Finished goods costing example. Unit cost calculation

In the article - different approaches to the calculation of cost, formulas, methods for classifying costs used in costing. In addition, we gave an example of calculating the cost of production in production.

In this article you will learn:

Before calculating the cost of production, the financial director needs to answer the following questions:

• the cost of which accounting object needs to be determined (manufactured products, technological process, separate order);
• what costs will be included (calculation of full or truncated cost (direct costing);
• on the basis of what data the calculation will be made (normative or actual);
• how to allocate indirect costs and take them into account.

Cost classification

The classification depends on what managerial task it is necessary to decide, for example, to make a calculation of the cost or profit from its implementation, to evaluate the results of the responsibility center.

By way of inclusion divided into direct and indirect. Straight lines can be accurately and in the only way attributed to the cost of a manufactured product or other object of calculation. As a rule, these include the costs of raw materials and materials used for the production of products, as well as the costs of wages for the main production personnel, which are accounted for on account 20 "Main production".

It cannot be economically justified to associate with a specific accounting object. These include general production, general business and commercial costs. They relate to the object of calculation by distribution in accordance with the methodology adopted at the enterprise and the distribution base.

In relation to the volume of production expenses can .

Variables depend on the volume of production or sales, and in terms of a unit of output remain unchanged (raw materials and materials, piecework wages of production workers, electricity).

Constants do not change with an increase in production volumes (rent of premises, equipment for the production of one type of product, administration wages), but those calculated per unit of production are adjusted with a change in the level of business activity. It should be noted that fixed and variable costs should not be confused with direct and indirect costs (see Table 1).

By relevance to a particular solution all costs can be divided into relevant and irrelevant. Irrelevant costs are costs that do not depend on decision. For example, a company owns a building. Two options for its use are being considered: create a sewing workshop or use it as a warehouse. In this case, the cost of maintaining the building and utilities will be irrelevant, since they do not depend on the decision made. The costs associated with the creation of a workshop or the additional equipment of premises for use as a warehouse, on the contrary, are relevant.

It should be noted that such a classification is quite rare. Most enterprises recognize all the main types of production costs as relevant and take them into account when analyzing the cost of finished products.

Excel model for cost calculation

If you need to calculate the direct production cost of products, use the ready-made calculation model in Excel. See how to adapt the model to the specifics of the company: create directories, adjust the method of attributing direct costs to prime cost.

Table 1. An example of fixed, variable, direct and indirect costs

Calculation methods

In practice, various approaches to the formation of the cost are used (see the figure for a classification of methods). The application of one or another approach is determined by the characteristics of the production process, the nature of the products or services provided, and other factors.

Drawing.

Completeness of inclusion of costs. You can determine both the full and truncated cost of production. Absorption costing is calculated taking into account all expenses incurred by the company.

Full cost

Truncated (direct costing) assumes that only variable costs are included in the unit cost of production. The constant part of general production, as well as commercial and general business expenses, are written off as a reduction in revenue at the end of the reporting period without distribution to manufactured products.

The formula for calculating the cost will look like this:

Cost of goods sold = Variable costs per unit × Sales volume

The direct costing method is justified in cases where it is necessary to make a decision on the release or termination of the production of a particular product.

Truncated

When using the absorption costing method, the unit cost includes both variables and fixed costs. It is reasonable to use the method when it is necessary to analyze, form an optimal product range or develop a pricing policy based on the "cost plus" principle. In other words, the price is defined as the total cost increased by the required profitability.

The formulas will look like this:

Unit cost = Variable cost per unit. + Fixed / Production volume

Cost of goods sold = Unit cost × Sales volume

Excel-model that will help control the change in cost

Download the Excel model, substitute your data and find out why the cost price has changed compared to the plan or the previous period.

Comparing two approaches

The company's financial results calculated using the direct costing method may differ from the results obtained using the full cost method.

Let's take an example.

The company during the reporting period produced 1,500 units of products. Variable costs for the production of a unit of output are 50 rubles. total amount fixed costs- 30,000 rubles. Sales volume - 1000 units at a price of 100 rubles. for a unit. At the beginning of the period, there were no stocks of work in progress and finished goods. Calculation by the method of full and truncated cost are presented in table. 2.

