1. Manufacturing cost: refers to the expenses allocated by products and directly related to product production. Composition: direct materials, direct wages, other direct expenses and manufacturing expenses.
2. Period expenses: refers to various expenses that have no direct or little relationship with production and operation in a certain accounting period. Composition: management expenses, financial expenses and sales expenses.
Cost is the value category of commodity economy and an integral part of commodity value. If people want to carry out production and business activities or achieve certain goals, they must spend certain resources, and the monetary expression and objectification of the resources spent is called cost. Moreover, with the continuous development of commodity economy, the connotation and extension of the concept of cost are constantly changing and developing.
From another point of view, cost can also be the price that must be paid to make a certain choice. When people "give up fish for bear's paw", "fish" is people's cost. Merchants invest, and the money paid by merchants is the cost of investment.
In the course of the company's business development, whether it is to produce products or provide services, costs and expenses will occur.
Expense is the consumption of assets, which is related to an accounting period and has nothing to do with what kind of products are produced; The production cost is related to the type and quantity of products, not to the accounting period.
After the products of an enterprise are sold, their production costs are converted into current sales expenses, which are called product sales costs or main business costs.