Implementation of the functional method of accounting costs in the accounting practice of organizations concerning the production of ceramic sanitary-technical products

In today’s business environment, organizations face various challenges every day that require an operational solution to remain competitive. For example, the structure of production costs in many modern companies has changed significantly, since production and non-production overheads have increased relatively, and direct labor has declined sharply due to progressive automation. Despite these changes, the traditional strategic management accounting system remained unchanged throughout the entire period. In the traditional cost accounting system, direct labor and machine hours were maintained as the main production bases. Both of these bases are quite closely connected with volume production, and therefore their use is based on the assumption that overhead costs depend on the volume of production. In addition, the frequent linking of non-production overheads to output in proportion to their cost remains a widely used unification method. The validity of this practice is doubtful, since overhead costs often may not be closely related to the costs of their production. In this regard, the article considers the cost accounting algorithm by the functional method. on the example of organizations involved in the manufacture of ceramic sanitary products.