How to calculate cost of goods sold formula. Cost of goods sold and production cost

If you are engaged in the production or resale of certain goods, then for you the cost of sales is one of the most important indicators of the profitability of a particular product. To calculate this cost, you need to determine the price of the inventory you have at the beginning and end of the tax year.

Who needs it?

Cost of sales is an important indicator for those people who are engaged in wholesale or retail trade th, direct production or entrepreneurial activity related to the purchase or sale of goods for profit. Thus, this concept does not in any way apply to people engaged in personal services businesses, including lawyers, doctors, painters or carpenters, unless they are involved in the trade of various supplies or materials.

How to make calculations?

Cost of sales is the result of detailed calculations over a certain period of time. In order to determine it, you need to know the following indicators:

• The price of inventory you have at the beginning of the year. If it differs from the price of inventory present at the end of the previous year, you should attach a detailed explanation.
• The cost of all kinds of purchases excludes those goods that you took for personal use.
• Costs that have been allocated to pay employees. You should also exclude any amounts allocated only for yourself.
• The price of materials, as well as all necessary supplies.
• All other costs.

Once you determine all these parameters, you can calculate your cost of sales. These are the most important indicators that should be present in your reporting.

To do the calculation, you need to add up all these characteristics, as well as determine the value of inventory present at the end of the year. It is enough to simply subtract the sum of all the above indicators from the cost of inventory that you have at the end of the year - and you can determine the cost of selling products.

Price of inventory at the beginning of the year

If you are a retailer, the price of your opening inventory will be the value of all the items you have on hand at the beginning of the year that you intend to sell to customers. If you are engaged in production, then for you this indicator will represent the total cost of all kinds of semi-finished products, raw materials, finished products and any supplies you need during the production process.

Beginning inventory in most cases is exactly the same as what was present at the end of the previous year, but if you have a discrepancy in these figures, you should determine the reason for it on the form attached to your tax return.

Donate to charity

If your company donates its own goods to charity, you can deduct either the fair market value of all donated goods or their basis, whichever is less. The donated inventory base is all of the inventory costs you incurred in previous years that you would otherwise have to include in your starting inventory price for that year. You will need to deduct the price of all donated products from the cost of the initial inventory, as it is not part of the cost of goods sold.

If the cost of all donated items was not included in the price of the initial inventory, the basis of the donated products is zero, and you are not entitled to deduct the donation from your tax base. In this case, the cost of such products is recorded using the standard accounting method.

A good example

You are a taxpayer who uses a standard calendar tax year and accrual technology. In 2015, you decided to donate property to a certain church, fair market price which is 600 euros. According to the rules, in the price of ending inventories for 2014 you included the costs of acquiring this property in the amount of 400 euros, and in the same year you deducted from the tax base administrative and other costs in the amount of 50 euros attributed to this property . You posted these costs as expenses related to entrepreneurial activity.

For 2015, you can only deduct this donation in the amount of €400, since €200 represents the amount that would have constituted your ordinary income if you had sold the property at a fair market price. The cost of goods sold that bases your gross income calculations will not have to include this €400, so you can deduct it from the total price of beginning inventory for that year.

Deduction of goods that were taken for personal use

If your main business is trading, you will need to deduct the cost of all goods you purchase for sale. In the case of manufacturing activities, it will be necessary to take into account the full cost of raw materials, parts or assemblies required to produce your final product.

Discounts

The difference between the originally published price and the actual cost of the product paid by the buyer when purchasing it is called the sales price discount. When calculating the cost of purchased products, you need to use not the originally published prices, but rather the prices that were actually paid. Accounting for cost of sales provides for the absence of indicating the amount of discounts as a separate item of gross income.

Thus, when calculating the cost of cars sold, a car dealer must initially subtract any factory discounts from it.

What are the discounts for cash purchases?

An instant cash discount is an amount that the supplier allows you to deduct from your invoice for the products you purchase to use as an instant payment incentive.

When calculating the cost of sales of services or goods, you can record these discounts using one of the following technologies accounting:

• record them as credit to a specific discount account;
• subtract them from the total amount of acquisitions for a given year.

Regardless of which method you will use, everything needs to be done consistently and systematically.

If such discounts are credited to a separate account, you will need to report the credit balance to your total business income at the end of the tax year. It is worth noting that the use this method does not provide for the deduction of discounts from the cost of goods sold.

Withdrawal from sales

If certain goods are withdrawn from sale for personal use or for the needs of your family, their cost must be deducted from the total price of the goods you purchased for sale. To do this, when the cost of sales is calculated, the invoice must contain the cost of these goods on credit for sales or purchases, and this amount must be withdrawn from your expense account.

The latter is a separate account designed to record business income, which is withdrawn to pay for any personal expenses of the entrepreneur or his family.

Salary

In the vast majority of cases, when the cost of sales is calculated, the calculation of labor costs is considered as a separate element of the cost of goods sold only in enterprises involved in the mining or manufacturing industries. Small trading companies often do not have their own labor costs, which provide for the possibility of attributing them to the cost of goods sold. In companies involved in the manufacturing industry, any labor costs necessarily include not only direct, but also indirect costs necessary for processing raw materials into finished products.

Remuneration of production employees

When the cost of sales is calculated (the calculation formula was indicated above), this item includes the wages of all employees who were employed in the specific production of a given product for a full working day. It is worth noting that this category also includes the salaries of part-time employees if you have the opportunity to calculate this component of their salary.

