SLC | S21W2 | Costos para emprendedores - Elementos del costo

Hello everyone, meet again with me on this post.

Learning is the best way to know many things, and I try to hone my skills and knowledge on the theme in the teaching team. One is about costs for entrepreneurs - a cost element introduced by @yolvijrm as a cost-teaching team for entrepreneurs.

Well, let's start learning, the form of errors that occur will be corrected by the organizers of this learning, without lingering let's look at my participation post. We begin with the first question to be answered.

In the past when I was still in high school, I had studied some sales Science in one of the subjects, this science is expected to be the provision for students to be able to understand some things about sales science. And I still remember very well some things related to sales, one of which is Accounting Science.

As I recall, accounting is an important part of the recording system, which groups and processes so that it presents data from financial sources. This recording is closely related to the financial database of a company, an individual, or also an organization. That's the least I know about accounting or in other words much simpler is to record financial transactions.

Well, accounting is always closely related to the balance sheet which has a sense that has the same purpose. Both become a tool to measure and ensure financial statements, as a picture of profit and loss and assets of the company in a certain period as desired.

Returning to the context in question, I would argue that cost and financial accounting are closely related, what distinguishes them is :
📝Accounting often focuses on managing specific financial records and statements.
📝While Financial Accounting is a bit more complex, namely as a detailed or complete picture, of all forms of financial transactions as a source of financial information in a company or organization.

This explanation is the least I know and little I understand, mistakes exist is a learning for me.

For this question, I try to think for a moment, but I know some things about this, such as the science of sales that I learned in school. Fixed costs and variable costs, I try to explain as I can.

📊 We start with Fixed Costs, these types of costs I can describe simply to all of you. For example, if a company produces goods, but does not have a factory, what happens? Of course, the company has to rent a factory. Well, the cost of renting a factory will always be paid, even if the company does not produce goods or production has not yet begun. These are the so-called fixed costs.

📊 What about Variable Costs, a simple example like this, if a factory produces bread, then what are the ingredients needed to make bread? The answer is simple, the factory must spend money to buy flour, sugar, butter, eggs, and others. This is what is called a fixed cost. Simple isn't it?

Well, the two simple examples above are the differences between fixed costs and variable costs that I understand, hopefully this is not mistaken.

Based on the simple analogy above, I seem to have been able to explain to us all about fixed costs and variable costs. Let's group the two types of costs if in the real world, we are a factory that produces bread.

Fixed Costs are related to various things outside of raw materials. Includes many things that support the process of the bakery continues to live and thrive. Examples that include fixed costs are :

1. Rental cost of premises
2. Employee salary
3. Property tax
4. Insurance
5. And others beyond the cost of raw materials.

While everything that includes variable costs can be guessed, is the cost of raw materials to produce products, in the case of the case that I exemplify is bread to be sold to the market or consumer. The following are elements of variable costs :

1. The cost of raw materials for making bread
2. Cost of meeting the needs of production equipment
3. Commission costs (these are like costs incurred by salespeople)
4. Product distribution costs (outbound costs for delivering products to end consumers)
5. Overhead costs (these are unexpected costs)

Based on the table found in the second week Task posting, then I try to separate direct costs from indirect costs and non-manufacturing costs. Here is the data :

The costs included in direct costs are :

1. Direct raw material
2. Direct labor

Indirect costs

1. Manufacturing Fixtures
2. Shrinkage of plant and machinery
3. Plant Manager
4. Building Preservation
5. Public Service
6. Distribution equipment maintenance

Non-Manufacturing Costs

1. Shipping cost
2. Sales Commission
3. Taxes and insurance
4. Sales and administration costs
5. Advertising

Direct costs : Direct raw material (130) + Direct labor (100) = 230

Indirect costs : Manufacturing Fixtures (210) + Shrinkage of plant and machinery (25) + Plant Manager (65) + Building Preservation (50) + Public Service (35) + Distribution equipment maintenance (65) = 450

Non-Manufacturing Costs : Delivery Costs (70) + Sales Commission (65) + Taxes and insurance (70) + Sales and administration costs (80) + Advertising (20) = 305

This is all I can share on my participation post, mistakes are part of learning. May we all always be healthy and happy. I invite @elagusella, @yanti84, and @rosselena, best regards to you all.