Calculation of material costs formula. Material costs the formula for calculating the balance sheet. Return on Cost Based on Financial Statements
The ultimate goal of any enterprise can be considered profit, which is a positive difference between the income received and the expense incurred.
Profit is an absolute financial indicator, calculating which an entrepreneur can conclude that for a certain period his income covered expenses. At the same time, this indicator does not make it possible to assess the effectiveness of activities. In this case, the formula for overall profitability comes to the rescue.
Simply put, profitability shows how much profit is in each ruble spent by the company.
Overall profitability formula
The formula for the overall profitability in its simplest form is as follows:
P = P / x * 100%,
Here P is an indicator of profitability;
P is the amount of profit;
x is the indicator for which it is necessary to calculate the profitability.
The profitability indicator is expressed as a percentage, so the result from the quotient is multiplied by 100%.
Types of profitability
Calculating different types of ROI has many aspects.
How to calculate profitability: how to determine if a business is profitable?
There are several types of profitability, let's consider the main ones:
- Return on assets, which is designed to show the amount of profit returned by each ruble invested in the company's property. To calculate this type of profitability, profit must be correlated with assets.
Total ROI formula for calculating assets:
Ract = P / SA * 100%
Here Rakt is an indicator of return on assets;
P - the amount of profit (profit for the calculation can be both net and profit from sales, which depends on the calculation goals);
CA - the average value of the assets of the company for the billing period.
When calculating, for example, the return on equity, you can find out how efficiently the investment is working. The general formula for the return on total capital is as follows:
Rcap = P / C * 100%,
Here Rcap is an indicator of the return on equity;
P - net profit (this type of profitability is calculated exclusively in accordance with net profit);
K is the average capital in the billing period.
The return on borrowed capital is calculated privately:
Rzk = P / (DO + KO) * 100%,
Here Рзк is an indicator of the return on borrowed capital,
P is the amount of net profit;
DO - the amount of long-term liabilities;
KO is the sum of short-term liabilities.
With the help of this indicator, the profitability of each ruble of borrowing is reflected.
The formula for the total profitability of sales is calculated by the ratio of profit to sales volume. This formula shows how much profit is in each ruble of revenue.
The formula for return on sales is as follows:
Pprod = P / OP * 100%,
Here P is the profitability of sales;
P is the amount of profit;
OP is the volume of sales (proceeds).
Any profit can be used to calculate the return on sales, depending on what information users need (gross, operating, net, etc.).
- Product profitability, which is the most important indicator of profitability, showing cost effectiveness and the share of profit in each ruble spent on production. The formula for calculating the profitability of products is the ratio of profit to the cost of production.
Examples of problem solving
The essence of material return
An enterprise with large production volumes must carefully monitor its material costs, for which special indicators are used in the accounting. The effectiveness of the use of material resources can be determined by means of several generalizing indicators, including:
- Material efficiency,
- Material consumption,
- Material cost coefficients,
- Profit for every ruble of material costs,
- Specific weight of material consumption in the cost of products.
Balance material efficiency formula
The formula for material efficiency in the balance assumes finding the ratio of the value of the produced product (volume) to the amount of material costs incurred for its production.
The formula for material efficiency in general form is as follows:
Mo = SP / MZ
Here Mo is an indicator of material efficiency,
JV - manufactured products, revenue (in kind or in value terms),
MZ - material costs of production.
The balance sheet material recovery formula assumes information from the financial statements. In this case, the value of material costs is taken from the appendix to the balance sheet (form No. 5, first line), and the value of proceeds from the income statement (form No. 2).
Practical use of material efficiency
The material efficiency indicator is considered dimensionless, the higher the coefficient calculated by the formula, the less material is required to produce the same amount of products.
The formula for material efficiency in terms of balance has one feature - the cost of a product is measured not in sales prices, but in the prices of materials spent on its production. In the opposite case, the material efficiency indicator will not be as informative, since it will depend on changes in the profit rate and product prices.
The balance sheet material efficiency formula is most often used when comparing the indicator with previous periods or when comparing with the material return value of similar companies.
The rate of return on assets is increasing through the introduction of advanced technologies (techniques), increasing control over the careful use of materials.
The value of the indicator of material efficiency
If the company is able to competently optimize the material efficiency indicator, it becomes possible to obtain more profit for the reporting period.
Step-by-step instructions for calculating the profitability of an enterprise
The balance sheet material efficiency formula allows for the analysis and characterization of the resources that the company has.
Material efficiency has an inverse indicator called material consumption. These indicators can be considered as general values of the efficiency of the use of resources that are used in accounting for the production of the company's products.
In the case of an increase in material efficiency, they speak of a positive trend, since the cost price is minimized and more competitive products are produced.
Examples of problem solving
The profitability ratio is the ratio of the net profit (after payment of all taxes and interest) of the enterprise to the total amount of sales, that is, to revenue. It reflects the efficiency of the organization, its financial results and shows how much of the proceeds from the sale is profit. The value of the indicator should be above zero, which means that the company is profitable. Otherwise, it is unprofitable. The calculation uses the data of the statement of financial results.
The goal of any commercial organization is to make a profit. The further development of the enterprise and its financial stability depend on its size. The management of companies, analyzing the results of their activities, uses different ratios, including profitability indicators, which give an idea of how much profit was received on the amount of invested funds, equity capital, total assets or revenue.
Determination of the coefficient
The profitability ratio (return on sales - ROS) shows what percentage of profit is contained in the total amount of the company's revenue. This is a relative indicator used by management, investors and lenders to analyze the business activity of the company and its performance.
Why is the profitability ratio calculated?
The ROS value allows you to evaluate:
- the level of business activity;
- share of profit in the volume of proceeds;
- risks of increasing the cost of production;
- the overall efficiency of the enterprise.
The indicator is calculated for both internal and external use. The management of the company uses it to make a decision on the need to reduce costs, selling, management or other expenses. Investors and lenders assess the degree of profitability and the margin of financial strength.
Important! For the management of the company, investors and lenders, it is not the volume of sales itself that is important, but how much net cash received from these sales.
Normative value
ROS should be higher than 0. If this is not the case, then the management of the enterprise is ineffective and it incurs losses. The normative values of this indicator depend on the industry:
- agriculture - 9%;
- retail trade - 2.2%;
- real estate transactions - 5.7%.
- oil and gas production - 4.1%;
- food production - 1.5%;
- construction of buildings - 1.1%.
Reference! There are no strict ROS regulations. These are only the average values by industry for the year, collected by Rosstat based on the analysis of the activities of Russian companies.
For a complete list of averages, download the Excel file.
In general, an enterprise is considered:
- low profitable if ROS is in the range of 1-5%;
- average profitable at ROS from 5% to 20%;
- highly profitable in the case of an indicator value of 20-30%;
- super profitable if the value exceeds 30%.
The efficiency of economic activity can be judged by analyzing the indicator in dynamics. Its increase indicates a high efficiency of sales and a reduction in production costs.
Calculation procedure
The indicator is calculated by the formula:
where PE is the net profit, that is, the profit remaining after the payment of interest and taxes;
В - proceeds from the sale of products.
Important!
What is ROI in simple terms?
This formula is used exclusively for Russian financial statements. In Western practice, ROS is calculated not on the basis of net profit, but on the basis of profit before taxes (EBIT).
The values of the indicators are taken for the same period, as a rule, this is a year. Several coefficients are calculated, ideally over 5 years, to assess the dynamics.
Formula for accounting forms
To calculate the ROS indicator, the data of the statement of financial results is used.
where p. 2400 of the report on f. R. - the value of line 2400 of the statement of financial results;
p. 2110 of the report on f. R. - the value of line 2110 of the statement of financial results.
ROS belongs to the group of profitability ratios:
- profitability of sales on EBIT - the ratio of profit before tax to sales;
- return on assets (ROA) - private equity divided by the assets of the enterprise;
- profitability of products - the ratio of EBIT to the cost of goods sold;
- return on equity (ROE) - characterizes the ratio of private equity to the amount of equity.
Calculation example
For example, let's calculate the profitability ratio of PJSC "LUKOIL" for the last three years using Russian and Western systems of financial analysis.
Data source: the official website of PJSC "LUKOIL"
As the calculation showed, the value of the coefficient over the past years is significantly higher than all standard values. PJSC LUKOIL is a super profitable enterprise. In 2015, the profitability ratio exceeded 100%, which indicates that the company has significant income from other activities not related to the sale of products. In this case, the drop in the coefficient in 2016 does not play a significant role, since its value is extremely high, and the growth next year indicates that the difficulties encountered were temporary.
Rice. 1. Dynamics of ROS of PJSC LUKOIL.
You can download the table with the calculation of the profitability ratio (ROS) in a convenient format - in an Excel file.
Questions and answers on the topic
The cost-benefit ratio is one of the main indicators for assessing the efficiency of a company, its use of resources, and the quality of management. On its basis, it is possible to determine what share of profit each ruble of spent labor, capital, financial resources brings. The data for the calculation are taken from the statement of financial results - F. No. 2. It is necessary to analyze ROCS by year in dynamics, as well as in comparison with similar enterprises in the industry. The normal value of the indicator is РЗ> 0.
Any enterprise in its activities often has to face the emergence of new competitors, changes in the cost of resources, adjustments in the product life cycle. In these conditions, it is important to objectively assess their advantages, to determine the ways of optimal use of material, labor and monetary resources.
Return on cost(Return on Cost of Sales - ROCS, РЗ) is a relative financial indicator that allows you to determine the efficiency of using the company's resources in its activities, the ratio of the balance sheet profit to the total cost of goods, works, and services sold.
Reference! Balance sheet profit is a category of financial analysis that is not indicated in the company's financial statements. In practice, it is equated to profit (loss) before taxes, presented in the statement of financial results (F. No. 2).
The value of the ROCS ratio is the ability to estimate the costs incurred in connection with the needs of the production process. It can be calculated not only for the entire enterprise as a whole, but also for individual production units and types of products.
Reference! In practice, RZ provides owners and managers with more meaningful information than indicators of the profitability of working capital and equity. He accurately indicates how much profit the company will receive from each ruble spent on production.
ROCS is a criterion on the basis of which it is possible to evaluate not only the efficiency of cost management, but also the policy of forming the cost price and profit of the company.
Reference! Often, managers assess the RH of competitors to determine their weaknesses and form their own quality policy for the optimal use of resources.
Formula for calculating ROI
All information to determine the profitability of costs can be taken from the financial statements of the organization - the statement of financial results (F. No. 2):
- Balance sheet profit (Art. 2300).
- Cost of goods sold (Art. 2120).
An important point! When assessing RH, it is worth using the full cost of production - the sum of costs for the production and sale of products, works, services.
In general terms, the formula for assessing the return on costs can be represented as a ratio:
ROCS = BP / PSA * 100%, where
- BP - balance sheet profit;
- PSA - cost of goods sold.
For ease of use in practice, it makes sense to express the formula through the financial statements:
ROCS = Art. 2300 / st.
An important point! In some cases, gross profit or operating profit is used in the formula instead of carrying profit. However, in this case, the result will be less accurate: operational, commercial, administrative and other costs will not be taken into account.
Indicator standard value
There is no exact limit value for the cost-benefit indicator: it depends on the industry affiliation of the enterprise. At the same time, there are several rules for assessing it:
- the value of the coefficient must always be positive (РЗ> 0) - otherwise, it is safe to say that the company is suffering losses;
- it cannot be considered for a separate period of activity of one enterprise - the relative indicator requires comparison with previous periods, basic values or other enterprises of the same industry.
An important point! ROCS for capital-intensive products (mechanical engineering, mining, metallurgy, etc.) will always be lower than for goods of a simple production cycle, trade, and services.
A positive indicator of economic profitability is considered normal (ER> 0).
Examples of calculating the coefficient
The process of calculating the profitability of costs is presented in detail using the examples of two well-known Russian corporations: the capital-intensive PJSC ANK Bashneft and the online platform for the sale of goods Yulmart.
Output! The dynamics of the RP indicator for PJSC JSOC Bashneft is unstable: in 2016 it decreases by 8.69% due to a large-scale reorganization, which entailed an increase in the cost of goods sold. In 2017, the company introduced new approaches to cost management. The structure of the corporation changed, which led to a reduction in administrative and operating expenses, which ensured a decrease in the balance sheet profit.
Output! Within the framework of NEPAO "Yulmart" the profitability of costs is increasing at a gradual rate: by 1-3% per year. This trend is due to the gradual reduction in administrative and commercial costs. The growth in the balance sheet profit covers the growth in the cost of production and ensures an increase in RZ.
Despite the fact that in 2017 both of the corporations under consideration showed an increase in profitability, this ratio is higher for Yulmart: its assets are mainly represented by inventories, while for ANK Bashneft, ROCS is expensive fixed assets.
A detailed algorithm for calculating the ROCS indicator based on the Excel spreadsheet editor is presented in the sample.
Questions and answers on the topic
No questions have been asked about the material yet, you have the opportunity to do it first
It is customary to refer to the material costs of the organization as such costs that were directed to the purchase of materials, as well as raw materials in order to create the final finished product. The specific features characteristic of the accounting process in commercial companies suggest that the management of each such organization independently determines a list of material expenses with its fixation in its own accounting scheme.
At the same time, it should be noted that the procedure for accounting for all material costs of the organization was unified on accounts 20-29 of the prescribed plan by representatives of the leadership of the Ministry of Finance of the Russian Federation. For this reason, certain methods, allowing you to calculate the amount of material costs within the balance sheet and derive on their basis a coefficient that accurately evaluates the performance of the company.
What is included
Among the most significant costs of the enterprise certainly include material. Often this type takes about 60-90%
from all costs of the company. For this reason, they should be given special attention. Before proceeding to the consideration of accounting for material costs, it is necessary to find out what exactly is included in them.
The material types of expenses of the organization include:
- outsourced raw materials and various materials;
- purchase from suppliers of semi-finished products and some kind of component parts;
- various types of services and works that are performed by third-party companies;
- all types of fuel that are purchased from other organizations;
- all types of energy resources that are used by the company in the course of its functioning;
- payment for the services of intermediaries, as well as various commission fees.
Each of the presented elements is credited to general cost price scheme taking into account the need to deduct the price of waste to be sold. It is customary to include the residual amount of primary raw materials, materials, components or thermal media that arose as a result of the production process and completely or partially lost their original consumer properties.
Depending on the method of their further use, they can be sold at a reduced price or at full primary cost. At the same time, it is worth noting that the material resources that, within the framework of a certain technological process, are transferred to other production departments and can be used as full-fledged materials for creating a finished product cannot be classified as a returnable type of waste.
The company's material costs consist of the totality of all purchased materials that are used to ensure the operation of the production process. Such materials include even those used for packaging, as well as for other production needs related to the maintenance, operation, testing and control of existing equipment, as well as buildings.
This category also includes various kinds of fixtures, tools, inventory, as well as laboratory installations and other labor tools that cannot be regarded as part of the fixed assets of an enterprise.
Of great importance in the amount of the cost of material resources of the company is the cost of their purchase excluding VAT... In addition, the influence of the size of the margin, the cost of broker services, commodity exchanges, customs duties, payment for storage of products, the cost of transportation and delivery, as well as commissions of organizations involved in supply and foreign economic activity cannot be neglected.
In order to determine the optimal price of the final product of the enterprise, a thorough analysis of the prices of materials that are offered by suppliers is carried out. In addition, this method allows you to increase the overall indicators of the economic stability of the organization in modern market conditions.
Also, we must not forget that in order to improve the efficiency indicators of the use of material resources it is recommended to actively use technology which helps to reduce waste and energy consumption of the production process.
An important aspect that affects the final cost of production is the usefulness of the use of industrial waste, as well as the validity of their assessment.
