1. Determine the cost accounting object: generally, the product is the cost accounting object, but the service can also be the cost accounting object as needed.

2. Determine the cost items: usually including direct materials, direct labor and manufacturing expenses. Direct materials refer to raw materials that constitute product entities, such as flour and rice. Direct labor refers to the wages and welfare expenses of workers directly engaged in product production; Manufacturing expenses refer to indirect expenses incurred for the production of products, such as equipment depreciation expenses and repair expenses.