Gaining a competitive advantage is increasingly determined by a company’s ability to adapt to changing conditions. A turbulent environment forces enterprises to possess the ability to anticipate changes, properly analyze situations, and react effectively. The greater the dynamics of change, the more important the accuracy of decisions made and the speed of reaction to signals from the environment.
One of the criteria for assessing the profitability of manufacturing enterprises is the analysis of production costs. The calculation of unit production cost is not only the basis for verifying decisions made by management personnel and senior management regarding pricing policy, but also an element of recording tangible current assets, carried out based on the provisions of the Accounting Act. It is obvious that organizing an efficiently functioning decision-making process in the scope of strategic and operational production planning is conditioned by access to and the timeliness of source data describing the components of the calculation. Currently, the foundation of managing a company’s business process and a condition for the integration of economic activities is the use of IT systems supporting the company’s information flows, data processing processes, and the analysis of cause-and-effect relationships. Due to the above, the article will present an example of using a tool supporting the execution of tasks related to the calculation of unit production cost.
Operating costs of an enterprise
Costs arise as an effect of the purposeful use of resources available in an organization, enabling the company to obtain benefits in the form of products or services. They represent value expressed in currency. In logistics literature, costs are defined as the purposeful consumption of enterprise resources expressed in monetary terms and financial expenditures resulting from the flows of material goods, inventory maintenance, and information processing related to the company’s logistics activities in the supply chain. The fundamental definition of costs is presented by legislation, indicating that it is the probable emergence in the reporting period of economic benefits, with a reliably determined value, in the form of a decrease in the value of assets or an increase in the value of liabilities and provisions, which lead to a decrease in equity in a manner other than the withdrawal of funds by shareholders or owners. Costs constitute an element of the profit and loss account of the financial statements of business entities.
It should be mentioned that the components of the financial statements, i.e., the balance sheet, profit and loss account, statement of changes in equity, cash flow statement, or additional information, represent aggregated and homogeneous data, created as a result of grouping and aggregating a significant number of transactions or other events causing financial effects. The account, operating with flow quantities, groups revenues and the corresponding costs and losses. There are two alternative ways of presenting the profit and loss account in the financial statements of Polish entities regarding operating activities.
The grouping of items can take place in a comparative layout, also known as the nature-of-expense method, or in a functional layout, also referred to as the cost-of-sales method. The comparative layout forces the grouping of costs according to the different forms of incurring expenditures. The components of operating costs include, among others: consumption of materials and energy, external services, depreciation, employee benefit costs, social security and other benefits, taxes and fees, and other nature-of-expense costs.
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Source: Logistyka Magazine