Friends of steemit all greetings of success always for all of you wherever you are...

A very interesting thing when we talk about the daily challenge about the challenge entitled: SLC | S21W6 | Costos para emprendedores - Estructura de costos, I invite fellow steemians @f2i5, @sriiza and @seribubulan to join this very interesting challenge.

What is a cost structure, and what is its importance to entrepreneurship?

---

image source

Cost structure is a very important thing in a company or an institution that produces, sells goods based on important things. In this case, every company must be able to determine the amount of costs in running its business or institution, all of which want a profit. For we must realize that an organization requires structured costs to run its business. Various types of costs that might arise when a business or a business is run.

The importance of cost structure.

Any work in an organization must be based on the pattern of preparing a cost structure. Here are some reasons why a cost structure is very important.

Filling a budget deficit: an integral part of a business is the formation of a budget structure. And if there is a fluctuation where the budget is reduced or in the term deficit. In this case it can be said that there is something that makes a business or business cannot run properly. So it's good that a company that is run should not occur in the name of a budget deficit but there should be something that can convey the budget in running the business venture to organize as well as possible the name of the budget structure for running a business is the most important thing for everyone who wants to run a business.

Execute good planning: Every business must have a cost structure so that the business can play a very important role in order to implement a plan properly. Understanding a cost structure says that a cost structure is very useful or helps a business or plan to be better.

Make the right decision: Making the right decision is what will make the business more successful. For this reason, a decision can change the image of the organization if it is based on a well-established cost structure. Decisions made based on the cost structure are more likely to be accepted and become more successful.

Accrual accounting: In this case, of course, there are incidental costs that we must incur to advance an activity or business entity. It should be understood that cash calculations must be made in which there are no gaps or differences in the cost structure. Incidental costs or all other cost items will depend on the cost structure that will be carried out based on the plan that has been prepared.

Give an example of a business that uses the cost structure method described; explain your answer.

---

Image source

Among the businesses that use cost structures. I can mention or describe a business that a family member of mine is currently managing. Where a cost structure calculation is done and designed as well as possible to buy or issue operational and production costs from the business he runs. Of course, all of that is designed as well as possible so that he does not experience a budget deficit or in other words a loss. So yes, it reduces the depreciation or waste of all the items needed in running the business and of course this has been compiled and can be accounted for in a very detailed cost structure.

The amount of cost required to produce a product is planned as accurately as possible. Even with regard to all activities carried out, it is always based on a budget structure in accordance with the plans that have been made. The price of the product is determined by calculating the costs that have been incurred and of course also the selling costs and production costs so that a profit of 10% of the total production cost is obtained. The amount of dividends is highly dependent on the quality and quantity of production in which there are production costs.

Most of the production costs are materials that must be purchased on the market but unintentionally the price of goods can be higher than the structured price so that every production must rely on breakthroughs that make or can reduce production costs. But will get a balanced income this often happens especially in sugar and eggs.

For this reason, in every production cost that has been structured as well as possible, it is necessary to consider the principle that the goods we buy in the market can sometimes go up. With very careful planning as a businessman, production costs can be reduced and of course the raw materials purchased remain in accordance with the best planned structure.

The point is that every thing we do in running a business planning must be considered as well as possible. Basically, all costs or income and expenses must be recorded, whether they are in accordance with the previously prepared plan.

What are the elements of a cost structure? Give an example

---

Image source

There are several types of cost structures. All costs are well itemized in this structure. As for what is included in the cost structure as mentioned below

Routine expenses.

When talking about routine costs, of course, we are talking about costs that we have to spend every time. These costs must be incurred within a certain time with a very small possibility of increase or decrease.

Labor wages: Of course in a company must pay the wages of the workers this wage point can be paid periodically, either daily weekly or monthly so a businessman must pay the cost of work this cost is basically also called a fixed cost.

Rent of premises: The rent of the premises is something that must be considered for the implementation or running of a business properly. And of course the payment pattern can be monthly or yearly based on the initial agreement and this fee is pre-structured. And of course this fee is a fixed cost.

Monthly loan installments: In addition to the two things we have mentioned above, another very important thing is the monthly loan installments. In developing a business we need money that we can apply for credit to banks or other institutions that want to help the business we are developing. Of course, after we borrow some money we need to pay back the money we have borrowed since every month according to the amount of the loan we applied for. Must be included in fixed costs. Because basically the cost of renting a place is the most important thing for the running of the business we run.

Variable costs

Variable cost is a cost that can change constantly, the point of this cost can change at any time, which of course differs from one period to another. Costs included in variable costs include

Raw material costs: The cost of raw materials to produce goods can go up or down. This will certainly vary from time to time. The price of the product can fluctuate down or up because it is based on the price of the product or raw materials that have not been processed. And it can also be caused by the demand for these goods.

Electricity bills: Electricity is a very important requirement in running a business. So this electricity needs to be paid on time at least at the beginning of the following month. And of course this electricity bill can vary so it is called a variable cost.

Advertising costs: Actually this cost is never questioned, because a product that has been sold in the market and many buyers then advertising is not important. This becomes an important thing if we want to sell our products to a very wide area. So we need to spend advertising costs that sometimes vary according to the area we want to reach.

Create the cost structure of a business dedicated to baking cakes. The business produces 5 cakes per day and expects to earn a total profit margin of 25%.

In this case I try to explain a plan to make one cake first based on the direction of the task. The costs that must be incurred for one cake are:

Material name	weight	price
Flour	200gr	0.16
Sugar	200gr	0.25
Liquid Vanily	1sdt	0.063
Salt	1/4 tsp	0.025
Pandan paste	1sdm	0.095
Edible Oil	150ml	0.19
Baking Powder	1sdt	0.13
SP(Cake Emulsion)	1sdt	0.19
Eggs	5	0.63
Total cost	1,733

The total cost required to make one cake is 1,733, so the cost required to make five cakes is 5 x 1,733 = 8,655.

Since we produce 150 cakes in a month, the cost we need is 30 x 8,655 = 259.95.

So the expected selling price of the cake to get a profit of up to 25% is 8,655 x 25% = 2,16625, then the profit earned is 150 X 2,16625 = 324, 9735.

So the profit earned from selling the cake is

Selling price	324.9735
Price of ingredients	259.95
The profit	64.9875

This is a profit calculated in detail based on production in one month.

Thanks to all steemit friends who have stopped by my post. Greetings @muzack1.

cc :
@adeljose
@yolvijrm