Costs and expenses contain two major categories.
I. Manufacturing Costs
Meaning: it is the cost apportioned on a product-by-product basis that is directly related to the production of the product.
Constituent items: direct materials, direct wages, other direct expenses and manufacturing costs
Two, the period costs
Meaning: refers to a certain period of time incurred in a certain accounting period is not directly related to the production and operation of a variety of costs or the relationship is not significant.
Constituent items: administrative expenses, financial expenses and selling expenses
Costs and expenses are two accounting concepts that are both interlinked and significantly different, in a general sense, the cost refers to the cost of production and operation of enterprises in the production and operation of a variety of capital expenditure. The cost of the enterprise, in terms of its economic substance, is the value of the product value composition of c + v two parts of the value of the equivalent, expressed in monetary terms, that is, the enterprise in the product operation of the sum of the funds spent.
Expanded:
Costs and expenses are the price a company pays to make a profit, and mainly include operating costs, business taxes and surcharges, selling expenses, administrative expenses, financial expenses, and income tax expenses .
After deducting the income tax, the income tax becomes the price to pay for the profit, so the net profit of cost and expense = net profit/operating cost+operating tax and surcharge+period expense+income tax expense.
Measures to reduce costs:
(1) Conserve material consumption and reduce direct material costs.
(2) Improve labor productivity and reduce direct labor costs.
(3) Implementation of quota management, reduce manufacturing costs.
(4) Strengthen the budget control, reduce the period cost.
(5) Implementation of total cost management, comprehensively reduce the level of costs.
References: