Composition of the total cost. Calculation of the cost of finished products: methods and recommendations

Theoretically, it is quite acceptable to use the term “costs” as a synonym for cost. Both are the valuation of all invested funds necessary for the manufacture and marketing of products. They directly affect the profit of the enterprise: when they grow, the profitability of the business falls.

What it is?

The total costs of an enterprise consist of two parts:

• costs directly for production – production cost;
• costs of selling finished products – cost of sales.

These two indicators add up to full cost, which is also called average. It is calculated for the entire volume of production and sales. If it is divided by the number of units manufactured, the costs for an individual product will be determined. They determine the production costs of each subsequent unit. This marginal cost.

Production costs comprise all expenses for organizing the production process. Mainly they include:

• costs of raw materials, materials used;
• payments for fuel, electricity;
• salaries of all employees of the enterprise;
• deductions for the repair of fixed assets and their maintenance;
• costs of insurance, storage of goods in warehouses;
• depreciation of fixed assets;
• mandatory contributions to various state funds (pension, etc.).

Sales costs include costs at the stage of marketing finished products. This is first of all:

• expenses for packaging finished products;
• transportation costs for delivering them to the distribution warehouse or to the buyer;
• marketing costs and other expenses.

Calculation methods

There are many ways to calculate the indicator. Each one approaches a specific enterprise taking into account its production technology, specifics, and characteristics of the products produced. Accounting selects the most suitable option.

For ongoing cost analysis, the two most common methods are used. All the rest are their varieties.

Process method

It is used in industries with a massive continuous type of production: primarily by energy, transport, and mining industries. They are characterized by the following factors:

• Limited nomenclature.
• Products have uniform properties and characteristics.
• Short production cycle.
• Insignificant volumes of work in progress, semi-finished products or their complete absence.
• The object of calculation is the final product.

In the absence of finished product inventories, as, for example, in energy enterprises, it is convenient to use a simple calculation formula:

C=Z/X, Where

• C – unit cost of production;
• Z – total costs for a specific period;
• X is the number of units of production produced during the same period of time.

Normative method

Used in serial and mass production with constantly repeating operations. There, every month, quarter, year, the ratio of standard and planned costs is checked, and if they do not correspond, appropriate adjustments are made.

Cost standards are usually developed based on data from previous years. The advantage of the method is to prevent the waste of financial, material and labor resources.

Custom method

Here, the object of calculation is a separate order or work that is performed to meet the customer’s requirements. This method is used:

• in single or small-scale production, in which each unit of expenditure is different from all others made previously;
• in the manufacture of large, complex products with long production cycles.

It is used by enterprises in heavy engineering, construction, science, furniture industry, and repair work. For each individual order, costs are individually determined using a costing card, which is constantly adjusted in connection with current changes in any costs.

The disadvantage of this method is that there is no operational control over the level of spending, and the complexity of inventory of work in progress.

Calculation method

It is selected by each enterprise depending on the characteristics of its production and product. For example, in a confectionery factory, when choosing a costing method, the shelf life of the products and the associated energy costs are of paramount importance. For a furniture manufacturing company, the most important factors are the high costs of materials, as well as the transportation of large goods.

Costing is a statement for calculating costs for an individual unit of production. In it, all expenses for homogeneous elements are grouped into separate items, of which the most important are:

• Payment for the energy and fuel needed to produce.
• Cost of semi-finished products supplied from other enterprises.
• Depreciation of equipment, wear of fixtures, tools.
• Salaries, social benefits for employees.
• Total production costs for the workshop.

The itemized calculation method is used to calculate the so-called shop cost. To do this, the sum of all costing costs should be divided by the number of units of the product produced. This, in fact, will be the production costs of each individual product.

They are inversely related to production volumes. The more products a workshop produces, the lower the production costs per unit product. This is the essence of the so-called economies of scale.

Transverse method

It is acceptable for production with several completed stages of processing of raw materials and materials. At each stage, semi-finished products are produced, which are used internally or sold to other enterprises.

Costs are calculated at each stage, but there is only one indicator for the finished final product.

Average method

Its essence is in calculating the share of specific costing items in the structure of the total cost. This allows you to determine how changes in certain costs affect the efficiency of the entire production.

If, for example, the share of transport costs is the highest, then their variability will have the greatest impact on the overall final result.

You can get detailed information about how to calculate the indicator from the following video:

Cost of services

The calculation of an indicator in the service sector can include many variable economic factors. The final service product does not always require costs for materials, components, and transportation to the point of consumption. Often its profitability depends on the availability of clientele and their orders.

The cost of a service is all the contractor’s expenses without which the work cannot be completed. They include:

• Direct costs that depend directly on the performance of the service. This is primarily the salary of the staff.
• Indirect costs are management salaries.
• Constant payments that do not depend on the volume of services performed. These include utility bills, depreciation of equipment, and contributions to the pension fund.
• Variable expenses - for example, the purchase of materials - are directly dependent on the number of services provided.

The need to analyze the indicator

Cost calculation is mandatory, since on its basis the following is carried out:

• planning work and monitoring the implementation of plans;
• preparation of financial statements;
• analysis of the economic efficiency of the enterprise and all its structural divisions;
• compiling data for financial reporting on finished and sold products and work in progress.

Without calculation it is impossible to make effective management decisions. On its basis, a competitive price for the manufactured product and a successful assortment policy are developed, which will ensure high production profitability and business profitability.

Cost is an indicator of the quality of the production process. Gives an idea of ​​the company's strengths and weaknesses. The cost price is formed on the basis of many factors: quality of goods, production volumes, equipment included in the company’s assets.

What is cost?

Cost is the totality of all costs for the production and sale of goods.

The indicator is necessary for managers to fully manage the company. It is a mandatory component of management accounting. Based on the cost price, decisions regarding pricing are made. The indicator affects the following points:

• company profitability;
• profit of the organization.

IMPORTANT! A low cost with a high markup is a guarantee of the company’s profit and its successful development. But it's not that simple. If the markup is too high, demand for the product will plummet. The organization cannot compete with other companies, since the latter offer attractive prices. Another problem is reducing costs in the production of goods. Reducing costs is often accompanied by a decrease in product quality, which is unacceptable.

Types of cost

Types of cost are classified depending on the sources of expenses:

• Shop. Combines the costs of the workshop and other production structures during production.
• Production. Determined based on the totality of workshop costs and target manufacturing costs.
• Full. Includes all costs, including production costs, target factors, and sales.

The workshop cost, as is obvious, will be the lowest. It is advisable to identify all types, as they give an idea of ​​the costs at all stages of manufacturing a product.

Cost components

The cost is formed from the following costs:

• Material. Includes the cost of material for production and energy.
• Wage. It includes wages for all employees of the enterprise, and not just the workers who directly manufacture the goods.
• Contributions for social needs. Includes expenses for pension contributions, social insurance, etc.
• Depreciation of fixed assets. This category includes deductions related to equipment wear and tear.
• Other costs. Costs of selling goods, transporting them, marketing costs.

Expenses can be classified depending on the purpose of the costs and their sources. The list includes:

• Raw materials.
• Fuel, production consumed.
• Deductions for wear and tear of equipment.
• Basic and additional part of the salary.
• Business trips.
• Expenses incurred in connection with the work of third parties.
• General production expenses.
• Expenses for social procedures.
• Administrative costs.

Sources of cost formation may vary depending on the type of production.

Cost calculation

Let's consider the main components of the calculations:

• Cost of a commodity batch.
• Product unit cost.
• Expenses per ruble of goods.

The components can be taken from income and expense reports, cost estimates for the manufacture of goods, and appendices to the accounting report. Let's look at the tools used in calculus:

• Conditional variables. Spending is constant. They include depreciation charges, salaries, expenses for renting retail and industrial premises.
• Variables. May vary depending on product release.

The calculation will depend on the tool used.

Example of calculating total cost

To calculate the full cost it is required

1. expenses for creating a business (authorized capital, etc.) are divided into the billing period;
2. then add general production expenses to expenses.

Based on these calculations, you can obtain data on the average cost per unit of goods.

