The cost management approaches in trade industry


Introduction. The current state of financial and economic government institutions negatively affects  Ukrainian budget execution, and the general trend of deterioration in the standard of living of the people, in general leads to low level of functioning of the enterprise and  their competitiveness, especially in such industry as trade.

Aims and tasks. In the conditions of an unstable political and economic situation in commodity market and services to overcome disproportions between operating profit  of some commodity groups of trade enterprise and its added value which indicates depreciation of the capital  invested by owners not only doesn't provide compensation of investments, but also leads to losses because of inflationary processes therefore there is a need for the mutual integration of approaches of management of expenses for assessment.

Results. The practical value of application of a method of Activity-based costing (ABC) and Economic Value Added (EVA) in management of expenses not only in creation of a system of accounting of expenses, but also and predictions through new approaches for the analysis for identification of unproductive fields of activity in value creation of a product is proved, including positively influences the growth of business activity for trade enterprises.

In the field of innovative approaches the balanced system of indexes (BSI) and EVA methods harmoniously are integrated in processes of costs planning, management of them at the level of departments and in general are distributed among operation processes to responsible persons, which has a positive impact on maximizing capital cost of the enterprise.

Conclusions. Application of methods of cost management as uniform system provides chance to distribute expenses on commodity groups and to define  goods which create added value gives the chance to settle the impact of minimum change of influence of a factor  on commodity turnover level due to decrease of unit  cost in life cycle of a product through the analysis of a point of profitability for increase in investment attractiveness.


expenses, costs, cost management, ABC costing, methods of management of expenses, added value, factors.


1. State Statistics Service of Ukraine (2019). National accounts. Retrieved from:
2. Radionova, N. Y. (2016). Methodological Foundations for Strategic Management Accounting at Enterprise Level. Scientific bulletin of the National Academy of statistics, accounting and audit, 3, 57–64 [in Ukrainian].
3. Melnik. Yu. M., & Savchenko. O.S. (2011) Problems of application of the balanced system o findicators on domestic enterprises. Marketing and management of Innovations, 1, 192–203 [in Ukrainian].
4. Govorushko T., & Kulynych Y. (2012). Scientific and theoretical problems of indicator «Economic Value Added» in the appraisal of property of an enterprise. Scientific works of National University of Food Technologies, 45, 122–127 [in Ukrainian].
5. Skrypnyk, M. I. (2009). ABC costing. The bulletin of Zhytomyr State Technological University, 3 (49), 176–179 [in Ukrainian].
6. Markus O. (2015). Application of ABC-costing Calculation of the Cost Products. Economic journal of Lesia Ukrainka Eastern European National University, 1, 64–71 [in Ukrainian].
7. Ivakhiv Yu., & Spilnyk I. (2008). Method of ABC-analysis: feasibility of application. Economical analysis, 2(18), 170–172 [in Ukrainian].
8. R. Justo, J.O. De Castro and A. Maydeu-Olivares (2008). Indicators of entrepreneurship activity: some methodological contributions, International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, 6(4), 604–621.
9. Hughes, S. B. & Paulson Gjerde, Kathy A. (2003). Do Different Cost Systems Make a Difference? Scholarship and Professional Work, Business, 11, 22–30.
10. Voynarenko, M., Dykha, M. V., Mykoliuk, O., Yemchuk, L. & Danilkova, A. (2018). Assessment of an enterprise’s energy security based on multi-criteria tasks modeling. Problems and Perspectives in Management, 16(4), 102–116.
11. Kostetska, N. (2011). Factor approach in formulation of cost minimization strategy of an enterprise. Galitsky economical bulletin, 1(30), 159–166 [in Ukrainian].
12. Yankovyi, O., Goncharov, Yu., Koval, V., & Lositska, T. (2019). Optimization of the capital-labor ratio on the basis of production functions in the economic model of production. Naukovyi Visnyk Natsionalnoho Hirnychoho Universytetu, 4, 134-140.
13. Kaplan, R.S., & Norton, D.P. (1996). The balanced Scorecard: Translating strategy into Action. Boston (Ma., USA): Harvard business press.
14. Deloitte (2019). Global Powers of Retailing. Retrieved from https://www2.
15. Retail market in Ukraine (2019). Ey.Com. Retrieved from:
16. Shim, J.K., & Siegel, J.G. (2009). Modern Cost Management and Analysis. 3rd Ed. Barron's Education Series.
How to Cite
Kvach, I. The Cost Management Approaches in Trade Industry. Economics Ecology Socium 2019, 3, 35-43.