How to calculate expenses

Any novice entrepreneur is interested in how much it will cost him to open a particular business, especially if it is associated with the production and production. The further activities of the enterprise will depend on how accurately the costs of production are calculated.

Instruction manual

1

First, decide how much you will provide services or produce products. You should clearly know that this month you will produce, for example, 200 pieces of goods or provide services to 200 people.

2

Now calculate the variable costs (costs that vary based on the volume of the service or output), for this it is necessary:

Calculate the cost of materials (the cost of the raw materials that you will buy for the manufacture of products). The cost of raw materials needed to produce a unit of goods must be multiplied by the volume of planned output. If you provide a service, then in this case you will not have costs at this point.

3

Labor costs. Decide how many people will work for you to complete the production or service plan, and how much wages you will pay them.

4

Deductions for social needs. As a rule, these are contributions to the social security fund and the compulsory insurance fund. Specify percentage of deductions proceeding from the legislation.

5

Now you need to calculate fixed costs (they are not related to the volume of services or production of goods). They consist of general production and general equipment and fixed assets, and so on), commercial expenses (expenses for advertising and delivery of goods to the consumer - if any).

6

All amounts, variable and fixed costs must be added up. This will be your cost of production and production.

Selling expenses