Production cost refers to all production expenses incurred by production units for producing products or providing services, including all direct expenses and manufacturing expenses. Direct costs include direct materials (raw materials, auxiliary materials, spare parts, fuel and power, etc. ), direct wages (wages and subsidies for production personnel) and other direct expenses (such as welfare expenses);
Manufacturing expenses refer to the expenses incurred by branches and workshops in an enterprise for organizing and managing production, including salaries, depreciation expenses and other manufacturing expenses (office expenses, travel expenses, labor insurance expenses, etc.) of branch and workshop managers. ).
In order to calculate the production cost, the production cost account can be set for accounting, and the basic production cost account and the auxiliary production cost account can be set separately for accounting. Manufacturing expenses should be included in the manufacturing expense account before being included in the cost calculation object of each product, and then allocated to each product cost according to certain standards.
The cost of finished goods in this period can be calculated by adding the cost of work in process at the beginning of the period to the production expenses incurred in this period and subtracting the cost of work in process at the end of the period.
Extended data:
The role of production cost:
Under the condition of market economy, product cost is the compensation scale to measure production consumption, and enterprises must use product sales income to offset various expenses in the production process to determine profits. Therefore, the control of production cost is an extremely important work in enterprise cost management.
Production cost method is a widely used cost calculation method in the world at present. When the production cost method is used to calculate the cost, only the direct material cost, direct labor cost and manufacturing cost incurred in the production and operation process are included in the product cost, while the management cost, financial cost and sales cost are not included in the product cost, and are directly included in the current profit and loss as current expenses.
Production cost is the sum of direct costs, direct labor and indirect manufacturing costs incurred by industrial enterprises in producing certain types and quantities of products.
The consumption level of raw materials, equipment utilization rate, labor productivity and the advanced degree of product technology will all be reflected through production costs. In other words, the control of production cost can reflect the effect of enterprise production and operation.
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