Costs of Socialist Enterprises, totality of the material resources (fuel, raw and other materials, equipment, etc.) expended and necessary labour expressed in money form and showing how much it costs an enterprise to produce and sell its commodities. The costs of the production and circulation of commodities are distributed among industrial and trade enterprises. Practically speaking, the activity of industrial enterprises also includes sales operations. Apart from these, trade enterprises carry out functions continuing the process of production. The costs of industrial enterprises therefore include part of the costs involved in circulation, while trade enterprises incur part of the costs involved in manufacturing commodities. Bringing products to the consumer presupposes their transportation, storage, packaging and other operations. Outlays on these operations are a continuation of the process of production in the sphere of circulation, and form additional costs of production. Outlays on operations involved in the change in the form of value and conditioned by the existence of commodity-money relations constitute the net costs of circulation. Costs of socialist enterprises differ in principle from capitalist production costs (see Production Costs, Capitalist), which express the capital expenditures for the means of production and the purchasing of labour power. Capitalist production costs are lowered through the exploitation of the workers, with the objective of obtaining as much profit as possible. Production costs are formed spontaneously, as a result of the fierce competitive struggle between capitalists and the ruination of small and medium entrepreneurs. Costs of socialist enterprises express the socialist production relations between the individual economic links and society as a whole. They stem from the manufacture of products necessary for satisfying the requirements of all society, and bringing them to the consumers. The lowering of these costs results in the extended scale of the surplus product, which belongs to all members of society and is wholly used in their interests. Costs of socialist enterprises are formed in a planned way through the state establishing rates for the expenditure of labour and material resources. Under commodity-money relations, costs of socialist enterprises take the form of the cost of product and the costs of commercial enterprises, that of circulation costs. The planned reduction of costs lowers the expenditure of social labour on the production and circulation of products, and helps lower the prime cost of product and increase the profitability of socialist enterprises.