Classification of production and circulation costs. Production costs and circulation. An example of changing the variable part of the costs
Total production costs are those costs incurred by the enterprise in the process of creating finished products. At the same time, in order to increase the profitability and profitability of the business, it is necessary to reduce the total costs for the production of goods/services as much as possible. The classification and essence of production and circulation costs depend on the purpose of the analysis.
The concept of production costs
Briefly, production costs can be described as the total cost of producing a product, performing a service. The volume of resources spent on the manufacture of goods - material, technical, labor, energy, organizational - affects the final level of pricing, and hence the profit from sales. Competent management accounting uses the composition of production costs as a multifaceted flexible tool to reduce the cost of the enterprise.
The constituent elements of the total cost of production:
- Preparatory costs for the development of production.
- Technological costs in the process of manufacturing products.
- Material costs, including the use of natural resources.
- Expenses related to remuneration of personnel, including various types of additional payments and allowances, compensations, vacation pay, sick leave and other types of remuneration.
- Non-capital expenses aimed at improving the quality of manufactured products, as well as improving the production cycle.
- Capital expenditures aimed at upgrading equipment and technological processes.
- Inventive and rationalization expenses.
- Repair costs associated with maintenance of production and carrying out current, medium or capital repairs.
- Expenditures aimed at labor protection and ensuring normal working conditions.
- Personnel recruitment costs.
- Management expenses.
- The cost of maintaining the required level of qualification, including retraining, of production workers.
- Fare.
- The cost of paying taxes and fees from the wages of workers employed in the production process.
- Costs associated with warranty service.
- Depreciation expenses for machinery, equipment, fixed assets of production.
- The amount of losses from the release of defective products.
- The amount of losses from downtime due to forced in-house reasons.
- Other types of production costs.
Production costs and profit are directly proportionally interconnected - the lower the cost value, the higher the financial results of the enterprise. In turn, the cost indicators of production costs vary both on the price of the necessary resources and on the quality of technological processes. The first factor depends little on the desire of the enterprise and is determined by market offers. The second allows the firm to influence profits by effectively managing production and sales costs.
Production cost structure - classification
The concept and composition of production costs are discussed above, and the grouping can be carried out according to the branches of activity of enterprises, according to the volume of trade, depending on the production cycle, from the position of one organization or society as a whole. Thus, the social costs of production are those costs that society incurs when creating a particular product. A firm's private cost of production is the cost incurred directly by the firm. In addition, production costs include:
- Explicit and implicit costs- that is, having a direct form of cash costs or alternative ones that do not take a monetary form due to belonging to the organization or business owners.
- Constants or Variables- production costs include costs that are constantly necessary for continuous production or change as the finished product is released.
- Irrevocable- are carried out once and cannot be returned to the company under any circumstances, up to the procedure for closing the business.
- Medium- are used in the formation of the unit cost of the product and the determination of the final price for the consumer.
- Limit- are used to determine the maximum workload of the enterprise and the minimum level of production.
- Appeals- are directly related to the transportation of products to the buyer.
The nature of production costs, their structure and types can be expanded by the enterprise independently, taking into account legislative norms and depending on the goals of management accounting. From the point of view of economics, the nature and essence of production costs can distinguish between external (paid to third parties) and internal (not paid to the side due to ownership) costs. From the position of accounting, external costs are interesting, requiring constant accounting and control.
Production costs - examples
The costs of production, which are borne by the commodity producer, are called the costs of the organization. The most popular accounting option for such expenses is to divide them into fixed and variable. Variables change along with changes in the volume of manufactured products - these are materials, raw materials, fuels and lubricants, wages, depreciation of production facilities, transportation costs, etc.
An example of changing the variable part of the costs
|
Period |
Production volume (in pieces) |
Consumption of materials for 1 product (in kg.) |
Total volumes of purchased materials (in kg.) |
The cost of 1 kg. materials (in rubles) |
Total cost of materials (in rubles) |
|
October 2016 |
|||||
|
November 2016 |
|||||
The example shows that due to the increase in production volumes by 25%, the total amount of consumable raw materials also increased by 25%, but the total cost of variable costs in the purchase of materials increased by only 4.1% due to the discounts provided. And the average cost of material variable costs per 1 product has decreased from 600 rubles. (1200000 / 2000) up to 500 rubles. (1250000 / 2500).
Fixed costs do not depend on the volume of products produced and are considered conditionally unchanged. Conditionally due to the fact that upon reaching a certain volume, their value may also begin to grow. These are lease payments, salaries of employees of the management and administration of the enterprise, interest payments on loan obligations, depreciation of objects that are not related to production, etc.
Foreign experience in determining production costs
The determination of production costs by foreign producers in recent years is often based on the reduced method of limited separation by cost items. Variable costs directly related to production are recognized as the main costs. And the total gross costs are made up of variable and fixed costs.
Essence of production costs. In the process of producing goods and services, living and past labor is expended. At the same time, each company seeks to obtain the highest possible profit from its activities. To do this, the company tries to reduce its production costs, i.e. production costs.
The cost of production is the total amount of labor involved in the production of a good.
Cost classification:
1) explicit costs- these are opportunity costs that take the form of direct (cash) payments to suppliers of factors of production and intermediate products. Explicit costs include salaries paid to workers, salaries of managers, commissions to trading firms, payments to banks and other financial service providers, fees for legal advice, transportation costs, etc.;
2) implicit(internal, implicit) costs. These include the opportunity cost of using resources owned by the firm's owners (or owned by the firm as a legal entity). These costs are not covered by contracts that are binding for explicit payments, and therefore remain under-received (in cash). Firms usually do not record implicit costs in their financial statements, but this does not make them any less real.
3) fixed costs. The costs associated with providing fixed costs are called fixed costs.
4) variable costs. They can quickly and without much difficulty be subject to change within the enterprise as the volume of output changes. Raw materials, energy, hourly wages are examples of variable costs in most firms;
5) sunk costs. Sunk costs have a distinctive feature that will allow them to be distinguished from other costs. Sunk costs are incurred by the firm once and for all and cannot be recovered even if the firm completely ceases its activities in this area. If a firm plans to start in some new line of business or expand its operations, then the sunk cost associated with this decision is precisely the opportunity cost associated with starting a new activity. As soon as the decision to implement costs of this kind is made, sunk costs cease to be alternative for the company, because it once and for all lost the opportunity to invest these funds anywhere;
6) average cost- cost per unit of output. They are used to form prices. Average fixed costs are determined by dividing the total fixed costs by the amount of output produced. Average variable costs are determined by dividing the total variable costs by the amount of output produced. Average total cost can be calculated by dividing the sum of total costs by the quantity of output;
7) marginal cost- additional or additional costs associated with the production of one more unit of output. Marginal cost helps determine the marginal workload above which production is not efficient. Using marginal cost, you can determine the minimum effective size of the enterprise;
8) distribution costs- the costs associated with the delivery of products to the consumer.
24. Proceeds from the sale of products: the essence and meaning.
Net proceeds from sales of products (works, services)– gross sales proceeds less value added tax, excises, returned goods and price discounts.
In addition to proceeds from the sale of finished products, an enterprise can receive proceeds from other sales (disused fixed assets, materials, etc.), as well as from non-operating transactions (leasing property, joint activities, income from securities transactions, etc.).
Currently, for the preparation of financial statements, the method of generating revenue from the sale of products (works, services) is established only after the shipment of products and the presentation of settlement documents to the buyer. When declaring an accounting policy, an enterprise chooses a methodology for determining sales revenue only for tax purposes: either by timing
Revenue from implementation includes amounts of money received as payment for products, goods, work performed, services rendered. Proceeds from the sale of products (goods, works, services) is the main source of cash flows in the enterprise.
The concept of “sales revenue* and methods for determining the moment of sale are essential for calculating financial indicators.
