If the very definition of the cost price seems intuitively clear, 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 is the determination of the costs of producing a good or service. This process is denoted by the economic term: "the calculation of the cost of production." Costing can be planned, standard, or actual. The first and second expresses the idea of how the economic process should be built. Actual costing is based on real data.
Calculation of the cost of production in the Republic of Belarus is a process regulated by many legislative and industry norms. This is due to the practice of setting prices based on the value of the declared cost. In many cases, enterprises have to, instead of market changes in prices, have to resort to regulation of the cost calculation system through the redistribution of costs from one type of product to others in order to have a legal opportunity to raise / lower the price.
After finding out the amount of costs and their distribution among expenditure items, it is the turn of calculating their specific value. Costing formulas are used to do just that.
Costing is a universal procedure for any economic process. The greatest difficulty such calculations have in the analysis industrial production... It also applies here nai large quantity different kind cost calculation formulas. These formulas can be adapted to other economic processes as well.
Full cost formula
For overall assessment the economic efficiency of the enterprise is often applied the formula of the total cost price. In the very simple version it looks like this:
Total cost = sum of production costs + sales costs.
Full cost is the highest planned or actual cost. The results for all other cost formulas are portions of this total.
For the greatest importance is not just produced, but sold products. Therefore, the cost formula takes the following form:
Cost of goods sold = full cost- the cost of unsold products.
An example of calculating the full cost price in expanded form, i.e. with emphasis individual elements, will look something like this:
Total cost = Costs of raw materials and supplies + Energy costs + Depreciation deductions + Salaries of key personnel + Salaries of management and support personnel + Salary deductions + Sales and sales service costs + Transportation costs + Other costs.
Special costing formulas
Knowing the total cost of producing and selling a product or service does not provide sufficient information to understand and evaluate individual elements of this system. So from the total cost, the amount of costs per unit of production is not visible. The costs of a single process remain uncertain. For this, many specific cost formulas have been developed that calculate individual values.
Given that some costs depend on the volume of production, and some do not, it is customary to distinguish between variable and fixed costs.
The amount of fixed costs is calculated by summing the values of some of the inevitable 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 salary + Cost of raw materials and materials + Cost of energy resources + Cost of transportation of products + Variable part of selling costs.
The cost of a unit of production in general form can be found by simply dividing the sum of costs by the volume of output in physical terms:
Unit cost = Full cost / Number of units.
For realities commercial organization more suitable more difficult option of the same formula:
Unit cost = Production costs / Number of units produced + Selling costs / Number of units sold.
There are many other costing formulas. Their exact number is difficult to determine, since each of them is formed according to the requirements of the accepted calculation method.
- The total cost of production is the calculation formula: C = waste on creating a product + waste of a non-production nature.
- Cost of the product sold (cost of sales) - calculation formula: C = total cost + business expenses- the remains of an unsold product.
- Production cost: C = gross product price - changes in WIP balances.
- Cost of gross production: С = production costs- non-production waste - future time expenses. Calculation of the cost of manufactured products has a huge impact on the formation of the future development strategy of the company, its position in the industry and the degree of consumer confidence.
Cost of goods sold
Indicator Calculation formula Costs of manufacturing products Materials + wages + depreciation + other costs Cost of production of gross products Cost of manufacturing products - non-production costs - payments of future periods Production cost of finished products Cost of gross products - \ + stock balances Full cost of production of finished products Amount of production costs and costs of transportation, fees, packaging Cost of goods sold Full cost of production plus advertising and marketing costs minus unsold goods Algorithm for calculating the cost of goods sold Specific types of manufactured products are subject to calculations: products.
Cost of goods sold: formula, methodology and calculation example
The calculation of the marginal cost is used to calculate all costs per unit of finished goods. The actual cost of one copy of the product consists of the following costs: materials, transport, wages, wear and tear, etc. In addition to the main types of cost, there are also types: Aggregate cost Costs for the production of a unit of production on a certain equipment are calculated.
Factory cost The cost of production is added to the cost of maintaining the plant. Total cost Consists of the costs of manufacturing products, repairing tools, staff development and taxes. Full cost Costs for loading, packing, transportation are added to the total costs.
Cost of sales. line 2120
And finally, for each specific product, the costs are attributed depending on the production need. The calculation process is quite complex and usually unites the work of several specialists. For the accuracy of calculations for products, estimates and rates for writing off costs are developed, prices are determined at which costs are written off, and at the final stage, indicators are analyzed and monitored.
Attention
Like other techniques, the full cost method has its advantages and disadvantages. The pluses include the elimination of market monopolization, since with this option for calculating goods, the price for the consumer is set on average at the same level. At the same time, sellers get the opportunity to realistically assess their costs and calculate the optimal cost of products for making a profit.
What is the profit of the enterprise and its types
Moreover, modern equipment allows us to talk about a decrease in the volume of rejects, which leads to savings in the cost of raw materials and materials for the manufacture of a specific product. Additionally, do not forget about another option for lowering the cost of goods. Its essence is to cooperate and expand the specialization of a manufacturing company.
Thanks to this, it is possible to achieve a significant reduction in the level of costs, both for administrative, managerial, and other types of activities of the organization. The opportunity to save money on production is also provided by analyzing the adjustments and upgrades made by the option of using the company's fixed assets. Additionally, you can revise the existing management structure, the administrative building in favor of reducing the number of hired employees.
Cost of sales - concept and calculation method
Process-by-Process What is the process-based calculation method can be understood from the accounting sequence diagram. Enterprise economists consider all direct and indirect costs of production for a certain period of time. Next, the resulting amount is divided by total amount manufactured products and get the cost.
This method is widely used in enterprises mass production products of one or several types, while the total manufacturing costs can be calculated in million rubles. Technological process should take a little time. At the same time, there should be no work in progress at the enterprise.
This method is called process-by-process because for its use the production process is divided into stages.
Calculation of the cost of goods sold
Operating profit is calculated using this formula: OP = BP + PC, where BP (balanced profit) - balance sheet profit, rubles; PC (percent) - interest payable, rubles. The net profit is found as follows: NP = BP - T, where NP (net profit) is the net profit, rubles; BP (balanced profit) - balance sheet profit, rubles; T (taxes) - value of the tax burden, rubles. Balance sheet calculation formulas The data for the calculation are shown in the income statement.
Available information from accounting statements allows you to calculate the following two types of profit using the same formula. The marginal and gross profit can be found using this formula: line 2100 = line 2110 - line 2120, where line 2100 is gross profit, rubles; p. 2110 - revenue, rubles; p. 2120 - technological cost, rubles. The sales profit is found as follows: p. 2200 = p.
2110 - (p. 2120 + p. 2210 + p. 2220), where p.
The total cost of production is determined ...
The total cost price usually includes the following types of costs:
- Production - consists of material, raw materials, fuel and energy, labor, depreciation, social and other costs directly expended in the production of SOE and its delivery to the warehouse of the organization. This group also includes the amounts of taxes, credit interest, rent, consulting, advertising, legal, auditing and other services received from outside.
- Commercial - consists of the costs associated with transportation, packaging, storage, advertising in order to sell the manufactured SOE and bring it to the end-consumer market.
- General production - for the maintenance of the main, auxiliary, service industries.
- General business - to ensure the successful operation of the entire enterprise.
An example of filling in line 2120 "Cost of sales" Indicators for subaccount 90-2 of account 90 in accounting (excluding turnover on the debit of subaccount 90-2 in correspondence with the credit of accounts 44 and 26): rub. Turnover for the reporting period (2014) Amount 1 2 1. By subaccount debit 90-2 72,013 678 1.1. On the debit of subaccount 90-2, analytical account for accounting for the cost of sales of finished products 53 214 540 1.2.
On the debit of sub-account 90-2, analytical account for the accounting of the cost of sales of goods 15 220 638 1.3. On the debit of subaccount 90-2, analytical account for accounting for the cost of rendering intermediary services 1 678 500 1.4. On the debit of subaccount 90-2, analytical account for accounting for the cost of car repair work 1,900,000 Fragment of the Statement of financial results for 2013
Explanations Indicator name Code For 2013 For 2012
Cost of sales balance sheet formula
These stages are called redistributions, and the method that is used to calculate the cost of such goods is cross-cutting.
- The calculation of the cost is carried out by redistribution, and not by types of goods or processes as with other methods. Several types of goods can be produced in one stage. Costing is carried out for the entire group of goods, in some cases, it is possible to divide products into types or groups.
Custom order The basis for calculating the cost of manufactured products is the availability of an order.
Important
The main expenses are calculated according to the list of goods that need to be manufactured and shipped to the customer. All further costs are recognized as incurred. As a result, the buyer's account in the manufacturing process of the product may increase.
The calculation algorithm is as follows:
- Managers take orders, register and assign numbers to them.
The value of VP (gross profit) in rubles. 200,000 232,000 The amount of sales costs in rubles. - 40,000 The amount of PE (net profit) from sales. The formula was used to calculate the total cost of the balance sheet and form 2 200000 192000 Thus, from the example it can be seen that the total cost of goods sold allows you to take into account all the costs incurred by the enterprise and more accurately set the price indicator in order to ultimately receive a large profit. Specifics of the full cost method In assessing current costs, the full cost method has been developed in order to establish a fair price for manufactured products. If the enterprise produces various products (types of goods), the responsible employees must first divide all costs by responsibility centers, that is, places of origin. Then you establish cost objects for their allocation.
If you carry out manufacturing activities or are engaged in speculative resale of certain commodity items, the cost of sales is the most significant parameter for you. To calculate this value, the presence of some other indicators is required. The subtleties of calculation actions and basic rules will be considered within the framework of this material.
The cost price is a set of costs (expenditure directions) that went to the production process of the product. Traditionally, this includes costs related to the units produced. But such a variant of calculations is also possible, within the framework of which administrative and commercial expenses are allocated to the cost of the final product.
This is one of the basic parameters related to accounting reporting, immediately following the sales proceeds. If you subtract the cost of sales parameter from revenue, you get gross profit, which can be positive and negative. As for other expenses of general economic importance, they also act as part of financial result... This is not all that is included in the cost of sales, since this indicator is very broad and generalized.
Cost of sales: varieties and classification
The cost of sales parameter can be considered in the context of cost directions and calculation elements. There are several key cost elements:
- material part (it includes raw materials, materials, components, expenses of general production value);
- personnel labor costs;
- deductions from salary - insurance, pension payments and other items;
- costs associated with depreciation (amortization) of fixed assets.
Calculation for current expenses
There is also a classification by article, which depends on the industry characteristics of the company. Traditionally, in practice, there are several fundamental cost items:
- raw materials and supplies;
- returnable waste;
- purchased components;
- fuel and energy resources;
- labor costs;
- deductions for needs of a social nature;
- production development costs;
- losses associated with marriage;
- implementation costs.
Considering the question of what the cost of sales is, it is worth considering two more classification signs. It can be medium or extreme. In the context of the full indicator, implies the volume of all waste associated with production activities, including business expenses. As for the marginal cost, it is represented by the price of a unit of output that is produced.
Within the framework of practice, several key types of cost are distinguished.
- Shop... It assumes the total amount of all expendable parts that were incurred by all structures that affect the process of creating a product.
- Production... Within its framework, the organization's expenses are recorded. Also here you can talk about general and target costs.
- Full... This indicator assumes the fact that the money spent on the final process of selling the product is attributed to the main expenses. That is, the costs associated with logistics are added here.
There are several more terms that define the cost indicator.
Cost analysis
The cost price acts as critical indicator to carry out analyzes aimed at improving operational efficiency. It can be implemented in several directions. For example, all expenses can be:
- variables(depending on the volume of output) - costs of warehousing and storage, purchase of raw materials, payment of wages to employees;
- permanent costs (not depending on the amount of products produced) - advertising costs, the cost of renting premises, the salary of management personnel.
Types of costs (expenses) on the chart
Thanks to the implementation of this type of analysis, you can start determining the volume of production, within which the company can recoup its costs, that is, achieve a break-even point and start making a profit. The source for analytical activities is accounting, as well as warehouse and production data. It is possible to analyze the cost on the basis of public reporting information only in a general way, defining only the trend of costs and profits (growth or decline). To ensure the conduct of deeper analytical activities, it is necessary to use the data that are in the accounting system of the enterprise.
How to carry out settlement activities
The cost of goods sold has certain calculation methods. To determine this indicator, it is necessary to have information about other company data.
- The price of the inventory that is available at the beginning of the year. If this indicator differs from the price of goods and materials at the end of the last year, it is worth finding an explanation for this phenomenon.
- The probable value of purchases, assuming the exclusion of goods that have been taken for personal use.
- Cost areas that were used to pay employees. From them it is necessary to exclude the amounts that are allocated for yourself.
- The cost of materials and other supplies.
