CATEGORIZATION AND MAKEUP OF ECONOMIC ENTITIES' EXPENDITURES

Аннотация

The examination of economic entities' costs is the focus of this essay. The article examinesin detail thecomposition,classification, different types ofexpenses and theirimpact on the activities of economic entities. Numerous cost classification techniques, such as functional and economic ones, are examined. Also, methods of cost management, keeping them at an optimal level and increasing efficiency are discussed. The article also shows the practical aspects ofanalyzing the costs ofeconomicentities, planning and controllingthem. Keywords:Business owner, subject, expense, classification. Businessentity-BE The terms "production costs" and "production outputs" do not mean the same thing. The second of these concepts is broader than the first, and from the point of view of society, it includes the entire volume of living and commodified labor and is equal to the value of the product. The concept of "production output" is, in most cases, associated with a certain sector of the economy (for example, production output, transaction output, etc.). Production outputs can be initially dividedinto two groups: •specific oractual outputs; •unclear outputs. Exact or actual costs consist of specific costs incurred by BE - wages, costs of raw materials and materials, payment for rent, etc. Implicit, exchanged outputs or missed, missed opportunity outputs are related to the fact that BE uses capital to produce a product, and therefore misses out onits alternative use. Limited funds force BE to use options of available opportunities depending on their usefulness. There will always be elements of foregone benefits, hence elements of uncertain outcomes. Any management decision to continue production of this or that product or expand it further is based on the calculation of specific and non-specific costs [1]. The choice between one or another economic decision always characterizes consciously lost or rejected opportunities to achieve other goals. The concept of "expenditures of BE" differs from the concept of "outputs of BE" in that they are directly connected with financial categories and, first of all, the cost of products. Therefore, the costs of BE can be defined as follows: the monetary value of resources used to obtain profit or achieve other goals of BE is called BE costs [2]. The concept of "costs" is broader than the concept of "cost". Because the cost reflects a part of the total costs (normal production costs). The cost of the product (work and service) consists of the value of raw materials, materials, fuel, energy, fixed assets, labor resources and other costs of their development and realization used in the production process of the product (work and service). In practice, the concepts of "total product cost" and "product unit cost" are widely used. In various sectors of the economy (industry, agriculture, trade, catering, construction, etc.), there are specific features of reflecting expenses in the cost structure of the manufactured product [3]. The compositionof costs included in the cost depends, onthe onehand, on thetax policy applied to the economy and on the other hand, on the state and structural structure of the economy. http://www.internationaljournal.co.in/index.php/jasass 563 Volume15 Issue 08, August 2025 Impact factor: 2019: 4.679 2020: 5.015 2021: 5.436, 2022: 5.242, 2023: 6.995, 2024 7.75 Depending on the conditions and directions of BE activity, expenses are divided into the followingtwo large groups: •expenses related toproduction and realization; •non-realizationexpenses;Costs associated with production and sales usually include: • costs of preparation, storage and delivery of products, execution of work, provision of services, purchase andsale ofgoods (work, service, property rights); • the costs of maintenance and operation, repair and maintenance of fixed assets and other assets, as well as theirmaintenance in acorrected state; •expenses ofdevelopment ofnatural resources; expenses related toresearch and experimental development; •mandatory and voluntary insurance costs; other costs related to production and sales. In addition to the above, these costs can be further classified as follows: •material costs; •laborcosts; •calculated depreciation amounts; •otherexpenses. totalcosts of BE, includes: •material expenses; •amortizationallowances; •laborcosts; •allocations forsocial needs; •changes inwork-in-progress balances and othercosts; •costs ofthenextperiod; •reserves for future expensesand payments, etc. Non-realization costs will not be related to the production and sale of the product. In order to ensure effective management of resources, the cost of the product is calculated according to the separately obtained units of BE. It includes the expenses of this department and becomes the basis for drawing up a planned calculation, that is, a budget (estimate) of BE expenses for a certain period. All expenses of BE can be classified in different directions (depending on what is thebasis ofthisor