Costs and Budgest (Costos y Presupuestos) TSU en Mantenimiento área Instalaciones Teacher Mayra G. Fuentes Sosa Thematic content I. Maintenance costs and financial Status 1. Costs Estimate a) Types of costs. b) Maintenance Costs. c) Punto de equilibrio 2. Financial Status a) Elements of Financial Status b) Maintenance Cost c) Direct and indirect Costs 1. Maintenance costs and financial Status • Unit Objective: Determine the comprehensive cost of maintenance and its impact on the company's financial statements by applying the concepts and cost methodology to ensure optimal operation of fixed assets and facilities. • Whats up with your english? • Lets talk! Evaluación diagnóstica Explain in your words... 1. 2. 3. 4. 5. 6. 7. Cost = Expense? Why? Concept of cost Concept of expense Mention two types of costs Mention two types of expense Do you need to know about costs and expenses? Why? • Today we are going to identify what is the difference between cost and expense Cost vs. Expense: What's the Difference? Costs and expenses sometimes are similar concepts, and they're used interchangeably, but there are some differences for businesses to consider: • A cost typically refers to the price paid to acquire an asset. • An expense is considere lika an ongoing expense, such as an employee's salary or rent on a retail space. Costs and expences • Cost – Some times it is an estimated amount that people pay or spend to shop for something. – For the administration of maintenance costs, the costs are all those expenses related to the production of a company such as: Purchase of materials; insurance of productive equipment, surveillance of the Production Plant, wages of employees in the productive area, depreciation of equipment, public services of the production plant, maintenance expenses, etc. Costs and expenses Cost in Cost Accounting • It is all that disbursement of money destined to the payment of those obligations that are required to keep the production process of the company active. • Es todo aquel desembolso de dinero destinado al pago de aquellas obligaciones que se requieren para mantener activo el proceso de producción de la empresa. • Ejemplos: Materia prima, equipos, herramientas, sueldo de los empleados de producción, materiales consumibles en el proceso de producción, renta de bodegas de almacenamiento del producto… Costs and expenses An expense is an economic payment, that the company makes to produce a product or service. However, unlike the cost, the expense, in accounting, is not directly related to the manufacturing process, so it is not considered as if it were an investment. • An expense produces indirect benefits (operating expenses and sales) • It is essential to maintain the operational part of the company. • It is not associated with any direct return of capital. Costs and expences • Expense – It is all that financial outlay, or payment, that the company makes to produce a product or service but, is not directly related to the manufacturing process or service, so it is not considered as an investment. Costs and expenses Like Costs we could mention: • The purchase of machinery that a company needs, in which it invests to get production out. • The raw material that need to produce, as well as the tools that allow the employee to make and finalize the production of a good. And finally, like an expense, • We can include the cost of personnel and the salaries they receive, as well as the expense of taxes. See you next class ¡Thanks! [email protected] Tel. 8811900 ext. 1260 Cubículo H211