The first of them (on economic elements) is applied when forming prime cost at the enterprise in general and includes five main groups of expenses: - material inputs; - labor costs; - assignments on social needs; - depreciation of fixed assets; - other expenses.
Subsequently, according to the Provision on structure of expenses, it was authorized to include wear on intangible assets in product cost (works, to an usl, and point on intangible assets of Provision on structure of expenses almost literally repeated that was told in the Provision on accounting and the reporting.
- the shop prime cost including costs of production within shop, in particular factor material inputs on production, depreciation of the shop equipment, a salary of the main production workers of shop, social assignments, expenses according to the contents and operation of the shop equipment, all-shop expenses;
The main mistake when forming this element of prime cost is that the principle of a production orientation of expenses is not observed. As a result product cost very often joins a salary of the personnel of the non-productive sphere.
At application of this principle it is necessary to consider that the order of inclusion of the current production expenses in prime cost has the features connected with order of their reference on prime cost. The current expenses can join in prime cost as follows:
Determination of prime cost – very difficult process, and calculation of product cost (works, to an usl has to answer branch specifics of the enterprise and also features of the organization of its production.
But, besides the expenses directly or indirectly caused by production process, the enterprise incurs also direct expenses which are not connected with production (works, to an usl and in prime cost, as a rule, do not join.
- full prime cost, or prime cost of the realized (shipped) production, - the indicator uniting production product cost (works, an usla and expenses on its realization (commercial expenses, extra production expenses).
On a way of reference on production. Very often at calculation of product cost it is impossible to define precisely, in what degree these or those expenses can be carried on this or that type of production. In this regard all expenses of the enterprise are subdivided into straight lines which can be directly carried on this type of production (works, to an usl, and indirect which are connected with production of many products, as a rule, it is all other expenses of the enterprise.
Idle time is applied at the enterprises which are developing uniform production, not having semi-finished products and a work in progress. In these enterprises all production costs for the reporting period make prime cost of all developed production (works, to an usl Prime cost of a unit of production is estimated by division of the sum of production costs into quantity of units of production.
In other words, for the correct formation of product cost the fact of consumption of inventory items (industrial works, to an usl in the course of production of this production (the holiday fact in production), but not payment of these TMTs, etc. matters.
In other words this principle can be formulated as follows: it is possible to include in prime cost only those expenses which are resolved. Those expenses which are not provided by the Provision on structure of expenses, it is not possible to include in prime cost.
- production prime cost (prime cost of finished goods), except shop prime cost, includes manufacturing expenses (administrative and managerial and general economy expenses) and expenses of auxiliary production;
Besides, charge of wear and depreciation in some cases is made on different structure of fixed assets. So, according to the Provision on an order of charge of depreciation charges on fixed assets in a national economy wear of fixed assets is defined and considered by all types of fixed assets except for some provided.