Accounting for assembling production cost and calculating construction product cost in nam phuong construction joint stock company

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DISCLAIMER
I certify that the attached thesis is my orginal work. No other person’s work has
been used without due acknowledgement. Except where I have clearly stated that I
have used some of this material, it has not been presented by me for examination in
any other course or subject at this or any other institution.
I understand that the work submitted may be reproduced and/or communicated for
the purpose of detecting plagiarism. I understand that should this declaration be
false, I am libel to be penalized under the Duy Tan University regulations.

Signature:

Date


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ACKNOWLEDGMENT
In the market economy, which is very diverse and rich, between theory and
reality there are not the same problem. So, from theory is learned when applying
reality faced many difficulties. The first, myself exposure toreal, so the comments
argue, think still immature, not enough to convince. I look forward to receiving
your opinions teachers and uncles accounting department to make the project
better.
I sincerely thanks for many help and deeply gratitude to leadership of the
company, he departments, directly as everyone in the accounting department has
guide and provide the necessary information to help me complete this project.
I sincerely thanks Mrs. Vo Thi Thuy Tien has guided and helped me a lot in
the work of editing and supplementing the missing information and create
condition for me complete this project.

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ABSTRACT
Companies always want to maximize its profits. To achieve this goal, they
will have to look for ways to save money from production, ultimately reduce
production cost and increase the quality of product. To achieve sustainable growth,
company needs to have a good management system and adding product value
through inbound and outbound logistic, not only identify the construction cost, but
also how and where costs are incurred, how cost relates to constructing activities
and wasted.
Constructing cost accounting and calculating the price of finishing goods
and constructing industry is an important aspect that is concerned by many
companies. In current economic condition, reducing constructing cost and finishing
prices play an important role in increasing profits and cash, which is the amount of
money to ensure the existence and the comparative position for the company in
nowadays intense market.
After the time studying at school and working at Nam Phuong construction
joint stock company. Thesis has defined the content and purpose of the study is
learn about set of manufacturing costs and construction product costs at Nam
Phuong Construction Joint Stock Company. From which proposed the measures
needed to improve the quality, efficiency, finishing cost accounting and calculating
construction product cost at the company.


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DISCLAIMER............................................................................................................i
ACKNOWLEDGMENT.........................................................................................ii

ABSTRACT............................................................................................................iii
INTRODUCTION...................................................................................................1
CHAPTER 1.THEORY BASES ACCOUNTING FOR ASSEMBLING
PRODUCTION COST AND CALCULATING COST OF CONSTRUCTION
PRODUCTS.............................................................................................................5
1.1. The scientific basis of accounting for assembling production cost and
calculating cost of construction products.[1].........................................................5
1.1.1. Characteristics of construction enterprises affect accounting work gathers cost
and construction cost of products..............................................................................5
1.1.1.1. Characteristics of construction products[5].................................................5
1.1.1.2. The tasks of accounting for assembling production cost and calculating cost
of construction products............................................................................................6
1.1.2. Definition and classification construction product costs..................................7
1.1.2.1. Definitions construction product costs........................................................7
1.1.2.2. Classification of construction product costs.................................................8
1.1.3. Definition and classification cost of construction products[3]..................10
1.1.3.1. Definition cost of construction products.....................................................10
1.1.3.2. Classification cost of construction products...............................................11
1.1.4. The relationship between construction product costs and cost of
construction products[2].......................................................................................11
1.1.5. Roles and meaning of accounting for assembling production cost and
calculating cost of construction products[4]........................................................12
1.1.5.1. Role of accounting for assembling production cost and calculating cost of
construction products..............................................................................................12
1.1.5.2. Meaning of accounting for assembling production cost and calculating cost
of construction products..........................................................................................13
1.2. Accounting for assembling production cost and calculating cost of
construction products[1].......................................................................................13

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1.2.1. Accounting for assembling production cost...............................................13
1.2.1.1. Accounting for direct materials cost...........................................................13
Figure 1.1: Accounting for assembling direct materials cost.............................15
1.2.1.2. Accounting for direct labor costs................................................................15
1.2.1.3. Accounting for construction using machines.............................................17
1.2.2. Accounting for losses in construction.........................................................19
1.2.2.1. Damage due to destroy and re-do the work................................................19
1.2.2.2. Losses due to discontinue production.........................................................20
1.2.3. General accounting for assembling costs of production...........................21
1.2.3.1. General accounting for assembling costs of production.............................21
1.2.3.2.Objects and methods for calculating cost of construction products.............22
CHAPTER 2.CURRENT STATUS OF ACCOUNTING PROCEDURE IN
ASSEMBLING PRODUCTION COST AND CALCULATING COST OF
CONSTRUCTION PRODUCTS AT NAM PHUONG COMPANY......................24
2.1. GENERAL ABOUT NAM PHUONG CONSTRUCTION JOINT STOCK
COMPANY (CJSC)...............................................................................................24
2.1.1 The formation and development of the company.......................................24
2.1.2 Functions and duties of the company..........................................................25
2.1.3 Features of the production process of the company...................................25
2.1.4 Organizational structure of the company...................................................27
2.1.4.1 Organization map management apparatus in the company.........................27
2.1.4.2. Organizational Structure.........................................................................27
2.1.4.2. Organizational Structure.........................................................................28
2.1.5. Characteristics production process technology products at NamPhuong CJSC
................................................................................................................................. 30
2.1.5.1. Manufacturing process diagram of Nam Phuong CJSC.............................30
2.1.5.2. The manufacturing process Nam Phuong CJSC.........................................30
2.1.6. Accounting policies applied in the company.................................................31

2.1.7. Accounting form at the company...................................................................31
2.1.7.1. The order for book......................................................................................31


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2.1.7.2. Accounting form.........................................................................................32
2.2. The situation of accounting for assembling production cost and calculating cost
of construction products at Nam Phuong CJSC......................................................33
2.2.1. Objects of accounting for assembling production cost and calculating cost of
construction products at Nam Phuong CJSC...........................................................33
2.2.1.1. Objects of accounting for assembling production cost at Nam Phuong
CJSC........................................................................................................................ 33
2.2.1.2. The method of calculating the cost of products...........................................34
2.2.2. Accounting for assembling direct material cost.............................................34
2.2.2.1. Contents......................................................................................................34
2.2.2.2. Documents used..........................................................................................35
2.2.2.3. Accounting methods....................................................................................35
2.2.3. Accounting for assembling direct labor cost..................................................45
2.2.3.1. Contents......................................................................................................45
2.2.3.2. Documents used..........................................................................................45
2.2.3.3. Accounting methods....................................................................................45
2.2.4. Accounting for assembling construction machines cost................................49
2.2.4.1. Contents......................................................................................................49
2.2.4.2. Documents used..........................................................................................50
2.2.4.3. Accounting methods....................................................................................50
2.2.5. Accounting for assembling general production cost......................................59
2.2.5.1. Contents......................................................................................................59
2.2.5.2. Documents used..........................................................................................59
2.2.5.3. Accounting methods....................................................................................59

2.2.6. General accounting for assembling production cost and calculating cost of
construction products...............................................................................................66
2.2.6.1. General accounting for assembling production cost..................................66
2.2.6.2. Evaluated unfinish production costs in ending of period............................67
CHAPTER 3.SOME FEEDBACK CONSTRUCTION AND SUGGESTION TO
FUTHER

IMPROVE

THE ORGANIZATION

OF ACCOUNTING

FOR


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ASSEMBLING PRODUCTION COST AND CALCULATING COST OF
CONSTRUCTION PRODUCTS AT NAM PHUONG CJSC.................................68
3.1. Reviews and evaluate the accounting for assembling production cost and
calculating cost of construction products at Nam Phuong CJSC.............................68
3.1.1. Advantages....................................................................................................68
3.1.2. Restrict..........................................................................................................69
3.2. Some feedback and suggestion to futher improve the organization of accounting
for assembling production cost and calculating cost of construction products........70
3.2.1. Organizing vouchers....................................................................................70
3.2.2. Improve efficiency work on computer............................................................70
3.2.3. Completing accounting for assembling production cost and calculating cost of
construction products...............................................................................................71

3.2.3.1. Direct materials cost...................................................................................71
3.2.3.3. Construction machines costs......................................................................72
3.2.3.4. General production costs............................................................................72
BIBLIOGRAPHY.................................................................................................74


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INTRODUCTION
1.

