The cost of goods sold is. Full cost

The price of any product depends on its initial cost, which is calculated using a special formula, taking into account a number of costs.

The cost of a product is the amount that was spent on its production. It includes the expended natural resources, raw materials, materials, fuel, energy, transportation, wages for production workers and other costs.

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The cost can be divided into the following types:

1. The definition of full cost includes all costs, including commercial costs.
2. The concept of marginal cost corresponds to the cost of one unit of production.

The cost of finished products is calculated taking into account the total cost of production and it happens:

1. Workshop. Includes the costs of all stages of production.
2. Production. Calculated by adding the shop floor and total costs of the plant.
3. Complete. It takes into account the costs not only for production, but also for transportation and sale.

The classification of cost is extensive, it can be divided into many types depending on the characteristics of production and methods of selling goods.

Calculation methods

There is no single methodology for calculating the cost. Depending on the type of product, its production and many different factors, the cost of production can be calculated in different ways.

Most often, the following costs are taken into account in the calculations:

• the cost of entrepreneurial activities of the manufacturer;
• the total cost of production and sales;
• the cost of preparing documentation for the goods;
• other expenses stipulated by the legislation;

Costs should be taken into account in the reporting period corresponding to the time of production of the goods, and not to the time of payment of all costs.

When calculating the price of a product, the cost calculation is performed. The calculation is made according to the quantity of products produced (in meters, pieces, or, in case of one-time production, a hundred meters or pieces are taken as a unit of measurement).

Costing items should reflect all stages of production, for example:

• the cost of raw materials and materials;
• fuel and energy costs;
• wages for production workers;
• total costs for the production process:
• expenses for the economic needs of the enterprise;
• business expenses;
• other costs;

All these factors are expressed in certain amounts, and taking into account them, a formula for calculating the cost is compiled.

General view and decoding

As mentioned above, there is no single calculation formula; when calculating the cost of a particular product, various factors can be taken into account.

Here is a general formula for calculating the total cost:

• PS \u003d Total Cost of Production + Cost of Selling Goods / Calculation Unit;

The cost is calculated in order to:

1. Assess profitability.
2. Set the wholesale and retail price for the product.
3. Assess the efficiency of resources used in production.
4. Calculate the potential profit of the enterprise.

The production process also includes such types of costs as fixed and variable, which must be reflected in the cost of goods. Moreover, fixed costs exist for the enterprise even when it does not produce anything.

In general, the formula for calculating the cost price looks like this:

• PS \u003d (Total production costs + Costs of selling goods) / cost unit;
• PS - total cost of production;

Total cost of production- this is the total cost of raw materials, energy, wages of workers and other costs that the production process required.

Costs for the sale of goods- the amount spent on storage, transportation, documentation for the goods.

Calculation unit- the quantity of goods, expressed in pieces or meters.

Formula calculation example

Using Excel

There are methods for calculating the cost using tables in Excel. Let us give examples of calculations.

Option 1

In cases where an organization is not able to calculate the exact cost of production, a rough estimate can be made. The planned quantity of goods and the planned costs are entered into the table and division is performed. The amount that will turn out as a result will be the unit of costs.

Example 1:

Option 2

After the company has allocated the amount necessary to produce 1 unit of goods, it is necessary to calculate the cost price by adding up the variable and fixed costs. The amount of variable costs depends on the quantity of output, and fixed costs do not change.

Example 2:

Reduction methods

Production Cost Reduction Scheme

There are methods by which the cost of goods can be reduced. This can be done by conducting a detailed analysis of the total cost of all production costs. In this case, you can plan measures to reduce the price of goods and calculate its optimal value.

If the analysis is carried out qualitatively and taking into account all the factors necessary for an objective assessment, then there are all opportunities to adjust the production process.

According to experts, one of the most effective ways to reduce the cost of goods is to increase.

Labor productivity- is the amount of work for a certain amount of labor costs in a given period of time.