As you can see from the example, the result financial activities if different calculation methods are used, it will be different due to the fact that at the end of the reporting period the company had a stock of finished products in the amount of 500 units. In other words, if inventory levels at the end of the year increase, then the financial result determined on the basis of full cost will be higher than if it were calculated using direct costing. With a decrease in inventory levels, the picture will be reversed: when using a truncated cost, profit will be greater.

Table 2. Comparison of costing approaches

Actual and standard cost

Calculation can be made on the basis of actual expenses incurred by the enterprise or on the basis of established norms for the consumption of raw materials and materials, as well as standard labor costs.

The use of the standard cost allows you to control the efficiency of resource spending and respond in a timely manner to emerging deviations.

The actual cost can be determined only after all expenses are reflected in the accounting. The main disadvantage of this method is considered to be rather low efficiency (data can be obtained only after the completion of the order, the manufacture of the product, etc.). In practice, both approaches are usually used.

Cost Accounting Objects

Depending on the object of calculation, one can distinguish

• transverse,
• process,
• calculation of the cost of individual functions (Activity based costing, ABC).

The choice of one or another costing object is influenced by the specifics of the business (in-line production, small-scale production, accounting for individual orders).

Custom Method used in the manufacture of, for example, unique equipment, in the execution of individual orders. Transverse more typical for enterprises with serial and mass production, when the product goes through several stages of processing. In this case, the product of each redistribution (production stage) becomes the object of calculation. per-process typical for mining facilities, but is also used in industries with a simple technological cycle (for example, in the production of asphalt).

At ABC method cost accounting organized by individual functions, operations performed by company divisions. For example, the management of an auto dealer enterprise intends to control the cost price by function - the sale of cars in the sales department or their maintenance in the service center. This may be necessary when deciding to outsource individual business functions. In addition, ABC allows you to more accurately allocate indirect costs when calculating the full cost.

Quite often, calculation methods are used in combination. For example, a variant of an order-based costing method with incomplete cost accounting or a line-by-line costing using the consumption rates of raw materials and materials or taking into account their actual consumption is possible.

One of the main problems associated with calculating the total unit cost of production is the need to allocate indirect costs. The simplest way is the direct distribution of the costs of service units in proportion to a single base (wages of the main production workers, costs of raw materials and materials, man-hours). However, such an approach, as a rule, does not allow for reliable and economically justified distribution of indirect costs, which means that it can cause incorrect management decisions.

More accurate is the multi-level distribution method, which is performed in several stages.

Step 1. All expenses for the period are grouped by departments. For example, the following expenses will be grouped under the "canteen" subdivision: salaries of the canteen staff, food costs, the cost of electricity consumed, etc.

Step 2 The costs of support units are redistributed among the production departments and workshops. For example, the cost of maintaining a canteen must be distributed over two production workshops. To do this, you need to choose a base: in the case of a canteen, it would be advisable to distribute its expenses in proportion to the number of employees in each workshop.

Step 3 Costs attributed to production units are allocated to the output. For example, after the costs of maintaining the canteen have been reallocated to two shops, the cost of maintaining each shop (Shop Cost + Shared Support Department Costs) is charged to the output. As a basis for distribution, the number of man-hours spent on the production of each type of product, the cost of raw materials and materials, etc. can be used.

Calculation of the cost of production in a manufacturing enterprise: an example

Consider, using the example of a large machine-building plant - OAO SSM-Tyazhmash, how cost accounting can be organized and the cost of production calculated.

OAO SSM-Tyazhmash is a subsidiary of OAO Severstal, which specializes in the manufacture and repair of metallurgical equipment. A few years ago, the company launched a project to implement the Axapta system. At the same time, the principles of management accounting and the formation of production costs were developed. Prior to this, the cost of finished products was calculated for accounting and tax purposes, and management, with the necessary analytics for the financial director, was absent. The automated system "1C: Accounting" did not provide the required level of data detail.

Grouping costs

When forming the structure of production costs, direct costs include material costs and the cost of manufacturing services from third parties. All costs that will need to be distributed to the objects of calculation are combined into groups depending on the source of their occurrence (see Table 3).

The company calculates the full production cost, while the amount of indirect costs in its structure can reach 40-60%.

The cost carrier (calculation object) is the production order; in the foundry, accounting is also kept by redistribution.