EXAMPLE. A million rubles were spent on opening the organization. The full payback period is 60 months. Monthly expenses amount to 16,667 rubles. Total monthly expenses, which include salaries, rent, and legal support, are equal to 150 thousand rubles. The company produces 1,000 units of products per month. Average monthly production expenses are 500,000 rubles. The calculations will be as follows:

16,667 + 150 thousand + 500 thousand / quantity of products in units. Calculation result is 667 per unit of production.

Why do you need to plan your cost?

Planning and studying cost is necessary for the following purposes:

• Improving company profitability by identifying areas where costs can be reduced.

  For example, a company needs the services of a lawyer. The specialist worked on the company's staff, which entailed high costs. However, it was decided to enter into an agreement for legal support with the company.

• Increase in on-farm savings.
• Increase in production volumes.

It makes sense to analyze cost indicators for different periods. Indicators should be viewed in the context of product quality. Cost reduction is not always good. If this process is accompanied by a decrease in the quality of goods, then this is a negative sign.

What is required to independently calculate the cost?

When making calculations, you need to remember the following nuances:

• It is important to keep records of UTII and simplified tax system. This is necessary not only for calculating taxes, but also for analyzing economic activities.
• Cost accounting must be carried out in blocks. It is required to separately record costs for basic activities and management costs.
• After calculating expenses, it is necessary to transfer indicators in the context of goods sold or produced. This measure is necessary to analyze actual profitability.

What will be the result of correct calculations? This will allow you to find indicators of the real profitability of the enterprise.

Are cost indicators and production volume related?

It is difficult to give a definite answer to this question. The relationship will be determined by specific gravity indicators. These are costs that are not directly related to production. Let's consider a household example. A person grows cucumbers on his own plot of land. There is no need to pay taxes. Indicators of general business costs are minimal, and therefore the volume of goods and cost will not influence each other.

Summarizing
Cost is an extremely important indicator that directly affects the quality of business management. This indicator affects pricing and profitability. The cost price is determined based on accounting documentation. That's why it's so important to keep records. This is needed not for the tax and regulatory authorities, but for managers. Objective indicators allow us to determine objective profitability and profitability. The manager’s task is to reduce costs, but not reduce the quality of the product.

Example 1. Within a month, finished products were accepted for accounting at the warehouse, the planned cost of which was 75,000 rubles. The cost of products sold at planned prices was 50,000 rubles. The total amount of expenses recorded in the debit of account 20 “Main production” during the month is 90,000 rubles.

A) The balance of work in progress at the end of the month is 18,000 rubles.

Actual cost of finished products: 90,000 – 18,000 = 72,000 rubles.

The amount of deviation of the actual cost from the planned one: 75,000 – 72,000 = 3,000 rubles.

The actual cost is less than the planned cost, so the amount of savings must be reversed.

The amount of deviation attributable to products sold: (3,000: 75,000) x 50,000 = 2,000 rubles.

Actual cost of products sold: 50,000 – 2,000 = 48,000 rubles.

Balance of finished products in the warehouse (at actual cost): 72,000 – 48,000 = 24,000 rubles.

B) The balance of work in progress at the end of the month is 12,000 rubles.

Actual cost of finished products: 90,000 – 12,000 = 78,000 rubles.

The amount of deviation of the actual cost from the planned one: 78,000 – 75,000 = 3,000 rubles.

The actual cost is higher than the planned cost, so additional entries need to be made for the amount of overrun.

The amount of variance attributable to products sold:

(3,000: 75,000) x 50,000 = 2,000 rubles.

The amount of deviation attributable to the balance of finished products in the warehouse: (3,000: 75,000) x 25,000 = 1,000 rubles.

Actual cost of products sold: 50,000 + 2,000 = 52,000 rubles.

Balance of finished products in the warehouse (at actual cost): 78,000 – 52,000 = 26,000 rubles.

Example 2. The balance of finished products in the warehouse at the beginning of the month is 60,000 rubles at planned prices, the amount of deviations is 5,000 rubles (overexpenditure). Within a month, products at planned prices in the amount of 200,000 rubles were accepted for accounting at the warehouse. The amount of production costs recorded on account 20 “Main production” amounted to 280,000 rubles, the balance of work in progress – 70,000 rubles. The planned cost of products sold is 230,000 rubles.