Other labor costs

These costs must be deducted from the compiled tax base as administrative or trading expenses, since the cost of sales according to the rules cannot be calculated with the inclusion of these costs. The only type of labor costs that, in accordance with the rules, can be taken into account when calculating the cost of goods sold is the payment of support and production employees, as well as various labor costs, considered as overhead costs.

Materials and supplies

All kinds of materials and supplies, including various chemicals and components required for the production of a particular product, must be recorded when calculating the cost of sales. Postings of chemicals and parts that are not used to manufacture products are carried out as deferred expenses, deductible from the tax base as standard business expenses (depending on the use of these materials).

Hello! Many people ask the question: what is the cost of goods or products? To produce any goods, a number of different resources are spent: natural, energy, land, financial, labor, etc. The sum of all costs incurred will be the cost of production. We will look at this issue in more detail in this article!

What is the cost of goods

First, let's look at determining the cost of a product.

Product cost - this is a monetary assessment of the current costs of the enterprise for the production and sale of goods, as well as the actual cost of labor and financial resources.

In fact, cost is an indicator of production and economic activity firm, reflecting the financial costs of the organization for the production of products. The price of the product directly depends on the cost. The lower the cost of finished products, the higher the profitability of the enterprise.

How to determine the cost of goods

Depending on the method of accounting for expenses, several methods for calculating the cost of goods have been formed: standard, process-by-process, assignment-by-product, order-by-order. In turn, the cost is also divided into several types: gross, commodity and sold.

What is included in the cost of goods

Surely every novice entrepreneur has at least once asked the question: why do we need cost? And it is needed in order to objectively assess the profitability of an enterprise, determine the wholesale and retail price of a product, and give an objective assessment of the efficiency of spending and using resources.

The cost of goods takes into account many indicators, depending on what exactly needs to be controlled.

The unit cost of a product directly depends on the quantity of products produced or purchased. To understand this, just consider a simple example:

Let's say you went to the store to buy a pack of tea worth 100 rubles. Then the cost calculation will take the following form:

• Let’s assume you spent 1 hour on the trip (assuming the estimated cost of a working hour is 100 rubles);
• The estimated depreciation of the car was 15 rubles.

Therefore, the cost of goods includes: Cost of a batch of goods (in this case, a pack of tea) + Costs) / Quantity = 215 rubles.

The picture will change significantly if you buy not one pack of tea, but, say, five:

Cost = ((5*100)+100+15)/5 = 123 rubles.

The example clearly shows that it directly depends on the quantity of products purchased - the more quantity you purchase (or produce), the cheaper each unit costs you. No enterprise is interested in increasing the cost of goods.

Types of product costs

Essentially, cost is the sum of all costs associated with the production and release of goods. The cost price can be calculated both for the entire product produced and for a separate product unit.

Strictly speaking, there are several types of cost, and, depending on what specific area of ​​activity the entrepreneur wants to control, the following indicators can be calculated:

• Shop floor, containing the costs of all departments of the organization aimed at manufacturing products;
• Production, which includes workshop cost, as well as general and target expenses;
• Complete, consisting of production costs and costs of selling products;
• General business expenses, which include expenses not directly related to production process, but aimed at doing business.

Production cost contains all the resources spent at the production stage, namely:

• Costs of purchasing raw materials and basic materials for manufacturing products;
• Costs of fuel and energy supply for production;
• Payments to employees of the enterprise;
• Costs of internal movement of raw materials and materials;
• Maintenance, Maintenance and maintenance of fixed assets of the enterprise;
• Depreciation of equipment and fixed assets.

Realized cost implies the costs of the enterprise at the stage of sales of goods, namely:

• Costs for packaging/packaging/preservation of products;
• Costs of transporting goods to the distributor’s warehouse or to the direct buyer;
• Product advertising costs.

The total cost of goods consists of production and realized costs. This indicator also takes into account the costs of purchasing equipment.

The costs of running a business are usually divided into certain periods, during which these costs must pay for themselves. Such costs are added in equal shares to total costs for the production and sale of products and are included in the concept of total cost.

There is also a planned cost, this is the average estimated cost of manufactured products manufactured in the planning period (for example, for a year). This cost is calculated if there are consumption standards for the use of materials, energy resources, equipment, etc.

To determine the cost of one unit of finished products, a concept such as marginal cost is used. This indicator directly depends on the quantity of products produced and reflects the effectiveness of further expansion of production.

In addition to the cost of production, there is also

The cost structure is classified according to costing items and cost elements.

By calculation items:

• Raw materials, materials, components, semi-finished products, units, etc., necessary for the production of goods;
• Fuel and energy resources spent on production;
• Depreciation of fixed assets of an enterprise or fixed assets (equipment, equipment, machinery, etc.), costs of their maintenance and maintenance;
• Remuneration of key personnel (salary or tariff);
• Additional remuneration for personnel (bonuses, additional payments, allowances paid in accordance with the law);
• Contributions to various off-budget funds(For example, Pension Fund, social insurance fund, etc.);
• Production costs in general (sales costs, transportation costs, payroll for company employees, etc.);
• Business travel expenses (ticket cost, hotel payment, daily allowance);
• Payment for the work of third parties;
• Costs of maintaining the administrative apparatus.

By cost element:

• Costs of materials (raw materials, parts, components, fuel and energy resources, general production costs, etc.);
• Costs of wages of employees (wages of workers, auxiliary personnel, for example, those servicing equipment, wages of engineers, employees, i.e. executives, managers, accountants, etc., junior service personnel);
• Contributions to social institutions;
• Depreciation of fixed assets of an enterprise;
• Other expenses aimed at advertising, sales, marketing, etc.).