Table 3. The structure of the production cost of JSC "SSM-Tyazhmash"

Attribution to the cost of direct costs

The initial step in costing is to allocate direct costs to production orders. As a rule, this is not difficult: in accordance with the specifications for types of finished products and semi-finished products, raw materials and materials are written off to specific orders in the analytics of cost elements and cost centers.

Distribution of indirect costs

The methodology for distributing overhead costs and attributing them to the cost of production includes several stages, which we will consider in more detail.

Collection of overhead costs. Their amounts are taken into account on account 25 in the analytics of cost elements and cost centers (production sections of workshops and non-production divisions of the enterprise). In the same account, all costs for auxiliary materials are collected and grouped by cost element and cost center. An example of accounting for business transactions with an indication of the code is presented in Table. 4.

Table 4. Grouping collected costs by types and places of their occurrence

Structure of codes. The code consists of seven characters. Consider the code 008-02-05 "Other fuels and lubricants". The first three digits (008) - the code of the cost group "Maintenance of fixed assets", the next two (02) - the code of the subgroup "Fuel and lubricants", the last (05) - the serial number within the subgroup. Thus, based on the code, one can unequivocally conclude which group and subgroup this type of expenditure belongs to.

Cost center codes are formed according to the following principle. The first three digits are the shop code. For example, 020 01-03, where the workshop code 020 “Shaping and Foundry Shop - FLC” 01 indicates that these are the main production sections of the workshop, 03 is the serial number of the section within the workshop (in this case, the iron smelting section).

Allocation of collected costs to production orders. The basis for distributing the collected overhead costs to orders, including those associated with the use of auxiliary materials, can be man-hours, standard hours, machine hours, conditional tons, tons of surfacing, etc., that is, physical indicators.

To link the activities you perform to cost centers and cost elements, you must start from the following:

• with any technological operation performed as part of the order, there is a list of expenses, the amounts of which must be charged to the order;
• any technological operation must be associated with a specific section of the production shop. For example, a machine tool operation may be carried out in the machine shop of a mechanical repair shop or in the pre-production area of ​​an assembly shop. The cost of these operations will vary.

Collection of total costs for intershop cooperation. All expenses (both direct and indirect distributed) are collected on the basis of primary documents for production orders executed within the framework of intershop cooperation. This sums up total time the work of each executing unit for the customer unit in the period under review. Expenses for inter-shop cooperation are grouped according to the places of their occurrence and one type - “Total costs for inter-shop cooperation”.

Allocation of costs for intershop cooperation to production orders. As part of individual orders, work is performed (services are provided) that ensure the manufacture of the final finished product. However, all costs incurred under such “related orders” must be included in the cost of the finished product. In other words, they are redistributed between production orders, and not sections of the shops.

Final cost estimate for production orders. All costs collected within production orders are summarized, and the final cost price is calculated.

Consider an example of costing in the production of JSC "SSM-Tyazhmash". In the reporting period, three orders were completed - order 1, order 2, order 3. Direct costs for them amounted to 100, 200, 150 rubles, respectively. and were immediately charged to completed orders.

Orders were fulfilled by two production sites (site 1 and site 2). In addition, a service section was involved, which this month provided equipment repair services to the main sections. To simplify calculations for intershop cooperation, we assume that the main sites did not provide services to each other, as well as to the service site.

Collection of costs of the 1st and 2nd production sites. Section 1 worked 50 standard hours, its costs amounted to 500 rubles, so the cost of a standard hour is 10 rubles.

Section 2 worked 20 machine shifts, the total cost was 800 rubles, the cost of a machine shift was 40 rubles.

Collection of service area costs. For the service section, the volume of production amounted to 30 man-hours, the total cost for the current period was 150 rubles, the actual cost of a man-hour was 5 rubles.

Allocation of service site costs to production sites 1 and 2. For section 1, the service section worked 10 man-hours, for section 2 - 20 man-hours. The operating time for the production shops will be used as the basis for the distribution of the costs of the service area in the amount of 150 rubles.

Thus, 50 rubles are additionally distributed to site 1. (10 man-hours. × 150 rubles / 30 man-hours), for section 2 - 100 rubles. (20 man-hours × 150 rubles / 30 man-hours). As a result, the costs of section 1 will be the sum of the own costs of this section in the amount of 500 rubles. and redistributed from the service area in the amount of 50 rubles. For section 2 it is similar: 800 and 100 rubles.

