Completing the accounting organization to collect production costs and calculate product prices at Than Uyen Tea Joint Stock Company

2.2 Accounting for production costs and product pricing at Than Uyen Tea Joint Stock Company 55

2.2.1 Accounting for production costs at Company 55

2.2.2 Accounting for production costs and product pricing at Than Uyen Tea Joint Stock Company 83

CHAPTER III. SOME RECOMMENDATIONS TO IMPROVE THE ACCOUNTING WORK OF COLLECTING PRODUCTION COSTS AND CALCULATING PRODUCTS AT UYEN TEA JOINT STOCK COMPANY 93

3.1 General assessment of production and business activities, production management organization, accounting and production cost accounting, product cost calculation at Than Uyen Tea Joint Stock Company 93

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3.1.1 Advantages. 93

3.1.2 Limitations and shortcomings. 97

3.1.3 Causes of limitations and shortcomings 99

3.2 Recommendations to improve the accounting work of collecting production costs and calculating product prices at Than Uyen Tea Joint Stock Company 100

3.2.1 The need to improve the accounting work of collecting production costs and calculating product prices at company 100

3.2.2 Requirements and principles of completion. 101

3.2.3 Some recommendations to overcome limitations and shortcomings in Than Uyen Tea Joint Stock Company 102

CONCLUSION 108

1 Reason for choosing the topic:

INTRODUCTION

In the fiercely competitive conditions of the current economy, in order to survive and develop, manufacturing enterprises must not only constantly improve and enhance quality but also have a competitive strategy in terms of price. Only then can enterprises continuously increase profits, expand production and business and stand firm in the market.

To achieve the goal of price competition, the most effective measure that businesses are often interested in is to reduce costs. To strive to reduce product costs, businesses must organize and manage production and business activities well. In particular, accounting work to collect production costs, calculate product costs in the right way, accurately, scientifically and reasonably is very important.

Through the data collected by the accounting department, calculating costs and providing prices, business managers know the actual costs and prices of each type of product, product group, business activities and other activities in the business. Thereby, it is possible to analyze and evaluate the effectiveness, the implementation of product cost plans, the use of labor, materials, capital... From there, appropriate measures can be taken to save and reduce production costs, creating conditions to reduce product prices.

Realizing the importance of product cost, accounting work to collect production costs and calculate product cost in enterprises, during my internship at Than Uyen Tea Joint Stock Company, I have studied and researched cost, accounting to collect production costs, calculating tea product cost and chose the topic for my graduation thesis as: " Improving the organization of accounting to collect production costs and calculate product cost at Than Uyen Tea Joint Stock Company ".

2. Purpose of the topic .

• System of basic knowledge, mainly about production costs and prices

finished products and organize production cost accounting, product pricing.

• Grasp the reality of production costs, product prices and accounting work to collect production costs and calculate product prices at Than Uyen Tea Joint Stock Company.

• From the knowledge learned, compare and examine with the reality of cost price, cost accounting and product costing at Than Uyen Tea Joint Stock Company to make suggestions and recommendations to improve the organization of cost accounting and product costing at the enterprise.

3. Research objects and scope .

• Research object: Accounting for collecting production costs and calculating the price of tea products at Than Uyen Tea Joint Stock Company.

• Research scope:

+ About space: the topic was carried out at Tra Than Joint Stock Company

Uyen

+ Time: from January 14, 2013 to March 17, 2013.

+ The analysis is based on 2012 data collected at

Accounting and Finance Department

4. Research methods.

In the thesis used: dialectical method, historical method, modeling method, practical survey, synthesis, statistics, comparison, analysis, logic methods...

5. Structure of the thesis.

In addition to the introduction and conclusion, the thesis consists of 3 chapters:

Chapter I: Some basic theoretical issues on production costs, product costs and accounting for production costs and product costs in manufacturing enterprises.

Chapter II: Current status of organizing accounting work to collect production costs and calculate product prices at Tra Than Uyen Joint Stock Company.

Chapter III: Some recommendations to improve the organization of centralized accounting work

Production cost and product pricing at Than Uyen Tea Joint Stock Company.

Due to limited time and research ability, the thesis will inevitably have shortcomings. I look forward to receiving comments and guidance from the Board of Directors, the staff of the Accounting - Finance Department, the relevant departments and divisions of Than Uyen Tea Joint Stock Company, the teachers in the department and in the school so that my writing can be more complete.

Here, I would like to present the thesis content:

CHAPTER I

SOME BASIC THEORETICAL ISSUES ON PRODUCTION COSTS, PRODUCT COSTS AND PRODUCTION COST ACCOUNTING, PRODUCT COST CALCULATION IN MANUFACTURING ENTERPRISES

1.1 Some common issues about production costs and product prices.

1.1.1 Production costs

1.1.1.1 Concept, position, role of production costs .

Manufacturing enterprises, whether large or small, regardless of the field of production and business, must necessarily have a combination of 3 factors in their production and business process:

• Labor objects: raw materials, materials.