Reasons choosing the topic
In the current development process, construction in general and specific

construction in particular have an important role and make a tremendous impact on
economic activity since they use huge social capital to create material facilities for
the national economy. Our country is integrating into the general world economy,
and it is totally converted to open economy, which creates more opportunities for
the company but also numerous challenges. In current economy, businesses have to
assert their prestige, quality and construction cost in order to survive and develop.
To enhance the sense of initiative, creativity and cost management responsibility
requires complete and accurate expenses calculation paid in the manufacturing
process so as to ensure proper and reasonable product price. The question is how to
manage capital efficiently, overcoming wasting, loss of capital in conditions of
production in capital construction spent many stages such as design, project
planning, construction and acceptance…
Nam Phuong Construction Joint Stock Company (CJSC) that has long time
operation experience is integrating into the market, and privatizing so the company
has some specific difficulties about capital, technology, human resources and
employment. Therefore, Nam Phuong has always focused on the management of

production costs to achieve the lower cost than expected, but it will not affect the
quality of the project, so they can improve current business efficiency and meet
high social demanding. The company always follows the motto "the lowest cost, the
highest efficiency". Then, costs information is very important in construction
planning, decision management and cost control.
Thereby, I choose the subject "Accounting for assembling production cost
and calculating construction product cost in Nam Phuong Construction Joint Stock
Company” by my experiences during the time I trained in this company along with
knowledge I have learned at school.


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2.
-

Research objective
Research and clarify the problem about accounting theory of assembling
production cost and calculating product price in construction business

-

Learn about situation of product cost department in Nam Phuong CJSC.

-

Analysis and evaluate the cost decisions in order to give some feedbacks and
suggestions to improve the cost department activity.

3.

Object and scope of research.
- Objects research: The research project gathering on accounting for
assembling production cost and calculating cost of construction products at
Nam Phuong CJSC.
- Research scope :
+ Time: research topic in the period from 05/01/2016 to 22/04/2016 with the
date scope of data used is from 01/01/2012 until 31/12/2015.

4.

The content and research methods
4.1.Research Contents
Research topics includes following contents:
- Rationale and overview on accounting documents gathering production
costs and cost of construction products.
- To reflect the actual situation on accounting set production costs and
product prices.
- The rating and provide solutions for production cost accounting and
product cost of construction.
4.2. Method of study
+ Study method document: By the documents such as books, newspapers,
internet, library, school ... to learn, synthesis of the rationale and methods to
manage production costs.
+ Method is observation, interview: Observe, learn to ask the company
accounting department to collect the data related to the topic.
+ Document collection method: Collect document book report production
costs and in cost of works other related the documents should be handled.

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+ Data Processing Method: Conducting analysis to compare, compare and
synthesize information from the data collected in the company to evaluate
and find a number of measures to complete the work over the next gathering
computing cost and construction cost of products.
There are some other methods such as statistical methods, methods of
accounting ...
5. The meaning of scientic and reality
5.1.The meaning of scientic
Assembling production cost and calculating cost of construction in
general and specific construction are concerned by many traders. The cost of
products is critical in maximizing the profitability of the business. So
gathering production costs and accurately calculate product costs by cost
accounting work have a great effect on the production decisions of the
business. The theme is to contribute to codify the basic theoretical issues of
assembling production cost and calculating cost of construction.
5.2. The meaning of reality
Based on actual survey, analyze, evaluate, specify the need to promote the
advantages and limitations that need research, the recommendations that the
subject made to contribute to the improvement of accountants gathering
spending cost and the cost of products at the joint-stock and commercial
construction Nam Phuong Company. Besides helping the managers have the
correct view of the situation capable business situation of their business to
learn from the research that launched the solution is improving the
technology innovation production, organization methods to save costs using
purposeful, lower cost products to increase the competitiveness of the
business and profit maximization.
6. Structure of the topic
Besides the introduction and conclusion, topics of three chapters:

Chapter 1: Theory bases accounting for assembling production cost and
calculating cost of construction products.