The process of rationing the use of material costs acts as one of the prerequisites for the rational use of the company's available resources... The consumption rate represents the maximum allowable amount of raw materials, materials and fuel resources used, which are consumed to create one final product of a certain quality, as well as for the full implementation of technological production processes.
Today the existing regulatory system is set of norms that have a scientific, labor, economic and financial justification, which are used in the development and creation of both promising and current plans for a commercial structure.
There is only four main methods, allowing you to control the amount of materials and raw materials used:
- documentation;
- batch cutting;
- batch accounting;
- inventory.
Documentation technique applied by all enterprises. This method is based on the procedure for issuing separate documents for each case of deviation of the quantitative consumption of raw materials from the previously determined standard volumes.
In industry that affects the field of mechanical engineering, a technique called batch cutting... The bottom line is the formation of special cutting sheets for each individual batch of incoming materials.
In such sheets, it is necessary to indicate the total volume of materials and raw materials, semi-finished products, as well as waste that should have been received and their real volume received. At the next stage, the final results are compared with the standard indicators. After that, a conclusion is made about the available savings or overruns. Ultimately, information on the reasons for the identified deviations, as well as the persons who are responsible for the resulting cutting, are entered into the record card.
Process batch accounting presupposes the formation of raw materials and material batches that are homogeneous in terms of technological parameters. Each batch is stored separately. In addition, each of them is assigned a unique individual number designation.
In the future, all these batch numbers must be indicated in all primary material accounting documentation. This method makes it possible to attribute each batch of materials to a specific type of product.
Usage inventory method assumes that at the end of each month the process of inventorying the available unspent raw materials and material stocks is initiated. Inventory technique can be characterized following formula:
P = He + P - Ok, where
R- the price of used inventories, He- the price of the primary material balance, NS- the amount of materials received per month, OK- the price of the final material balance.
Each enterprise in the course of its work uses a huge amount of different kinds of materials and raw materials. One of the main tasks of the management of such organizations is to monitor compliance with established production standards, as well as the dynamics of real material consumption.
This is due to the fact that this type of cost has the greatest impact on the size of the total recoverable profit... At the same time, processes that affect material savings act as critical factors in helping to improve the overall performance of the manufacturing process.
Outcomes
The main task of each enterprise is to extracting as much profit as possible... This can be achieved only through competent management of the internal processes of such an enterprise. One of the most important factors affecting the general economic indicators of the success of a commercial structure is correct management of material costs.
The material cost reduction webinar can be viewed below.
The accounting features imply that all firms have the right to independently determine the list of material costs and reflect it in their accounting policies. In accounting, accounts from 20 to 29 are provided for accounting for material costs. In the balance sheet, line 1210 is provided specifically for their reflection.
Since all firms determine the list of material costs in accounting themselves, the characteristic features of accounting for such costs will directly depend on the characteristics of a particular company.
The unity of the approach to their accounting lies only in the fact that material costs, being a component of production costs, are accounted for in accounts from 20 to 29.
General calculation formula
The formula for material costs will be as follows:
Mz = Zmdt + Zte + Zsip + Zstop + VATm.
- Zmat - the cost of materials that are required to implement the production process;
- Zte - costs for energy and fuels and lubricants;
- Zsip - the cost of purchasing and using natural raw materials;
- Zstop - the cost of services performed by third-party firms;
- VATm - the amount of VAT paid by the supplier.
Material costs in the balance sheet
Consider unified reporting forms and establish how to find material costs in the balance sheet.
To account for material costs, there are no specials in the balance sheet. lines. But, despite this, accounting provides several accounts for their accounting: 20, 21, 23, 25, 26 and 29.
Material cost analysis
Material costs are one of the main cost items in any production process. As a result, they are usually closely monitored by the employees of the economic planning department. After all, it is not enough to carry out the calculation of material costs, it is also important to analyze the results obtained.
One of the main coefficients, which is calculated using the indicator of material costs, is material consumption. To calculate it, it is necessary to divide the material costs by the total cost of manufacturing the goods. This indicator reflects how much is the share of material costs in the total cost of goods.
Another approach to determining the consumption of materials is to calculate the share of material costs in the production of products. In this case, material consumption is the ratio of material costs to the number of manufactured goods in value or in kind.
An increase in this indicator means that the amount of material costs per product has increased, and the profitability of goods has decreased. This is why material management is the key to reducing costs and increasing profitability.
Separately, you can determine the profit per 1 ruble. material costs. This can be done using the formula:
- Пмз - profit, which falls on one ruble of material costs;
- P - income from the sale of goods;
- MZ - the amount of material expenses that were committed for the manufacture of goods.
Material Cost Ratio
The coefficient of material costs is calculated by the formula:
Кмз = МЗф / МЗп.
- МЗф - actual expenses of a material nature;
- МЗп - planned indicators of material costs, which are calculated on the actual volume of production.
One of the most popular concepts of commerce, economics and entrepreneurship is the formula for the cost of creating and selling products. The indicator is explained as the total number of funds spent by the company for the production and subsequent sale of a service or product, in strict dependence on the sector of the economy in which the company operates.
Calculation: Existing Waste Cost Types and Types
Today, the cost is divided into marginal and average (in other words, the total cost).
Full cost, means the volume of all production waste of the enterprise, including commercial, aimed exclusively at the production process.
The marginal cost indicator is the unit cost of the product created.
Key types of costs:
- Shop... It implies the total volume of all costs of the firm, incurred by all of its production structures that have a direct impact on the creation of the product.