General production costs are usually understood as the organization's expenses for payments. wages management staff, security payments, business travel expenses, as well as management department salaries. This expense item also includes depreciation and maintenance of buildings and structures, labor protection, training and education of specialists.

The figure shows approximate items of expenditure of an enterprise for production.

Theory of Constraints

According to this theory, there are certain significant costs that do not depend on the quantity of output. Such costs include loan payments, rent payments and payroll for permanent employees. If there are such fixed costs, the use of product cost as an indicator becomes a limiter on the economic policy of the enterprise, which can lead to illogical decisions. For example, a product sold below cost is discontinued, which in turn increases the cost of other goods produced.

Methods for calculating the cost of goods

There is no single methodology for calculating cost as such. This indicator can be calculated in completely different ways, depending on the type of product, the method and technology of its production and many other factors.

As a rule, in order to calculate the cost of production, the following factors must be taken into account:

• The amount of all expenses for production and sales of products;
• Manufacturer's costs of operating as an entrepreneur;
• Costs associated with preparation of documentation for products.

It is necessary to keep records of the cost of goods directly for a certain production cycle of products. In order to determine the price of a product, you need to calculate the cost. It is compiled based on the quantity of products produced (in pieces, meters, tons, etc.). The cost estimate must reflect absolutely all costs associated with production. (Which items are included in the calculation are described in the paragraph “Cost structure”).

Method No. 1

Full addition of expenses to the cost price. The cost price can be full or truncated. At full cost, all expenses of the enterprise are taken into account. When truncated, the cost per unit of production is variable costs Oh. Constant share of total production costs refers to the reduction of profit at the end of the specified period and is not distributed to the goods produced.

With this method of determining cost, this indicator is influenced by both variables and fixed costs. By adding the required profitability to the cost, the price of the product is determined.

Method No. 2

In this method, actual and standard costs are calculated based on the expenses incurred by the enterprise. Standard cost allows you to control the costs of raw materials and materials, and, in case of deviations from the norms, take appropriate measures. This method is very labor intensive.

Method No. 3

Transverse method. It is convenient for use in enterprises with serial or continuous production, in which the products undergo several stages of processing.

Method No. 4

The processor method is used mainly in the mining industry.

So, to calculate the total cost of production, we will use the following algorithm:

1. We calculate variable costs for the production of one unit of product, taking into account costs;
2. Of the general plant costs, we highlight those that relate to this type of product.
3. Let's sum up all expenses not directly related to the production process.

The resulting value will be the cost of the finished product.

Since there are several types of cost, one calculation formula is not enough.

Production costs:

C = MZ+A+Tr+ other expenses

Where C is the cost of expenses;

MH – material costs of the organization;

A – depreciation charges;

Tr – expenses for salaries of company employees.

To get the full cost of the finished product, you need to add together all the costs of its production:

Where PS is the total cost;

PRS - production cost of goods, which is calculated based on production costs (costs of materials and raw materials, depreciation production assets, social and other contributions);

РР — costs of selling goods (packaging, storage, transportation, advertising).

The cost of goods sold is calculated using the formula:

Where PS is the total cost,

KR – costs associated with the commercial activities of the enterprise,

OP – remains of unsold products.

Gross cost is defined as:

C = Production costs - non-production costs - future costs

If an enterprise produces only one type of product, then its cost and price can be determined using the calculation method. In this case, the unit price of a product is obtained by dividing the sum of all costs spent on production by the number of products produced. It is worth remembering that all calculations are made for a certain specified period.

Calculation and analysis of the cost of goods produced large enterprise, a very complex and labor-intensive process that requires certain knowledge, so an accountant solves such problems. It is customary to divide costs into direct and indirect.

The most common way to determine the price of a product is to calculate the cost of production, since this method allows you to calculate the costs of producing a single unit of product.

Cost classification

Depending on what task you want to implement, costs are classified as follows:

1. There are two types of expenses that are usually added to the cost of the finished product. These are direct costs (these costs are added to the cost of finished products in an exact or single way) and indirect costs (costs added to the subject of calculation according to the methodology established at the enterprise). Indirect costs include general business, general production and commercial costs;
2. Depending on the quantity or volume of products produced, costs are:

• Constant (independent of the volume of goods produced), indicated per unit of production;
• Variables (depending on production or sales volume);

1. There are also costs that are significant for specific case. Such as relevant (depending on decisions taken) and irrelevant (not related to the decisions being made).

All of the above indicators of costs and expenses significantly influence the formation of the price of the product. But there is another important indicator - tax deductions.

If the definition of cost itself seems intuitive, then the formulas for its calculation are already strict mathematical expressions. To understand them, it is necessary to study the analysis methodology used in each specific case.

The first stage cost calculation always involves determining the costs of producing a product or service. This process is designated by the economic term: “product costing.” Costing can be planned, standard or actual. The first and second express an idea of ​​how the economic process should be structured. The actual calculation is made based on real data.

Calculation of product costs in the Republic of Belarus is a process regulated by many legislative and industry standards. This happens due to the practice of setting prices based on the value of the declared cost. In many cases, instead of market price changes, enterprises have to resort to regulating the cost calculation system through the redistribution of costs from one type of product to another in order to have the legal opportunity to raise/lower the price.

After determining the amount of costs and their distribution among expense items, it is time to calculate them specific value. Cost calculation formulas are used precisely for this purpose.

Costing is a universal procedure for any economic process. Such calculations are most difficult to perform when analyzing industrial production. It also applies here greatest number different types cost calculation formulas. These formulas can be adapted for other economic processes.