The following factors influence labor productivity:

1. The level of qualification of employees involved in the production of products. It is better to replace untrained employees with low qualifications with qualified specialists. This will reduce the number of production workers, and hence the cost of paying wages, which also affect the cost of production.
2. Conditions of production and organization of the work process. At a manufacturing enterprise, which is equipped with modern high-tech equipment, energy costs will be significantly lower than where obsolete models of equipment are used. In addition, modern equipment will reduce the number of defects, and therefore the cost of raw materials and materials in the manufacture of goods. .

There is another way to reduce the cost of production - its essence is to cooperate and expand the specialization of the manufacturing enterprise. This will reduce the cost of administrative, management and other activities of the enterprise.

Savings on the production of goods will also allow such a measure as analysis, making the necessary changes and improving the ways in which the fixed assets of the enterprise are used.

It is also possible to revise the management structure, the staff of administrative and executive employees in the direction of reducing their number. Since the costs of the management activities of the enterprise also affect the cost of the product and are taken into account in its calculations, reducing staff and replacing quantity with quality will also lead to cost reduction and cost reduction.

In conclusion, we can say that by applying the formula for calculating the cost and taking into account the result obtained, it is possible to objectively assess the profitability of production and the main indicators of the company.

The result of the calculations is an indicator of how efficiently the resources of the enterprise are used and what results are obtained by measures to improve production conditions and introduce new technologies.

In the process of accounting and analysis, the relevant structural divisions of an economic entity calculate indicators that characterize the efficiency of the enterprise. The calculated indicators also characterize the level of efficiency of managing an economic entity, the ratio between the profit received and the costs incurred. One of these indicators is the cost of goods sold.

The concept of the cost of products that are sold

In a general sense, the cost of production is understood as the totality of all costs associated with the production and sale of products, and these costs are presented in monetary terms. In practice, there are cases when not all products that were produced during the reporting period were immediately sold in a given period of time. In this case, the cost of goods sold is calculated as a set of costs relative to the products that were sold in this reporting period.

The formula for calculating the cost of products that are sold

In order to determine the cost of products sold during the reporting period, it is necessary to calculate:

• the full cost of manufactured products for the reporting period;
• carry-overs of those products that have not yet been sold.

To determine the carry-over balances of products that have not yet been sold, they find the difference between the balances of finished products at the beginning and end of the reporting period.

Cost of goods sold - formula:

C/C real. prod. \u003d C \ C floor. prod. + Per. rest. GP,

where C \ C floor. prod. - indicator of the total cost of production, rub.;

Per. rest. GP - carry-over balances of finished products, rub.

What is included in the total cost of products sold

Business entities incur costs:

• on raw materials, materials necessary for the production of a particular type of product;
• to wages for those workers who are directly involved in the production of a certain type of product (with deductions for social needs);
• depreciation expenses;
• costs associated with the management and organization of both production units and the entire business entity;
• those costs associated with the preparation for the production of new types of products;
• costs associated with the sale of finished products;
• other expenses of an economic entity.

The total cost of goods sold is a set of all costs incurred by an economic entity for a specific period of time in the production of this product and its sale, excluding the balance of products that are not sold for a certain reporting period. The calculated indicator is qualitative, characterizing the level of use of the resources available to the economic entity in the production and sale of products.

Cost of sales: calculation example

Let us give an example of calculating the cost indicator, provided that the following initial data for the enterprise for the reporting period are given:

• the total cost of production is 678,589 thousand rubles;
• balances of finished products at the beginning of the reporting period - 56,435 thousand rubles, at the end of the period - 32,567 thousand rubles.

First of all, carry-over balances of finished products are calculated as the difference between the corresponding indicators at the beginning of the reporting period and at the end of the reporting period: 56,435 - 32,567 = 23,868 thousand rubles.

Then the cost of products sold during the reporting period is calculated according to the above formula: 678589 + 23,868 = 702,457 thousand rubles.