Actual cost of finished products: 280,000 – 70,000 = 210,000 rubles.

Amount of deviations for products transferred to the warehouse: 210,000 – 200,000 = 10,000 rubles.

Percentage of deviations for shipped products: (5,000 + 10,000) : (60,000 + 200,000) x 100% = 5.77%.

The amount of deviations attributable to shipped products: 230,000 x 5.77% = 13,271 rubles.

Actual cost of shipped products: 230,000 + 13,271 = 243,271 rubles.

Balance of finished products at the end of the month at actual cost: (60,000 + 5,000) + (200,000 + 10,000) – (230,000 + 13,271) = 31,729 rubles, including:

planned cost: 60,000 + 200,000 – 230,000 = 30,000 rubles.

amount of deviations: 5,000 + 10,000 – 13,271 = 1,729 rubles.

Example 3. The balance of finished products in the warehouse at the beginning of the month is 60,000 rubles at planned prices. Within a month, products at planned prices in the amount of 200,000 rubles were accepted for accounting at the warehouse. The amount of production costs recorded on account 20 “Main production” amounted to 280,000 rubles, the balance of work in progress – 70,000 rubles. The planned cost of products sold is 230,000 rubles.

The balance of finished products in the warehouse at planned prices: 60,000 + 200,000 – 230,000 = 30,000 rubles.

Example 4. Costs recorded during the month on account 20 “Main production” amounted to 250,000 rubles. The balance of work in progress is 80,000 rubles. All finished products were sold in the same month.

It should be noted that this method is convenient for use only in cases where all products produced in the reporting period were sold during the same period. Otherwise, there is a need to account for unsold finished products as part of work in progress on account 20 “Main production”.

The cost of production is one of the main qualitative indicators of the economic activity of an enterprise. The value of the cost directly depends on the volume and quality of products, as well as on the level of rational use of raw materials, equipment, supplies and employee working time. The cost indicator is the basis for determining the price of a manufactured product. In the article we will talk about the specifics of calculating the cost indicator, and also use examples to consider the methodology for determining the cost of production.

Cost refers to the current costs incurred by an organization for the production and sale of products. At enterprises, it is customary to calculate two cost indicators - planned and actual. The value of the planned cost is determined based on the estimated average cost of the manufactured goods (performed work, services) for a certain period of time. To calculate the planned cost, indicators of consumption rates for materials, raw materials, labor costs, and equipment used in the production process are used. The basis for calculating the actual cost is the actual production indicators that determine the cost of producing a unit of product (group of goods).

The monetary indicator of cost is determined by calculating costing - identifying the costs of producing a unit of production (a group of goods, a separate type of production). To calculate the cost, costing items are used, which determine the type of costs that affect the cost. The types of costing items depend on the characteristics of the type of goods produced, the specifics of the production process and the economic industry in which the enterprise operates.

Types of product costs

In production practice, the concepts of production and full cost are used. To determine production costs, such costing items as materials, raw materials, technological costs (fuel, energy, etc.), wages of production workers (including wage accruals), general production and general business expenses, as well as other production expenses are used. To calculate the full cost of manufactured products, you should take into account not only production costs, but also commercial expenses. This type includes expenses for the sale of products, namely advertising, storage, packaging, remuneration of sellers, etc.

Expenses affecting the cost of production may vary depending on the volume of goods produced. Based on this criterion, a distinction is made between semi-fixed and semi-variable expenses. As a rule, semi-fixed expenses include general production and general business expenses, the level of which is not affected by the number of products produced. Labor costs, technological costs (fuel, energy) are considered conditionally variable, since the indicators of these types of costs can be increased (reduced) depending on the volume of production.

Calculation of product costs using examples

The cost of commercial products (services, works) in accounting can be determined from the information in reports and balance sheets. The cost indicator is determined by excluding from the amount of costs for production and sales of products expenses on non-production accounts, as well as the amount of balances, changes in balances and semi-finished products, which are not included in the cost of products.