Redistribution of costs of production sites for completed orders. Section 1 worked 30 standard hours. to fulfill order 2; 20 standard hour. to order 3. This means that the second order will be charged costs in the amount of 300 rubles. (500 × 30/50), for the third order - 200 rubles. (500×20/50).

Section 2 worked for the execution of order 1 and order 3 for 10 machine shifts. Accordingly, each of these orders will be assigned its costs in the amount of 400 rubles. (800 × 10/20).

Redistribution of costs for intershop cooperation to orders. As a result of the distribution of the costs of the service section to section 1, we received 50 rubles. With the production volume of section 1 in 50 norm-hours. the cost of one standard hour will be 1 rub. By analogy, in section 2 it will be 5 rubles. (100/20).

Accordingly, 50 rubles will be added to the cost of order 1. from section 2 (5 rubles × 10 machine shifts), order 2 - 30 rubles. (1 rub. × 30 standard hours) from site 1, order 3 - 20 rub. from site 1 (1 rub. × 20 standard hours) and 50 rub. from section 2 (5 rubles × 10 machine shifts). Let's present results of distribution of expenses in tab. 5.

Table 5 Final costing of completed orders, rub.

This indicator shows how efficient and cost-effective production is. Also, the cost directly affects pricing. Now we will tell in detail everything about this qualitative indicator and learn how to calculate it.

General concept of cost

In every textbook on economics, you can find a variety of interpretations of the term "cost". But no matter how the definition sounds, its essence does not change from this.

Production cost - Thisthe sum of all costs incurred by the enterprise for the manufacture of goods and their subsequent sale.

Costs are understood as expenses associated with the purchase of raw materials and materials necessary for production, wages of workers, transportation, storage and sale of finished products.

At first glance, it may seem that calculating the cost of production is quite simple, but this is not entirely true. At each enterprise, such an important process is entrusted only to qualified accountants.

It is necessary to carry out the calculation of the cost of goods on a regular basis. Often this is done at regular intervals. Every quarter, 6 and 12 months.

Types and types of cost

Before undertaking the calculation of the cost of production, it is necessary to study into what types and types it is divided.

Cost can be of 2 types:

• Full or average- includes absolutely all expenses of the enterprise. All costs associated with the purchase of equipment, tools, materials, transportation of goods, etc. are taken into account. The indicator is averaged;
• Marginal - depends on the number of products produced and reflects the cost of all additional manufactured units of the goods. Thanks to the value obtained, it is possible to calculate the efficiency of further expansion of production.

The cost is also divided into several types:

• shop cost- consists of the costs of all structures of the enterprise, whose activities are aimed at the production of new products;
• Production cost- represents the sum of the shop cost, target and general expenses;
• Full cost- includes production cost and costs associated with the sale of finished products;
• Indirect or general business cost- consists of costs that are not directly related to the production process. These are management expenses.

The cost price can be actual and normative.

When calculating the actual cost, they take real data, i.e. Based on the actual costs, the price of the goods is formed. It is very inconvenient to make such a calculation, because often it is necessary to find out the cost of a product before it is sold. The profitability of the business depends on this.

When calculating the standard cost, the data is taken according to production standards. This allows you to tightly control the consumption of materials, which minimizes the occurrence of unnecessary costs.

Product cost structure

All enterprises that produce products or provide services are different from each other. For example , technological processes of the ice cream factory and tailoring factory soft toys absolutely different.

Therefore, each production individually calculates the cost of finished products. This is made possible by a flexible cost structure.

The cost is the sum of the costs. They can be divided into the following categories:

1. Spending on raw materials and materials necessary for the production of products;
2. Energy costs. Some industries take into account the costs associated with the use a certain kind fuel;
3. The cost of machinery and equipment, thanks to which production is carried out;
4. Payment of salaries to employees. This item also includes payments related to the payment of taxes and social services. payments;
5. Production expenses (rental of premises, advertising campaigns etc.);
6. Expenses for holding social events;
7. Depreciation deductions;
8. administrative costs;
9. Payment for third party services.

All costs and expenses are percentages. Thanks to this, it is easier for the head of the enterprise to find the “weak” aspects of production.

