What is non -repairing expenditure?
non -returning costs are costs that, although related to the company, are not linked to the primary objectives it does. It can be either for material or service, and is often focused on cuts before the basic operating costs when the company is experiencing financial problems, simply because the reduction of basic operating costs has such a drastic impact on the company's ability to maintain high quality and production high. Types of expenditure that get a truly accurate picture of the company's financial situation. Suppose, for example, the company has created "product X." If the company's income from the sale of "X" exceeds what it costs to create a "product X", then the company would seem to be in good financial shape. At the moment, however, business has to manage all the non -repairing expenses it has. If these expenses are high enough, the company can actually end up in red.
As examples are common expenses on business interest rates MusIt pays for loans, loss of the sale of the company, including securities, restructuring costs and currency fees as non -repairing expenses. Insurance is also considered as non -repairing costs, as well as maintenance and contributions to employee benefits. Another common non -repair cost is cleaning.
It is important to understand that what is in one company is not repairing expenditure does not necessarily have to be non -repairing expenses in another business. Looking at non -repairing expenses, accountants must always look at the cost of the company's objective. For example, if the company was to produce cars, then additions, such as corporate phones, would be non -repairing expenses, not operating costs, because phones do not directly connect to delivery or production line for vehicles. However, if the company had a goal to obtain gifts via a phone request, then the company's phones couldconsider operating costs.
As with operating costs, the company must track its non -working costs to set and hold on to the functional budget. The financial department is usually trying to reduce from non -repairing costs before they move to lowering operating costs. This does not necessarily make employees happy, as if the company has reduced the benefits of employees. This does not affect business ability to produce a good, high quality object or service - 10 employees without benefits can produce "X" with or without benefits, for example if they have appropriate stocks and knowledge. As a result, the consumer is often not aware of until the budget ax reaches basic operations.