• Means of labor: factories, machinery, equipment and other fixed assets.

• Labor: human labor.

However, to get those 3 input factors, businesses have to spend a certain amount of money and people consider that as production cost.

Thus, production costs are the total expenditure on live labor, materialized labor and other necessary costs expressed in money that a business spends to carry out production activities in a certain period.

Position and role of production costs in enterprises:

In the production and business activities of enterprises, costs play an indispensable important role. Production costs are also the basis for calculating the cost price, selling price of products and deciding the income and profit of enterprises. Therefore, enterprises must always pay attention to cost management. If production costs are unreasonable and not true to their nature, they will cause difficulties in management and reduce the profits of enterprises.

1.1.1.2 Classification of production costs.

Production costs in an enterprise include many types and items with different economic content, properties, uses, roles, and positions. For convenience,

In order to facilitate management and accounting, cost control as well as serve business decision making, production and business costs need to be classified according to appropriate criteria. Here are some main classification methods:

a) Classify production costs according to cost factors (content and economic nature of costs).

According to this classification, costs with the same economic content are classified into the same cost element, regardless of where the cost arises and what its purpose is, including 5 elements:

• Raw material costs: include all costs of main raw materials, auxiliary materials, fuel, spare parts, materials... that the enterprise uses for production activities during the period.

• Labor costs: include all costs payable to employees for salaries, wages, allowances, subsidies of a salary nature, deductions from employees' salaries (social insurance, health insurance, unemployment insurance, union funds...) in the enterprise.

• Fixed asset depreciation expense: Reflects the total depreciation that must be deducted during the period of all fixed assets used for the enterprise's production and business activities.

• Outsourced service costs: Reflects all service costs used for production and business activities during the period provided by other outside units such as: electricity, water, telephone, etc.

• Other expenses in cash: Reflects all other expenses other than the above cost elements such as: Office supplies, reception expenses, conferences...

Classifying production costs according to economic content shows the structure and proportion of each cost element. It is the basis for establishing, checking, and evaluating the implementation of production cost estimates, planning the supply of materials, labor, and capital.

b) Classify production costs by cost item (purpose and use of costs).

According to this classification, production costs with the same economic function are arranged in the same item, regardless of their economic nature. Production costs are divided into the following items:

• Direct material costs: Reflects all costs of main materials, auxiliary materials, fuel, etc. directly involved in the production of products or the performance of labor and services.

• Direct labor costs: Include labor remuneration payable to direct production workers such as salaries, salary-related allowances, salary deductions for social insurance, health insurance, unemployment insurance, and union contributions.

• Manufacturing overhead: Costs necessary to produce products and provide services other than direct material costs and direct labor costs. Manufacturing overhead includes:

+ Workshop staff costs: Including salary costs, salary-related allowances, and deductions from workshop staff salaries.

+ Material costs: Material costs shared by the production workshop for the purpose of serving production and production management.

+ Tool costs: Includes costs of tools and equipment used in the workshop to serve production and production management.

+ Fixed asset depreciation costs: Total depreciation costs of fixed assets belonging to production and use workshops.

+ Outsourced service costs: Outsourced service costs used for service activities and production management of workshops and production teams.

+ Other expenses in cash: Are direct expenses in cash used for service and production management in the production workshop.

This classification serves the requirements of production cost management and provides data for cost calculation as well as analysis of cost estimate implementation and cost plan implementation to make reasonable business decisions.

c) Classify costs according to their relationship with the volume of work products

production service

According to this classification, production costs are divided into two cost elements.

fee:

• Variable costs are costs that change in quantity in proportion to the change in the volume of products produced over a period. Variable costs are usually direct labor costs, indirect labor costs, etc. Variable costs, if calculated per unit of product, are fixed.

• Fixed costs are costs that do not change in total even if the volume of products, work, or production services changes to a certain extent. For example, fixed asset depreciation costs, premises costs, etc. These costs are calculated per unit of product, but change when the quantity of products changes.

This classification is effective for cost and price management, effective in break-even point analysis for decision making, and is also the basis for determining the portion of costs transferred to calculate product cost.

d) Classify costs according to the method of collecting production costs and the relationship with cost-bearing objects.

According to this classification, production costs are divided into 2 cost elements:

- Direct costs: Are costs that are directly related to the production of a product or a certain job. Accountants can base on data from accounting documents to record these costs directly to the product or cost-bearing object.

- Indirect costs: Are costs related to the production of many types of products and jobs. Accountants must allocate these costs to objects according to appropriate criteria.

This classification is effective in determining the accounting method of collecting and allocating costs to users in a reasonable and correct manner.

e) Classification according to cost components.

According to this classification, production costs are divided into: