Internal Control Costs

Internal control costs

Concept

Costs are monetary amounts that must be paid to be able to acquire or prepare a product or service. There are ways to be able to calculate the amount of a purchase for example when paying for a product and one knows the value assigned for such purchasing requirement then the financial costs of said acquisition must be added in case of installments.

Developing

We can also know the cost when producing a product or service, it would be a bit more complex than a simple purchase, since in this segment we should take into account more aspects, such as the raw material which we are going to use,

If we talk about costs of a company we have two large items to talk, on the one hand, we have the fixed costs that are those that do not depend on production but rather they are already standardized such as the lease of the premises and on the other handWe have the variable costs these depend on the amount of the raw material that is going to be produced, that of the workforce that is being used, etc.

The determination and full knowledge of the company’s costs, since between the objectives and functions of cost determination, are the following: serve as a basis for setting sales prices and to establish marketing policies, to establish marketing policies, to establish marketing policies, to establish marketing policies,and facilitate decision making.

Nature

Everything is a process, for example, all people take it on a day -to -day basis to be able to acquire any good or service that they promptly require deadlines or to be able to elaborate and be able to meet their wishes or needs the costsDo not simply use the large companies, quite the opposite, they carry it daily.

Natural or legal persons do not have a bias itself for a single type of people or organizations, we all use costs, we all measure what we are going to pay forAnd so we can get a budget on our environment and how to distribute our income in a way to take advantage of them.

Characteristic

• These allow us to know the cost of the production and manufacture of it.
• Through their knowledge you can make better financial decisions. These analyze in a correct way the income and expenses of the company and allows us to identify the direct and indirect costs.
• The quality and efficiency on production can be identified including all the functions required to obtain money through the sale of a product or provision of a service.
• All income acquired by an entity is saved, transformed, processed and used in another way to obtain as a result a finished product. 

conclusion

Likewise, if we talk about an organization, it is a process, in each area of the organization, the official in charge of directing it is responsible for internal control before its immediate boss in accordance with the established levels of authority;And in their compliance all the company’s workers participate regardless of their category in charge. 

An understandable security level is provided that is related to the fulfillment of the declared objectives;The conclusion of objectives must be facilitated in one or more of the areas or operations in the entity and must tend to achieve self-control, leadership and strengthening the authority and responsibility of the members.