Calculation of production costs

Let's say Teplostroy LLC is engaged in the production of electrical appliances. The reports of Teplostroy LLC for November 2015 reflected the following:

• production costs - 115 rubles;
• charged to the accounts of non-production expenses - 318 rubles;
• charged to deferred expenses (account 97) - 215 rubles;
• credited to reserves for future expenses and payments (account 96) - 320 rubles;
• balances on accounts of work in progress, semi-finished products - 815 rubles.

The production cost per unit of production will be:

Calculation of cost by allocating costs

Let's say Elektrobyt LLC is engaged in the production of electrical equipment.

Data for calculation:

• for the period January 2016, the workshop produced 815 units;
• expenses for materials, components, spare parts - RUB 1,018,000;
• The selling price for electrical equipment was RUB 3,938. (RUB 3,150 + 25%);
• wages of production workers (including contributions to social funds) - 215,000 rubles;
• general production expenses (electricity, depreciation of equipment, etc.) - 418,000 rubles;
• general business expenses (maintenance of management personnel) - 1800 rubles.

At Elektrobyt LLC, direct expenses include material expenses; spare parts and semi-finished products; wages of production workers (including insurance premiums). The remaining costs are indirect.

Calculation of direct production costs per unit of production:

(RUB 1,018,000 + RUB 215,000 + RUB 418,000) / 815 units = 2026 rub.

Calculation of indirect general business expenses per unit of production:

1800 rub. / 815 units = 2 rub.

We will present the calculation of the cost per unit of manufactured electrical equipment in the form of a statement.

Cost price represents the current expenditure of the organization, expressed in monetary form, which is aimed at the production and sale of goods.

Cost price is an economic category that reflects the production and economic activities of an enterprise and shows the amount of financial resources spent on the production and sale of products. Cost affects the profit of the enterprise, and the lower it is, the greater the profitability.

Cost formula

The cost price includes the sum of all expenses for the production of goods. To calculate using the cost formula, you need to sum up all the costs that were incurred during the production (sales) process:

The cost formula is as follows:

Full = Spr + Rreal

Here Full is the full cost,

Spr – production cost of a product, calculated by the sum of production costs (labor, depreciation, material costs, etc.),

Rreal – costs of selling products (storage, packaging, advertising, etc.).

If you need to determine the cost of a unit of production, then the formula for the cost of goods produced is calculated by simple calculation. In this case, the price of a unit of goods produced is determined by dividing the sum of all costs for the corresponding period by the quantity of goods produced during this time.

Cost structure

The cost formula includes the following components:

• Raw materials needed in the production process;
• Calculation of energy resources (various types of fuel).
• Expenses for equipment and machinery that are necessary for the operation of the enterprise.
• Salaries of company employees, including payment of all payments and taxes.
• General production expenses (office rent, advertising, etc.).
• Expenses for depreciation of fixed assets.
• Administrative expenses, etc.

Features of cost calculation

There are several different methods for calculating the cost of a product. They can be applied according to the nature of the work, services or products produced. There are two types of product costs:

• Complete, including all expenses of the enterprise.
• Trimmed cost, which refers to the unit cost of variable costs.

Actual and standard costs are calculated based on the expenses incurred by the company. At the same time, standard cost helps control costs for various resources and, in the event of deviations from the norm, timely provision of all necessary measures. The actual cost per unit of output can be determined after calculating all costs.

Types of cost

Costs are of the following types:

• Full (average) cost, implying the entire set of expenses, including commercial costs for the production of products and the purchase of equipment. The costs of creating a business are divided into periods during which they are repaid. Gradually, in equal parts, they are added to general production costs.
• Marginal cost, which is directly dependent on the quantity of products produced and shows the cost of each additional unit of goods. This indicator reflects the effectiveness of subsequent expansion of production.

Also, the cost can be:

• Shop cost, which includes the totality of costs of all departments of the enterprise that are aimed at producing new products;
• Production cost, which makes up the workshop cost, including target and general expenses.
• The full cost price, which includes not only production costs, but also expenses incurred by the company in the process of selling goods.
• General business (indirect) cost, consisting of business management expenses and not directly related to the production process.