The calculation method of product cost, the basic method of product cost calculation

1. Definitions. The product cost calculation method refers to the method of determining the product cost calculation object, collecting production expenses, and calculating the total cost and unit cost of the product according to the characteristics of the product production process and the requirements of cost management.

2. Types. The product costing method includes the basic method and the auxiliary method.

1. The basic methods of product cost calculation include variety method, batch method and step-by-step method.

1) Variety method: Variety method refers to a method that takes product varieties as the object of cost accounting, collects and allocates production expenses, and calculates product costs. It is suitable for single-step, high-volume production enterprises, such as power generation, water supply, mining and other enterprises.

2) Batch method: Batch method refers to a method that takes the batch of products as the cost accounting object, collects and allocates production expenses, and calculates product costs. It is suitable for enterprises with single piece and small batch production, such as shipbuilding, heavy machinery manufacturing, precision instrument manufacturing, etc.

3) Step-by-step method: Step-by-step method refers to a method of collecting and distributing production expenses and calculating the cost of semi-finished products and final finished products at each step according to each processing step (sub-variety) in the production process. It is suitable for a large number of large-scale, multi-step production enterprises, such as metallurgy, textile, machinery manufacturing, etc.

2. Auxiliary methods for product cost calculation, including classification method, quota method, etc.

The details are as follows:

1. Variety method: It is a method to collect production expenses and calculate product costs by taking product varieties as the cost calculation object. Since the variety method does not need to calculate the cost by batch, nor does it need to calculate the cost of semi-finished products by step, this cost calculation method is relatively simple.

The variety method is mainly suitable for enterprises with large-scale single-step production, or small enterprises that are multi-step production, but do not require the calculation of the cost of semi-finished products. The variety method generally calculates the cost of products on a monthly basis, and does not need to allocate production expenses between finished and semi-finished products.

2. Batch method: also known as the order method. It is a method that uses the batch or order of the product as the cost calculation object to collect production expenses and calculate the cost of products.

The batch method is mainly suitable for multi-step production of single pieces and small batches. The costing period of the batch method is not fixed, and generally a production cycle (i.e., the entire period from production to completion) is used as the costing period to calculate the cost of the product on a regular basis. Since there is no finished product when it is not finished, and there is no product in progress after completion, the finished product and the product in progress do not coexist at the same time, so there is no need to allocate production costs between the finished product and the finished product.

3. Step-by-step method: It is a method to collect production costs and calculate product costs according to the production steps of products. The step-by-step method is suitable for multi-step production in large quantities or large quantities.

Due to the large quantity of production, the step-by-step method often has finished products at a certain time, and there are unfinished products and semi-finished products, and it is impossible to calculate the cost after all the products are completed. Therefore, the step-by-step method generally calculates costs on a monthly basis, and the production costs are allocated between finished and semi-finished products.

General procedures for product costing.

Moving-weighted collapse averaging: The cost of goods in stock under the moving weighted average method** is automatically weighted average according to each income document; It is calculated by calculating the moving weighted average unit price based on the quantity and amount of each revenue and the amount before each income.

The formula is as follows: moving weighted average unit price = (amount of goods in the balance before this revenue + amount of goods in this income) (number of goods in the balance before this revenue + number of goods in this income).

First-in-first-out method: the latest issuance (requisition) of the material is based on the time of each batch of the material (or the type of material) to determine the valuation basis of its inventory issuance, and the more first in the warehouse, the first to issue. In the FIFO method, the cost of inventory at the end of the period is close to the current market value.

Basic requirements for product costing

Correctly delineate the boundaries of expenses that should be included in the cost of the product and those that should not be included in the cost of the product. The business activities of the enterprise are multifaceted, and the use of the enterprise's consumption and expenditure is also multifaceted, of which only a part of the expenses can be included in the cost of products.

In general, it is not a production operation.

The cost of activities cannot be included in the cost of products, only the costs of production and business activities can be included in the cost of products. The cost of normal production and business activities is divided into product cost and period cost. Normal production costs.

Included in the cost of products, other normal production and operation costs are listed as period costs.

First, the step-by-step method.

Compared with other methods, the step-by-step mountain belt is very different in the specific calculation of the way to hit the object, which is mainly due to the calculation of the cost according to the production and processing stages and steps.

2. Taxonomy.

The cost of the taxonomy is a product "class", which can be defined as the natural category of the product and the product category required for management.

3. Batch method.

A method of using "product class" as the cost calculation object, collecting expenses, and calculating costs.

Fourth, the variety method.

A costing method that uses product varieties as the cost calculation object.

5. ABC cost method.

Since the 70s, the activity costing method (ABC method) has been studied in some developed countries, and now, it has been adopted by many countries.

The production characteristics and cost management requirements determine three different cost calculation objects, namely product variety, product production batch and production steps of collapsed bridge products. Marked by the above three types of costing objects, three main costing methods have emerged.

1 Breed method.

The variety method is a method of calculating the cost of a product by taking the product variety as the cost calculation object. In this way, it is not required to calculate the cost by product batch, nor does it require the cost to be calculated by production step. It is suitable for large-scale single-step production, such as power generation, mining and other production, or large-scale multi-step production that does not require step-by-step calculation of product costs.

2 Batch method.

The batch method is a method of calculating the cost of products by product lot (or group order). Since the variety, quantity, and planned start and completion time of each batch or single product are generally determined according to the customer's order, the batch method is also known as the order method. It is suitable for single-piece, small-batch, single-step production and multi-step production that does not require step-by-step cost calculation in management, such as precision instrument and shipbuilding, garment processing and other production.

3 Step-by-step.

The step-by-step method is a method of calculating the cost of a product by the steps in which it was produced. It is suitable for industrial enterprises that produce large quantities of large quantities and multi-step production, and the management requires step-by-step calculation of product costs. Such as textile, metallurgy, papermaking and machinery manufacturing.

The step-by-step method can be divided into the step-by-step method and the parallel carry-over step-by-step method according to whether the cost of semi-finished products is calculated.