General production expenses

In the process of production at the enterprise there are costs that do not directly relate to a particular object of expenditure. They are referred to general production costs. In addition to the costs for the management of shops (divisions, sections) of main and auxiliary industries, they include those for the operation and maintenance of general purpose machinery and equipment.

General production expenses include:

1. Costs for production management:

- the salary of the apparatus of management of sites, shops, structural divisions ;

- deductions for medical insurance, social activities;

- for the payment of official business trips for workers of sections and shops.

2. Amortization of fixed assets and intangible assets of local and shop appointments.

3. Expenses for maintenance of general production assets:

- repair and operation;

- operating lease;

- insurance.

4. Expenses for organization of production and improvement of production technology:

- wages of employees;

- deductions to social funds;

- Expenditures designed to improve products, improve its reliability and other operational characteristics;

- payment for services and work of outside organizations.

5. Costs intended for the maintenance of industrial premises (lighting, heating, drainage and water supply, other public utilities) and the production process (wages of general production personnel, deductions for medical insurance and social activities).

6. Costs for safety technology, technological control, environmental protection and labor.

7. Other costs:

- shortages from unfinished production, from spoilage and loss of material values;

- expenses for the movement of materials, raw materials within the enterprise;

- payment of downtime.

The distribution of general production costs has some features. Since these costs are attributed to indirect costs, it is economically expedient to distribute them and become attached to such a concept as normal power. This term means the expected average volume of productive activity achieved under the condition of normal activity for several operating cycles or years. At the same time, the planned volume of production maintenance is taken into account. The normal power is determined by the organization itself. General production costs are calculated based on the normative capacity. They are divided into variables and constants. The company determines the composition and the list of these indicators independently.

Variable costs are the costs of management and maintenance of production, which vary in proportion to the adjustments in output. They are allocated to all cost objects using the selected distribution base (production volumes, wages, hours of work) based on the actual capacity of the enterprise in the reporting period. Thus, they are fully included in the cost of production.

Constant costs are the costs of managing and maintaining production, which are fairly stable (despite changes in production volumes). They are allocated to cost objects using a special database (production volumes, wages, hours of work), based on the calculated normal capacity of the enterprise. Undistributed fixed costs are included in the cost of production during the period when they arose. In the cost of products sold includes the difference between actual constant costs and their amount, calculated at normal production capacity. In the presence of several shops or divisions at the enterprise, general production expenses are distributed in their section.

Accounting for general production costs is based on:

- the selected cost allocation base;

- calculated normal power;

- the total planned value of general production expenses, with their breakdown into constants and variables.

Accounting for them is carried out in the account 25 "General production expenses".