| Sumario: | The objective of the research is to determine the effect of costs on the economic and financial situation of a furniture production company in the year 2021, to achieve this, it is centered on a quantitative approach, applied type developing a non-experimental design of cross-sectional cut with a descriptive scope, which had as a sample a furniture production company in Villa El Salvador in the periods 2020 - 2021, to which the technique of documentary analysis was applied and, through the data collection sheet; also the analysis of the financial statements of the company was performed. Among the main results, it was observed that the company has been applying an empirical cost system during the period 2020 and 2021; on the other hand, from the analysis of the financial statements it was observed that in the year 2020 there was greater profitability than in the year 2021. Concluding that, the proposal of an absorbent production cost system will allow evidencing the excess general expenses and establishing the production costs, achieving a positive effect in the economic and financial situation of the company in a determined period after its implementation.
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