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Chapter 2: Current status of accounting procedure in assembling production
cost and calculating cost of construction products at Nam Phuong CJSC.
Chapter 3: Some feedback and suggestion to further improve the
organization of accounting for assembling production cost and calculating
cost of construction product at Nam Phuong CJSC.


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CHAPTER 1
THEORY BASES ACCOUNTING FOR ASSEMBLING PRODUCTION
COST AND CALCULATING COST OF CONSTRUCTION PRODUCTS
1.1. The scientific basis of accounting for assembling production cost and
calculating cost of construction products.
1.1.1. Characteristics of construction enterprises affect accounting work
gathers cost and construction cost of products
1.1.1.1. Characteristics of construction products
Basic construction material industry is an important industrial nature to
reproduce fixed assets for all sectors of the national economy, creating
material and technical basis for society, increased economic potential
strength, defense, and contributing to the process of industrialization and
modernization of the country. Therefore, good management and correct
accounting of all costs of production and product costs have particularly
important implications. However, construction sector also has its own

characteristics that govern accounting work gathering production costs and
product prices. These characteristics are:
Construction products are constructionsand architectures ... of infrastructure
facilities of the national economy scale and high value complex structural,
long-term use of time ... So , the organization of management and accounting
necessary to have the design estimates, construction is established for each
work, construction items. In the construction and installation process to
regularly compare the performance test estimate cost, find the cause of
excess, loss estimates and evaluate business performance on the basis of
estimates as a measure.
Construction products fixed at the production places also the production
conditions (motorcycles, construction equipment, laborers ...) have to
moving in location of the product. Other hand, construction activities usually
conducted outdoors so influenced by the natural conditions, weather. This


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characteristic makes management work, use and accounting of assets and
materials is complex, loss or damage to increase production costs. Besides,
the production cycles of the construction units are usually very long, regular
expenses incurred while revenue generated only at each given time.
Therefore, the period in the unit cost of construction is usually determined
according to the production period.
Organization of production in the construction enterprises in our country
now popular compact presumptive works, construction items, work mass or
units internal enterprise (and teams, factories ... ) . In the package price, not
only wages but also cover the costs of materials, tools, construction tools, the
department's general expenses contractor.
Prices of construction works do not include the value of equipment itself by

investors brought in to install that only includes the cost of construction
enterprises by spending related to the construction and installation. Prices of
construction work and installation of structures including structural material
value and the value attached devices such as sanitary facilities, ventilation,
heating equipment, air conditioners, transmission equipment. ..
1.1.1.2. The tasks of accounting for assembling production cost and calculating
cost of construction products.
To accomplish the target production cost to lower cost products, the
construction business unit use different measures to produce. Standing on
aspect of management, need to know the source or path of its formation,
content composition of cost, so that knows what the underlying cause, the
specific factors were increases or decreases cost and only on that basis, the
proposed new management measures are needed to limit the impact of
eliminating the negative factors so impact and promote the influence of
positive factors , exploiting the ability, potential in the management and use
of materials, labor and capital.
One of the important measures and indispensable, not to mention measures to
manage accounting tool. So have to calculate accurate and full cost of


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production on the new costs that ensure the use of accounting work in
production management. Therefore the primary task of accounting work
production cost accounting and product cost of construction is: Determine
exactly who gathering production costs and costing object suit conditions the
reality of the business, satisfying the requirements of management in place,
applying the cost method of accounting for production and pricing methods
into a scientific and rational.
Management need to provide timely, accurate and complete data:

- Reflecting the full, accurate and timely manner all expenses actually
incurred for each object.
- Checking the cost of materials, labor, cost of construction machines and
other costs, timely detection of differences compared to the norm, other
expenses unplanned, Clauses damage, loss or damage ... in production from
that proposed measures to prevent and correct promptly.
- Perform analysis on the implementation of cost estimates to produce
recommendations for corporate governance decisions accordingly.
- Organization gathers allocated cost of production of each type of object in
accordance with the accounting cost of production was determined by the
appropriate method, determine the correct value at maturity unfinished
products.
1.1.2. Definition and classification construction product costs
1.1.2.1. Definitions construction product costs
The production process of the construction enterprises is a process that
businesses frequently must invest in different types of costs to achieve the
purpose is to create product corresponding mass, which is the process of
transformation construction materials into products under the impact of
machinery with human labor, or that is the conversion of the material factors
of labor and objects of labor (costs related to reification labor) under the
impact of labor purposes, (labor wasted life) through the construction process