Total cost formula

To generally assess the economic efficiency of an enterprise, the full cost formula is often used. In the very simple version it looks like this:

Total cost = sum of production costs + sales costs.

The full cost shows the largest amount of planned or actual expenses. The results of all other cost formulas are parts of this total value.

What is of great importance is not just the products produced, but the products sold. Therefore, the cost formula takes the following form:

Cost of goods sold = total cost - cost of unsold goods.

An example of calculating the full cost in expanded form, i.e. with individual elements selected, it will look something like this:

Total cost = Costs of raw materials and supplies + Energy costs + Depreciation charges + Salaries of key personnel + Salaries of management and support personnel + Deductions from wages + Sales and sales service costs + Transportation costs + Other costs.

Special formulas for calculating costs

Knowing the total cost of producing and selling a product or service does not provide sufficient information to understand and evaluate the individual elements of this system. Thus, the total cost does not show the cost per unit of production. The costs of an individual process remain uncertain. For this purpose, many specific cost formulas have been developed that calculate individual quantities.

Given that some costs depend on production volume and some do not, it is customary to distinguish between variable and fixed costs.

The size of fixed costs is calculated by summing up the values ​​of some unavoidable costs of the enterprise. Calculation example:

Fixed costs = Fixed part of the salary + Expenses for rent and maintenance of premises + Depreciation deductions + Property taxes + Advertising expenses.

Methodology for calculating variable costs in general view can be represented by the following formula:

Variable costs = Variable part of wages + Cost of raw materials and supplies + Cost of energy resources + Costs of transporting products + Variable part of business expenses.

The cost per unit of production in general can be found by simply dividing the sum of costs by the volume of output in physical terms:

Unit cost = Total costs/Number of units.

For realities commercial organization more suitable more difficult option the same formula:

Unit cost = Manufacturing costs/No. of units produced + Selling costs/No. of units sold.

There are many other formulas for calculating cost. Their exact number is difficult to determine, because... each of them is formed according to the requirements of the accepted calculation methodology.

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

How to calculate cost

The cost of products sold, goods, work performed, services provided is the totality of all costs that the store incurs in order to manufacture and sell.

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

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

Costs are divided by economic elements and cost items:

1. Material costs. In the context of retail trade, this is the cost of products purchased for further sale;
2. Depreciation of fixed assets;
3. Wage;
4. Social contributions to extra-budgetary funds. Previously it was the Unified Social Tax;
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 all the cost amounts indicated in these paragraphs.

Costs in the cost of production can be calculated using costing items. The cost price for costing items is calculated per unit of manufactured products.

Another way to divide 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

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. Delivery 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. Anything 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 from sales and concluded contracts that sales managers receive depending on the effectiveness of their work;
7. Deductions for wages. These are contributions to extra-budgetary funds, the former UST - to the Pension Fund, to the Social Insurance Fund, to the Compulsory Medical Insurance Fund;
8. Taxes;
9. Services of third-party organizations – transport services, Internet, communications, including mobile;
10. Other expenses. This usually includes what is not included in the above large groups of expenses: office supplies, other expenses.

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

The remaining costs are considered fixed. They do not change depending on the volume of trade: no matter how much you sell - little or much - your rental cost is the same, you pay the same salary to the store director, along with accountants and cleaners, you spend the same on communications, internet and office supplies same.

The Business.Ru service will generate reports on total balances and turnover Money your store, and will also help you create detailed sales analytics, which will allow you to correctly calculate the cost and profitability of goods in your store.

Methods for calculating costs in trade

In retail trade, it is very important to use one of three costing methods. What is meant here is not the full cost, but the cost of goods.

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

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

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

Cost per unit method

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

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

When applying this method, the cost for which each individual product was purchased, each individual product that was later sold, is written off as expenses.

Average cost method

It consists in the fact that monthly the cost (actual cost) of the goods sold is written off to expenses 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 cost calculation using the average cost method

Let's say you have a butcher shop. At the beginning of the month, you had 5 kilograms of sausages left 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:

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

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

17 * 259 = 4403

5100 – 2590 = 697 rub.

FIFO method

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

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

An example of calculating cost using the FIFO method and financial results:

When you sold 17 kilograms, first you sold the remainder:

5 kg. 270 rub. = 1350 rub.

Then your first batch sold:

7 kg. 270 rub. = 1890 rub.

Then you sold 5 kilograms from the second batch:

5 kg. 240 rub. = 1200 rub.

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 for the month will be:

5100 – 4440 = 660 rub.

The most important indicators expressing the cost of production are the cost of the entire commercial products, costs per 1 ruble of marketable products, cost per unit of production.

Sources of information for analyzing product costs are: Form 2 “” and Form 5 Appendix to the balance sheet annual report enterprises, costing of commercial products and costing of certain types of products, consumption rates of material, labor and financial resources, cost estimates for production and their actual implementation, as well as other accounting and reporting data.

As part of the cost of production, a distinction is made between variable and semi-fixed expenses (costs). The amount of variable costs changes with changes in the volume of products (works, services). Variables include the material costs of production, as well as the piecework wages of workers. The amount of semi-fixed costs does not change when the volume of production (work, services) changes. Conditionally fixed expenses include depreciation, rental of premises, time-based wages of administrative, managerial and service personnel and other costs.

So, the task of the business plan for the cost of all marketable products has not been completed. The above-plan increase in cost amounted to 58 thousand rubles, or 0.29% of the plan. This was due to comparable marketable products. (Comparable products are not new products, which was already issued in the previous period, and therefore its release in the reporting period can be compared with the previous period).

Then it is necessary to establish how the plan for the cost of all marketable products has been fulfilled in the context of individual costing items and determine for which items there are savings and for which there is overexpenditure. Let's present the corresponding data in Table 16.

Table No. 16 (thousand rubles)

	Indicators	Full cost of actually manufactured products		Deviation from plan
		at the planned cost of the reporting year	at the actual cost of the reporting year	in thousand rubles
					to the plan for this article	to the full planned cost
	Raw materials
	Returnable waste (subtracted)
	Purchased products, semi-finished products and services of cooperative enterprises
	Fuel and energy for technological purposes
	Basic wages of main production workers
	Additional wages for key production workers
	Insurance contributions
	Expenses for preparation and development of production of new products
	Expenses for maintenance and operation of equipment
	General production (general shop) expenses
	General (plant) expenses
	Losses from marriage
	Other production costs
	Total production cost commercial products
	Selling expenses (selling expenses)
	Total total cost of marketable products: (14+15)

As we can see, the increase in the actual cost of marketable products compared to the planned one is caused by overexpenditure of raw materials, additional wages of production workers, an increase in other production costs against the plan and the presence of losses from defects. For the remaining items of calculation, savings occur.

We looked at the grouping of product costs by cost items (cost items). This grouping characterizes the purpose of the costs and the place of their occurrence. Another grouping is also used - according to homogeneous economic elements. Here costs are grouped according to economic content, i.e. regardless of their intended purpose and the place where they are used. These elements are the following:

• material costs;
• labor costs;
• insurance contributions;
• depreciation of fixed assets (funds);
• other costs (depreciation of intangible assets, rent, mandatory insurance payments, interest on bank loans, taxes included in the cost of production, deductions to extra-budgetary funds, travel expenses, etc.).

During the analysis, it is necessary to determine the deviations of actual production costs by element from the planned ones, which are contained in the production cost estimate.

So, analysis of the cost of production in the context of costing items and homogeneous economic elements allows us to determine the amounts of savings and overruns by certain species costs and promotes the search for reserves to reduce the cost of products (works, services).

Analysis of costs per 1 ruble of commercial products

- a relative indicator characterizing the share of cost in the wholesale price of products. It is calculated using the following formula:

Costs per 1 ruble of commercial products this is the total cost of commercial products divided by the cost of commercial products at wholesale prices (excluding value added tax).

This figure is expressed in kopecks. It gives an idea of ​​how many pennies are spent, i.e. cost, accounts for every ruble of the wholesale price of products.

Initial data for analysis.

Costs per 1 ruble of marketable products according to plan: 85.92 kopecks.

Costs per 1 ruble of actually produced commercial products:

• a) according to the plan, recalculated for actual output and product range: 85.23 kopecks.
• b) actually in prices in force in the reporting year: 85.53 kopecks.
• c) actually at the prices adopted in the plan: 85.14 kopecks.

Based on these data, we will determine the deviation of actual costs per 1 ruble of marketable products in prices in force in the reporting year from the costs according to the plan. To do this, subtract line 1 from line 2b:

85,53 — 85,92 =— 0.39 kopecks.

So, the actual figure is 0.39 kopecks less than the planned figure. Let us find the influence of individual factors on this deviation.

To determine the impact of a change in the structure of manufactured products, we compare the costs according to the plan, recalculated for the actual output and product range, and the costs according to the plan, i.e. lines 2a and 1:

85.23 - 85.92 = - 0.69 kopecks.

It means that by changing the product structure the analyzed indicator decreased. This is the result of an increase in the specific gravity of more profitable types products with relatively low level costs per ruble of products.

We will determine the impact of changes in the cost of individual types of products by comparing the actual costs in the prices adopted in the plan with the planned costs recalculated for the actual output and range of products, i.e. lines 2c and 2a:

85.14 - 85.23 = -0.09 kopecks.

So, by reducing the cost of certain types of products the cost indicator for 1 ruble of commercial products decreased by 0.09 kopecks.

To calculate the impact of changes in prices for materials and tariffs, we divide the amount of change in cost due to changes in these prices for actual marketable products in the wholesale prices adopted in the plan. In the example under consideration, due to an increase in prices for materials and tariffs, the cost of commercial products increased by + 79 thousand rubles. Consequently, costs per 1 ruble of commercial products due to this factor increased by:

(23,335 thousand rubles - actual marketable products at wholesale prices adopted in the plan).

Impact of changes in wholesale prices for products of this enterprise the indicator of costs per 1 ruble of marketable products will be determined as follows. First, let's determine the overall influence of factors 3 and 4. To do this, let’s compare the actual costs per 1 ruble of marketable products, respectively, in the prices in force in the reporting year and in the prices adopted in the plan, i.e. lines 2b and 2c, we determine the impact of price changes on both materials and products:

85.53 - 85.14 = + 0.39 kopecks.

Of this value, the influence of prices on materials is + 0.33 kopecks. Consequently, the impact of product prices accounts for + 0.39 - (+ 0.33) = + 0.06 kopecks. This means that a decrease in wholesale prices for the products of this enterprise increased the costs of 1 ruble of marketable products by + 0.06 kopecks. The total influence of all factors (balance of factors) is:

0.69 kopecks — 0.09 kopecks + 0.33 kop. + 0.06 kop. = - 0.39 kop.

Thus, the decrease in the cost indicator per 1 ruble of commercial products took place mainly due to changes in the structure of manufactured products, as well as due to a decrease in the cost of certain types of products. At the same time, an increase in prices for materials and tariffs, as well as a decrease in wholesale prices for the products of this enterprise, increased costs per 1 ruble of marketable products.

