General production costs of an enterprise characterize its costs of servicing the main and auxiliary industries. Due to the fact that these costs affect the value of the cost of production, the accountant must carefully approach their distribution.
Instructions
Step 1
Analyze all of the plant's overall production costs. Identify the main items of expenditure, which include the cost of maintaining and operating equipment and machinery, depreciation, property insurance, utility costs, rent, employee wages and other production costs of the enterprise. The total amount of costs is collected on the debit of account 25 "General production costs", after which it is distributed to the appropriate accounts.
Step 2
Distribute part of the general production costs to the credit of account 10 "Materials". It reflects the cost of materials and spare parts that were used by the enterprise for the repair and maintenance of equipment used in the production process.
Step 3
Accrue depreciation on fixed assets that are used in the main and auxiliary production, and reflect these costs on the credit of account 02 "Depreciation of fixed assets".
Step 4
Allocate a part of the general production costs that are aimed at paying for utilities, rent and other costs for the maintenance of premises and equipment needed in production. These costs are reflected on the credit of account 60 "Settlements with suppliers" and 76 "Settlements with creditors and debtors."
Step 5
Identify the items of expenditure that relate to the payment of wages to employees involved in the production process. Labor remuneration is reflected on the credit of account 70, and insurance premiums on the credit of account 69.
Step 6
Create sub-accounts 25.1 and 25.2 that will distribute all overhead costs to those that relate to ancillary or main production. Write off these costs to the debit of account 20 "Main production" and 23 "Auxiliary production".