Analytical cost accounting
After determining all these parameters and elements, you can answer a simple question, how to calculate the cost of sales and do it as efficiently as possible. After all, these indicators are the most important, and they must be present in the framework of your reporting documents without fail. To carry out the calculated actions, it is necessary to add up all these parameters. To do this, it is enough to subtract the sum of other indicators from the amount of inventories, and it will not be difficult for you to start determining the cost of sales of products.
The most common counting methods
Traditionally, the generation of a publicly available formula occurs in accordance with the full volume of accounted costs. There are several options for action - a normative option, by orders, by processes. Each of them has a base in the form classic version determining the full cost. In order to obtain the parameter of the total cost of the produced units of production, it is necessary to sum up all the values of the shop floor and other rasters. A workshop cost of sales consists of several components:
- operation of equipment along with its practical use;
- the cost of electricity and the purchase of process fuel used in the production process;
- payment arrangements for obligations, wages for basic workers;
- a complete list of workshop expenses, including depreciation, inventory, various deductions.
Special attention is paid to the general production costs of the company, which include the salaries of management personnel, travel expenses, the costs of maintaining the guard. In this regard, the calculated actions are performed in a specific sequence.
- Identification of the costs of a variable type associated with the creation of one product unit, taking into account costly activities.
- Determination of the types and directions of expenses directly related to the type of products.
- Implementation of the summation of accompanying expenditure operations that are not related to production-type costs.
Current costs of the company
If the value of the total cost of production is increased, there will be an increase in the cost of its sale. And this will negatively affect the indicator of the competitiveness of the product in the market and the company's ratings.
General view of the formula
The way in which costs will be calculated depends on the degree of readiness of the product units. The generalized type of the formula is as follows.
- Production costs:
Cost = Material costs + Depreciation charges + Payroll costs + General costs. - The generalized type of formula for calculating the total cost is as follows appearance which is important to take into account.
PS = production costs + non-production costs. - The calculation of the cost of a product that has been sold is carried out according to the following principle:
SP = PS + commercial expenses - product leftovers that have not been sold. - The production cost can be calculated based on the following formula.
PS = value of gross product - changes in WIP balances. - The cost price associated with gross output is equal to the following value:
BC = Production costs - non-production areas - future costs.
So, we looked at which areas the cost of sales includes. To have an idea of the company's activities as a whole, it is necessary to correctly analyze and calculate the main parameters. This will allow you to always be aware of the need to take the measures that are needed to improve business and improve basic economic indicators commercial activities.
Hello! Many people ask the question: what is the cost of goods or products? For the production of any goods, a number of various resources are spent: natural, energy, land, financial, labor, etc. The sum of all costs incurred will constitute the cost of production. More details this question consider in this article!
What is the cost of goods
First, let's look at determining the cost of a product.
Cost of goods - This is the monetary value of the current costs of the enterprise for the manufacture and sale of goods, as well as the actual cost of labor and financial resources.
In fact, the cost price is an indicator of production and economic activity firms reflecting financial expenses organizations for the production of products. The price of the goods directly depends on the cost price. 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 keeping records of expenses, several methods of calculating the cost of goods have been formed: standard, process-by-process, by-process, order-by-order. In turn, the cost is also subdivided into several types: gross, commodity and sold.
What is included in the cost of goods
Surely every novice entrepreneur at least once asked the question: why do we need a prime cost? And it is needed in order to objectively assess the profitability of an enterprise, to determine the wholesale and retail price of goods, to give an objective assessment of the efficiency of the expenditure and use of resources.
The cost of goods takes into account many indicators, depending on what exactly needs to be monitored.
The unit cost of goods directly depends on the amount of produced or purchased products. To understand this, it is enough to consider a simple example:
Let's say you went to the store to buy a pack of tea worth 100 rubles. Then the calculation of the cost will take the following form:
- Suppose 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: The 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 more than one pack of tea, but, let's 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 will cost you. Not a single company is interested in increasing the cost of goods.
Types of production costs
Basically, the cost price is the sum of all costs attributed to 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 which particular field of activity the entrepreneur wants to control, the following indicators can be calculated:
- Workshop, containing the costs of all divisions of the organization, aimed at manufacturing products;
- Production, which includes the workshop cost, as well as general and target costs;
- Full, consisting of production costs and costs of selling products;
- General business, which includes expenses that are not directly related to the production process, but aimed at doing business.
Production cost contains all the resources spent at the production stage, namely:
- The cost of purchasing raw materials and basic materials for the manufacture of products;
- The cost of fuel and energy production;
- Remuneration of labor to employees of the enterprise;
- Costs for internal movement of raw materials and supplies;
- Maintenance, Maintenance and the maintenance of the company's fixed assets;
- Depreciation of equipment and fixed assets.
Realized cost means the costs of the enterprise at the stage of selling the goods, namely:
- The costs of packing / packing / preserving products;
- The costs of transporting goods to the distributor's warehouse or to the direct buyer;
- Product advertising costs.
The total cost of goods is made up of the production and realized costs... Also, this indicator takes into account the cost of purchasing equipment.
Maintenance costs entrepreneurial activity and it is customary to divide into certain periods during which these costs should pay off. Such costs are added in equal shares to the total costs of production and sales of products and are included in the concept of total cost.
There is also a planned cost price, this is the average estimated cost of goods manufactured in the planning period (for example, for a year). Such a cost is calculated in the presence of consumption rates for the use of materials, energy resources, equipment, etc.
To determine the cost of one unit of finished goods, such a concept as the marginal cost is used. This indicator directly depends on the number 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 by costing item and cost item.
According to calculation articles:
- Raw materials, materials, components, semi-finished products, units, etc. required for the production of goods;
- Fuel and energy resources spent on production;
- Depreciation of fixed assets of an enterprise or fixed assets (equipment, tooling, machinery, etc.), the cost of their maintenance and maintenance;
- Remuneration for the main personnel (salary or tariff);
- Additional remuneration for personnel (bonuses, additional payments, allowances paid in accordance with the law);
- Contributions to various extrabudgetary funds (e.g. Pension Fund, social insurance fund, etc.);
- Production costs in general (sales costs, transportation costs, payroll for employees of the enterprise, etc.);
- Travel expenses (ticket prices, hotel fees, per diem);
- Payment for the work of third-party organizations;
- The costs of maintaining the administrative apparatus.
By cost elements:
- Material costs (raw materials, parts, components, fuel and energy resources, general production costs, etc.);
- The cost of wages of employees (remuneration of workers, auxiliary working personnel, for example, servicing equipment, remuneration of engineering and technical personnel, employees, i.e. managers, managers, accountants, etc., junior service personnel);
- Contributions to social institutions;
- Depreciation of fixed assets of the enterprise;
- Other expenses related to advertising, sales, marketing, etc.).
Under general production costs, it is customary to understand the costs of an organization for paying salaries to management, security payments, travel expenses, as well as remuneration of the management department. This expense item also includes depreciation and maintenance of buildings and structures, labor protection, training and education of specialists.
The figure shows the approximate items of the enterprise's expense for the production of products.
Theory of Constraints
According to this theory, there are certain significant costs that do not depend on the quantity of products produced. Such costs include loan payments, rent and payroll for permanent employees. Given these fixed costs, the use of production costs as an indicator becomes a constraint economic policy enterprises, which can lead to illogical decisions. For example, a product sold below cost is removed from production, which in turn raises the cost of other manufactured goods.
Methods for calculating the cost of goods
There is no single methodology for calculating the 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 more different factors.
As a rule, in order to calculate the cost of production, you need to take into account the following factors:
- The sum of all expenses for the production and sale of products;
- The costs of the manufacturer for acting as an entrepreneur;
- Costs associated with the 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 an item, you need to make a cost estimate. It is made up based on the amount of products produced (in pieces, meters, tons, etc.). The calculation must reflect absolutely all costs associated with production. (Which items are included in the calculation is described in the paragraph "Cost structure").
Method # 1
Complete addition of costs to cost. The cost price is full and truncated. At full cost, all expenses of the enterprise are taken into account. When truncated, the unit cost at variable costs Oh. A constant share of overhead costs is attributed to the decrease in profits at the end set period and is not allocated to the goods produced.
With this method of determining the cost, this indicator is influenced by both variable and fixed costs. When adding the necessary profitability to the cost price, the product price is determined.
Method # 2
In this method, the actual and target costs are calculated based on the costs incurred by the entity. The standard cost allows you to control the cost of raw materials and materials, and, in case of deviation from the norms, to take appropriate measures. This method is very laborious.
Method # 3
Alternating method. It is convenient for use in enterprises with serial or in-line production, while the products go through several stages of processing.
Method # 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:
- We calculate variable costs for the production of one unit of products, taking into account the costs;
- From the general plant costs, we single out exactly those that relate to this kind products.