The cost is not constant. It is influenced by factors such as:

• Inflation;
• Interest rates on loans (if the company has such);
• Geographical location of production;
• The number of competitors;
• Use of modern equipment, etc.

In order for the company not to go bankrupt, it is necessary to calculate the cost of the product in a timely manner.

Formation of production cost

Calculating the cost of production, summarize the costs necessary for the production of products. This indicator does not take into account the cost of selling products.

The formation of the cost at the enterprise occurs before the products are sold, because the price of the product depends on the value of this indicator.

There are several ways to calculate it, but the most common is costing. Thanks to him, you can calculate how much is spent Money to produce 1 unit of output.

Classification of production costs

As we said earlier, production costs (cost of production) at each enterprise are different, but they are grouped according to separate characteristics, which makes it easier to make calculations.

Costs, depending on the method of their inclusion in the cost price, are:

• Direct - those that relate directly to the production of products. That is, the costs associated with the purchase of material or raw materials, the remuneration of workers who participate in manufacturing process etc;
• Indirect costs are those costs that cannot be attributed directly to production. These include commercial, general and general production costs. For example, the salaries of managers.

In relation to the total volume of production, the costs are:

• Constants are those that do not depend on the volume of production. These include the rent of premises, depreciation, etc.;
• Variables are costs that directly depend on the volume of products produced. For example, the costs associated with the purchase of raw materials and supplies.

According to the significance of a specific decision of the manager, the costs are:

• Irrelevant - costs that do not depend on the decision of the manager.
• Relevant - dependent on management decisions.

For a better understanding, consider the following example. The company has an empty space at its disposal. Certain funds are allocated for the maintenance of this facility. Their value does not depend on whether some process is being performed there. The manager plans to expand production and use this room. In this case, he will need to purchase new equipment and equip jobs.

There are two ways to calculate the cost of production in production. These are the costing method and the tiered allocation method. Most often, the first method is used, since it allows you to more accurately and quickly determine the cost of production. We will consider it in detail.

Costing - this is a calculation of the amount of costs and expenses that fall on a unit of production. In this case, the costs are grouped by items, due to which the calculations are carried out.

Depending on the activity of production and its costs, costing can be carried out in several ways:

• Direct costing. This is a production accounting system that arose and developed in a market economy. This is how limited cost is calculated. That is, only direct costs are used in the calculation. Indirect ones are written off to the sales account;
• Custom Method. Used to calculate the cost of production for each unit of output. It is used in enterprises that produce unique equipment. For complex and time-consuming orders, it is rational to calculate the costs for each product. For example, at a shipyard, where several ships are produced per year, it is rational to calculate the cost of each separately;
• Transverse method. This method used by enterprises that carry out mass production, and the manufacturing process consists of several stages. The cost price is calculated for each stage of production. For example, at a bakery, products are made in several stages. In one workshop they knead the dough, in another they bake bakery products, in the third they are packaged, etc. In this case, calculate the cost of each process separately;
• Process method. It is used by extractive industries, or companies with a simple technological process(for example, in the production of asphalt).

How to calculate the cost

Depending on the type and type, there may be several variations of the formulas for calculating the cost. We will consider simplified and expanded. Thanks to the first, every person who does not have an economic education will understand how this indicator is calculated. With the help of the second, you can make a real calculation of the cost of production.

A simplified version of the formula for calculating the total cost of goods looks like this:

Full cost = Production cost of the product + Cost of implementation

You can calculate the cost of sales using the expanded formula:

PST \u003d PF + MO + MV + T + E + RS + A + ZO + NR + ZD + OSS + CR

• PF - expenses for the purchase of semi-finished products;
• MO - the costs associated with the purchase of basic materials;
• MW - related materials;
• TR - transportation costs;
• E - the cost of paying for energy resources;
• PC - the costs associated with the sale of finished products;
• A - depreciation expenses;
• ZO - wages of the main workers;
• HP - non-production costs;
• ZD - allowances for workers;
• ZR - factory costs;
• OSS - insurance deductions;
• CR - shop expenses.

