PLANNING AND FORECASTING THE REDUCTION OF PRODUCTION COSTS

Abstract

One of the main indicators of a company's performance is the cost of production. This is the total amount of expenses incurred in monetary terms for the production and sale of goods. Thus, it determines the overall efficiency of production.

        The economic content of production costs is compensation for incurred expenses and ensuring simple reproduction, production reserves, and labor for all elements produced at the expense of this element.     Meanwhile, the most important elements of an enterprise's cost price are: depreciation, the cost of material resources consumed, and wages - the main statuses of these costs.

       In addition, the enterprise simultaneously incurs other expenses: maintenance of social facilities, contributions to extrabudgetary funds - these expenses constitute additional expenses of the enterprise.

         Cost determines the following important performance indicators: the level and dynamics of profit and profitability. The significance of cost is determined by the functions it performs.

1. Cost price is a wide range of product costs. The essence of this is that the cost price of products ensures the expenditure of production resources.
2. Cost price is the basis for forming the selling price, and its unaccounted conduct cannot serve as a basis for price formation.
3. Calculation of profit based on cost price, profitability of certain products, i.e., the feasibility of their production.