- We summarize all costs that are 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 price, then one calculation formula this is indispensable.
Production costs:
С = МЗ + А + Tr + other expenses
Where C is the cost of costs;
МЗ - material costs of the organization;
A - depreciation charges;
Tr - waste on wages to employees of the company.
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 - the 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 for the sale of goods (packaging, storage, transportation, advertising).
The cost of goods sold is calculated by the formula:
Where PS is the total cost,
KR - costs associated with the commercial activities of the enterprise,
OP - the remains of unsold products.
Gross cost is defined as:
C = Production costs - non-production costs - future costs
If the company produces only one type of product, then its cost and price can be determined using the costing method. In this case, the unit price of a product is obtained by dividing the sum of all costs spent on production by the amount of products produced. It is worth remembering that all calculations are made for a certain set period.
Calculation and analysis of the cost of goods produced by a large enterprise is a very complex and time-consuming process that requires certain knowledge, therefore, an accountant solves such problems. At the same time, 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 cost of producing a single unit of product.
Cost classification
Depending on what task you want to accomplish, the costs are classified as follows:
- There are two types of costs that are usually added to the cost of the finished product. These are direct costs (these costs are added to the cost of the finished product in a precise way, or in a 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;
- Depending on the quantity or volume of products produced, the costs are:
- Constant (independent of the volume of goods produced), indicated per unit of production;
- Variables (depending on the volume of production or sales);
- There are also costs that are relevant to a particular case. Such as, relevant (dependent on decisions taken) and irrelevant (not related to the decisions made).
All of the above indicators of costs and expenses significantly affect the formation of the price of goods. But there is another important indicator - tax deductions.
A mistake in calculating the cost of goods sold can be costly for a business owner. Aspiring entrepreneurs can set average market prices for the services or goods they produce. Practice shows that the cost of production is different for each owner.
Analysis of the cost of goods or services produced is an effective tool for managing the competitiveness of any enterprise. It shows the profitability of production, helps to optimize fixed and variable costs. Calculation of the cost price helps to determine the correct retail and wholesale price, which is a kind of protection against unjustified reduction in the cost of production.
The profit of the enterprise directly depends on the calculation of the cost price. The lower the cost of production, the greater the income, and vice versa. Therefore, manufacturers, in pursuit of increased profits, forget about the quality of products. Calculation of the cost of production allows you to balance these processes and is the main tool for enterprise management.
Definition and types
Cost of goods sold - the sum of fixed and variable costs of production, as well as the sale of a unit of production. These include the salary of the employee, the cost of the materials from which the products are made, the cost of transportation, rental of premises, etc.
Different types of product manufacturing require individual approach to the calculation of the cost of manufacturing a unit of goods. In the science of economics, the following concepts of cost are distinguished: full and maximum.
The total cost of finished goods is understood as the ratio of all costs to the total volume of goods produced. These are the costs of salaries, taxes, raw materials, depreciation, advertising and others. This approach is used in large enterprises.
The calculation of the marginal cost is used to calculate all costs per unit of finished goods. The actual cost of one copy of the product consists of the following costs: materials, transport, wages, wear and tear, etc.
In addition to the main types of cost, there are also types:
General structure
The structure of the cost of finished goods is determined by calculation items or cost elements:
Methods for calculating the cost of goods sold
There are the following methods of calculating the cost price: by-process, standard, indicative, by-cut. The choice of the calculation method depends on the state of readiness of the goods. In order to calculate the cost of goods sold, you must have all the data about the product, how it is produced, where it is sold.
