It is necessary to distinguish the general prime cost of all made production – the total amount of the expenses falling on production of production of a certain volume and structure; individual prime cost – costs of production of one product (for example, on production of the unique unit provided that in this production link of any other types of production at the same time it is not made; the average prime cost determined by division of total amount of costs of quantity of the made production.
In this drawing it is shown the directions of comparisons, and about arrows the name of a factor which influence comes to light at the corresponding comparison is specified. As for a way of comparison, comparisons and in differential (absolute), and in relative forms are admissible, however because of simplicity of interpretation in practice give preference to a differential method.
Each of articles of accounting contains various economic elements of expenses taking into account their role in production. So, for example, the structure of general production and general running costs includes also expenses on compensation, and depreciation of the fixed business assets, and costs of fuel, energy (except spent for technological needs) and auxiliary materials though each of these types of expenses represents different economic elements.
To find out, under the influence of what factors a certain level of prime cost was created, in what measure and in what direction these factors influenced the general prime cost, it is necessary to divide various expenses on groups, or elements of expenses.
Expenses on the organization of production and business management (charges of administrative, administrative personnel; depreciation charges, maintenance costs and repair of buildings, constructions of general economy appointment, etc.) make general running costs.
This group the sign of the economic maintenance of this or that expense is taken as a principle. Costs of raw materials, fuel, of compensation and other expenses in this case are considered not simply as the composed prime costs and as compensation of expenses of the substantiated and live work – compensation of the consumed subjects and means of labor and the work.
The group of expenses under articles of accounting considers expenses in a place of their emergence and the direction, and therefore gives the chance to determine prime cost level by separate types of production at the enterprises with wide listed products.