To make it clear to everyone how to make calculations, we will give an example of cost calculation and step-by-step instructions

Before proceeding with the numbers, you need to do the following:

1. Sum up all the costs associated with the purchase of raw materials and supplies needed for production;
2. Calculate how much money was spent on energy resources;
3. Add up all the costs associated with paying salaries. Don't forget to add 12% for additional work and 38% for social. deductions and health insurance;
4. Add deductions for depreciation costs with other expenses that are associated with the maintenance of devices and equipment;
5. Calculate the costs associated with the sale of products;
6. Analyze and account for other production costs.

Based on the initial data and costing articles, we make calculations:

Cost components - what does this indicator depend on

As it has already become known, the cost price consists of the costs of the enterprise. It can be subdivided into different types and classes. This main factor, which must be taken into account when calculating the cost of the enterprise.

Different cost implies the presence of completely different components. For example, when calculating the shop cost, we do not take into account the cost of selling products. Therefore, each accountant is faced with the task of calculating exactly the indicator that will most accurately show the effectiveness of this enterprise.

The cost of a unit of production depends on how much production is established. If each workshop of an enterprise “lives its own life”, employees are not interested in the quick and high-quality performance of their duties, etc., then with great confidence, we can say that such an enterprise suffers losses and has no future.

By reducing the cost of production, the company receives more profit. That is why every leader is faced with the task of establishing a production process.

Cost reduction methods

Before you start reducing costs, you need to understand that product quality should not suffer from this in any way. Otherwise, the savings will be unjustified.

There are many ways to reduce costs. We have tried to collect some of the most popular and effective ways:

1. Raise labor productivity;
2. Automate workplaces, purchase and install new modern equipment;
3. Engage in the enlargement of the enterprise, think about cooperation;
4. Expand the range, specifics and volume of products;
5. Introduce economy mode throughout the enterprise;
6. Use energy resources wisely, use energy-saving equipment;
7. Make a careful selection of partners, suppliers, etc.;
8. Minimize the appearance of defective products;
9. Reduce the cost of maintaining the administrative apparatus;
10. Conduct market research regularly.

Conclusion

Cost is one of the most important quality indicators of any enterprise. She is not constant value. Cost is subject to change. Therefore, it is very important to periodically calculate it. Thanks to this, it will be possible to adjust the market value of the goods, which will avoid unnecessary costs.

For those who decide to start their own business, it will be necessary to study the question of how to calculate the total cost of production. This is important for its implementation. In order to understand this issue, it is necessary to clearly understand what the cost of a product is.

The concept of cost

The cost price is the total and private sum of the costs for the production and sale of the product. Resources required to produce a product:

• the material from which the product is directly produced;
• fuel needed to transport materials for manufacturing or transport finished products to points of sale;
• repair work;
• workers' wages;
• rental of premises, if required.

Each product is individual, and it requires its own resources for manufacturing. And to figure out how to calculate the cost of production, you need to take into account each stage separately.

Economic concepts of cost

Full cost

This is the ratio of all costs to total production. This calculation is suitable for mass production. The costs include:

1. Employee salary.
2. Contributions to state funds.
3. The raw material used to make the product.
4. Accounting for depreciation of equipment and the cost of its repair (depreciation).
5. Advertising expenses.
6. Other expenses.

It is these costs that determine how to calculate the cost of finished products. Usually used in large, large-scale enterprises.

marginal cost

This concept includes the cost of a manufactured unit of output. How to calculate the actual cost of finished products (it is also called full)? This can be done according to the formula, but for this you need:

1. Calculate how much raw materials and materials it takes to manufacture one copy of the product.
2. Calculate how much fuel and lubricants and electricity is spent on one unit of production.
3. Take into account the cost of semi-finished products purchased from other industries, if any.
4. Calculate how much the employee will receive by manufacturing this type of product (including all social benefits).
5. Know the cost of repairs and depreciation of equipment.
6. Consider tool wear.
7. Calculate the cost of maintaining a production facility.
8. Other costs.

After analyzing the data above, you can imagine how much raw material is spent on the manufacture of a unit of production. And if we add to all this: transportation; contributions to state funds; vacation pay for employees; taxes; expenses incurred by the organization due to unforeseen circumstances - all this will give you a complete picture of how to calculate the actual cost of production.

Cost types

In addition to the main types of cost, there are types that are specific to a particular production.

