Features of formation of overall costs for goods (works and services) in managerial accounting for pricing purposes

Abstract

The article examines the economic substance and structure of technological, production and overall costs for goods (works and services). It is found that technological costs include direct expenses of enterprises, whereas production costs also include variable production overhead costs and constant apportioned production overhead costs. In managerial accounting for pricing purposes, overall costs are viewed as production costs for goods (works and services) plus administrative expenses, sales expenses and other expenses of operating activities. The article argues that expenses of other operating activities, which should be taken into account while forming overall costs for goods (works and services), include the following expenses: expenses for initial recognition and movements in the values of assets measured at fair values; research and development costs; expenses for purchase / sale of foreign currencies for performing operating activities; uncollectible accounts expenses and provision for bad and doubtful debts; currency exchange losses; loss in value; material deficiencies / losses within natural norms; acknowledged fines, forfeitures and financial penalties.On the other hand, it is considered unreasonable to take into account a number of expenses such as: costs of sold production supplies; expenses for research and development of brand new goods (works and services); material losses / deficiencies exceeding natural norms; expenses for social and cultural facilities.It is pointed out that expenses over a period are an integral part of operating costs of domestic enterprises. Therefore, cost optimization is seen as an effective tool for pricing, increasing profitability of enterprises, and managing their growth. The article captures how cost optimization of expenses over a period contributes to: detailed item-wise accounting of such expenses; justified grouping of expenses by cost centres and responsibilities; staff motivation; reasonable allocation of expenses over a period of operating activity between types of goods (works and services).