| Index | Calculation formula |
| Manufacturing costs | Materials + salary + depreciation + other expenses |
| Gross production cost | Manufacturing cost - non-production costs - prepaid payments |
| Production cost of finished products | Cost of gross production - \ + stock balances |
| Full production cost of finished goods | The amount of production costs and costs of transportation, fees, packaging |
| Cost of goods sold | Total production cost plus advertising and marketing costs minus unsold items |
Algorithm for calculating the cost of goods sold
Specific types of manufactured products are subject to calculations:
| Normative | This method of calculation is based on data on the required costs for the commodity production of a unit of output. It can be technological maps, production instructions. The economist, on the basis of such data, calculates the cost of producing a unit of goods or services. Basic principles this method:
With this accounting method, the actual cost is made up of the calculation of costs according to the norms and possible deviations from these standards. The company has no right to change the standards during the reporting period. They are analyzed, after which changes are made to the technological process. |
| Process-by-process | What is the process calculation method can be understood from the accounting sequence diagram. Enterprise economists consider all direct and indirect costs of production for a certain period of time. Next, the resulting amount is divided by the total number of manufactured products and the cost is obtained. This method is widely used at enterprises of mass production of products of one or several types, while the total manufacturing costs can be calculated in millions of rubles. The technological process should take a little time. At the same time, there should be no work in progress at the enterprise. This method is called process-by-process because for its use the production process is divided into stages. There are several options for using the method in work:
|
| Transverse |
|
| Custom | The basis for calculating the cost of manufactured products is the availability of an order. The main expenses are calculated according to the list of goods that need to be manufactured and shipped to the customer. All further costs are recognized as incurred. As a result, the buyer's account in the manufacturing process of the product may increase. The calculation algorithm is as follows:
The custom-made method is convenient for small businesses where there is no prepayment. This is the calculation of the cost of finished goods after the order is made. The total cost is divided by the volume of finished products. |
Basic formulas
Understanding the definition of cost is not difficult. Difficulties arise with the formulas for its calculation. The calculation of the cost of products is regulated by law. Nevertheless, in conditions of instability, one has to include certain risks associated with the release of products in the total cost.
Cost formulas are used to determine the exact cost of manufacturing a unit. The correctness of the calculation affects the future profit, therefore it must be calculated accurately and correctly.
So, to determine the economic efficiency, the formula for the total cost price (hereinafter PS) is used.
It looks like this:
PS = ∑ costs of production + costs of selling products
The PS formula is the main one, all the others represent its separate parts. This indicator indicates what the planned cost of the finished product will be.
If it is important to know not only the cost of manufactured products, but also the costs of their implementation, use the formula for calculating the cost of goods sold (hereinafter PSA):
PSA is equal to PS - cost of unsold products
In addition to the basic formulas, special calculation formulas are applied that take into account the cost of individual quantities. There are costs that affect how fixed costs and variables. The total cost does not provide an understanding of the individual components of the entire system.
Fixed costs = salaries of permanent employees and contributions to government funds + maintenance of working premises + depreciation of fixed assets + tax on fixed assets + marketing costs.
Variable cost = temporary workers wages + variable cost Supplies+ electricity, gas + transportation + variable marketing costs. If desired, you can analyze the changes in variable costs over a certain period of time, and derive the rate of their growth or decrease.
The unit cost is easily calculated using the arithmetic mean method. All costs are paid for the number of units produced.
Principle and example of finding the amount
The basic principle of costing is consistency. We do everything step by step necessary calculations based on the standards created for certain types of production. Next, we apply the basic formulas and get the cost of goods sold.
Costing example. For example, the Zvezdochka enterprise specializes in the production of pots and pans. It is necessary to calculate how much a unit of goods costs. During the reporting period, 30 pans and 13 pots were produced, 20 pans and 10 pots were sold. A preliminary costing has been made.
As a result, 125 thousand rubles were spent on pans:
- materials 100 thousand rubles;
- electricity 15 thousand rubles;
- a patch with deductions of 5 thousand rubles;
- depreciation 3 thousand rubles;
- other expenses - 2 thousand rubles.
For pots 61 thousand rubles:
- materials 50 thousand rubles;
- electricity 5 thousand rubles;
- a patch with deductions of 2.5 thousand rubles;
- depreciation 1.5 thousand rubles;
- other expenses - 2 thousand rubles.
The cost of the frying pan is 4 thousand rubles. (125/30), pots - 4.6 thousand rubles. (61/13). As a result of the sale, the company sold all the pans and pans. The total cost of goods sold is equal to the sum of the production costs of all goods, i.e. 186 thousand rubles
Analysis of the results
The analysis of the results of calculating the actual cost is carried out in order to identify the inefficiency of the use of resources. In the process of analysis, specialists can identify missed opportunities, find the keys to reduce costs. An analysis of the totals is also necessary to identify errors in previous calculations, because the cost of goods sold is reflected in and written off by posting.
This procedure is carried out in stages. The formula is used to calculate the total cost of production. Further, its structure is studied.
The analysis is carried out over several reporting periods. This could be a month, a year, etc. The results obtained are compared, and the magnitude of the deviations is determined. In order to comply, the analysis is carried out across the entire product range.