An estimate is the calculation of the costs of production and sale of goods. It includes, in addition to direct costs for the purchase of materials, wages, as well as indirect (overhead) costs. These are the costs that are allocated to create working conditions. They can not be attributed to the costs of the main production, as they are the key to the proper operation of the organization.
Terminology
All costs of the organization are divided into basic and overhead. The first category includes those associated with the production process: the salary of workers, the cost of raw materials, etc. Overhead costs are the costs of organizing business processes that support production activities: management, organization of production, business trips, employee training, etc. This category includes such non-production costs as compensation for damage from loss, damage to property.
Structure
Overhead costs are the costs of:
- repair work;
- receiving additional education, advanced training;
- payment of fees;
- transport services;
- losses caused by the release of defective products;
- payment for advertising services.
Economists divide overhead costs into four groups:
- general production;
- general business (labor content);
- production;
- other commercial.
The legislative acts of the Russian Federation do not spell out “overhead costs”. This term is present only in medicine, construction, coal industry. Therefore, manufacturing enterprises have to independently distribute and calculate the amount of such costs. Typically, the distribution is carried out by the proportion of each article in the total cost.
Consider the structure of each item of overhead costs.
Administrative expenses
This type of overhead costs consists of the costs of:
- remuneration taking into account the social contributions of the management apparatus, line personnel (site managers, foremen, etc.), persons servicing the management apparatus;
- postal and telegraph expenses;
- the use of computers, computer equipment, which is listed on the balance sheet of the organization;
- topographic work (in the construction industry);
- payment of legal, informational, consulting, audit, notarial and other services;
- purchase of office supplies;
- carrying out repairs;
- payment of travel expenses to employees;
- operation of a company car.
- depreciation on funds used by the management apparatus;
- entertainment expenses;
- payment for bank services.
This is a rough list of costs. Each organization independently forms the structure of the management apparatus.
Maintenance of workers, construction sites
The first category includes costs for:
- staff training;
- deductions for social activities of workers employed in construction;
- ensuring living conditions: depreciation of premises for domestic use;
- salaries of cleaners, locksmiths, electricians and other maintenance personnel;
- maintenance of premises provided free of charge, their repair and maintenance, etc .;
- labor protection: repair and washing of workwear, individual devices;
- purchase of first-aid kits, medicines, medical and preventive services;
- purchase of guides, safety posters;
- contributions to social events;
- for medical examinations, certification of workplaces, the purchase of regulatory documents on labor protection, etc.
This category also includes overhead production costs.
The costs of organizing construction sites include:
- wear of production tools;
- depreciation of temporary structures: pantries, sheds, showers, flooring, stairs, structures, temporary wiring of electricity, water, gas networks;
- formation of reserves for all types of repair work;
- maintenance of fire protection, experimental work, rationalization proposals, geodetic works;
- design of production, maintenance of laboratories;
- improvement of construction sites.
Other expenses
This category includes:
- depreciation;
- loan payments;
- advertising costs;
- taxes and other obligatory payments;
- certification costs.
Payment
To determine the amount of direct costs and overhead, you need to identify the criteria by which the division will be carried out. Basically, experts allocate costs according to functionality and volume of production.
In construction:
- construction work standards (when drawing up an estimate for investments, tenders);
- installation standards (in the preparation of working projects);
- individual standards, etc.
In all other areas:
- In proportion to the wage bill of employees engaged in primary production. Used in enterprises with manual labor.
- In proportion to the volume of sales of products. Used in areas with automated production.
- According to the formula - the ratio of direct costs per unit of production to the total amount of expenses. It is used if direct costs are several times higher than indirect costs.
- Calculation of each item of expenses separately.
The volume of all indirect costs is calculated by the following formula:
= + Taxes + indirect overhead costs.
If an organization produces several types of products, it is better to combine different methods of dividing costs for each item of goods. The developed method for the distribution of overhead costs should be prescribed in the accounting policies of the organization.
Any of the accepted methods should be used according to the following principles:
- all costs are reflected in the accounts of the accounting authority;
- costs are recognized in the period when they were actually incurred;
- cost of production should be accounted for in a separate account;
- overhead costs are taken into account in the formation of estimates for the period.
Percent
The proportion by which the division of direct costs and overhead costs is carried out, each organization determines independently.
This is what the formula looks like according to which the distribution is based on the payroll:
Indirect costs = Total overhead / payroll * 100%.
The construction additionally provides for mandatory standards. For example, installation costs should not exceed 85% of payroll. This restriction does not apply to objects financed from the state budget: the construction of bridges, subways, tunnels, the laying of pipelines, and the strengthening of the soil. However, when calculating expenses for large facilities, as well as at times when industry-wide expenses are distributed within 60% of all costs, the indirect cost coefficient should not exceed 80%.
