Completing the accounting organization to collect production costs and calculate product prices at Quang Ninh Seafood Export Joint Stock Company 2

of each enterprise must bring about real efficiency, that is, bring maximum profit. To do that, the enterprise must synthesize management measures for all production and business activities of the unit, especially must organize and manage well the production of products to reduce production costs, reduce product prices to the lowest limit.

Therefore, organizing accounting work to collect production costs and calculate product costs in the enterprise is very important. Through the data that the accounting department collects production costs and calculates product costs, the management board can know the costs incurred, the cost of each product as well as determine the production and business results of the enterprise. From there, it is possible to analyze and evaluate the implementation of the estimated norms on labor costs, labor materials, etc., thereby proposing measures to reduce production costs and lower product costs in time with the business development and management requirements of the enterprise.

Realizing the importance of accounting for production costs and product pricing, during my internship at Quang Ninh Seafood Export Joint Stock Company 2, I have deeply researched the theory, learned and chosen the topic for my graduation thesis: "Improving the organization of accounting for production costs and product pricing at Quang Ninh Seafood Export Joint Stock Company 2".

Maybe you are interested!

2. Research purpose of the topic

- Systematize the most general knowledge about the work of collecting production costs, product costs and production cost accounting - calculating product costs in manufacturing enterprises.

- Understand the accounting work of collecting production costs and calculating prices at Quang Ninh Seafood Export Joint Stock Company 2.

- Propose some recommendations to gradually improve the organization of accounting work to collect production costs and calculate product prices at Quang Ninh Seafood Export Joint Stock Company 2.

3. Subject and scope of the research topic

Accountant collects production costs and calculates product prices at Quang Ninh Seafood Export Joint Stock Company 2.

4. Structure of the thesis

In addition to the introduction and conclusion, the thesis includes the following main contents: Chapter 1: Theory of production costs, product costs and accounting for production cost aggregation and product costing in manufacturing enterprises.

Chapter 2: Organization of accounting to collect production costs and calculate product prices at Quang Ninh Seafood Export Joint Stock Company 2.

Chapter 3: Some recommendations to improve the organization of accounting for collecting production costs and calculating product prices at Quang Ninh Seafood Export Joint Stock Company 2.

CHAPTER 1

THEORY OF PRODUCTION COSTS, PRODUCT COSTS AND PLANNING

MATH OF COLLECTING PRODUCTION COSTS AND CALCULATING PRODUCT COSTS IN MANUFACTURING ENTERPRISES

1.1. Theoretical issues on production costs and product prices

1.1.1. Production costs

1.1.1.1. Concept and nature of production costs

*/ Concept of production cost

To conduct production and business activities, manufacturing enterprises must regularly spend on labor objects (raw materials, fuel), labor materials (factories, machinery and equipment, etc.), labor, outside service costs and other cash expenses. In order to know how much the enterprise spends during the operating period, and at the same time be able to synthesize and calculate the overall economic indicators to serve management requirements, all of these costs are ultimately expressed in a measure of value (currency) called production and business costs.

So the production cost of an enterprise is the monetary expression of all the costs of living labor, materialized labor and other necessary expenses that the enterprise has spent to carry out production activities in a certain period (month, quarter, year).

*/ Nature, content, position, role of production costs

+/ Nature and content

Production costs include salaries, wages of workers directly involved in production and workshop management, depreciation of fixed assets, etc., and raw material costs – the largest cost of a product. In addition, there are some actual costs that are part of the newly created value (salary deductions such as social insurance, health insurance, union funds, unemployment insurance), expenses related to asset rental, and asset rental fees.

Business costs are always measured, calculated in money and associated with a certain period of time (month, quarter, year). From the business perspective, production costs include all expenses that a business must spend to carry out production processes to create products. The magnitude of production costs is a determined quantity that depends on the following two main factors:

- The amount of labor and means of production consumed in producing a product in a certain period of time.

- The price of consumed means of production and the wages of a unit of labor expended.

The essence of production costs is the transfer of capital, the transfer of the value of input factors aggregated for each pricing object.

+/ Position, role

In production and business activities, costs play an indispensable role. Production costs are the basis for calculating the cost price, selling price of products and determining the profit of the enterprise. Enterprises must always pay attention to the management of production costs, because if the production costs are unreasonable, not true to their nature, it will cause difficulties in management and reduce the profit of the enterprise.

1.1.1.2. Classification of production costs

Production and business costs can be classified according to many different criteria depending on the purpose and requirements of management. However, in terms of accounting, production costs are often classified according to the following basic criteria:

*/ Classify production costs according to the content and economic nature of the costs

Based on the content and economic nature of different production costs, cost elements are divided. Each cost element includes costs with the same economic content, regardless of which field of activity the cost arises in. Therefore, this classification is also called classification of production costs by element. According to this classification, production costs are divided into the following five elements:

- Raw material costs: Includes all costs of main raw materials, auxiliary materials, fuel, spare parts, tools, equipment... that the enterprise has used for production and business activities during the period (excluding the value of unused materials returned to the warehouse, and recovered scrap).

- Labor costs: Includes all salaries, allowances, and salary deductions according to regulations of direct laborers producing and manufacturing products, performing work and services during the period.

- Fixed asset depreciation expense: Reflects the total amount of depreciation of fixed assets used in the production process of the enterprise.

- Outsourced service costs: Includes the total amount the business has paid for outsourced services such as electricity, water, telephone... to serve the business's production and business activities.

