Dear friends wherever you are, I hope you are always in good health. This time I will follow a lesson from Mr. @yolvijrm and Mr. @adeljose, whose material title is Costs for entrepreneurs - Introduction to cost. I also invited Mr. @muzack1 Mr. @candra8692 and Mr. @anroja to participate in this lesson.

What are costs and how important are they to entrepreneurs?

^Soure
As far as I know, cost is the source of everything that a business or a person needs to spend to keep the business running-such as food ingredients in a restaurant, electricity, rent, and employee salaries. For an entrepreneur, understanding these costs is key. It helps them set the right and fair price, make smart investments, and ultimately make the desired profit. If you don't know about these costs, then entrepreneurs may set their prices too low which will result in losses or they may set them too high which will result in losing customers.

Define the difference between costs and expenses, giving examples through real cases.

Let's take a look at Costs and expenses which may sound the same, but it's important to know that there is a difference between the two.
Cost is the total money or resources used for the purpose of creating a product or service. So let's think of it as a complete package of expenses, which includes materials, and labor, and utilities. Whereas expenses are simply payments or money that we spend. These expenses can be something specific, such as machinery or even new equipment.

^Soure
Let's look at a simple case example. Let's imagine a coffee shop where costs include coffee beans, milk, cups, barista wages, electricity and so on. All of these will be additional costs when making each cup of coffee. As for what is an expense here, if the coffee shop owner buys a new espresso machine, then the money spent on this purchase is called an expense. Although this is a one-time purchase, it will affect the coffee shop budget.

What are the benefits of good costing?

Well friends, if we become an entrepreneur then the benefits for us to set good costs are as follows.

• When we have managed costs well, the first thing we get is to find ways to reduce waste and will also increase profits in the business we run.
• We will also easily set a good and competitive price for our products.
• With correct and good costing, we will also make the right decisions in order to expand and be able to buy new and better equipment.
• Not only that, we can certainly keep our business financially healthy and competitive.
• Furthermore, we will also be able to track costs precisely and accurately which will be a game-changer for any other business, no matter how it wants to grow in the future.
• And there are many other things that we can't possibly mention here.

How do you determine your business costs? If you are not an entrepreneur, how do you do it?

When we have run a business, the thing we need to know is the cost calculation. So to calculate the cost of our business, of course we have to do several things such as:

• Make a list of all costs, the point is to include small examples of direct costs such as materials and labor, as well as indirect costs such as rent and utilities.
• It is necessary to separate fixed costs and variable costs, where in fixed costs we will remain the same, for example in rent, while in variable costs we can fluctuate with the level of production, a simple example is materials.
• Next, we will choose a method, which is a popular way to calculate how much cost includes job costing and that is for special jobs, now this costing is based on activity, or on process costing.

^Soure
Now if we are not an entrepreneur, of course we will first try to research the business according to what we want to run. We need to find out how much general costs are in the industry. Then we also need to see how much they spend on materials, on rent, and also on other basic costs. Then this kind of thing will certainly benefit us on a sufficient estimate to be able to understand how the business can work financially.

source :

• https://dac.telkomuniversity.ac.id/pengertian-biaya-fungsi-jenis-jenisnya-kenali-dalam-akuntansi/#:~:text=Dengan%20kata%20lain%2C%20biaya%20adalah,dari%20proses%20produksi%20hingga%20pemasaran.
• https://faspay.co.id/id/blog/strategi-penetapan-harga-pengertian-cara-manfaat-tujuan-dan-lainnya/
• https://runsystem.id/id/blog/cost-analysis/

Best Regard
@walictd