In domestic practice, two methods are used to determine the moment of implementation:
By shipment - accrual method;
For payment - cash method.
All but small organizations should apply accrual method and take into account the proceeds from the sale of products upon shipment of products, goods, performance of work, provision of services. Revenue is also considered to be the stage-by-stage payment for the work performed with a long production cycle as the stages in the construction industry, research and development work are ready.
Small businesses may record sales revenue as it is paid. These include organizations whose average income from the sale of goods (works, services) for the previous four quarters, excluding value added tax, did not exceed one million rubles for each quarter.
If an organization recognizes sales revenue upon shipment of products, goods, performance of work, provision of services, then obligations to pay taxes arise regardless of the fact of receiving money from buyers (debtors). In such cases, the organization has the right to create a reserve for doubtful debts, which is created from profit before tax. Doubtful debt is an unsecured receivable that has expired.
25. Profit: essence, types, order of formation and use.
Profit Loss)= Profit from sale + Operating income - Operating expenses + Non-operating income - Non-operating expenses
The budget includes the following areas spending:
For the development of production, science and technology, the development of the production of new types of products, new technological processes, the conduct of research and development work, the repayment of long-term bank loans and the payment of interest on them;
For the social development of the team, the construction of residential buildings, children's institutions, the maintenance of social and cultural facilities, the holding of recreational activities, the payment for food, the improvement of living conditions, the payment of remuneration based on the results of the year, the provision of material assistance, the accrual of dividends;
To form a reserve (insurance) fund;
For charitable purposes.
In essence, the value of the property invested by the owner in the enterprise forms the equity capital of this enterprise. And the capitalized property becomes the assets of the enterprise, which undertakes to use it in such a way that the value of these assets increases as much as possible.
The increase in equity, due to the activities of the enterprise, aimed at increasing the value of assets, is called enterprise profit .
The part of the profit remaining after the payment of income tax by the enterprise belongs to the owners of the enterprise and is called net profit.
If the owners of the enterprise consider to leave the amount of profit due to them to the enterprise, then in this case they speak of reinvestment of profits. The value of assets is always equal to the value of the capital invested in them. The main purpose of the assets of the enterprise is to make a profit. An enterprise can combine its assets in any way not prohibited by law in order to maximize the result.
In fin. management excludes the possibility of an accidental acquisition by the enterprise of any assets. Any purchase must be pre-justified, the main criterion of which is maximization of income.
After the establishment of the enterprise, as a rule, equity capital is not enough to cover the needs for fixed and current assets. Then there is an interest in increasing capital through borrowed funds. The effect of using borrowed sources is called fin effect. lever or fin. leverage. Therefore, the capital structure is not homogeneous. For finance, the period for which resources are attracted is of fundamental importance. The most profitable for the company are long-term loans and credits. In Russian practice, such obligations include obligations with a maturity of more than 1 year, while in most developed countries, obligations with a maturity of more than 5 years are considered long-term. Long-term sources are a full-fledged investment resource that can be invested in large-scale projects. In this case, long-term sources are identical to equity. The sum of equity capital and long-term borrowed capital is called permanent or long-term capital; short-term liabilities (up to 1 year) are usually attracted to cover the additional need for working capital.
Short-term liabilities (borrowing) are divided into:
Interest (credits, loans)
Interest-free (debts to suppliers, to the budget, to workers)
The total amount of short-term liabilities is called short-term liabilities or short-term capital.
Long-term and short-term capitals together form enterprise liabilities. The difference between the total value of assets and the total amount of borrowed capital is called net assets. Net assets should always equal the amount of equity.
§ Profit (loss) from sales determined in two steps. First, gross profit is calculated as the difference between the proceeds from the sale of products (works, services) without VAT, excises and other similar obligatory payments and the cost of goods sold without recurring expenses (commercial and management). Then, after subtracting selling and administrative expenses, the indicator of profit from sales is determined.