1. Aggregate cost. The cost of manufacturing a product on a particular machine is estimated, whether it is a technical machine or a woven one.
2. Prime cost. In addition to estimating the costs of manufacturing products in the workshop, the costs of maintaining and servicing the territory itself are also taken into account: heating, security, alarm, fire protection, management structure.
3. General production costs. Consist of the cost of depreciation and repair of equipment, advanced training of workers, taxes.
4. Full cost. In addition to other expenses, it includes the costs of packaging, loading and unloading products, transport services.

Why do you need to calculate the cost of production?

When opening a business, not everyone is in a hurry to immediately calculate the cost of production, thereby making a huge mistake. This mistake can lead you to at least losses, and at most to complete bankruptcy.

What will cost analysis give you:

1. Shows the profitability of all your products. After all, it depends on it how efficiently raw materials and other, monetary and human, resources will be used.
2. Generate retail and wholesale prices. The right effective pricing policy will allow you to make production competitive.
3. It will make it clear how efficiently the production process operates in the enterprise. The lower the cost of production compared to the average data in this industry, the more effective the company will work. Accordingly, the higher the costs, the lower the profitability and efficiency of the enterprise.
4. Forms an indicator of reduction of fixed and variable costs.

Your profit depends on the calculation of the cost price. There is a cycle system here: the lower the cost, the greater the profit, and the higher the cost, the lower the profit. Therefore, each manufacturer seeks to reduce the cost of production in the pursuit of profit. In this case, the quality of the product may also suffer. In order to properly conduct your business, you must definitely calculate the cost of products, this is one of the main elements of management in the enterprise.

How to calculate the cost of production using the example of a furniture workshop

As an example, the furniture company Divan LLC will be taken. You want to calculate the cost of a manufactured product for December. In total, 12 corner sofas, 10 book sofas, 24 easy chairs were produced.

Total:

1. The cost of one corner sofa is: 265,320: 12 = 22,110 rubles.
2. The cost of one sofa-book is: 101,500: 10 = 10,150 rubles.
3. The cost of one chair is: 115,480: 24 = 4,812 rubles.

How to calculate cost of goods sold

Let's take as an example a company already familiar to us for the manufacture of sofas. In December, ten corner sofas, seven sofa-books and twenty armchairs were sold.

Let's use the data above and calculate:

1. Ten corner sofas cost us 221,100 rubles (22,110 x 10).
2. Seven sofa-books - 71,050 rubles (10,150 x 7).
3. Twenty chairs - 96,240 rubles (4812 x 20).

The total result was: 388,390 rubles.

Cost features

In the process of its work, each organization seeks to minimize its production costs. Therefore, the question of how to calculate the cost of production will depend on a number of factors. Directly all costs are included in the cost of production, up to heating the premises in winter period(V summer period absent). All this allows us to judge that the main management mechanism is the analysis and accounting of all aspects economic activity organization to judge correct work firms. At the same time, a specific cost estimate will depend on the inventory, technological features of the enterprise and on the managers themselves, who own this or that information about production.

Each company has its own method of calculation. So, for example, the production of confectionery according to the costing system will differ significantly from the method of calculating the cost at a furniture factory. In the first case, electricity and shelf life will be of paramount importance (special attention should be paid to it), and in the second case, large financial resources spent on raw materials and transportation of a large-sized product will come first. And, accordingly, for an enterprise producing sweet products, the calculation method is one, and for upholstered furniture - another.

Product costing is the calculation of the sum of all production costs in terms of value. The method of calculation depends on which costs are taken into account. See examples of calculation by methods of absorbed and direct costs. Download the method of cost accounting and calculation.

The cost price can be called the cornerstone of making business decisions, so an example of calculating its cost estimate will be useful to a very wide range of users within the company:

• marketers - when determining prices for products;
• commercial director to decide on the range and launch of new products;
• production managers - when analyzing cost variances in order to identify reserves for improving efficiency;
• financial managers to determine the performance of the organization;
• top managers - when distributing bonuses and bonuses.

Costing: Definition and Technique

The cost of production is the monetary value of the resources spent on its production, such as raw materials and materials, human resources, and so on. It can be calculated as a whole for the company, production unit or workshop, for an individual product. For some companies, the calculation of the cost of an order, a technological stage, a node is relevant.

The figure shows the main articles accounting to calculate the cost.

In accounting includes the articles shown in the figure.

Drawing.

