Written by:Diomer Antonio Galán Rincón.
Bachelor's Degree.Public Accounting / MSc.Science of Higher Education.
Author: @dgalan,through Power Point 2010 tool, and using public domain image Pixabay
Costs are an important and necessary essential tool for any company, they allow to demonstrate the results of the operations and to identify the weak and strong elements of the same ones, helping for an effective decision making, to fortify the income of the same ones. Likewise, costs are a term commonly used to refer to decreases in income, which in many situations is not adequately used.
In this sense, Horngren, C; Datar, S, y Rajan, M. (2012), refer that it is "the cost produced from the sum of the costs from one department to another until reaching the final product". We can also mention that they are those items that affect the amount of income, these are known as expenses, and in general these can be divided into two types, expenses whose benefit or profit is immediate are considered expenses, while expenses that are capitalizable and inventoriable are known as costs.
In turn we can say that costs are the loss of economic resources by the organization to achieve its objectives or goals and in turn represents a monetary measure of the services that have been delivered. Likewise, companies must have an adequate record of the costs of services, meaning those that provide information for decision making on the efficient use of resources.
Image taken from:Pixabay
It should be noted that this cost of production should be known in the preparation of any product because this is the financial tool that allows to determine the time at which sales will cover exactly the costs, expressed in values, percentage and / or units, also show the profit or loss of the company during the realization of the product for sale exceed or fall below the actual cost that was stipulated for the procedure, so you should see the most important aspects such as fixed, variable and generated cost.
For its part in the production of products, the cost plays an important role for the company, so it must keep a cost accounting, which according to Amat and Soldevila (2002), Cost Accounting, also called analytical, "focuses on the calculation of the costs of services or products offered by the company", is relevant because it will analyze the real cost of production to achieve profits and not completely lost, due to not having the necessary knowledge in order to achieve the goal proposed by the company.
In other words, the cost will be measured according to what is used from the beginning of the realization until reaching the objective, which is to achieve quality production and sustainability for the company.
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