Material Cost Analysis

The main place in the cost of industrial products is occupied by material costs, i.e. costs of raw materials, supplies, purchased semi-finished products, components, fuel and energy, equal to material costs.

Specific gravity material costs accounts for about three-quarters of production costs. It follows that saving material costs to a decisive extent ensures a reduction in production costs, which means an increase in profits and an increase in profitability.

The most important source of information for analysis is the costing of products, as well as the costing of individual products.

The analysis begins with a comparison of actual material costs with planned ones, adjusted for the actual volume of production.

Material costs at the enterprise increased compared to their stipulated value by 94 thousand rubles. This increased the cost of production by the same amount.

The amount of material costs is influenced by three main factors:

• change in specific consumption of materials per unit of production;
• change in the procurement cost per unit of material;
• replacing one material with another material.

1) A change (reduction) in the specific consumption of materials per unit of production is achieved by reducing the material intensity of products, as well as by reducing waste of materials in the production process.

Material consumption of products, which is specific gravity material costs in the product price are determined at the product design stage. Directly in the course of the current activities of the enterprise, the reduction in specific consumption of materials depends on the reduction in the amount of waste in the production process.

There are two types of waste: returnable and irrecoverable. Returnable waste materials are subsequently used in production or sold externally. Irrevocable waste is not subject to further use. Returnable waste is excluded from production costs, since it is returned to the warehouse as materials, but the waste is not received at the price of full-fledged waste, i.e. source materials, but at the price of their possible use, which is significantly less.

Consequently, the violation of the specified specific consumption of materials, which caused the presence of excess waste, increased the cost of production by the amount:

57.4 thousand rubles. — 7 thousand rubles. = 50.4 thousand rubles.

The main reasons for changes in specific material consumption are:

• a) changes in materials processing technology;
• b) change in the quality of materials;
• c) replacing missing materials with other materials.

2. Change in the procurement cost of a unit of material. The procurement cost of materials includes the following main elements:

• a) supplier’s wholesale price (purchase price);
• b) transportation and procurement costs. The value of purchase prices for materials does not directly depend on the current activities of the enterprise, but the amount of transportation and procurement costs does, since these expenses are usually borne by the buyer. They are influenced by the following factors: a) changes in the composition of suppliers located at different distances from the buyer; b) changes in the method of delivery of materials;
• c) changes in the degree of mechanization of loading and unloading operations.

Suppliers' wholesale prices for materials increased by 79 thousand rubles against those provided for in the plan. So, the overall increase in the procurement cost of materials due to an increase in supplier wholesale prices for materials and an increase in transportation and procurement costs is 79 + 19 = 98 thousand rubles.

3) replacing one material with another material also leads to a change in the cost of materials for production. This can be caused by both different specific consumption and different procurement costs of the replaced and replacement materials. We will determine the influence of the replacement factor using the balance method, as the difference between the total amount of deviation of actual material costs from the planned ones and the influence of already known factors, i.e. specific consumption and procurement cost:

94 - 50.4 - 98 = - 54.4 thousand rubles.

So, the replacement of materials led to savings in material costs for production in the amount of 54.4 thousand rubles. Substitutions of materials can be of two types: 1) forced replacements, unprofitable for the enterprise.

After considering the total amount of material costs, the analysis should be detailed for individual types of materials and for individual products made from them in order to specifically identify ways to save various types materials.

Let us determine by the method of differences the influence of individual factors on the cost of material (steel) for product A:

Table No. 18 (thousand rubles)

The influence on the amount of material costs of individual factors is: 1) change in specific material consumption:

1.5 * 5.0 = 7.5 rub.

2) change in the procurement cost of a unit of material:

0.2 * 11.5 = + 2.3 rub.

The total influence of two factors (balance of factors) is: +7.5 + 2.3 = + 9.8 rub.

So, the excess of the actual costs of this type of material over the planned ones is caused mainly by the above-planned specific consumption, as well as by an increase in procurement costs. Both should be regarded negatively.

The analysis of material costs should be completed by calculating reserves for reducing production costs. At the analyzed enterprise, reserves for reducing production costs in terms of material costs are:

• elimination of the causes of excess returnable waste of materials during the production process: 50.4 thousand rubles.
• reduction of transportation and procurement costs to the planned level: 19 thousand rubles.
• implementation of organizational and technical measures aimed at saving raw materials (there is no reserve amount, since the planned measures have been fully implemented).

Total reserves for reducing production costs in terms of material costs: 69.4 thousand rubles.

Payroll Cost Analysis

During the analysis, it is necessary to assess the degree of validity of the forms and systems of remuneration used at the enterprise, check compliance with the regime of economy in spending funds on labor costs, study the ratio of the growth rate of labor productivity and average wages, and also identify reserves for further reducing production costs by eliminating the causes unproductive payments.

Sources of information for analysis are calculations of product costs, data from the statistical form of the labor report f. No. 1-t, application data to the balance f. No. 5, accounting materials on accrued wages, etc.

At the analyzed enterprise, planned and actual data on the wage fund can be seen from the following table:

Table No. 18

(thousand roubles.)

This table separates out the wages of workers who receive mainly piecework wages, the amount of which depends on changes in the volume of production, and the wages of other categories of personnel, which does not depend on the volume of production. Therefore, the wages of workers are variable, and the wages of other categories of personnel are constant.

