Direct costs are an important part of accounting for investments

The concept of costs allows us to characterize the amount of funds and resources that are used during the entrepreneurial activity of the enterprise for the period under consideration. The availability of information of this kind makes it possible to perform many functions. For example, to their number it is possible to carry establishment of cost of the made goods and rendered services; Determination of the rationality of resource allocation between divisions and divisions; Making estimates that characterize the economy and efficiency of production processes. In addition, such events allow us to consider the importance of executors and customers during the certification of their participation in the profits of the organization.

Classification

All costs of the enterprise can be divided into several areas, which differ depending on the intentions of using the information received. According to the first, the results of the economic activity of the organization can be identified by the effect on the established cost of production. There are indirect and direct costs. This allows you to analyze the impact of investment on the production process, as well as its payback.

Indirect costs

They are considered as related to the direct work of the organization as a whole or one of the units. An important difference of this category is that they can not be attributed to any one type of product. These are traditionally attributed to labor costs, depreciation costs, heating costs . The above feature allows us to conclude that the method of distribution of this type of expenditure should be specified in the accounting policy of the enterprise.

Direct costs

These are costs that are interrelated with the performance of a particular type of work or the production of a certain type of product. Their magnitude is necessarily taken into account in the cost of goods. These include the costs of raw materials and materials; Costs for electricity and fuel; Purchase of semi-finished products and finished products; Depreciation charges for equipment; Labor remuneration of workers with all necessary insurance contributions. Direct costs are an important part of accounting for investments. Consequently, the distribution of a given quantity between the output is irreplaceable. The most important in shaping the size of such financial resources can be considered the timely finding of correspondences between goods produced and expenditures, in whose role direct costs appear. This distribution must be carried out in accordance with established norms, which must be previously developed by the employees of the relevant departments of the organization. However, in some cases, situations may arise in which the same materials will be used either on several pieces of equipment or in two or more production cycles. Then the distribution of the cost price should be made in proportion to the cost.