On the Issue of the Essence of General Production Costs of the Enterprise and Their Management
Authors:   Dnipro State Agrarian and Economic University, Bardadym Mariya V. 
Published: May 2024

The article summarizes the content of general production costs, their specific composition, the order of distribution of general production costs (on the example of specific situational material), the order of reflection in accounting of the distribution of general production costs, the functions of strategic management of general production costs. The aim of the article is to study the topical aspects of formation and distribution of general production costs of enterprise, optimization of the level of general production costs in the context of their planning, analysis and control. Further, the general production costs associated with the organization, management, maintenance and control of the production activities of the enterprise as a whole. In order to avoid an arbitrary interpretation of general production costs, they are standardized with the help of National Accounting Standards (NP(S)BO 16 «Costs»). These costs form the production self-cost are the basic indicator of the enterprise’s activity, which affects the profitability of its activities. The formation of such costs is carried out in compliance with the current sectoral procedure for their accumulation and distribution (in compliance with the provisions of the Methodological Recommendations for the formation of the self-cost of production). These costs are subject to distribution. The distribution base can be: hours of labor, wages, volume of activities, direct costs, land areas, etc. General production costs are divided into: fixed and variable. The list of fixed and variable general production costs is determined by the enterprise within the framework of the approved accounting policy. Since some of the general production costs are mixed or it is difficult to distinguish either fixed or variable costs for them, individual enterprises do not carry out such a division and, accordingly, fully distribute them according to the selected distribution base, based on the actual capacity. In production, the distribution of general production costs is carried out between the main products. Among the main methods that can be used for cost distribution are the following: direct distribution; distribution based on production volume; distribution based on the cost of materials; distribution on the basis of labor; capacity-based distribution. The use of these methods involves the choice of a single base for the distribution of general production costs, which is based on the consideration that costs are written off (distributed) by types of products on the basis of a single standard – the coefficient of distribution of general production costs or the cost rate. Accounting for these costs is carried out through account 91 «General production costs». The article provides an example of the distribution of general production costs. The functions of strategic management of general production costs (planning, implementation of parameters laid down in the plan, efficiency control, analysis of results and feedback) are generalized. The introduction of these functions will make it possible to identify energy- and material-intensive units and, as a result, to control the use of material, labor, and financial resources.