If you add general business, other production costs and accounted losses from marriage, you get the production cost of production. The calculation, which includes commercial expenses, fully reflects the list of costs in monetary terms. All figures are included in the statement based on accounting data.
It is worth noting that documents of this purpose may include preliminary and factual data.
Depending on this, the costing of services (products) can be planned, standard and actual.
Planned is the basis for calculating the price of products, which includes the costs of production and sales expected in a certain future period. In herbased on progressive norms for the use of the organization's resources, and the standard cost estimate remains unchanged for the entire set period of time.
Standard costing is based on currently valid rates. It helps to control the production process by detecting deviations.
Actual - is a reflection of the actual cost of production. Only in it you can see the real costs, costs and losses that cannot be taken into account in preliminary calculations. That is why it is impossible to imagine the activities of the enterprise without compiling an actual cost estimate.