- Other cash expenses: Are all expenses incurred in the production and business process of the enterprise other than the above factors.

This classification is very important in business management. Through this classification, people can know what costs the business has incurred in the production process, and from there determine the proportion and structure of each cost element. It is the basis for businesses to plan the supply of materials, labor, capital , etc. for the next production periods. It is also the basis for preparing financial statement explanations to provide information to managers.

*/ Classify production costs according to the purpose and use of costs

Each production cost element arising during the period has a certain purpose and function for production activities. According to this classification, people base on the purpose and function of the cost in production to divide into different production cost items, each item only includes costs with the same purpose and function. Therefore, this classification is also called classification of production costs by item. All production costs arising during the period are divided into the following items:

- Direct material cost (CP NVLTT): Includes costs of main materials, auxiliary materials, and fuel used for the direct purpose of manufacturing products.

- Direct labor costs (DPC): Include salaries and payments directly to production workers, deductions from production workers' salaries such as health insurance (HI), social insurance (SI), union dues (TUF), unemployment insurance (UI).

- General production costs (CP SXC): Are costs used for general production activities in workshops and production teams other than the two direct items mentioned above, including workshop staff costs, material costs, production tool costs, fixed asset depreciation costs, outsourced service costs, and other cash costs.

This classification is effective in managing costs according to standards, and is the basis for accounting to collect production costs and calculate product prices according to standards.

Items are the basis for analyzing the implementation of cost plans and setting production cost standards for the next period.

*/ Classification of production costs according to the method of collecting production costs and the relationship with the cost collection object

According to this classification, production costs are divided into:

- Direct costs: Are costs directly related to a cost collection object, product type or job that can be directly attributed to that product or cost collection object.

- Indirect costs: Are costs related to many products, many cost aggregation objects, many different jobs and services, so they must be aggregated and assigned to each object according to the indirect allocation method.

This classification is very helpful in accounting techniques. In the process of collecting production costs, if indirect costs arise, it is necessary to choose the correct and reasonable allocation criteria to obtain honest and accurate information about costs and profits for each product and each location where costs arise.

*/ Classify costs according to the relationship of costs with the volume of products, work, and production labor in the period

According to this classification, costs are divided into:

- Variable costs: Are costs that change in quantity proportional to the change in the volume of products produced over a period. This type of cost includes raw material costs, direct labor costs, sales commission costs, and service costs such as electricity, water, telephone, etc.

- Fixed costs: Are costs that do not change in total regardless of changes in the level of production activity or the volume of products, work, and production labor during the period. These costs include: Depreciation costs of fixed assets; salaries paid to managers, employees, experts, interest on loans payable, costs of renting assets, offices, etc.

- Mixed costs: Are costs that have both fixed and variable cost characteristics. These costs are fixed costs up to a certain limit, beyond which they become variable costs.

However, this classification is only relative. It is effective for managers in building the relationship between cost - volume - profit as a basis for determining the break-even point, thereby making correct decisions in the short term. In addition, correctly determining fixed costs and variable costs in the enterprise will help managers use costs more effectively.

1.1.2. Product cost

1.1.2.1. Concept and nature of product cost

*/ Product cost concept

Product cost is the monetary expression of all expenses on live labor and materialized labor related to the volume of completed product and service work.

Product cost is a comprehensive economic indicator reflecting the quality of business operations in all economic, technical, organizational aspects and the efficiency of management, use of materials, labor, and capital of the business. At the same time, cost is also the basis for businesses to determine the selling price of products and the results of production and business activities of the business.

Especially in the current market-based operating conditions, along with product quality, product price is always the top concern of manufacturers. Along with improving product quality, businesses always seek ways to reduce production and business costs, thereby reducing prices to capture the market. This is a decisive factor to improve the production and business efficiency of businesses.

*/ Nature, content, position, role of cost

+/ Nature and content

Product cost is the most comprehensive indicator that fully reflects the loss of all aspects in terms of economics or production and business activities, and the costs serving the consumption of products.

Cost represents the level, scale of organization, modernity or backwardness in terms of technology of production, is the basic indicator for planning product production, choosing the cost reduction plan of the enterprise. The movement of the production process of a manufacturing enterprise includes two opposing sides, but closely related to each other: one is the costs that the enterprise has spent, the other is the production results obtained.

Certain completed products, jobs, and services that meet the consumption needs of society need to be priced, or in other words, the costs incurred to produce and complete them need to be calculated.

Product cost is also a comprehensive economic indicator reflecting the quality of production activities, reflecting the results of using materials, labor, capital in the production process as well as technical solutions that the enterprise has implemented to achieve the goal of producing the largest volume of products with economical production costs and reducing product costs. Product cost is also the basis for calculating and determining the economic efficiency of the enterprise's production activities.

+/ Position, role

In the management of business activities, product cost index plays an important role as shown in the following aspects:

- Cost price is a measure of the level of production and consumption costs of a product, and is the basis for determining the efficiency of business operations. To decide to produce a certain type of product, a business needs to understand market demand, market prices, and production and consumption costs of that product. On that basis, the efficiency of production of that type of product can be determined to decide on the selection and production volume to achieve maximum profit.

- Cost is an important tool for businesses to check and monitor production and business costs: reviewing the effectiveness of organizational and technical measures. Through the implementation of the cost plan, businesses can review the production situation and production costs, the impact and effectiveness of the actual production.

Completing the accounting organization to collect production costs and calculate product prices at Quang Ninh Seafood Export Joint Stock Company 2 - 2

Comment