Variety method is a relatively simple calculation method. Generally, a lot of simple production (one-step production) is adopted.

Such as the production of tap water and the exploitation of raw coal and crude oil. This kind of production is often a single variety, closed production, and there is generally no product at the end of the month. Even if there are in-process products, the quantity is very small, so there is generally no need to divide production costs between finished products and in-process products.

The sum of the production expenses incurred in the current period is the total cost of finished products. Divided by the output, the unit cost of the product can be calculated. Under the simple method, all costs incurred in production are direct costs and can be directly included in the cost of the product.

Because the simple method does not have the problem of dividing the cost of finished products and products in process, the calculation method is relatively simple, so it is called the simple method.

Extended data:

The characteristics of the variety method:

(1) The cost calculation object variety method takes the product variety as the cost calculation object, sets the product cost subsidiary ledger, collects the production expenses and calculates the product cost. If an enterprise produces a variety of products, it is necessary to set up product cost ledgers for each product as the object of cost calculation.

(2) Cost calculation period Because mass production is uninterrupted and continuous, it is impossible to collect production expenses and calculate product costs according to the production cycle of products, so we can only calculate product costs on a regular and monthly basis, so as to match the sales revenue and product production costs of this month and calculate the profit and loss of this month.

Therefore, the product cost is calculated regularly on a monthly basis, which is consistent with the reporting period and inconsistent with the product production cycle.

(3) Whether the production cost needs to be allocated between finished products and products depends on the actual situation.

If a large number of simple production uses the variety method to calculate the product cost, because simple production is a production step, the whole production process is completed. So there are generally no products at the end of the month (or at any time).

Therefore, when calculating the product cost, there is no need to allocate production expenses between finished products and products.

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