What is a cost estimate?
When we hear the word "calculation", we clearly understand that it is one-root to the word "calculator" and is somehow connected with calculations. So what is calculation?
Indeed, the calculatio from Latin is translated as "counting, counting, calculating". Most often this term is used in the meaning of calculating the cost of production of any product.
How to calculate the cost of production
What you need to consider in order to calculate the cost of production? The most costly items are the costs of:
- purchase of raw materials;
- Equipment for the production of;
- salaries of employees;
- transport costs for the delivery of goods to the points of sale;
- sales of products.
As a rule, the cost of production of a product unit is calculated. The resulting figure in the future is the basis for determining the final price for the goods.
Calculation can be planned and actual. The planned cost estimate is carried out at a preliminary stage. Here, based on certain economic standards, the estimated cost of production is calculated. The actual cost estimate is carried out after the start of the production of the goods and shows the real costs of production.
However, the term "costing" can be usedin all other situations associated with the conduct of calculations. For example, you can talk about the calculation of the damage suffered. By the way, read the special article How to recover damages.
