Methods for calculating the cost of production. Fixed costs per unit of output

The cost of production is an important economic indicator that reflects the efficiency of production activities. Therefore, it is so important to be able to correctly carry out calculations and draw informed conclusions. Let us consider in more detail the main types, methods of calculation.

Essence

Costing is the process of grouping all costs associated with the manufacture of products by economic elements. This is a way to calculate costs in monetary terms. The main methods of calculation: boiler, alternating and custom. All other methods of calculating cost is a combination of the above methods. The choice of a particular calculation method depends on the industry specifics of the organization.

An equally important issue is also the choice of the object of calculations. It depends on the entire system of managerial and analytical accounting, for example, on the division of costs into direct and indirect. The objects of calculations are expressed in:

• natural units of measurement (pcs., kg, m, etc.);
• conditionally-natural parameters, which are calculated by the quantity of the type of product whose properties are reduced to the main parameters;
• conventional units are used to measure goods consisting of several types; one of the species is taken as a unit for some reason, and the calculation coefficient is established for the rest;
• cost units;
• time units (e.g. machine hour);
• units of work (e.g. ton-kilometer).

Costing Tasks

They are as follows:

• competent substantiation of objects of calculations;
• accurate and reasonable accounting of all expenses;
• accounting for the volume and quality of manufactured products;
• control over the use of resources, compliance with the approved amounts of costs for maintenance and administrative management;
• determining the results of work of units to reduce costs;
• identification of production reserves.

Principles

Methods for calculating the cost of production - this is a combination of the costs of manufacturing products, by which you can determine the actual cost of a particular type of work, or its unit. The choice of one or another method of calculation depends on the nature of the manufacturing process. The application of calculation methods intended for mono-production organizations at enterprises producing non-uniform products distorts the data on the profitability of products and “spreads” the costs. When calculating the costs of industrial production from the amount of expenses excluded costs at the end of the year.

Costing methods allow you to:

• to study the process of forming the cost of specific types of goods;
• Compare the actual costs with the planned;
• compare production costs for a particular type of goods with the costs of competitors' products;
• justify product prices;
• make decisions on the manufacture of cost-effective products.

Expenditure

The total cost of manufacturing products includes the costs of:

• purchase of raw materials;
• purchase of fuel, including for technological purposes;
• salaries of workers and accruals for social needs;
• general production, household expenses;
• other manufacturing costs;
• business expenses.

The first five items of expenditure make up production costs. Selling expenses reflect the amount of costs for the sale of goods. These are the costs of packaging, advertising, storage, transportation. The sum of all these items of expenditure is the full cost.

Types of expenses

The classification of cost accounting methods involves the division of costs into groups. Direct costs are associated with the production process of the product directly. These are the first three items of expenditure listed. Indirect costs are allocated to the cost of products through certain ratios or percentages.

These two groups of expenses can vary greatly depending on the specifics of the activity. In monoproduction, direct costs include absolutely all costs, as the result is the output of one product. But in the chemical industry, where a gamma of other substances is obtained from one raw material, all costs are indirect.

Variable and fixed costs per unit of output are also distinguished. The second group includes expenses, the amount of which remains virtually unchanged with fluctuations in the volume of output. Most often these are general production and household expenses. All costs, the volume of which increases with the growth of production, refer to variables. This includes the amount of funds allocated for the purchase of raw materials, fuel, salary with accruals. The specific list of cost items depends on the specifics of the activity.

Boiler (simple) method

This is not the most popular calculation method, because it allows you to display information about the amount of costs for the entire production process. This calculation method is used by single-product enterprises, for example, the coal mining industry. In such an organization there is no need for analytical accounting. Cost is calculated by dividing the total cost by the volume of production (in the example considered, the number of tons of coal).

Custom method

In this method, the object of the calculation is a specific production order. The cost of production is determined by dividing the amount of accumulated costs by the number of manufactured units of goods. The principal feature of this method is the calculation of costs and financial results for each order. Overhead costs are accounted for in proportion to the distribution basis.