- Production... It takes into account the company's expenses incurred by all involved structures of the company, as well as general and targeted spending.
- Full cost implies that in addition to the costs of the enterprise for organizing the entire production process of the release of a product or service, money intended for the final sale of the released product is entered in the line of waste. In other words, to the production cost of waste are added the costs necessary to build logistics, deliver goods to the end consumer.
In addition to the above types, such concepts as the average industry, individual, actual, as well as full cost are often used.
Structure
The architecture of the cost of waste of the company is built on the basis of the following structural indicators:
- Wage. Depending on the deductible cost, wages can be taken into account for auxiliary personnel, the main class of workers, junior maintenance and intellectual personnel.
- Deductions for the depreciation of the main assets of the enterprise (renovation of buildings, improvement of the adjacent territory).
- Waste on the organization and conduct of social events.
- Material expenses of the company. The following types are credited: the purchase of raw materials, electricity, general production costs, the purchase of components and production equipment.
- Waste on the development and implementation of a marketing strategy.
The following balance sheet items are taken into account in the calculation process:
- Electricity and fuel used in the process of creating the manufactured product.
- The approved salary of the main personnel of the company.
- Key materials used in the production of a product (for example, components, semi-finished products, units).
- General production costs aimed at delivering the product to consumers (sale), payment of employees involved in the repair of production facilities and fixed assets of the company (premises), intra-production waste.
- Depreciation deductions in favor of the main production fund.
- Social expenses of the company.
Also taken into account are the costs of paying for the services of contractors, travel allowances and administrative expenses for the maintenance of the management apparatus. The calculation of the cost of spending on the creation of a product may be different depending on which sector of the economy the company operates in.
The main goals of cost planning are to identify and use the available reserves to reduce production costs and increase on-farm savings. The plan (estimate) for the cost of production is drawn up according to the same rules for all enterprises. The rules contain a list of costs included in the cost of production, and determine the methods for calculating the cost.
The plan for the cost of production includes the following sections:
1. Cost estimate for the production of products (compiled by economic elements).
2. Calculation of the cost of all marketable and sold products.
3. Comparison of planned cost estimates of individual products.
4. Calculation of the reduction in the cost of marketable products by technical and economic factors.
Common to all industries is the procedure for including in the cost of production only those costs that are directly or indirectly related to the production of products. You can not include in the planned cost of production costs that are not related to its production, for example, costs associated with servicing the household needs of the enterprise (maintenance of housing and communal services, costs of other non-industrial farms, etc.), overhaul and construction and installation work , as well as the costs of cultural and household purposes.
Not included in the planned cost and some other costs, for example, non-productive costs and losses due to deviations from the established technological process, manufacturing defects (losses from defects are planned only in foundries, thermal, vacuum, glass, optical, ceramic and canning industries, as well as especially complex productions of the latest technology in the minimum size according to the standards established by a higher organization).
The plan of the enterprise defines the task to reduce the cost of comparable products. It is expressed as a percentage of the reduction in production costs in relation to the previous year. It may also indicate the amount of planned savings from the reduction in the cost of comparable products.
The cost of production is characterized by indicators expressing:
a) the total cost of all manufactured products and work performed by the enterprise for the planned (reporting) period;
b) costs per unit of volume of work performed, costs per 1 rub. marketable products, costs for 1 rub. regulatory net production.
Depending on the volume of costs included, they are distinguished cost price:
1) workshop (includes direct costs and general production costs; characterizes the costs of the workshop for the manufacture of products);
2) production (consists of the shop cost and general operating costs; indicates the costs of the enterprise associated with the release of products);
3) full (production cost, increased by the amount of commercial and sales costs; characterizes the total costs of the enterprise associated with both production and sales of products).
The level of costs is influenced by a number of factors, including changes in consumption rates and prices for materials, growth in labor productivity, changes in production, etc.
The economic (imputed) costs of the intended resource used in production are equal to its cost (value) in the most optimal way of using it for the production of goods.
Calculation at the enterprise, regardless of its type of activity, size and form of ownership, organized according to certain principles:
1) scientifically based classification of production costs;
2) establishment of cost accounting objects, costing objects and costing units;
3) the choice of the method of distribution of indirect costs and the consolidation of this method in the accounting policy of the enterprise for the financial year;
4) differentiation of costs by periods at the time of their commission without reference to cash flows;
5) separate accounting for current production costs and capital investments (Federal Law dated November 21, 1996 No. 129-FZ (as amended on November 28, 2011) "On accounting");
6) the choice of the method of cost accounting and calculation.
The choice by the enterprise of the method of accounting for production costs is carried out independently and depends on a number of factors: industry affiliation, size, technology used, product range.
The classification of methods of accounting for production costs and calculating the cost of production assumes:
1) completeness of cost accounting (full and incomplete cost price, cost price at variable costs);
2) objectivity of accounting, cost control (accounting for actual and standard cost, the "standard-cost" system);
3) cost accounting object (process-by-process, by-pass and order-by-order methods).
The unit cost is determined by dividing the total costs for the reporting month by the amount of products produced during this period and is calculated using the formula:
C = Z / NS,
where C is the unit cost, rubles;
З - total costs for the reporting period, rubles;
X- the amount of products produced during the reporting period in physical terms (pcs., T, m, etc.).
