What are the costs for a commercial company?

Article by: D. Samuel Escobar Segundo | Last update: April 10, 2022
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Are those costs that originate in the administration area of ​​the company, such as salaries, electricity, office supplies, telephone, depreciation, among others, that are incurred in administrative departments such as accounting, finance, cash, treasury, among others. .

How are the costs of a commercial company determined?

Trading company cost of goods sold = beginning inventory of merchandise + cost of purchases – ending inventory of merchandise.

What are the costs of companies?

The cost is defined as all those investments necessary for the production of the good or service, such as: labor, raw materials. The costs are considered as investments, since they are expected to return as a form of profit for the company.

What are the types of costs?

What types of costs are there?

    1.- Direct costs. These are the costs that arise from the production of a good or service. … – Indirect costs. … – Fixed costs. … – Operating costs. … – Opportunity costs.

What are the types of production costs?

Production costs can be divided into two large categories: DIRECT OR VARIABLE COSTS, which are proportional to production, such as raw material, and INDIRECT COSTS, also called FIXED, which are independent of production, such as taxes paid by the building.

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What are costs and how are they classified?

Costs are sometimes classified on the basis of the economics involved in making managerial decisions, including differential costs, opportunity costs, sunk costs, and out-of-pocket (or out-of-pocket) costs.

How to calculate the costs of a company?

According to Milton Fridman’s “Theory of Prices”, the formula for estimating costs is as follows:

Total Fixed Costs + Estimated Total Variable Costs = The Sum of Fixed and Variable Costs. The Sum of Fixed and Variable Costs / Your Total Estimated Output = Cost per Unit of Output.

How are costs classified according to their costing method?

According to the cost system according to the cost method, we have: the historical or resulting cost systems, the predetermined cost systems. Within the latter, there are: estimated cost systems and standard cost systems.

What are production costs?

Total manufacturing costs are essentially an expense analysis that calculates how each of the company’s departments has contributed to producing an end product.

What are the three elements of the cost of production?

In this post we are going to analyze what are the elements that make up production costs: raw material, labor and indirect manufacturing costs.

What are production costs in accounting?

A term used to refer to the total cost of materials, manufacturing, and/or other processes used in the production of a good sold in a local market or another country together with the appropriate allocation of general and administrative expenses.

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