A custom costing method is used for single or small-scale production, in which the manufacturing process lasts longer than the reporting period. For example, in engineering plants that create rolling mills, power excavators, or in the military-industrial complex, where processing processes predominate and rarely repeated products are manufactured. It is permissible to use this calculation scheme in the manufacture of complex or products with a long production cycle.

Cost accounting is carried out in the context of final products (completed orders) or intermediate products (parts, assemblies). It depends on the complexity of the order. The first option is used if the object is products with a short production cycle. Then all expenses are included in the cost. If we are talking about the manufacture of intermediate products, then the cost is determined by dividing the sum of the costs of the order by the number of identical products.

Process costing method

This method is used in mining (coal, gas, mining, oil, logging, etc.) industries, in the energy sector, and in the processing industries. All of the above organizations are characterized by a massive type of production, a short production cycle, a limited range of products, one unit of measurement, the absence or insignificant amount of wages. As a result, manufactured products are simultaneously objects of accounting and calculation. Cost accounting is carried out throughout the production cycle and at a specific stage. Upon completion of the process, all costs are divided by the number of units of production. So the cost is calculated.

Alternate way

Based on the name of this method, it is clear that the object of the calculations is the process, the result of which is the release of intermediate or final products. This calculation method is used in mass production, where products are made by processing raw materials at several successive stages. Some product elements can only go through a certain number of limits and be released as intermediate products. A prerequisite is a phased production process, divided into repeated operations.

A feature of this method is the formation of costs for each completed redistribution or for a specific time period. Cost is calculated by dividing the amount of expenses accumulated during the redistribution or time span by the manufactured quantity of products. The sum of the costs of manufacturing each part is the cost of finished products. Direct costs are calculated by redistribution. To differentiate the costs between semi-finished products and SOEs for each order, the residues of the WIP at the end of the month are evaluated.

The alternate calculation method is very material intensive. Therefore, accounting should be organized in such a way as to control the use of raw materials in production. Most often, for these purposes, the calculation of the yield of semi-finished product, marriage and waste.

Normative method

This method provides a preliminary calculation of the cost of each product based on current estimates. The latter are recounted in each period. Separately allocated costs for norms and deviations with identifying the causes of the latter. Cost is calculated as the sum of regulatory costs, changes in these standards and deviations. The standard method of calculation allows you to calculate the cost before the end of the month. All costs are allocated to responsibility centers and compared with actual costs.

ABC method

Calculation algorithm:

• The entire organization process is divided into operations, for example, placing an order, operating equipment, readjusting, quality control of semi-finished products, transportation, etc. The more complex the organization of work, the more functions should be allocated. Overhead costs are identified with activities.
• Each work is assigned a separate cost item and unit of measurement. In this case, two rules must be observed: the ease of obtaining data, the degree to which the treated cost figures correspond to their actual purpose. For example, the number of concluded orders for the supply of raw materials can be measured by the number of signed contracts.
• The unit cost is estimated by dividing the sum of the costs of the operation by the amount of the corresponding operation.
• The cost of work is calculated. The sum of costs per unit of output is multiplied by their number by type.

That is, the object of accounting is a separate operation, costing is a type of work.

The choice

Costing methods are part of the organization of production, accounting and workflow at the enterprise. The choice of one or another calculation method depends on the characteristics of the enterprise: industry, type of products, labor productivity, etc. In practice, all these calculation methods can be applied simultaneously. You can calculate the cost of orders by the ostentatious method or in parallel using raw material consumption rates. The selected method should be written in the order on accounting policies.

Example

The company manufactures three types of products. It is necessary to develop a planned cost price if it is known that the monthly production volume is: for product A = 300 pcs., Product B = 580 pcs., Product C = 420 pcs.

Whatever calculation methods are chosen, you need to determine the amount of costs per unit of product (table 1).

Table 2 presents indirect costs.

We calculate the amount of expenses using various methods of costing.

Option 1

We determine the amount of direct costs for each product, based on the data in table 1:

Product A: (1 * 0.5 + 2 * 0.9) * 300 = 690 rubles / month.

Product B: (2 * 0.5 + 4 * 0.9) * 580 = 690 rubles / month.

Product C: (3 * 0.5 + 3 * 0.9) * 420 = 690 rubles / month.

