Cost classification: Activity quality cost is divided into four categories, namely prevention cost, appraisal cost, internal loss cost and external loss cost. Cost items are also called "production expense items". Classification of industrial production expenses included in product cost according to economic use. Generally divided into:

1, raw materials. Refers to the raw materials and main materials that constitute the main entity of the product, as well as auxiliary materials and outsourced semi-finished products that contribute to the formation of the product.

2. Fuel and power. Refers to the fuel and power directly used in product production.

3, production workers' wages and employee welfare fund. Refers to the wages of employees directly involved in the production of products and the employee welfare fund extracted according to the prescribed proportion.

4. Waste losses. Refers to the net loss of unrepairable waste and the repair cost of repairable waste in the production process.

5. Workshop expenses. Refers to the expenses incurred in organizing and managing workshop production.

6. Enterprise management fee. Refers to the expenses incurred in organizing and managing the production of the whole plant.