Accounting collects production costs and calculates the cost of the project to add more floors to the BIS International School at An Phong Construction Company Limited

An Phong Construction Company Limited

ENTRANCE DOCUMENT - Account 154 No. 12

August 31, 2014 Unit: VND

Abstract	Account Number		Amount
Abstract	In debt	Have	Amount
1	Carry over CPNVLTT to calculate construction cost Raise the floor to build more Bis International School	154	621	837.832.158
2	Carry over CPNCTT to calculate construction cost Raise the floor to build more Bis International School	154	622	624,527,500
3	Transfer of CPSXC to calculate construction cost Raise the floor to build more Bis International School	154	627	264,630,382
	Add			1,726,990,040

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Chief Accountant

(Signature, full name) (Signature, full name)

REGISTER OF ENTRANCE DOCUMENTS

August 2014 Unit: VND

Document

Amount
Amount	Number	Date
09	31/08	837.832.158
10	31/08	624,527,500
11	31/08	264,630,382
Total		1,726,990,040

Project cost calculation

In addition to correctly determining the cost object and cost period, it is also necessary to choose a suitable cost calculation method. Based on that requirement, the company has chosen the direct cost calculation method. According to this method, the collection of all direct costs incurred by the project from the start of construction to the completion and handover is the actual cost of that project.

Based on the production cost table and related books, there is a construction cost calculation table as follows:

An Phong Construction Company Limited

COST CALCULATION SHEET

Project: Raising the floor to build more floors at Bis International School August 31, 2014

Unit: VND

Expense items

Cost of production incurred during the period	Total product cost
Material cost	837.832.158	837.832.158
NCTT cost	624,527,500	624,527,500
Production cost	264,630,382	264,630,382
Total	1,726,990,040	1,726,990,040

Chief Accountant

(Signature, full name) (Signature, full name)

CHAPTER 5: COMMENTS AND RECOMMENDATIONS

5.1 Comments

Through studying the actual work of accounting for collecting production costs and calculating the cost of construction products at the company, I found that: in general, the management of production costs and cost calculation at the company is relatively tight, providing timely and quick information to the company's leaders so that the company's leaders can grasp the situation of fluctuations in product costs, have appropriate management measures to reduce costs, save materials, reduce costs and increase profits for the company. However, there are also limitations that require more practical solutions.

5.1.1 Advantages

 Correctly assessing the importance of the current accounting section, the company has chosen the production cost accounting object as the project, project items for each clear period, at the same time the method of collecting production costs and calculating product costs is also determined in accordance with the object of collecting production costs and calculating product costs. Production costs are collected according to each item, creating conditions for calculating construction product costs accurately.

 The company orders raw materials from suppliers and the suppliers deliver them directly to the construction site, helping the company save on transportation costs, warehousing costs, transportation, and loading and unloading. Accounting documents are fully collected in the accounting department so costs can be controlled.

 The company closely monitors workers' salaries, clearly distinguishing salaries for each department, which is consistent with the current accounting regime.

 Direct labor costs, the company divides the items into quite detailed and clear items, creating favorable conditions for closely monitoring costs.

 The company uses an account system in accordance with the current accounting regime and each account is detailed for each affiliated unit, each project, and each project item. This ensures close monitoring of the costs of each project and construction team.

that project, convenient for checking, analyzing economic operations, promptly solving production and business work.

 The company has a team of highly qualified and experienced staff, with clearly defined responsibilities and departments that support each other, contributing to the company's existence and sustainable development.

 The company has used a fairly complete system of documents and accounting books. The documents are closely monitored, ensuring the accuracy of the data.

 The accounting system operates effectively, providing timely necessary information to the Board of Directors and relevant departments.

 The company applies the accounting system according to Circular 200/2014/TT-BTC in accordance with the company's production and business characteristics, creating conditions for easy accounting. The company fully performs its obligations to the state according to the prescribed regime.

5.1.2 Limitations

 The company has a widely dispersed area, in many different places due to the characteristics of the company being in the construction industry, so the volume of materials is large, with many types... Making the management of materials to the construction site not strict.

 Although direct material costs account for a large proportion of total production costs, when costs arise, accountants only control based on documents and books without going into depth to check, evaluate, compare, and analyze reality to find optimal management measures.

 The company imports and exports raw materials for the project by direct import and export method, without storage, this is suitable for the construction industry, but when there are fluctuations in materials in the market such as scarcity or sudden price increase... it can easily lead to the company's production stagnation, which will slow down the construction progress, affect costs, reduce the reputation of the business, thereby risking not making a profit or breaking even.

