Международная студенческая научно-практическая конференция «Инновационное развитие государства: проблемы и перспективы глазам молодых ученых». Том 2

Nestrelyai A., Kalinichenko A., Reutskova O.

Oles Honchar Dnipropetrovsk National University, Ukraine


Cost is the one of the most important indicators of economic activity of agricultural enterprises because it indicates how much the production of a particular type of products costs and how profitable it is in the specific geographic economic conditions of farming. Market conditions cause new approaches to the application of costs figures; the expenses included in cost of production; principles of formation and distribution of costs. Various aspects of product costs have been considered and reviewed by economists. It conditions extraordinary definitions of product cost and its quality characteristics.

The cost as an economic category is "... a form of social product costs and the value of differentiated products that reflects costs of means of production and wages for its creation, it provides them with compensation to carry on the production process" [1].

The Law of Ukraine "On Accounting and Financial Reporting in Ukraine" defines the actual cost as one of the basic principles of accounting and financial reporting, so the priority is the valuation of enterprise assets according to the cost of its production and purchase [3].

The cost of agricultural products is determined according to the costs classified to a specific culture or a group of plants, animal species and production. Cost as an economic category is the part of the cost of goods and includes all costs of agricultural enterprises in terms of money that are necessary for simple reproduction. The cost reflects not only the initial movement of the expenses, but also the impact of the secondary distribution of newly created product, so the value of the deviations from the production costs of an enterprise in each specific case varies. It leads to inconsistency of cost as measuring product costs. Thus, on the one hand the cost reflects the actual production costs, on the other hand – their significant changes under the influence of a number of redistribution processes, so the basic principles of cost formation is the reflection of real expenses of the enterprise under simple reproduction in conditions of established relationships with resource suppliers and relationships with a budget, banks in the real functioning of the economic management [4].

Nowadays in economic literature there is no definitive approach to output cost determination. According to the Regulations (Standards) accounting 16 [7] to determine the product cost it is necessary to divide production costs into those which form product cost, and expenses that do not affect the cost value. Historical (actual) product cost should include only production costs: direct material costs, direct labor costs, other direct costs and general production costs. Administrative costs are not included in production cost, but along with the cost of sales and other operating expenses are related to expenses of a period.

Investigation of the formation of product costs is complicated by organizational and technical structure of a modern agricultural enterprise which is divided into structural subdivisions – responsibility centers. The main production units (farms, brigades, etc.) are focused on production of commodity products and are usually direct costs for certain types of products, and support units are directed to provide basic services and therefore the work cost and services of auxiliary production are included in the cost of basic production.

Today in practice there are two types of production costs: manufacturing and total. According to S. Kotlyarov, production costs include material costs for technological needs, labor costs of basic workers and general production costs. All costs included in manufacturing cost of production determine the cost of commodity products and unfinished production, total cost is the amount of the cost of commodity products, business expenses and administrative costs for the accounting period [8].

Methodical recommendations for planning, accounting and estimation of product cost (work, services) determine farm production costs as an expenditure of a company associated with the production of goods, work and services.

The purpose of estimation of product cost (servicing) is a "documented, timely, complete and accurate reflection of actual product costs to ensure control over the use of material, labor and financial resources" [9].

In today's market economy managers have constantly to make decisions related to the definition of a contractual price for purchase of supplies and sales of internal production, but unavailable information on current costs, as it is defined only in the end of the year, besides not in full volume (including only production costs), brings to nothing the oversight function of the cost, as a tool for increasing economic efficiency.

Solution of the assigned tasks is possible due to the operational definition of the cost in which the company is able to determine the expected volume of income (or damages) from sale of certain types of agricultural products after its production, even prior to its implementation. Correct and timely assessment of the level of expenses and cost allows introducing an effective price policy and define the calculation of price fluctuations. It also allows developing a flexible system of discounts taking into account the level of profitability at more attractive levels for both manufacturers and buyers.


1. Paly V.F. Basics of calculation. – Moscow: Finances and Statistics, 1987. – 288 р.

2. Tsal-Tsalka S. Expenditures: Teach. user. – K.: TSUL, 2002. – 656 p.

3. Law of Ukraine "On Accounting and Financial Reporting in Ukraine" dated 7/16/99. – № 996-XXV / / http:// zakon.rada.gov.ua / cgi-bin / laws / main.cgi? Nreg = 489-16.

4. Matsybora V.I. Economics of Agriculture: Textbook / VI Matsybora. – K.: Higher HQ., 1994. – 415 p.

5. Sokolov, Y. History of development of accounting / Y. Sokolov. – Moscow: Finnish. and Art-ka, 1985.

6. Borodkin A. About the formation and registration of cost of production in market conditions / A. Borodkin / Accounting and Auditing. – 2004. – № 3. – S. 32-41.

7. Regulation (Standard) 16 "Costs": approved by the Ministry of Finance of Ukraine of 31.12.99, № 318 / / All of accounting. – 2001. – № 37 (Special Issue 64) – P. 47-51.

8. Kotlyarov S. Manage cost / SA Kotlyarov. – St. Petersburg: Peter, 2001. – 160 p.

9. Methodical recommendations for planning, accounting and calculation of the cost of products (works, services) farms approved by the Ministry of Agrarian Policy of Ukraine of 18.05.2001, № 132 / / Agro balance. – 2001. – № 6 – S. 1-28.

10. Yarmolenko V.P. On the formation of prices of agricultural products /Economy APC. – 1999. – № 8. – S. 64-70.

11. Yurovsky B. Costs of goods sold. Planning, accounting, analysis. / B. Yurovsky. – Kharkov: Consult Center LLC, 2002. – 203 p.