How Do I Calculate Cost Of Living Expenses?

Cost calculation is a special method that collects the costs and expenses incurred in the production and management process according to a certain cost object to determine the total cost and unit cost of each object. By accurately calculating the cost, you can grasp the cost composition, evaluate the completion of the cost plan, understand the results of production and operation activities, and encourage enterprises to strengthen accounting, save expenses, and improve economic benefits. ^[1]

cost calculation

Reasonably determine the cost calculation object

So-called

A method of grouping production costs according to a certain cost object in order to calculate the total cost and unit cost of various products. The most basic cost calculation methods are: variety method, batch method, step-by-step method. ^[3] The determination of the cost calculation method depends to a large extent on the characteristics of enterprise production and the requirements of cost management. For example, in the case of a large number of single-step production, it is only required to calculate the cost according to the product variety, and this cost calculation method is stable to the variety method. For another example, in the case of single-piece, small-batch, multi-step production, since production is produced according to the customer's order and the production batch organization of the enterprise organization, the product cost should be calculated according to the order or production batch. This cost The calculation method is called batch method. However, in the case of a large number of large-scale multi-step production, it is often required that not only the calculation method according to the product variety is called the step-by-step method.

In addition, there are some cost calculation methods that can be used in combination with the basic methods. For example, the variety method is used to calculate costs. In the case of a large variety of product specifications, in order to simplify the cost calculation, the products can be divided into several categories. Calculate the cost of each category of product separately, and then use a certain allocation standard within each category to calculate the cost of products of each size. This method is called classification. In enterprises with relatively sound quota management systems, in order to strengthen the quota control of costs, the actual cost of the product can also be calculated on the basis of the quota cost. This method is called the quota method.

It should be pointed out that due to the complex production conditions of enterprises, in actual work, various cost calculation methods are often used simultaneously or in combination. This mainly depends on the production characteristics of the enterprise, and its goal is to strive to achieve both the correct calculation of product costs and simplified cost accounting.