 During times of heavy workload, the number of workers to be hired

In addition, the skill level of these workers is often not tested, so the assessment of their skills is not accurate.

 The company does not account for the cost of using construction machinery separately but accounts it in general production costs, which makes the general production costs large, making the accounting of general production costs complicated and unreasonable for the construction industry.

5.2 Recommendations

 The cost of raw materials accounts for a very large proportion of the construction cost, so the company needs to manage and strictly control this cost. The company needs to establish a regulation for managing and circulating payment documents between construction teams and the accounting department, requiring the team leader of each project to submit documents to the accounting department when they arise for timely accounting, ensuring close monitoring of the quantity of materials imported and exported from the warehouse. Enhance the spirit and sense of responsibility of workers in managing, using and preserving materials at the construction site, or conducting cross-checks.

 Saving materials must always be given top priority, however, saving does not mean cutting or reducing materials but rather minimizing loss in transportation, construction and preservation. It is necessary to set up a reward system for individuals who save or waste materials.

 Regularly monitor the prices and fluctuations of raw materials in the market, and reserve a reasonable amount of raw materials in the warehouse so that construction work is not interrupted due to lack of raw materials. And when exporting raw materials for use, it is necessary to consider the quantity and purpose of exporting and whether the exported raw materials meet the efficiency and requirements of that work or not to avoid wasting raw materials. It is necessary to choose a supplier that ensures timely supply of raw materials, ensuring quality to meet the continuous construction process. Take advantage of old tools and spare parts that can still be used to save costs.

 The company needs to improve the professional skills of workers and have policies

Rewards and penalties for violations as well as the achievements they achieve. For example, for violations such as being late, quitting work, taking leave without permission or working less than the maximum efficiency of the assigned work, there are specific penalties. For employees who work actively and creatively, complete work ahead of schedule, there are additional bonuses.

 When hiring a lot of workers, the company should divide the number of workers into groups, such as iron workers, welding workers, carpentry workers, etc. Each group will have a manager to evaluate their capacity and level of work completion. Dividing into small groups will also make management easier and evaluate workers' skills more accurately.

 In the company, the cost of using construction machinery is recorded in account 6278 "other cash costs", for example, on August 15, 2014, the project of raising the floor of the Bis International School had a crane rented for construction, the accountant recorded it in account 6278, such accounting is suitable for the purpose of use, which is to serve the construction work, so it can only be recorded in general production costs. However, due to the unique characteristics of the construction industry, once a machine is rented, it must be used. On the other hand, in construction, there is a separate item of cost of using construction machinery. Moreover, in the construction industry, there are many companies that specialize in renting machines for use, so it is necessary to calculate the cost of using machines. In the project of raising the floor of the Bis International School, the cost of purchasing protective clothing and the cost of renting a crane are jointly accounted for in account 6278. In my opinion, the company should separately account the cost of renting a crane in account 623 to comply with current regulations and accounting regimes, so that it is easy to control and evaluate the use of construction equipment.

 Every year, the company needs to have a plan to supplement knowledge for its staff. Recruit more qualified staff and place them in suitable positions. Continue to maintain and continuously develop relationships with current customers, gradually increasing the number of orders for the company.

CONCLUDE

In today's competitive and integrated environment, in order to survive and develop, businesses need to have a method to operate effectively or in other words, to make a profit. To make a profit, businesses need to ensure that the revenue is greater than the cost. And this is also the basic principle as well as the top goal of businesses today.

In general, the business performance of An Phong Construction Company Limited is relatively good because it generates profits every year. To achieve that result, the contribution of accounting is not small. Accounting collects costs and calculates product prices, providing the company's management with accurate information and data on business results. From there, find out the positive aspects as well as the limitations to propose solutions to improve business efficiency.

After a period of researching the topic "Accounting for cost aggregation and product costing at An Phong Construction Company Limited", I found this to be a very interesting topic because for the construction industry, accounting for cost aggregation and product costing is the most important and decisive. During the time of researching the topic, it helped me to systematize the knowledge I learned at school, as well as have the opportunity to be exposed to real work, helping me to improve my knowledge and gain experience.

Although the internship time was not much, it was enough for me to have the opportunity to approach reality and compare the similarities and differences between reality and theory.

Due to limited knowledge and lack of experience, the above comments and recommendations are inevitably flawed. I look forward to receiving comments and feedback from teachers and those in the company's accounting department to help improve my thesis.

APPENDIX 01