Costs of the enterprise

In the process of producing products, providing services and performing work, the business entity spends its labor, material and financial resources. The costs of these items ultimately form the cost of the goods. The magnitude of this indicator has a significant impact on the final result of the organization's activities, which can be either profit or loss.

The costs of the enterprise must be properly taken into account. This will ensure proper control over their effective use and will allow to correctly calculate the financial result of the business entity. The costs of the enterprise are an important component in determining the selling cost of the goods and are the basis for analyzing the work of the organization, which is necessary for management and forecasting.

In the course of its activities, the business entity makes monetary and material expenditures, the purpose of which is both simple and expanded reproduction of non-current and circulating assets, as well as manufacturing and selling products and much more.

The greatest specific weight is the cost of producing goods. The enterprise also produces costs for the sale of products. These costs are commercial or non-productive. These include transportation, packaging and storage of goods, advertising and much more. The totality of the cost of production and commercial expenses is the total amount of expenditure that characterizes the costs of the enterprise.

A reliable definition of this indicator is the basis for the following:

- Conducting marketing analysis and deciding on the release of a new product with a minimum cost;

- finding the degree to which certain items of expenditure affect the costs incurred in the course of output;

- formation of prices;

- reliable determination of the amount of income and the correct calculation of taxes.

The costs of the enterprise, which should be included in the cost of production, services provided and work performed, are a valuation of the natural resources and raw materials used, fuel and materials, energy and fixed assets used during the production process, labor resources and many other necessary expenses. In addition, the business entity bears costs that do not affect the release of goods. These costs should not be included in the cost of production.

To them it is possible to carry:

- work related to the improvement of towns and cities;

- rendering assistance to the village;

- expenses for repair and amortization of cultural and household objects that are on the balance sheet of the business entity;

- work done for other organizations in order to help.

For the correct planning of activities, accounting and analysis, the costs of the enterprise and their classification (unification into homogeneous categories) must be correctly determined. It is these indicators that reflect the rational use of financial, labor and material resources.

The total costs of an enterprise are divided into the following types:

- included in the cost of production;

- mixed (interest paid for the loan, travel and entertainment expenses, and so on);

- attributable directly to financial results (canceled orders, production costs, which did not produce products, the content of canned production assets, and so on);

- produced at the expense of net profit (material assistance, expenses incurred in excess of the standard, and so on).

A reliable cost analysis and correctly adopted management decisions on the rational use of the company's resources should lead to a reduction in the expenditure level of the business entity, which will be a significant indicator of the efficiency of its activities and will ensure revenue growth.