What are the components of product cost?

The composition of product cost mainly includes direct material cost, direct labor cost and manufacturing cost.

1. Direct material cost: refers to the purchase cost of direct materials used in the production of products. Direct materials include raw materials and semi-finished products. Raw materials refer to materials directly used in product production, such as wood and iron. Semi-finished products refer to materials that have completed certain processing procedures in the production process, but still need to be processed to become final products, such as plates and paints.

2. Direct labor cost: refers to the human resources consumed in the production process, which can be calculated by wages and welfare expenses. This involves wages, bonuses, allowances and subsidies for production workers, as well as employee welfare funds.

3. Manufacturing expenses: refers to the facilities such as factories, machines, vehicles and equipment used in the production process, as well as machine materials and auxiliary materials. Part of their consumption is included in the cost through depreciation, and the other part is included in the cost through maintenance, fixed expenses, machine material consumption and auxiliary material consumption.

Accounting method of product cost:

1. Variety method: Variety method is the most basic cost accounting method, and the production expenses are collected by taking the product variety as the cost accounting object. This method is suitable for mass production enterprises, and the production process is simple, with no products or a small number of products in production. Under the variety method, it is generally only necessary to calculate the total cost of each variety, and then calculate the unit cost according to the total cost and output.

2. Batch method: Batch method is to collect production expenses based on the batch of products as the cost accounting object. This method is suitable for small-batch or single-piece production enterprises, and the number of products in each batch is small, and the production technology and raw materials in each batch may be different. Batch method usually needs to divide products into several categories, calculate the cost of each product separately, and then summarize the cost of each product to get the total cost.

3. Step-by-step method: Step-by-step method is to collect production expenses with the production steps of products as the cost accounting object. This method is suitable for a large number of multi-step production enterprises, and there are a large number of products in the production process. The step-by-step method usually needs to divide the product into several steps, calculate the cost of each step separately, and then summarize the cost of each step to get the total cost. Because the cost calculation of each step is complicated, the step-by-step method usually needs the help of computer for data processing and cost accounting.