Revenue when an enterprise adopts an accounting policy for the reporting year is determined either as payment is made, or as a result of the shipment of products, goods, performance of work and presentation of settlement documents. The proceeds from the sale may be more or less than the volume of marketable products - depending on the change in the balance of industrial, but unsold products.
The cost of commercial products is the monetary expression of the costs of both living and materialized labor. The costs of living labor are reflected to the extent that they are paid by the enterprise, they correspond in the cost of a kind of block of costs - wages, social insurance contributions and bonuses to workers and employees. The costs of materialized labor are the costs of raw materials, materials, fuel and others.
This is s.010-(s.020+s.030+s.040)=s.050 or s.029-s.030-s.040
Revenue from sales(or profit from ordinary activities) is the financial result of sales and is defined as the difference between debit and credit turnover on the accounting account "Sales".
Sales Profit Planning can be produced by traditional methods, based on the planned revenue indicators and the cost of products (works, services). However, it is more expedient to use an instrument called “operating leverage” when planning profit from sales.
Operating leverage- This is an indicator that answers the question of how many times the rate of change in sales profit exceeds the rate of change in sales revenue. In other words, when planning an increase or decrease in sales revenue, using the indicator of operating leverage allows you to simultaneously determine the increase or decrease in profit. Conversely, if the company needs a certain amount of profit from sales in the planned period, using operating leverage, you can determine what sales revenue will provide the desired profit. OL=profit growth rate,%/production growth rate,%
The change in prices is more reflected in the dynamics of profit from sales than the change in the natural volume of sales.
Profit from sales is needed to calculate the financial. the result of the company's activities: Profit (loss) = Profit from sale + Operating income - Operating expenses + Non-operating income - Non-operating expenses
Profit from sales is the main component of the balance sheet profit of the enterprise, since it reflects the result of regularly carried out activities for the production and sale of products (rendering services), which is the purpose of creating an enterprise. Its size is affected by the level of selling prices, the cost of production, assortment shifts in the composition of products. Profit from sales grows if the share of highly profitable products in the composition of sold products increases.
Financial planning in a commercial organization. Business plan.
Financial planning is the process of developing a system of financial plans and targets to ensure the development of an enterprise with the necessary financial resources and improve the efficiency of its financial activities in the coming period. FP includes the following steps: 1. Analysis of the financial situation (The financial performance of the enterprise for the previous period is analyzed on the basis of the balance sheet, income statement, cash flow statement. The focus is on indicators such as sales volume, costs, the size of the profit received.The analysis makes it possible to evaluate the financial performance of the enterprise and identify the problems facing it.); 2. Development of a general financial strategy of the enterprise (development of a financial strategy and financial policy in the main areas of the financial activity of the enterprise, at this stage, the main forecast documents are compiled that relate to long-term financial plans and are included in the structure of the business plan if it is developed on enterprise); 3. Drawing up current financial plans (clarification and concretization of the main indicators of forecast financial documents by compiling current financial statements); 4. Correction, linking and concretization of the financial plan (matching the indicators of financial plans with production, commercial, investment, construction and other plans and programs developed by the enterprise); 5. Implementation of operational financial planning. 6. Fulfillment of the financial plan (implementation of the current production, financial and other activities of the enterprise, which determines the final financial results of the activity as a whole); 7. Analysis and control of the implementation of the plan (determining the actual final financial activities, comparing them with the planned indicators, identifying the causes and consequences of deviations from the planned indicators, developing measures to eliminate negative phenomena). Based on this, financial plans can be divided into long-term, current and operational. An example of a combination of long-term and current planning is a business plan, which is usually developed in developed capitalist countries when creating a new enterprise or justifying the production of new
types of products. Long-term plans should be a kind of framework, the constituent elements of which are short-term plans. Basically, enterprises use short-term planning, and deal with a planning period equal to one year. This is explained by the fact that over a period of such a length, as can be assumed, all the events typical for the life of an enterprise occur, since seasonal fluctuations in the conjuncture are leveled during this period. By time, the annual plan can be divided into monthly or quarterly plans.