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will become product building. Complete waste are expressed in terms of
some value, which is the cost of production.
1.1.2.2. Classification of construction product costs
The cost of many types of enterprises, many items in the nature, Various
application. So to cater for management work accounting as well as

production costs are classified according to the following criteria:
a. Classification construction product costs according to the economic content
- Cost of materials: This includes the full value of raw materials, of spare
parts, tools and supplies used in production and export business in the
reporting period.
- Labor costs: Includes all expenses paid to employees (permanent or
temporary) on salaries, wages and allowances, allowances of wage nature of
the reporting period before except deduction.
- Depreciation fixed assets: The entire amount of depreciation of fixed assets
used for production activities of the enterprise
- Cost of services purchased from outside: It's all of the money that
enterprises pay for hired services such as electricity, water, telephone postal
money ... for production and business activities of enterprises .
- Other expenses with money: As money for custumer, conference expenses,
advertising ...
b. Classification construction product costs according to the purpose and utility of
cost
- Cost of direct materials: Include the cost of raw materials, materials and
raw materials used for the direct purpose of product.
- The cost of direct labor: Includes salaries and allowances as the salary paid
to the workers directly involved in the production of construction product
- Costs for use of construction machines: Includes the cost of construction
machines to perform the construction and installation mass by machine.
Costs used construction machines including recurrent costs and temporary
costs.


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+ Regular expenses for the operation of construction machines are

costs incurred when using the machine every day, including labor cost
machine control, serve machines, cost of raw materials, materials, tool costs
and tools, cost depreciation, cost of services purchased and other expenses in
cash.
+ Cost temporary costs to support the use of the machine, including
the cost of major repairs and construction machines, the cost temporary
works for construction machines (tents, tents, trays, rails running
machine ... ), maintenance cost, temporary .. the cost of the machine may
arise before then amortized into TK 623. Or arising after but must precalculated into the cost of construction machines in the period (due to
relating to the actual use of construction machinery in the period). This case
must advance an expense (recorded on account 352).
-Construction product cost: The cost reflects serving and management team,
the construction site, including team management staff salaries and
deductions for social insurance, unemployment insurance, labor union fee
payable on the wages of workers management team members, workers
construction machine control, production workers directly under the Labour
list indefinite term business, depreciation fixed assets to operating shared the
lead and other costs related .
This classification helps to provide data for the calculation of the production
of construction product, the analysis of the implementation plan costs and
examine the implementation of the cost of production, the establishment
period after the plan to lower the cost of products.
c. Classification of construction product costs according to the relationship with
product mass of work, production workers in the period
- Variable costs (variable costs): As the cost can vary in terms of total
numbers,
the correlation is proportional to the change in mass produced products
during the period (cost of direct materials, labor costs direct).

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- Fixed costs (the cost) is the cost of not changing the total change when
product production mass during the period (depreciation fixed assets
according to the average method, the cost of lighting .. )
- Cost mixed: As costs which itself consists of elements of variable costs and
fixed costs. If operating at a fundamental level, the cost of the mixture shows
the characteristics of the charge. If the extent that it shows the character of
variable costs. Costs usually mixtures include: general production expenses,
selling expenses, general and administrative costs now ..
Classification on the basis of helping enterprises to plan check costs,
determine breakeven points, analyze the situation cost savings, find
directions improve quality and lower product cost.
d. Classification of construction product costs under the cost method of gathering
and the relationship with the subject costs.
- Direct costs: are costs directly related to the production of a product directly
perform a work service, certain services.
- Indirect costs: Costs related to manufacturing products, more work done for
the service.
e. Classification of production costs according to the content of the cost structure.
- Cost unique: As the costs of a constituent.
- Cost aggregate: As different elements regrouped same uses as general
production costs.
1.1.3. Definition and classification cost of construction products
1.1.3.1. Definition cost of construction products
Construction cost of products is represented by the entire amount of waste
amounts of living labor and reification of labor incurred in the production
process related to the volume of construction has been completed. The nature
of the product cost is the shifting values of the cost elements in product
construction completed. Thus, there are two functional costs mainly offset

the cost and pricing functions.