The total amount of direct costs is 4702 rubles / month.

We calculate the amount of labor costs for each type of product per month. To do this, you need to multiply the complexity, tariff rate and volume of production:

Product A: 3 * 4 * 300 = 3600 rubles / month.

Product B: 2 * 3 * 580 = 3480 rubles / month.

Product C: 1 * 2.5 * 420 = 1050 rubles / month.

The total amount of expenses is 8130 rubles.

The next stage is direct costing, i.e., the calculation of the amount of direct costs.

Define the amount of indirect costs per unit of product:

• Production: 1270/1300 = 0.98 rubles / unit.
• Realization: 1530/1300 = 1.18 rubles / unit.
• Administrative: 1186/1300 = 0.91 rubles / unit

Based on the previously presented calculations, we determine the cost of manufacturing products:

This costing example is based on costing by dividing costs by direct and indirect.

Option 2

Consider the example of costing, in which indirect costs are distributed depending on the complexity of the production process.

The calculation of direct costs has already been carried out as part of the previous example. We calculate the total complexity of the process:

Product A: 3 * 300 = 900 hours.

Product B: 2 * 580 = 1160 hours.

Product C: 1 * 420 = 420 hours.

Define the distribution rate of indirect costs by dividing the sum of costs by the volume of production:

• production: 1270/2480 = 0.51
• sales: 1530/2480 = 0.62
• administrative: 1186/2480 = 0.48

Define indirect costs by multiplying the complexity of a unit of product on the previously calculated accrual rate.

Based on the previously presented calculations, we determine the cost of production:

Profitability

Production profit is the income that remains from revenue after deducting all expenses. If the prices of goods are set regulated, then this indicator depends on the manufacturer’s strategy.

In modern conditions, the objects of direct regulation at the legislative level are gas prices for monopolists, electricity, freight rail transport, and important medicines for life. From the side of local authorities the object of direct regulation is a wider list of goods. It is determined depending on the social tension in the region and the possibilities of budgets.

If prices are set free, then the amount of profit is calculated at the rate of return.

Example

The cost structure per thousand units of products includes:

1. Raw materials and materials - 3 thousand rubles.
2. Fuel, including for production purposes - 1.5 thousand rubles.
3. Salary of workers - 2 thousand rubles.
4. Salary charges - 40%.
5. Production costs - 10% of the salary.
6. Household expenses - 20% of the salary.
7. Transportation and packaging - 5% of the cost.

You need to calculate the cost using the normative method of costing and determine the price per unit of product.

At the first stage, we calculate the amount of indirect costs per 1000 units of products:

• payroll: 2000 * 0.04 = 800 rubles .;
• production costs: 2000 * 0.01 = 200 rubles .;
• household expenses: 2000 * 0.02 = 400 rubles.

Cost is calculated as the sum of expenses for all items of expenses, except for transportation costs: 3 + 1.5 + 2 + 0.8 + 0.2 + 0.4 = 7.9 (thousand rubles).

Packaging costs: 7.9 * 0.05 / 100 = 0.395 thousand rubles.

Total cost: 7.9 + 0.395 = 8.295 thousand rubles .; including per unit of product: 8.3 rubles

Suppose that the profit per unit of product is laid at 15%. Then the price is: 8.3 * 1.15 = 9.55 rubles.

Margin method

An equally important indicator of production efficiency is marginal profit. He counts on the enterprises in order to optimize production - selection of assortment with greater profitability. With a full load of equipment, the calculation should be carried out taking into account the maximization of profit.

The essence of the method is to divide the costs into the costs of production and sales, fixed and variable. Direct costs are those that vary in proportion to the growth in the volume of services. . , .

- :

= – .

Example

, 160 . ., - 120 . . , 1 .

:

5 : (55-50)*(160-120) = 200 . .;

10 : (40-50)*(160-120) = -400 . .

, , , . .

It is also necessary to take into account the limitations in the application of this method. This will avoid planning errors. The decision to increase the production of profitable and reduce the output of non-profitable products should be based not only on the calculation of marginal income. Plans for the development of the product range in the future, increasing production capacity to meet demand, improving the cost management system - all these factors of business valuation are no less important.