The calculation of the unit cost is carried out in three stages:
1) the production cost of all manufactured products is calculated, then the production cost of a unit of production is determined by dividing all production costs by the number of manufactured products;
2) the amount of administrative and commercial expenses is divided by the amount of products sold during the reporting month;
3) the indicators calculated in the first two stages are summed up.
However, at enterprises that produce one type of product (in the absence of semi-finished products of their own production) and have a certain amount of finished products not sold to the buyer, a simple two-stage calculation method is used.
Production cost by method simple two-step calculation calculated by the following formula:
C = (W pr / NS pr) + (З control / NS prod),
where C is the total cost of production, rubles;
З pr - total production costs of the reporting period, rubles;
NS pr - the number of units of products produced in the reporting period, pcs;
NS prod - the number of units of products sold in the reporting period, pcs.
If the production process consists of several stages (redistributions), at the exit from which there is an intermediate warehouse of semi-finished products, and from redistribution to redistribution the stocks of semi-finished products change, then use the method multi-step simple costing... The calculation of the unit cost is carried out according to the following formula:
C = (W pr 1 / NS 1) + (W pr 2 / NS 2) + ... + (З control / NS prod),
where C is the total cost of a unit of production, rubles;
W pr 1, W pr 2 - total production costs of each redistribution, rubles;
З control - administrative and commercial expenses of the reporting period, rubles;
X I, NS 2 - the number of semi-finished products manufactured in the reporting period by each redistribution, pcs;
NS prod - the number of units sold in the reporting period, pcs.
The object of costing is the product of each completed redistribution, including those redistributions in which several products are simultaneously obtained. As a result of the sequential passage of the starting material through all processing stages, finished products are obtained, at the exit from the last processing there is not a semi-finished product, but a finished product. In industry, there are two options for accounting for production costs: semi-finished and non-semi-finished.
The costs of manufacturing semi-finished products, parts and assemblies are accounted for by workshops in the context of expense items. The added costs are reflected for each workshop (redistribution) separately, and the cost of raw materials is included in the cost of production of only the first conversion. With this option for accounting for production costs, the unit cost of finished products is formed by summing up the costs of workshops (redistributions), taking into account their share of participation in the manufacturing process.
The non-semi-finished accounting method is simpler and less labor-intensive than the semi-finished one. Its main advantage is the absence of conditional calculations that decipher the costs of previous workshops and redistributions, which increases the accuracy of the calculation.
Note! The advantage of the semi-finished accounting method is the availability of accounting information about the cost of semi-finished products at the exit from each redistribution (it is necessary when selling them). This does not require a simultaneous inventory of work in progress throughout the enterprise.
The costs of the enterprise associated with the production and sale of products are conventionally divided into two large groups: direct and indirect.
Direct costs include direct material costs and direct labor costs. They are called direct because they can be directly attributed to the cost object. Allocating indirect costs to a product requires special tricks.
The first element of direct costs is the actual consumption of materials for the reporting period, which is determined by the formula:
R f = O np + P - B - O kn,
where R f is the actual consumption of materials for the reporting period, rubles;
О np - the balance of materials at the beginning of the reporting period, rubles;
P - documented receipt of materials during the reporting period, rubles;
B - internal movement of material during the reporting period (return to the warehouse, transfer to other workshops, etc.);
About kp - the balance of materials at the end of the reporting period, determined according to the inventory data, rubles.
The actual consumption of materials for each product is determined by distributing them in proportion to the standard consumption.
The second element of direct costs is the wages of the main production workers with the corresponding charges for it.
To calculate the wages of employees on the time-based wage system, data from the timesheets are used. In the conditions of piecework wages, various systems of accounting for the production of pieceworkers can be used. For example, the system of operational accounting of production provides for the acceptance, calculation and recording of information about the production of a worker (brigade) in primary documents by the controller and foreman after each operation.
In the conditions of small-scale and individual production, the main primary document for accounting for production is a piecework order. It reflects the task, its implementation, grade of work, hours worked, rate and amount of earnings.
In serial production, route sheets or maps are the primary documents. They record the launch into production and processing of a batch of blanks in accordance with the established technological process. When transferring a batch of parts from workshop to workshop, a route sheet is also transferred with them.
Workers' production is defined as the remainder of parts or blanks at the beginning of the shift, increased by the number of parts transferred to the workplace per shift, minus the remainder of unused or unassembled parts at the end of the shift. The output of each worker calculated in this way is drawn up in reports or production records. After multiplying the piece rate by the actually achieved output, the size of the accrued wages of the piecework worker is obtained.
In practice, the following bases are used to allocate production overheads among cost carriers:
1) working hours of production workers (man-hours);
2) wages of production workers;
3) equipment operating time (machine hours);
4) direct costs;
5) the cost of basic materials;
6) the volume of products produced;
7) distribution in proportion to the estimated (standard) rates.
The most important principle of choosing the method of allocating overhead costs is the maximum approximation of the distribution results to the actual consumption for a given type of product.
One of the alternatives to the traditional domestic approach to costing is the approach when cost objects are planned and taken into account. incomplete, limited cost... This cost may include only direct costs and be calculated on the basis of only production costs, that is, costs directly related to the production of products (works, services), even if they are indirect. In each case, the completeness of the inclusion of costs in the cost is different. However, common to this approach is that some types of costs related to the production and sale of products are not included in the calculation, but are reimbursed in total from the proceeds.