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1.1.3.2. Classification cost of construction products
Estimated cost: The entire estimated cost to complete the construction and
installation volume. Cost estimates are determined on the basis of the norms
under the approved design and price brackets prescribed basic construction
unit price applicable to each region, each locality, the competent authorities
issued.
The estimate cost = Estimate value - Profit margin
In particular, the value estimates is worth paying for the completed
construction

mass according to the estimates. Value estimates are the basis

for planning the allocation of capital for infrastructure, as a basis for
determining the effectiveness of the design, as well as a basis to examine the
implementation of the plan workload and determine economic performance
of construction enterprises.
Price plans: As prices are determined from the conditions and specific
characteristics of a construction enterprises in a certain period of the plan.
Based on the cost estimates and based on specific conditions, the actual
production capacity of the enterprise business in the accounting period, the
enterprises themselves develop economic and technical norms and determine
unit prices necessary waste, to construction of a planning period.
Plan costs = Estimate cost - Estimate lower cost
1.1.4. The relationship between construction product costs and cost of
construction products

There is a close relationship between production cost of products in
close relationship with each other in the manufacturing process to create
products of construction. They are two different aspects of the production
process. Production costs reflect the consumption of the production cost of
products also reflect the results of production. Production costs consist of
labor costs related to labor and reification life that enterprises spent to
manufacture product. Product price is calculated on the basis of the cost has
been gathering and the number of completed products.


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However, there are manyn differents between production costs and product
prices:
Production costs only those costs incurred in a period without regard
to the product have been formed or not. And the cost of the aggregate
product manufacturing costs related to mass finished product or work
construction items were investors accept acceptance and payment.
Production costs only for a month, a quarter, a year also product costs
related to the production cost of the switch to the previous period, the cost of
production of this period and the cost of production of this period to switch
to subsequent period.
Production costs not associated with the number and categories of
finished product. In contrast, the cost of products is always associated with
the number and categories of finished product.
The relationship between production costs and product prices are expressed
through the following formula:
Total
Cost

=

Beginning
Production cost

Costs in
+

Period

Ending
-

Production cost

1.1.5. Roles and meaning of accounting for assembling production cost and
calculating cost of construction products
1.1.5.1. Role of accounting for assembling production cost and calculating cost of
construction products
Cost accounting organizations precision manufacturing, logical
correctness and full construction cost of the project has great significance in
management work the construction cost. With the recording function
calculates reflection and continuous regular monitoring fluctuations in
supplies and capital assets, accounting uses artifacts and measure the value of
a measure to manage costs.

=

+

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Through data accounting of assembling for construction costs, managers
know the cost and the actual cost of the work or construction items of
production and business processes. Through which administrators can
analyze the implementation of product plan, the use of labor, materials,
capital or wasting savings from which to take measures to reduce prices and
make decisions suit production and business activities of enterprises. Lower
product costs still ensure quality is an important condition for business
enterprises in the market ..
1.1.5.2. Meaning of accounting for assembling production cost and calculating cost
of construction products
Organization costs product costing a reasonable and scientifically sound
great significance in management work expenses incurred in the enterprises,
in each department, each object, contributes to strengthening governance
asset management, labor supplies, capital an effective way to save. Other
hand facilitate save costs and lower product costs.
It is one of important conditions for enterprises to create a competitive
advantage. Besides, the cost of products is also the basis for the
productselling price, the basis of assessment of internal economic
accounting, cost analysis, and also as a basis for determining business results.
1.2. Accounting for assembling production cost and calculating cost of
construction products
1.2.1. Accounting for assembling production cost
1.2.1.1. Accounting for direct materials cost
a. Definition
Cost is direct materials cost of these types of materials constituting the
product, great value and can determine a clear separation for each product.
The cost of materials directly include the costs of the main raw materials,

auxiliary materials, components or separated parts, recyclable materials
participating entities constituting construction product.