It can be concluded that business entities are interested in accurately determining the cost of their products, the calculation of which has its own characteristics.

The cost price is one of the most important indicators of the efficiency and profitability of the store. It can be calculated in several ways using different formulas. In our article, we will give examples and tell you how to determine this indicator correctly.

How to calculate the cost

The cost of products sold, goods, work performed, services rendered is the total of all costs incurred by the store in order to manufacture and sell.

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How to calculate the cost? To do this, you need to sum up all the costs and expenses of the store. The full cost price is the totality of all expenses in monetary terms, all the costs incurred by the store to carry out its activities.

In general, in the economy, including the microeconomics of each store, costs are divided into types depending on the methods of their structuring, on how these costs change under the influence of various factors of commercial activity.

Costs are divided by economic elements and by cost items:

1. material costs. In the context of retail, this is the cost of products purchased for resale;
2. Depreciation of fixed assets;
3. Wage;
4. Social contributions to off-budget funds. It used to be the ESN;
5. Other taxes, for example, transport tax, property tax;
6. Rent;
7. Third-party company services;
8. Telephone and Internet ;
9. Other expenses.

The total cost is found by simply adding up all the costs indicated in these paragraphs.

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Costs in the cost of production can be considered by calculation items. The cost of calculation items is calculated per unit of manufactured products.

Another way to share costs is by how they behave depending on changes in commercial, production, and management factors. In this context, all costs of the company, including the store, are divided into two groups:

• fixed costs;
• variable costs.

We calculate the cost using an example. Video

The cost of goods in the store

The cost of goods in retail trade may consist of the following elements:

1. The purchase price of goods in the cost of production. This is the cost at which stores buy goods from suppliers, wholesalers, manufacturers for further retail sale;
2. Shipping costs;
3. Renting a retail outlet - if the store is not owned by the entrepreneur;
4. Depreciation of fixed assets in the cost of production. This is commercial equipment, computer equipment. Everything that costs more than 10 thousand rubles;
5. The salary is constant. This is the salary of management, accounting, permanent salaries of sellers and sales managers, service personnel;
6. Salary is variable. These are percentages of sales, concluded contracts, which are received by sales managers depending on the effectiveness of their work;
7. Payroll deductions. These are contributions to off-budget funds, the former UST - to the Pension Fund of the Russian Federation, to the Social Insurance Fund, to the Compulsory Medical Insurance Fund;
8. taxes;
9. Services of third parties - transport services, Internet, communications, including mobile;
10. Other expenses. This usually includes what is not included in the above large groups of expenses: stationery, other expenses.

Costs in retail trade in the cost of production specified in paragraphs 1, 2 and 6 are variable. This means that they change, the amount of costs varies depending on the volume of trade: the more you sell, the more you spend on buying goods.

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The rest of the costs are fixed. They do not change depending on the volume of trade: no matter how much you sell - little or a lot - the cost of rent is the same for you, the salary for the store director, along with accountants and cleaners, you pay the same, for communications, the Internet and stationery you spend as much same.

The Business.Ru service will generate reports on the total balances and cash flow of your store, as well as help you compile detailed sales analytics, which will allow you to correctly calculate the cost and profitability of goods in your store.

Cost calculation methods in trade

In retail, it is very important to use one of the three costing methods. Here we mean not the full cost, but the cost of goods.

Namely: at what price to write off the cost, write off the costs of goods purchased for further resale. All other costs mentioned above are simply added to the cost of goods.

There are three methods for determining at what price to write off goods purchased for sale:

• At the cost of each unit of goods;
• at an average cost;
• According to the FIFO method (FIFO: First In First Out - First In, First Out).

Cost of each unit method

It is used in those areas of trade when they sell some piece and expensive goods. It can be cars, jewelry.

This method is used where accuracy is needed in determining the cost, as well as in determining the financial results from each individual sale.

When applying this method, the cost is deducted from the cost for which each individual product was purchased, each individual product, which was then sold.