In general, overhead costs in construction are costs, the volume of which directly depends on the wage fund. They are calculated by the formula:
= Total amount of salary of production workers * Norm of overhead expenses (%) * Decreasing coefficient.
PHOT includes not only salaries, but also the amount of deductions for social events. The cost rate and the reduction factor are regulated by legislative acts for each type of cost.
Consider a few examples of calculating direct and overhead costs.
Example 1
The organization delivers flowers and gifts. The payroll of employees is 29.5 million rubles. in year. In 2017, indirect costs were planned at the level of 89% and amounted to 26.3 million rubles. At the end of the year, the administration decided to reduce overhead costs by up to 63% by streamlining processes and reducing staffing levels. In 2018, the level of fixed overhead costs should be: 29.5 * 0.63 = 18.585 thousand rubles.
Example 2
The total amount of indirect costs of the shoe factory for the year amounted to 26.4 thousand rubles, and the salary of the main workers - 27.6 thousand rubles. The basis for the distribution of costs in the accounting policies of the organization selected payroll of primary production workers. That is, 26.4 / 27.6 x 100 = 95.65% of indirect costs relate to production costs.
Optimization
To reduce the amount of direct and overhead costs, you must first plan them. Drawing up a detailed budget, the subsequent analysis of deviations of actual costs from the planned ones will help management to analyze the cost structure and identify bottlenecks. Another optimization method is revealing hidden reserves and automating routine processes. For example, instead of expanding the accounting staff, you can automate the entry of items and unload, thus, the inventory accountant. You can also transfer the accounting process to outsourcing, that is, service by a third-party organization.
Very often, cost reduction in the future involves capital investment. For example, in the long run it is more profitable to purchase premises and equipment than to spend money on rent. Also, optimization methods include a competent choice of suppliers of materials, bulk purchase, which allows you to use discounts.
Sometimes department heads simply don’t see cost reduction options. In such situations, it is worth considering the proposals of employees of a lower rank. For example, issue an order that during the quarter, each employee makes a proposal to reduce costs in his department. Such a strategy will identify bottlenecks and hidden reserves in each unit.
Rationing Examples
Let us analyze the process of rationing the expenses of the organization, the volume of which is 16.871 million rubles.
Administrative cost items:
- ZP admin staff + insurance premiums - 10 million 258 thousand rubles.
- Communication services - 1 million 124 thousand rubles.
- Consulting, legal services - 560 thousand rubles.
- Stationery - 512 thousand rubles.
Total: 12 million 454 thousand rubles.
General cost items:
- Employee training - 210 thousand rubles.
- Labor protection - 78 thousand rubles.
- Hygiene products - 38 thousand rubles.
Total: 326 thousand rubles.
Organization of business processes:
- Protection - 1 million 943 thousand rubles.
- Fire safety - 755 thousand rubles.
- Auto repair - 515 thousand rubles.
- Fuel - 878 thousand rubles.
Total: 4 million 91 thousand rubles.
Total expenses: 16 million 871 thousand rubles.
At the end of 2018, management will be able to compare actual costs with the planned ones, analyze possible excesses and make a decision to minimize costs.
BOO
As mentioned earlier, all costs included in the estimate should be reflected in the accounting. Accounting for overhead costs is carried out on account 26. Consider the main postings:
- DT26 KT70 - accrual of salaries to administrative staff.
- DT26 KT71 - the issuance of accountable amounts.
- DT26 KT69.1 (69.3) - insurance premiums of the Social Insurance Fund (MHIF).
- DT26 KT60 (76) - the cost of services.
- DT26 KT10 - accounting of materials for household needs.
- DT26 KT21 - write-off of semi-finished products in production.
- DT26 KT02 - OS depreciation.
- DT08 KT26 - construction costs.
- DT20 KT26 - write-off of production costs.
- DT28 KT26 - registration of defective products.
- DT76 KT26 - insurance.
- DT86 KT26 - targeted financing.
The medicine
The cost of medical services is an assessment of the materials used in the process, operating systems, fuel, labor and other costs. By purpose, costs are divided by economic elements. So, the cost of services in state institutions includes labor costs with all deductions, travel expenses, food expenses, purchase of medicines, depreciation deductions.
In addition, there is a division of expenses into distribution costs, direct, general and overhead costs. These are costs that do not have a direct relationship with individual species that are allocated to cost. These, in particular, include the costs of operating the OS, production, employee training, etc. Direct costs are directly related to the provision of services. This is the salary of employees involved in the provision of services, the cost of materials, food costs, etc. Institutions also spend money on managing, organizing processes, and delivering services to consumers. These amounts form the general economic and distribution costs.