One of the modifications of this system is the "direct-cost" system. Its essence lies in the fact that the cost price is taken into account and planned only in terms of variable costs, that is, only variable costs are distributed among cost objects. The rest of the costs (fixed costs) are collected on a separate account, they are not included in the calculation and are periodically written off to financial results, that is, they are taken into account when calculating profit and loss for the reporting period. Inventories are also assessed by variable costs - balances of finished products in warehouses and work in progress.
Example 1
The initial data for costing are presented in the table.
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Costing example |
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P / p No. |
Cost item |
Amount, rub. |
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Basic materials, including purchased products |
direct costs |
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Transportation and procurement costs |
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Fuel, energy (technological) |
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Basic salary |
cost of a standard hour |
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Additional salary |
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Contributions to funds |
34.2% of (p. 4 + p. 5) |
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Preparation and development costs |
30% of (p. 4 + p. 5) |
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Equipment maintenance costs and tool wear |
40% of (p. 4 + p. 5) |
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Workshop costs |
30% of (p. 4 + p. 5) |
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General plant costs |
10% of (p. 4 + p. 5) |
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Production cost |
item 1 + item 2 + item 3 + item 4 + item 5 + item 6 + item 7 + item 8 + item 9 + item 10 |
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Non-production costs |
15% of p. 11 |
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Total production cost |
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Planned savings |
10% of clause 13 |
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Wholesale price |
p. 13 + p. 14 + VAT 18% |
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The normative method of accounting for costs and calculating the cost is characterized by the fact that the company prepares a preliminary standard cost estimate for each type of product, that is, a cost estimate calculated according to the rates of material consumption and labor costs in force at the beginning of the month.
Standard costing is used to determine the actual cost of production, estimate production defects and the size of work in progress. All changes in the current norms are reflected during the month in the normative calculations. The rates can change, for example, decrease, as production is mastered and the use of material and labor resources improves.
Accounting is organized in such a way that all current costs are subdivided into consumption according to the norms and deviations from the norms.
The system of normative (standard) costs serves to assess the activities of individual employees and the organization as a whole, prepare budgets and forecasts, and help make a decision on setting real prices.
Overhead cost allocation scheme as follows:
1. Select the object to which overhead costs are allocated (product, product group, order).
2. The choice of the distribution base for this type of indirect costs is the type of indicator used to allocate costs (labor costs, basic materials, occupied production areas, etc.).
3. Calculation of the ratio (rate) of distribution by dividing the amount of distributed indirect costs by the value of the selected distribution base.
4. Determination of the amount of indirect costs for each object by multiplying the calculated value (rate) of the distribution of costs by the value of the distribution base corresponding to the given object.
Example 2
The general production costs of the enterprise to be distributed over several orders that were completed within a month are 81,720 rubles.
The direct costs accounted for when completing the order were:
1) material costs - 30,000 rubles;
2) the cost of remuneration of basic production workers - 40,000 rubles.
The distribution base is the cost of wages for basic production workers (including salary taxes). In general for the organization for the same period, the base amounted to 54,480 rubles. (40,000 × 36.2%).
The distribution rate (C) will be determined by the following formula:
C = HMO / Z,
where OPP - general production costs;
З - wages of the main production workers.
In this case, C = 81 720/54 480 = 1.5 (or 150%).
Based on the distribution rate, overhead costs are charged to specific orders (items, products). HMO = З × С = 40,000 × 1.5 = 60,000 rubles.
After that, the amount of direct and general production costs is determined (as the production cost of fulfilling an order): 30,000 + 40,000 + 60,000 = 130,000 rubles.
But such a distribution scheme is not always linked to the process of organizing production, and in this case, more complex calculation methods are used. For example, general production costs are first divided by places of origin (workshops, departments, etc.), and then only by orders.
However, when choosing a distribution base, it is necessary to observe the principle of proportionality in order to maintain a fair and rational distribution of costs for orders (products, etc.), namely: the value of the selected distribution base and the amount of distributed costs must be in direct proportional relationship to each other.
For example, the larger the distribution base, the greater the cost to be allocated.
The difficulty is that finding such a basis for heterogeneous indirect costs is almost impossible in practice. In order to improve the feasibility of allocation for different types of overhead costs, you can apply different allocation bases, for example, the following:
1) the cost of labor remuneration of the AUP is distributed in proportion to the salary of the AUP;
2) the costs of repairs and maintenance of general production buildings are distributed in proportion to the area of the production unit;
3) the costs of operation and maintenance of equipment are distributed in proportion to the time of operation and the cost of this equipment;
4) the costs of storing materials are distributed in proportion to the cost of materials;
5) the business expenses of the enterprise are distributed in proportion to the proceeds from the sale for a certain period of time.
Example 3
Let's use the data from the previous example, but add overhead:
1) labor costs of the AUP - 50,000 rubles;
2) rent for industrial premises and payment of utilities - 105,000 rubles;
3) business expenses of the enterprise - 35,000 rubles.
Production area - 60% of all production areas.
The share of proceeds from the order is 30% of the total proceeds of the entire enterprise for the period under review. The share of labor costs for this order is 35% of the total labor costs of production workers of the enterprise.
The cost of the order under these conditions will be the following allocated amounts:
1) labor costs of the AUP - 17,500 rubles. (50,000 × 35%);
2) expenses for rent and utilities - 63,000 rubles. (105,000 × 60%);
3) commercial expenses - 10,500 rubles. (35,000 × 30%).
