Cost is understood as the cost of products, taking into account the costs of their production. It is customary to refer to costs as wages, materials, raw materials, etc. Calculation of the cost price allows you to determine the cost of producing a unit of output in cash.
Instructions
Step 1
The generally accepted algorithm for calculating the cost of goods sold looks like this. First, you need to determine the costs that vary in proportion to the volume of production, i.e. the amount of variable costs per unit of output. Before that, find the product of the cost norms and the cost of their acquisition. Next, sum up the remaining expenses for the period and divide them by specific types of products. This can be the cost of repairing equipment, building maintenance, depreciation, administration costs.
Step 2
At the moment, there are several types of cost calculation: per-limit, custom-made, process and standard. Western economists, on the other hand, most often use methods such as target costing, direct costing, and others for calculation.
Step 3
For specific industries, their own methods are applied. So for large industries related to the processing of raw materials, the per-limit method is often used, the essence of which is that direct costs are reflected in the accounting not by types of products, but by limits (certain phases of production), and, for example, the order-by-order method takes into account costs based on production orders.
Step 4
Western methods allow you to take into account the cost of products at the design stage. Thus, the target costing method is based on the concept of target cost. In this case, cost is the difference between price and profit. The price is understood as the market value of the product, which is advisable to determine with the help of marketing research. And under the profit - the desired amount of profit. Thus, the cost price is no longer just a normative indicator, but the value that the company strives for in order to be competitive.