The distribution of overhead costs can be carried out in proportion to direct costs, revenue, another indicator. The last category in trading and manufacturing enterprises includes profit. But state institutions are not created to generate income, but to implement social tasks. Therefore, it is possible to evaluate the results of the work of state structures by:
- The volume of quality services provided. The more services were provided, the more needs were met, the more the medical institution made a profit.
- Labor intensive services. It is expressed in the duration of the process of its provision, the involvement of a large number of employees, the amount of materials. It also leads to a gap in the time of receipt of income. However, the complexity, albeit indirectly, but affects the overall result.
Now let's look at examples of how the division of overhead costs into fixed and variable by new indicators is carried out.
Scope of Services
The medical institution provides several types of services. Based on the results of the monthly work, statistics are generated on the volume of work performed for each study (analysis, procedure, etc.) in each unit. Although all types of services are equated with each other, their valuation is significantly different.
Example
Data on the volume of services provided by a medical institution for a month:
- Item A: 20pcs - 11.1% (20/180 x 100).
- Item B: 50 pcs. - 27.8% (50/180 x 100).
- Product B: 110 pcs - 61.1% (110/180 x 100).
- Total: 180 pcs. goods.
According to the results of the month, the institution received an invoice for payment of electricity services in the amount of 15,000 rubles. Given the subsidies received, 7500 rubles. organizations will have to cover at the expense of their income. Overhead costs will be paid in the following proportions:
- Service A: 7500 x 0.111 = 832.5 rubles.
- Service B: 7500 x 0.278 = 2085 rub.
- Service B: 7500 x 0.611 = 4582.5 rubles.
Labor input
This indicator means the time spent on the production of a unit of production / provision of one service. The value is measured in UET (conventional units of labor input). In dentistry, the procedure for calculating labor input is prescribed in the Instruction of the Ministry of Health of Russia No. 408 of 2001. For other areas of medical services, the procedure for calculating labor intensity is not legally established. In practice, the method of timing and expert evaluations is used for this purpose.
The first method involves calculating the time in minutes for the provision of services. To conduct an experiment, you must have at least three specialists and one assistant. An observation map is made for each doctor. It records the time spent on the provision of the service, taking into account all the necessary elements: from examining the patient to performing an x-ray, from dismantling the seal to installing the prosthesis, etc. The experiment ends after 10 operations by each doctor: first aid, performing a certain operation, pin manufacturing, etc.
The complexity is calculated by the formula:
T1 = T / 30 minutes, where:
- T is the total time spent on all operations.
- T1 - the time required to complete one action.
YET = T1 / 20 minutes.
Additionally, rest time is taken into account (within the 4-hour shift):
- 10 minutes. - for personal needs;
- 10 minutes. - to rest;
- 10 minutes. - to the morning meeting;
- 10 minutes. - for sanitary work.
Accordingly, if for a shift (six and a half hours) the doctor needs to perform 5 procedures with a complexity of 5 UET, then the rest remains: 2 minutes x 4 = 8 minutes.
At least 10 specialists with a certificate for the provision of certain types of services, knowledge of a specific technology should participate in the method of expert evaluations. Each of them should have at least 5 years of experience in the specialty, and at least 12 months in a particular industry. The essence of the experiment is as follows. Doctors are provided with a clear description of the case. They coordinate it with personal assistance experience and make adjustments. Based on these data, an independent expert calculates UET according to the formulas presented earlier.
Example
Variable overhead costs in a medical institution are transferred to the cost of the services provided in the proportions:
- Service A: 30 UET - 33.3% (30/90 x 100).
- Service B: 50 UET - 55.6% (50/90 x 100).
- Service B: 10 UET - 11.1% (10/90 x 100).
Total: 90 UET.
At the end of the month, the institution received an invoice for payment of water supply services in the amount of 9 thousand rubles. This amount is transferred to the cost of services in the following proportions:
- Service A: 9,000 x 0.333 = 3 thousand rubles.
- Service B: 9,000 x 0.556 = 5 thousand rubles.
- Service B: 9,000 x 0.111 = 1 thousand rubles.
Rate
The cost structure of medical services is different. Some of them do not use consumables. At the same time, laboratory and radiological services are resource intensive. When choosing a base for classifying costs, you need to consider the features of the provision of services. , . , . , . , . - .
Example
:
- : 250 . - 19,7 % (250 / 1270 100).
- : 400 . - 31,5 % (400 / 1270 100).
- : 620 . - 48,8 % (620 / 1270 100).
: 1270 .
32 . . :
- : 19,7 % - 6300,8 .
- : 31,5 % - 10 080 .
- : 48,8 % - 15 619,2 .
Conclusion
– , . , . , .