Average cost method

It lies in the fact that the cost (actual cost) of the goods sold is written off to the costs on a monthly basis not at the price of each individual purchase, but at the arithmetic average, that is, at the average cost. This method is used more often than the first.

The formula for calculating the average cost is as follows:

Average cost =(cost of balances at the beginning of the month + cost of the next delivery) / (quantity of goods at the beginning of the month + quantity of goods in the next delivery)

Example of calculating costs using the average cost method

Let's say you own a butcher shop. At the beginning of the month, you still had sausages in the amount of 5 kilograms at 270 rubles per kilogram (supplier price).

Within a month, you received new sausages in two batches: 7 kilograms for 270 rubles and 7 kilograms for 240 rubles. During the reporting month, you sold 17 kilograms at a selling price of 300 rubles per kilogram.

Let's find the cost of sausages sold per month using the average cost method:

• Balance at the beginning of the month:
  5 kg. * 270 rub. = 1350 rubles.
• First delivery cost:
  7 kg. * 270 rub. = 1890 rubles.
• The cost of the second delivery:
  7 kg. * 240 rub. = 1680 rubles.
• Average cost of sausages:
  (1350 + 1890 + 1680) / (5 +7 +7) = 4920 / 19 = 259 rubles.

Since you sold 17 kilograms at 300 rubles per kilogram in a month, that is, for 5100 rubles (17 * 300), then you write off 17 kilograms at the average price to the cost of sales:

17 * 259 = 4403

5100 - 2590 = 697 rubles.

FIFO Method

This is the most popular costing method used in the trade. It consists in the fact that the cost price is first written off the goods at the price of the first delivery (previous), then at the price of the next one, and so on.

This method may also be more profitable for the store. Let's consider an example, based on the previous sausage data for your butcher shop: you have a balance of 5 kg. 270 rubles each, and two deliveries - 7 kg. for 270 rubles. and 7 kg. for 240 rubles. and sale of 17 kg. 300 rubles each

Example of FIFO cost calculation and financial results:

When you sold 17 kilos, you sold the rest first:

5 kg. for 270 rubles. = 1350 rubles.

Then you sold the first batch:

7 kg. for 270 rubles. = 1890 rubles.

Then you sold 5 kilograms from the second batch:

5 kg. for 240 rubles. = 1200 rubles.

Thus, the total cost (actual cost of sales) of 17 kilograms of sausages sold during the month will be:

1350 + 1890 + 1200 = 4440 rubles . (actual cost of sales)

Profit from the sale of sausages per month will be:

5100 - 4440 \u003d 660 rubles.

Full cost are the costs of producing and selling products.

The total cost consists of the production cost and selling expenses.

Selling expenses are associated with the sale of products. These include: the cost of packaging, packaging, loading, unloading, transportation, etc.

When planning the cost of production, three main calculations are performed:

1. Calculation costing;

2. Calculation of cost estimates for production;

3. Calculation of production cost reduction.

Calculation are the costs in cash associated with the production and sale of a unit of output.

Such a unit in the confectionery industry is 1 ton of products.

Costing is compiled for each product range in order to determine the profitability of the production of a particular product. A cost estimate is made. The essence of this method is that all costs are divided into: direct and indirect.

Direct costs include costs that are calculated according to established standards, for example: the cost of raw materials, materials, fuel, electricity, packaging, etc.

Indirect costs include such costs that are difficult to calculate according to the norms and they are calculated relative to the established base - these are general production costs, general business expenses, and commercial expenses.

The methodology for calculating indirect costs is as follows: general production costs, general business expenses are calculated as a percentage of wages; selling expenses are calculated as a percentage of the production cost.

In the calculation of cost items are: fixed and variable.

fixed costs do not depend on the amount of output. These include: general production and selling expenses.

variable costs depend on the amount of production. These include all other costing items.

Estimated production costs- these are the costs associated with the release of gross output, taking into account work in progress.

