Expenses of an enterprise are a decrease in economic benefits as a result of cash costs associated with ensuring the production process, economic activities, wages, leading to a decrease in the assets of the enterprise. To account for expenses, classification is used according to various principles.
Profit-making costs
These are the costs associated with the creation of products, the provision of services, the performance of work, as a result of which the company will receive financial profit or loss. These include: the cost of production and sale of products, the cost of work, services determined in calculating the cost of production, labor costs and social insurance contributions, costs associated with managing the production process, long-term financial investments, intangible assets, fixed assets, investments.
Non-profit expenses
These are expenses for social support of employees, incentives, charity, they contribute to an increase in labor productivity.
There are also compulsory expenses - these are taxes and tax payments, social security contributions, expenses for various types of insurance.
Cost classification
The classification of expenses on an accounting basis includes: expenses for ordinary activities that are associated with the manufacture and sale of products, performance of work or provision of services, as well as administrative and commercial expenses. Operating costs include material costs; labor costs; deductions for social needs, depreciation deductions.
The category of other expenses includes: provision for temporary use of assets: costs associated with the provision for a fee for temporary use, provision of patent rights, financial participation in other organizations, disposal and write-off of fixed assets and other assets, repayment of loans and borrowings, payment for services, fines, penalties, penalties, damages, expenses incurred in extraordinary circumstances.
In relation to the volume of production, costs are divided into fixed and variable. Fixed costs - their value does not depend on the volume of production. Rent, depreciation of own fixed assets, wages, utilities and postal and telegraph services, taxes.
Variable costs - a value that increases with an increase in output and decreases with a decrease. These are the costs of raw materials, materials, components, fuel, wages, equipment repair and maintenance.
According to the method of attributing costs to the cost price, the division into direct and indirect is applied. Direct - costs that can be directly attributed to the cost of production.
Indirect - costs that cannot be correlated at the time of their occurrence with specific types of products, they are included in the cost of products already sold at the end of the reporting period.
Cost management methods are classified as administrative and economic. Administrators warn of unreasonable, unauthorized expenses, theft and abuse. The economic methods of cost management include: planning and budgeting.
