What is the difference and connection between cost and production cost? Please, thank you

Expenses: It is the outflow of economic benefits incurred by enterprises in their daily activities such as selling goods and providing labor services. Cost:

It is the cost of a certain product or service object. The differences between the two are as follows: 1. The content is different.

Expenses include production expenses, administrative expenses, sales expenses, and financial expenses, etc. The cost of products of an industrial enterprise includes only the cost of producing a certain type or quantity of finished products. It does not include the production costs and other expenses of unfinished products.

2. The calculation period is different. The calculation period of the expense is linked to the accounting period, and the cost of the product is generally linked to the production cycle of the product. 3. The object is different.

The calculation of expenses is classified by economic use, and the cost of products is calculated for products. 4. The calculation basis is different. Costs are calculated on the basis of direct costs and indirect costs.

The cost of the product is based on a certain costing object. 5. The account and the original voucher are different. Expenses are based on various original vouchers obtained during the production process, and accounts are production costs, etc.

The cost of a product is based on a costing sheet or cost summary table and a product inventory list, and the account is an inventory item, etc. 6. The total amount is different. The total cost is not equal to the total cost of the product for a certain period.

Because the content and value of the two are different. The cost of the product is a part of the total expense, excluding the cost of the period, and the cost of unfinished products at the end of the period. 7. The role is different.

Cost indicators, analysis of their weights, understanding structural changes to strengthen cost management, etc. The product cost index reflects the consumption of physical labor and live labor, the second is the compensation of capital consumption, the third is the inspection cost and profit plan, and the fourth is a comprehensive index that indicates the quality of the enterprise's work.

Production cost refers to the cost of producing and processing the product, while cost refers to the cost of processing or producing the product.

Production costs refer to the direct costs of the product, including the cost of materials and labor that can be directly charged to the product.

Production costs, also known as manufacturing costs, are the indirect costs of the product, which should be allocated to the product through a certain distribution method.

First, from the content reflected;

The content reflected by the production cost element includes all the production expenses incurred by the enterprise, such as purchased materials, whether it is direct or indirect materials used for product production, or used for fixed asset repair or special projects. Another example is wage expenses, which include both wage expenses used for product production and wage expenses that are not used for product production. The raw materials reflected in the cost item only refer to the cost of raw materials that make up the entity (or main component) of the product, and the wage expense only refers to the wages of direct production workers.

Second, from the perspective of the scope covered.

The element of production cost reflects the actual production expenses incurred by the enterprise in a certain period (month, quarter, year), while the product cost reflected by cost item refers to the cost that should be borne by a certain product in a certain period. While both reflect costs for a given period, the former includes the amortization of expenses to be amortized and the provision for provisions.

The difference between production cost and product cost is as follows:

1. The classification of expenses is different

Production costs are classified according to the economic nature of the costs, that is, they are classified according to the original form of production costs. It is usually classified according to the three major elements of labor objects, labor materials and live labor consumption. It is further divided into raw material costs, wages and surcharges, depreciation costs, purchased power costs, other expenses and other cost elements.

The cost of industrial products is classified according to the economic nature of production expenses, and then classified according to economic use, divided into more than 1,000 cost items. Specifically, it is divided into cost items such as raw material costs, wages and surcharges, workshop expenses, and enterprise management fees.

2. The range of fees included is different

The production cost includes not only the industrial production cost of the production of industrial products, but also the non-industrial production cost incurred in other production activities, such as the difference between the cost of trial production of new products and the price of the car; net loss in products and self-made semi-finished products; Provide labor and operation expenses to the living and welfare departments; the cost of major repair of fixed assets; Labor costs for special projects, as well as the cost of self-made equipment, etc.

The cost of products includes only the production expenses that should be included in the cost of the product, and does not include the non-industrial production expenses incurred in carrying out other activities, and also excludes the amortized expenses that have not yet been included in the cost of the products and the actual withholding expenses paid. The calculation formula is: the subtotal of the expenses that should be included in the product cost in the production expenses of this month = the total production expenses of the current month - the production expenses of non-industrial products - the actual withholding expenses - the expenses to be amortized.

3. The basis of accounting treatment is different

There are two main bases for accounting treatment. It is based on cash receipts and payments, also known as the cash system, which is based on whether expenses and income are actually incurred in the current period. The second is the accrual basis, also known as accrual accounting, which is based on whether expenses and income should be included in the current period as the standard for accounting.

The cost of industrial products is calculated on an accrual basis and includes amortized charges and withholding charges that should be included in the cost of the product for the current month. The calculation formula is: the total amount of expenses that should be included in the product cost of the current month = the subtotal of the expenses that should be included in the product cost in the production expenses of the current month + the amortized expenses to be amortized + the accrued withholding expenses.

4. The expectation of expense collection is different

Production costs are aggregated based on the period in which they are incurred.

The cost of the product is linked to a certain product, and it is collected in the period that should be included in the cost of the sail stove product. For example, the cost of the finished product this month includes not only the expenses that should be included in the product cost of the month, but also the cost of the product at the beginning of the month, and then the cost of the product at the end of the month is deducted.

The link between production expenses and product costs:

Production expenses are the basis for forming the cost of a product, and some of the names of expenses (such as raw material costs) are also the same for both. When some small township industrial enterprises produce only one product, if there is no product at the beginning and end of the period, and there are no expenses to be amortized and expenses to be withheld, generally speaking, the production cost is equal to the cost of industrial products.

The Production Costs and Manufacturing Expenses accounts are both distinct and related:

1. Contact. The two accounts of "Production Cost" and "Manufacturing Expense" are both cost accounts, which are used to collect various production expenses and calculate the cost of products. The cost item for Production Costs includes Manufacturing Expenses.

2. Differences. The specific content and procedures of accounting are different, the "manufacturing expenses" account only reflects the various indirect costs incurred in the workshop, and the "production costs" collect all the expenses of production, including manufacturing expenses. The manufacturing expenses incurred in the production process of the enterprise are first collected in the "manufacturing expenses" account, and then distributed and carried forward to the detailed account of each product in the "production costs" according to a certain distribution standard at the end of the period, and the costs of finished products and products in progress are summarized and calculated together with the direct materials and direct labor included in the production costs in advance.