In the analysis, we first determine the absolute and relative deviation in the wage fund of industrial production personnel. The absolute deviation is equal to the difference between the actual and basic (planned) wage funds:

6282.4 - 6790.0 = + 192.4 thousand rubles.

The relative deviation is the difference between the actual wage fund and the base (planned) fund, recalculated (adjusted) by the percentage change in production volume, taking into account a special conversion factor. This coefficient characterizes the share of variable (piece-rate) wages, depending on changes in the volume of production, in the total amount of the wage fund. At the analyzed enterprise this coefficient is 0.6. The actual volume of production is 102.4% of the base (planned) output. Based on this, the relative deviation in the wage fund of industrial and production personnel is:

So, the absolute overexpenditure on the wage fund of industrial and production personnel is equal to 192.4 thousand rubles, and taking into account the change in production volume, the relative overexpenditure amounted to 94.6 thousand rubles.

Then you should analyze the wage fund of workers, the value of which is mainly variable. The absolute deviation here is:

5560.0 - 5447.5 = + 112.5 thousand rubles.

Let us determine by the method of absolute differences the influence on this deviation of two factors:

• change in the number of workers; (quantitative, extensive factor);
• change in the average annual wage of one worker (qualitative, intensive factor);

Initial data:

Table No. 19

(thousand roubles.)

The influence of individual factors on the deviation of the actual wage fund of workers from the planned one is:

Change in the number of workers:

51* 1610.3 = 82125.3 rub.

Change in average annual salary per worker:

8.8 * 3434 = + 30219.2 rub.

The total influence of two factors (balance of factors) is:

82125.3 rub. + 30219.2 rub. = + 112344.5 rub. = + 112.3 thousand rubles.

Consequently, the overexpenditure on the workers' wage fund was formed mainly due to an increase in the number of workers. The increase in the average annual wage of one worker also influenced the formation of this overexpenditure, but to a lesser extent.

The relative deviation in the wage fund of workers is calculated without taking into account the conversion factor, since for the sake of simplicity it is assumed that all workers receive piecework wages, the size of which depends on changes in the volume of production. Consequently, this relative deviation is equal to the difference between the actual wage fund of workers and the basic (planned) fund, recalculated (adjusted) by the percentage change in production volume:

So, according to the workers’ wage fund, there is an absolute overexpenditure in the amount of + 112.5 thousand rubles, and taking into account the change in production volume, there is a relative saving in the amount of 18.2 thousand rubles.

• additional payments to piece workers due to changes in working conditions;
• additional payments for working overtime;
• payment for all-day downtime and hours of intra-shift downtime.

At the analyzed enterprise there are unproductive payments of the second type in the amount of 12.5 thousand rubles. and the third type for 2.7 thousand rubles.

So, the reserves for reducing production costs in terms of labor costs are eliminating the causes of unproductive payments in the amount of: 12.5 + 2.7 = 15.2 thousand rubles.

Next, the wage fund of other categories of personnel is analyzed, i.e. managers, specialists and other employees. This salary is a semi-fixed expense that does not depend on the degree of change in production volume, since these employees receive certain salaries. Therefore, only the absolute deviation is determined here. Exceeding the basic value of the wage fund is recognized as an unjustified overexpenditure, the elimination of the causes of which is a reserve for reducing the cost of production. At the analyzed enterprise, the reserve for reducing costs is the amount of 99.4 thousand rubles, which can be mobilized by eliminating the causes of overexpenditures in the wage funds of managers, specialists and other employees.

A necessary condition for reducing production costs in terms of wage costs is for the growth rate of labor productivity to outpace the growth rate of average wages. At the analyzed enterprise, labor productivity, i.e. The average annual output per worker increased compared to the plan by 1.2%, and the average annual wage per worker increased by 1.6%. Therefore, the advance coefficient is:

The faster growth of wages compared to labor productivity (this is the case in the example under consideration) leads to an increase in production costs. The impact on the cost of production of the relationship between the growth of labor productivity and average wages can be determined by the following formula:

Y wages - Y produces labor multiplied by Y, divided by Y produces. labor.

where, Y is the share of wage costs in the total cost of marketable products.

The increase in production costs due to the faster growth of average wages compared to labor productivity amounts to:

101,6 — 101,2 * 0,33 = + 0,013 %

or (+0.013) * 19888 = +2.6 thousand rubles.

At the end of the analysis of wage costs, reserves for reducing production costs in terms of labor costs identified as a result of the analysis should be calculated:

• 1) Elimination of reasons causing unproductive payments: 15.2 thousand rubles.
• 2) Elimination of the causes of unjustified overexpenditure in the wage funds of managers, specialists and other employees 99.4 thousand rubles.
• 3) Implementation of organizational and technical measures to reduce labor costs, and therefore wages for production: -

Total reserves for reducing production costs in terms of wage costs: 114.6 thousand rubles.

Analysis of production maintenance and management costs

These expenses mainly include the following items of product cost calculation:

• a) costs of maintaining and operating equipment;
• b) general production expenses;
• c) general business expenses;

Each of these items consists of different cost elements. The main purpose of the analysis is to find reserves (opportunities) for reducing costs for each item.

Sources of information for the analysis are the calculation of product costs, as well as analytical accounting registers - statement No. 12, which records the costs of maintaining and operating equipment and general production expenses, and statement No. 15, where general business expenses are recorded.

The costs of maintaining and operating equipment are variable, i.e., they directly depend on changes in the volume of production. Therefore, the basic (as a rule, planned) amounts of these expenses should first be recalculated (adjusted) by the percentage of fulfillment of the production plan (102.4%). However, these expenses include conditionally constant items that do not depend on changes in production volume: “Depreciation of equipment and intra-shop transport”, “Depreciation of intangible assets”. These items are not subject to recalculation.

