# Cost Calculation

## Calculation, Cost

the calculation of the prime cost of a unit of output or job performed. Cost calculation is one of the basic indexes of the prime-cost plan and report. It reflects in monetary form the enterprise’s expenditures for the production and sale of a unit of a particular type of output as well as expenditures for the performance of a unit of work (such as shipping or repair) in industry and other economic sectors.

Plan cost calculations are compiled for a period being planned using progressive input norms for labor and the means of production; the progressive norms reflect continued technical progress and improvement in the organization of production and labor. Report cost calculations are computed on the basis of accounting figures and characterize the actual level of expenditures. Normative cost calculations are a variety of current planning calculations; they are prepared in a number of sectors in connection with the normative method of recording expenditures. The current actual norms, characterizing basically the attained level of expenses, form the bases for these calculations. Projected cost calculations are a variation of long-range planning cost calculations; they are necessary, together with other indexes, to determine the efficiency of capital investments and new machinery.

Cost calculation is an important means of implementing ruble control and a system of economy measures. It permits comparison of the levels of prime costs and profitability for enterprises producing identical articles, and it makes possible the correct solution of problems in such areas as specialization, the allocation of production programs among enterprises, and material-technical supply. The preparation of planning cost calculations on the basis of progressive norms is an essential condition for establishing sound wholesale prices in industry and other sectors of the national economy. Calculations of the prime cost of agricultural products are used to plan state purchase prices.

Cost calculations are drawn up by types of output. In them the basic expenses are computed according to their purpose. At industrial enterprises the following are singled out: expenditures directly related to the technological process of manufacturing particular types of articles, that is, expenditures for raw and processed materials, fuel, and energy for production purposes; wage payments to production workers and deductions for social security; expenditures on preparation for and starting up of production; equipment maintenance and operating expenditures, including depreciation and current repair; general shop and plant expenditures, that is, systemwide (particularly administrative) expenditures; and other production expenditures, including those for scientific research and experimental work and for standardization. In report cost calculations, unproductive expenditures (losses from spoilage and rejects) are singled out. For an enterprise as a whole the cost calculation also includes non-production expenditures, including sales expenditures. A uniform classification of expenditures is separately determined in each sector, with due regard for its characteristics.

The magnitude of expenditures in the basic subheadings of cost calculations is determined by many factors. Expenditures for raw and processed materials, fuel, and energy depend on the expenditure per unit of output, the makeup of prices, and transportation and preparatory expenditures. The sum of wage payments in the cost calculation is determined by the level of labor productivity and the average wage of production workers. Expenditures for equipment maintenance and operation and general shop, plant, and nonproduction expenditures per unit of output depend on the substantiation of the sums of these expenditures for the primary subheadings provided for in estimates and also depend on the level of output.

Depending on how they are counted, expenditures included in the cost calculation are divided into direct and indirect. Direct expenditures include those determined per unit of output or for particular sectors of production on the basis of norms and direct record-keeping data; indirect expenditures include expenditures recorded and planned for production as a whole and distributed in some way or other among the production shops and sections, between finished products and incomplete production, and among types of articles.

### REFERENCES

Bunimovich, V. Kal’kulirovanie sebestoimosti promyshlennoi produktsii. Moscow, 1967.
Shchenkov, S. Bukhgalterskii uchet v promyshlennosti. Moscow, 1969.Chapter 5.

V. A. BUNIMOVICH

Mentioned in ?
References in periodicals archive ?
Additionally, the Company is adjusting cash G&A (non-GAAP) to \$2.00 to \$2.20 per Boe, as a result of the impact of the adjusted volume forecast on the unit cost calculation. Capital expenditures have been lower than originally forecasted as a result of lower completed well costs due to shorter cycle times and optimized well designs, and lower working interests in operated wells than originally forecasted.
Automated cost calculation of the annual purchasing volume optimizes requirements planning and offers a better basis of data for negotiations with suppliers.
They conclude by considering system aspects like the life-cycle cost calculation and odouble useo of storage systems.
Ayesha Mubarak Bu Unq signed the health services' cost calculation and management agreement with Invoice Company and Etissalcom the national partner.
To do so, the team develops a detailed decision for the support system called "Cost Calculation Tool" that investigates total direct and main indirect costs of individual injury claims from the time of the incident of all injured individuals up to their death.
Borderfree provides management for all aspects of international online retailing, including localized pricing and payment processing, landed cost calculation, customs clearance and brokerage, fraud management, logistics orchestration and customer-experience parity.
Lootah honoured all teams that contributed to obtaining DM's IP rights in different areas such as Hotel Income Auditing and Calculation Manual in Dubai, DM Service Cost Calculation Guide, Lab Test Guide, National Grid, Job Description Guide, Historical Panorama of Bastakiya, Historical Buildings Maintenance Cost Manual, Historical Buildings Tourist Guide, Children's Environment Magazine, Green Building Products Manual, E-signature on electronic correspondence using Emirates ID, Early Sandstorm Forecasting System, Makani and iDubai.
In-depth interviews with our four experts resulted in a draft method for cost calculation that included six components and 26 subcomponents.
The new tool adds rapid, accurate harness manufacturing process modeling and cost calculation capabilities to the Capital Define-Design-Build-Service flow.
For this reason, it will have a more extensive documentation as support, including the cost calculation. The "economic difficulties" to which the Labor Code is referring must be real and can be made inclusive or primarily in terms of costs.
Nevertheless, there are some research results which can contribute to the application of operation modeling in transport cost calculation.
The model of quality assurance activities cost calculation has been worked out.

Site: Follow: Share:
Open / Close