# How to calculate the cost of production in an enterprise

Finance

Calculation of the cost of production and costservices is a necessary attribute for any enterprise in analytical reports. One of the most important indicators, the correct calculation of which affects the efficiency of the entire operation of the enterprise, is the cost of goods or services. Such economic calculations are made not only before the start of a new enterprise for the proper conduct of business, but also in the production process to improve efficiency and identify opportunities to reduce costs. In connection with the significance of this indicator, there is a lot of special literature on how to calculate cost of production. A private entrepreneur who opens a business produces this work, most often, independently. He collects all data on the cost of the material necessary for production, calculates the costs of equipment maintenance, electricity, predicts the possible costs of transportation and storage, before calculating the cost of production and correctly plan further work. How to calculate the cost of goods produced a large enterprise, the decision is made by the financial manager depending on the required result. There are two methods that show how to calculate the cost of production. This is the calculation of the cost of production by articles and by economic elements.

The first method for carrying out the necessarycalculations involves the use of accounting data for various expenditure items. Moreover, the calculation is carried out in several stages. So, before calculating the cost price of the goods at the shop level, financial statements are collected for items of expenditure. Then, the following articles are calculated: the cost of materials spent for production, the wages of all the main workers and engineering personnel of production, the cost of goods delivered for the production of semi-finished products and various services, social contributions, maintenance costs and equipment maintenance. Determination of the cost price of the goods at the factory level is made by adding to the previous calculation the calculation of the cost of travel of employees, promotion of goods, bonuses workers. In order to determine the total cost of goods for the enterprise, the calculation results for the costs of transportation, storage and delivery of the finished goods to the consumer. This method is that such a calculation allows you to accurately determine the value of a unit of finished goods.

Calculate the cost of goods on economicthe second method helps. Carrying out such a calculation allows us to determine the full amount of costs for producing a batch of products. Regardless of the type of goods produced by the enterprise, the data of certain articles are used. This is the cost of basic raw materials, materials, semi-finished products, auxiliary materials, fuel, electricity, wages for all employees, the amount of deductions for depreciation and social payments. Then, the value of the secondary raw materials returned to production is deducted, which is then used in the production of the products. Based on these calculations, it is possible to more accurately plan the effective activity of the enterprise and find ways to reduce the cost of the goods. Before calculating the cost of production by any of the methods, , that when summing up the final results, it is necessary to take into account the cost of production waste.

Carrying out calculations to determine the cost priceservices is not much different from the calculation of the cost of goods. To calculate the financial manager of the enterprise, the same accounting items are used. A private entrepreneur, before calculating the cost price of his business, conducts the same collection of raw data.