The actual expense amounts are then compared with the recalculated base amounts and variances are determined.

Expenses for maintenance and operation of equipment

Table No. 21

(thousand roubles.)

	Composition of expenses:		Adjusted plan	Actually	Deviation from the adjusted plan
	Depreciation of equipment and intra-shop transport:
	Operation of equipment (energy and fuel consumption, lubricants, salary of equipment adjusters with deductions):		(1050 x 102.4) / 100 = 1075.2
	Repair of equipment and intra-shop transport:		(500 x 102.4) / 100 = 512
	In-plant movement of goods:		300 x 102.4 / 100 = 307.2
	Wear of tools and production equipment:		120 x 102.4 / 100 = 122.9
	Other expenses:		744 x 102.4 / 100 = 761.9
	Total costs for maintenance and operation of equipment:

In general, there is an overexpenditure for this type of expense compared to the adjusted plan in the amount of 12.8 thousand rubles. However, if we do not take into account savings on individual expense items, then the amount of unjustified overexpenditure on depreciation, operation of equipment and its repair will be 60 + 4.8 + 17 = 81.8 thousand rubles. Eliminating the causes of this unlawful overspending is a reserve for reducing production costs.

General production and general business expenses are semi-fixed, i.e. they do not directly depend on changes in the volume of production.

General production expenses

Table No. 22

(thousand roubles.)

	Indicators	Estimate (plan)	Actually	Deviation (3-2)
	Labor costs (with accruals) for shop management personnel and other shop personnel
	Amortization of intangible assets
	Depreciation of buildings, structures and workshop equipment
	Repair of buildings, structures and workshop equipment
	Expenses for testing, experiments and research
	Occupational Health and Safety
	Other expenses (including wear and tear of inventory)
	Non-productive expenses: a) losses from downtime due to internal reasons b) shortages and loss of damage to material assets
	Excess material assets (subtracted)
	Total overhead costs

In general, for this type of expense there is a saving of 1 thousand rubles. At the same time, for certain items there is an excess of the estimate in the amount of 1+1+15+3+26=46 thousand rubles.

Eliminating the causes of this unjustified cost overrun will reduce production costs. Particularly negative is the presence of non-productive expenses (shortages, losses from spoilage and downtime).

Then we will analyze general business expenses.

General running costs

Table No. 23

(thousand roubles.)

	Indicators	Estimate (plan)	Actually	Deviations (4 - 3)
	Labor costs (with accruals) for administrative and management personnel of the plant management:
	The same for other general business personnel:
	Amortization of intangible assets:
	Depreciation of buildings, structures and equipment for general purposes:
	Conducting tests, experiments, research and maintaining general economic laboratories:
	Occupational Safety and Health:
	Personnel training:
	Organized recruitment of workers:
	Other general expenses:
	Taxes and fees:
	Non-productive expenses: a) losses from downtime due to external reasons: b) shortages and losses from damage to material assets: c) other non-productive expenses:
	Excluded income from surplus material assets:
	Total general expenses:

In general, there is an overexpenditure in the amount of 47 thousand rubles for general business expenses. However, the amount of unbalanced overexpenditure (that is, without taking into account savings available on individual items) is 15+24+3+8+7+12=69 thousand rubles. Eliminating the causes of this overexpenditure will reduce production costs.

Savings on certain items of general production and general business expenses may be unjustified. This includes items such as costs for labor protection, testing, experiments, research, and personnel training. If there are savings on these items, you should check what caused them. There may be two reasons: 1) the corresponding costs are incurred more economically. In this case, the savings are justified. 2) Most often, savings are the result of the fact that planned measures for labor protection, experiments and research, etc., have not been carried out. Such savings are unjustified.

At the analyzed enterprise, as part of general business expenses, there is unjustified savings under the item “Training” in the amount of 13 thousand rubles. It is caused by incomplete implementation of planned personnel training activities.

So, as a result of the analysis, unjustified overexpenditures were identified in terms of costs for the maintenance and operation of equipment (81.8 thousand rubles), in general production expenses (46 thousand rubles) and in general business expenses (69 thousand rubles).

The total amount of unjustified cost overruns for these cost items is: 81.8+46+69=196.8 thousand rubles.

However, as a reserve for reducing costs in terms of production maintenance and management costs, it is advisable to accept only 50% of this unjustified cost overrun, i.e.

196.8 * 50% = 98.4 thousand rubles.

Here, only 50% of unjustified overexpenditure is conditionally accepted as a reserve in order to eliminate double-accounting of costs (materials, wages). When analyzing material costs and wages, reserves for reducing these costs have already been identified. But both material costs and wages are included in the costs of production maintenance and management.

At the end of the analysis, we will summarize the identified reserves for reducing production costs:

in terms of material costs, the reserve amount is 69.4 thousand rubles. by eliminating excess returnable waste of materials and reducing transportation and procurement costs to the planned level;

in terms of wage costs - the amount of the reserve is 114.6 thousand rubles. by eliminating the reasons causing unproductive payments and the reasons for unjustified overspending on the wage funds of managers, specialists and other employees;

in terms of production maintenance and management costs - the amount of the reserve is 98.4 thousand rubles. by eliminating the causes of unjustified cost overruns in the costs of maintaining and operating equipment, general production and general business expenses.

So, the cost of production can decrease by 69.4 +114.6+98.4=282.4 thousand rubles. The profit of the analyzed enterprise will increase by the same amount.