Let's determine the amount of direct and general production costs (production cost of order execution): 30,000 + 40,000 + 17,500 + 63,000 + 10,500 = 161,000 rubles.
In this case, the result obtained is more accurate than in example 2, but the process of determining it is more laborious.
Process-by-process calculation method It is used mainly in the production of homogeneous products or where for a long time the products are processed through several production stages, which are called redistributions (in the service sector (in catering establishments) and in enterprises using a self-service system). The process-by-process calculation method allows all production costs to be grouped by department (by production process).
Example 4
Furniture assembly consists of two stages (redistributions), at each of which processing is performed. Labor costs of production personnel (Z) are: Z 1 = 20,000 rubles; З 2 = 31,000 rubles.
Materials are included in production, respectively: M 1 = 80,000 rubles; M 2 = 62,000 rubles.
At the end of the first stage, 200 pieces are formed. blanks, of which only 150 pieces are for further processing. (the remaining 50 pieces are used in the next reporting period). At the end of the second stage, the output is 140 pcs. furniture.
Let's determine the cost of furniture after each stage of the production process and the cost of 1 piece. furniture after the second stage of processing.
After the first stage, the cost of 200 pcs. blanks will amount to 100,000 rubles. (80,000 + 20,000).
Cost of 1 pc. blanks - 500 rubles. (100,000/200).
Cost price 150 pcs. furniture for further processing (ZI) will amount to 75,000 rubles. (500 × 150).
Let's determine the cost of 150 pieces. furniture after the second stage: М 2 + З 2 + З I = 62,000 + 31,000 + 75,000 = 168,000 rubles.
Cost of 1 pc. furniture will be 1200 rubles. (168,000/140).
The example reflects only the production cost, excluding the costs of AUP and selling costs.
When two or more products are produced simultaneously in the course of the technological process, then the elimination method or the distribution method is used for the calculation. It is problematic to distribute the costs of the first stage of processing between products in subsequent stages.
When calculating by elimination one of the products is chosen as the main one, the rest are recognized as side products. Then only the main product is calculated, and the cost of by-products is deducted from the total costs of the complex production. As a result, the resulting difference is divided by the amount of the main product obtained.
The cost of by-products is determined by the following indicators:
1) the market value of by-products obtained at the point of separation;
2) the potential selling price of by-products at the point of separation;
3) standard cost of by-products;
4) indicators of by-products in physical terms (product units), etc.
Example 5
The production consists of two stages (redistribution). After the first stage, the production process is divided into two products, each of which undergoes independent processing. At all stages, the processing costs are carried out, consisting of the cost of labor of production personnel: З 1 = 20,000 rubles; З 2-1 = 15,000 rubles; З 2-2 = 25,000 rubles.
Basic materials are included in production at the first stage, additional materials are used at the second production stage for each product: M 1 = 80,000 rubles; M 2-1 = 30,000 rubles; M 2-2 = 45,000 rubles.
After the first stage, 200 pieces are formed. blanks of option 1 and 30 pcs. blanks of option 2. All blanks obtained after the first stage go to further processing. According to an expert assessment, the market price of furniture of option 1 at the point of division is 600 rubles / piece, furniture of option 2 - 40 rubles / piece.
After the second stage, 145 pieces are formed. furniture option 1 and 10 pcs. of furniture in option 2. It is necessary to determine the unit cost of furniture in option 1. The decision was made on the basis that its market price and production volume are higher than that of furniture in option 2.
After the first stage, the costs of complex production (Зкп) will amount to 100,000 rubles. (80,000 + 20,000).
The unit cost of product 1 at the point of separation (С 1-1) can be determined by the formula:
С 1-1 = З кп / К 1,
where З кп is the cost of furniture in option 2;
K 1 - the received amount of furniture of option 1.
С 1-1 = (100,000 - 30 × 40) / 200 = 494 rubles / piece.
After the second production stage, the cost of 100 pcs. furniture of option 1 will be the costs that came from the first stage, plus the costs of materials for stage 2 plus the costs of processing stage 2: 494 × 200 + 30,000 + 15,000 = 143,800 rubles.
Cost of 1 pc. furniture option 1 - 1438 rubles. (143 800/100).
Then the calculation can be repeated by accepting the furniture of option 2 as the main one.
Using distribution method the cost of both products is calculated.
Example6
The initial data are the same as in example 5. The cost of products after the first processing is determined by the formulas:
1) for the first furniture option:
С 1-1 = (З кп × Furniture cost of option 1 / The sum of the costs of all received furniture options) / К 1.
С 1-1 = (100,000 × 600 × 200) / (600 × 200 + 40 × 30) / 200 = 495 rubles / piece;
2) for the second furniture option:
С 1-2 = (З кп × Furniture cost of option 2 / The sum of the costs of all received furniture options) / К 2.
С 1-2 = (100,000 × 40 × 30) / (600 × 200 + 40 × 30) / 30 = 33 rubles / piece.
Further calculation of the cost of each product after the second production stage is similar to the calculation using the elimination method.
The choice of the calculation method largely depends on the characteristics of the production process and the types of products produced. If it is a product of the same type that moves from one production area to another in a continuous flow, the process of costing is the preferred method. If the production costs of various products differ significantly from each other, then the use of such a calculation method cannot provide accurate information on production costs, and in this case, the order calculation method must be used. In some cases, a mixed version of the use of the two systems is also possible, depending on the nature of the movement of products through production areas.
O. I. Sosnauskiene,
chief of PEO