For trade or service companies, the plan of cost items for calculating the cost will differ slightly - there may not be an item “raw materials and materials”, there will almost certainly not be items “Returned waste” and “Losses from rejects”, “Selling expenses” can be considered as "General production" and so on.

Cost types for costing

When evaluating actual cost production or services rendered for the reporting period, actual expenses incurred for the needs of the main activity are taken into account. It is not difficult to assume that both productive reasonable expenditure of resources and unproductive ones can be included in the calculation. It is possible to assess the effectiveness of the costs incurred only by comparing the results obtained with the normative or planned ones.

Normative costing of products represents the monetary expression of the historically established technology of production. In order to the current achievable standard cost should be used, that is, the standards for which correspond to the effective functioning of the existing equipment. It takes into account the real level of equipment failure, the usual level of downtime and scrap. If the equipment is new and the statistics of its operation have not yet been developed, use the standards of the supplier company or ask the engineering company serving you. To evaluate the effectiveness, it is necessary to calculate the cost of actually produced products or services according to the standards. In this case, we will clearly see deviations in production from technology.

Planned is based on planned output values. When calculating the planned cost, both standards and data from the past period can be used. In practice, this value is often calculated in order to do at the end of the period.

How to Calculate Direct Manufacturing Cost of Products Using Excel

If you need to calculate the direct production cost of products, use the ready-made calculation model in Excel. The CFO System solution will tell you how to adapt the model to the specifics of the company: create directories, adjust the method of attributing direct costs to prime cost.

Unit costing

The main question is: what costs does the company attribute to cost per unit of output?

The answer to this question depends on the method of calculation:

• if we take into account all production costs, we use the method of calculating the full cost price for costing. Another name is the method of absorbed costs (absorption costing);
• if we take into account only direct costs, then we calculate the truncated (not full) cost using the direct costing method.

Let's take a closer look at both of these methods.

Absorption costing

When using the method of absorbed costs, direct and indirect costs, that is, all costs related to production processes, are included in the cost of production (these are accounts 20 and 25 of RAS). General business expenses (account 26 RAS) are attributed to the sale of products and are not allocated to final products.

Direct costs do not require additional transformations when transferred to products, while to allocate general production costs, the method of allocating costs based on the distribution base is used. One of the following criteria is selected as the base:

• labor of production workers (man-hours);
• operation of the main equipment (machine-hours);
• volume of output (in units);
• wage fund for production workers;
• proceeds from the sale of products;
• direct costs attributed to the product, etc.

It is good practice to pre-allocate costs to production cost centers, and only then, in proportion to the distribution base, transfer costs per unit of output. At the same time, different distribution bases can be used for different cost centers.

Absorbed costing example

The company produces two products "A" and "B". The volume of production amounted to 1,000 pieces. per month of product "A" and 200 pcs. product "B" (Table 1).

Table 1. An example of calculating the cost of production using the method of absorbed costs (rub.)

Direct costing

According to an alternative method - direct costing - when calculating the cost of production, only those costs that have direct relationship to production. The idea of ​​the direct costing approach is that the production manager controls only those costs that are related to production.

Example of direct costing calculation

In our example, we need to remove commercial expenses from the cost of products. Then for product "A" it will be 234 rubles, and for product "B" - 599 rubles (Table 2).

Table 2. Sample costing of products by direct costing (rub.)

The situation is vital - the marketing department and the sales department of a large enterprise can generate expenses that are disproportionate to the cost of production, which will lead to losses, and when choosing the direction of cost optimization, to erroneous decisions.

In the long term - from a year - all costs are variable and it can be stated that production cannot function without commercial and other overheads .

How to avoid mistakes in direct costing

Errors in actual costing result in the risk of setting unprofitable prices for products or abandoning a profitable line of business. This solution will help determine whether the company calculates the direct cost correctly, and will also tell you how to adjust the calculation rules.

Applied methods for calculating the cost of production

In practice, a number of applied costing methods are also used:

• process method. When using it, the cost of each process involved in the production process is calculated. This is a very powerful tool for reformatting production processes. An enlarged version of the process-by-process method can be considered the step-by-step method in the primary industries.
• custom method - only effective method, for cases where the production is of a single custom nature, when each order is unique and the calculation of the cost is based on negotiations with the client about the final cost of the order.

For financial reporting under both RAS and IFRS, the full cost accounting method is used.