The cost estimate is compiled according to aggregated economic indicators, regardless of the purpose of the costs and the place of their use. This allows you to determine the total need of the enterprise for raw materials, the total cost of wages, the total need for fuel, electricity, the total amount of depreciation and other expenses.

In the calculation, wages are indicated in separate articles for production workers, for the administrative apparatus and non-administrative apparatus, and the general article "Wages of the PPP" is indicated in the production estimate.

The production estimate includes the following cost elements:

1. Raw materials and basic materials;

2. Auxiliary materials;

3. Fuel part;

4. Electricity from outside;

5. PPP salary;

6. Payroll charges;

7. Depreciation charges;

8. Other expenses;

There are two methods for calculating the reduction in the cost of production:

1. Calculation of cost reduction of comparable products;

2. Calculation of cost reduction of incomparable products.

Comparableproducts These are products that were produced last year and are planned to be produced next year.

Incomparable products- This is a product that is produced for the first time.

When producing comparable products, the percentage of cost reduction is planned according to the formula

where T - commercial products, rub.;

C - cost, rub.

At each enterprise it is necessary to reduce the cost of production, because. profit increases, and conditions are created to reduce the price of goods, so it is necessary to know the sources and factors of cost reduction. Sources of cost reduction include:

Saving raw materials and materials;

Decreased TZR;

Reducing fuel and electricity;

Growth in labor productivity;

Reducing indirect costs.

The main factors for reducing the cost of production are:

1. Implementation of scientific and technical progress;

2. Improving the form of organization of production;

3. Improvement of the main and auxiliary production;

4. Improving the organization of service jobs;

5. Introduction of advanced management methods;

6. Effective use of advanced management methods;

7. Development of quality products;

8. Improving the planning of the enterprise;

9. Market expansion

2 Calculation of the cost of 1 ton of products

2.1 Calculation of the quantity and cost of raw materials and materials per 1 ton.

The initial data are in table 1.

Table 1

Any enterprise that produces any goods or provides any services has a business plan. This is an annual program that contains a description of the company's activities, the planned volume of output, revenue, profits and costs. In turn, it is the costs that give a person an idea of ​​what

By introducing new technologies, using the operation of machinery and equipment, burning fuel and consuming materials, the enterprise spends huge amounts of money on production. It is they that underlie the cost price - the main indicator on which the work of the company is based.

The analysis of this indicator allows you to find the volume of production at which the output will be profitable. The cost basis is fixed (in no way dependent on the volume of output) and variable (may vary depending on the volume indicators of the output of goods) costs. So what is the cost price and what is included in it?

This indicator is considered in the context of costing items, as well as the costs used to manufacture products. The calculation is based on the following costs:

Including the cost of such components as raw materials, parts, components, etc.;

Depreciation of fixed equipment and fixed assets;

Wages of employees involved in the production process;

Deductions from accrued wages: the so-called pension, social and insurance contributions;

Other costs.

A more complete picture, telling what the cost is, is represented by the industry departments of the enterprise. Each department or workshop involved in the production of products has its own highly specialized costs. Thus, they include expenses for general business and general production needs, for defective products and returnable waste, for the remuneration of employees and deductions from it, for purchased components and services of third-party organizations, as well as other expenses. All these components are included in the structure of such a concept as shop cost.

Each department, each shop and each ancillary production, directly or indirectly involved in the production of products, affects the cost price underlying the price of the goods. Therefore, the effective work of each participant in the production process allows minimizing the cost of sales, increasing revenue and, as a result, the profitable operation of the company depends on these factors.

What is All costs incurred by the enterprise for the sale of products, including services of third parties, transport and others, are included in this indicator. The realized production gives one more such indicator as the cost price of the realized production. The basis of this indicator is the cost of production of goods, marketing and management.

Thus, the cost price is the value expression of the sum of all costs incurred by the enterprise in the production, storage and marketing of products. A is the main and main indicator of the activity of the organization on which it affects.