The purpose of financial planning is to provide financial resources (in terms of volume, directions of use, objects, in time) of reproduction processes in accordance with socio-economic development forecasts, business plans and taking into account market conditions and development trends.
Financial plan
The financial plan is a document that is a system of interconnected financial indicators that reflect the expected volume of receipt and use of financial resources for the planned period.
Financial plans serve as a tool for economic verification of internal balance and interconnection of material, labor and cost indicators of various plans and forecasts, assessment of their economic efficiency.
Tasks of financial planning
The main tasks of financial planning include:
1) determination of the amount of financial resources for each source of income and the total amount of financial resources of government entities and business entities;
2) determining the volume and directions of use of financial resources, setting priorities in spending funds;
3) ensuring a balance of material and financial resources, economical and efficient use of financial resources;
4) creation of conditions for strengthening the sustainability of organizations, as well as budgets formed by state authorities and local self-government, budgets of state extra-budgetary funds;
5) determination of the economically justified amount of financial reserves, which makes it possible to prevent the occurrence of disproportions in the transition from long-term to current planning, from forecasts to plans, and also to maneuver resources.
financial planning is aimed at achieving sustainable economic growth, maintaining a balance, creating conditions for effective financial management both at the micro- and macroeconomic levels.
For an enterprise (firm), it is important to determine not only its income, but also its production costs. Production costs are called production costs or simply costs. Correlating income (total income) with costs (often not only with production costs, but also with other costs - taxes, advertising, etc.), determine the excess of income over costs.
From an economic point of view, the costs of production and distribution represent the value of the costs of the enterprise. Enterprises perform the functions of producing their own products, selling their own products and purchased goods. Consequently, the costs of the enterprise include, along with the costs of production, the costs of selling and consuming their own products and purchased goods.
The costs of production and circulation are classified according to various criteria: explicit and implicit; limit; alternative; depending on the functions performed by the enterprise; by types of costs; tangible and intangible; constants and variables; by product groups; direct and indirect; by articles, etc.
There are two approaches to cost estimation: accounting and economic. Explicit costs are reflected in the company's reports. In addition to explicit costs, economists also take into account implicit costs, as well as the costs of lost opportunities.
The value of the resources used in production, first of all, can be expressed by the price at which the firm acquired them on the market. In this case, the costs are represented as the sum of payments that the company made by suppliers to its own employees. All payments must be recorded in accounting documents. This method of estimating costs is called accounting, and the costs estimated using it are called accounting costs.
To better understand what exactly is included in accounting costs, we list their main articles:
1) material costs - payment for raw materials, materials, fuel, energy, purchased components and semi-finished products;
2) labor costs - wages of employees, as well as other payments provided for by employment contracts;
3) deductions for social needs - deductions according to the norms established by law to the social insurance fund, employment promotion fund, etc.;
4) depreciation - deductions according to the norms established by law, reflecting the wear and tear of equipment, buildings, etc.;
5) other costs - commission payments to the bank for cash and banking services; interest on a loan, rent payments; payment for works and services rendered to other firms; taxes and fees included by law in production costs.
The concept of accounting costs is very important and convenient. Resource costs here receive a clear, unambiguous and objective monetary measurement. Knowing the exact size of accounting costs is the key to determining whether a firm is profitable or unprofitable. To do this, it is enough to compare the accounting costs with the amount of the company's income. At the same time, the level of accounting costs does not always allow one to correctly judge the state of affairs in the company. Accurate measurement of costs is possible only when all the resources expended are valued at their market price.
However, in modern Russia, the actual prices for acquiring resources may not be market prices. Elements of the administrative mechanism and other market imperfections still play a big role in our economy. The second disadvantage of the accounting method is that it includes the costs of only those resources that the company will acquire from the outside (raw materials, materials, labor, etc.). They are called explicit (external) costs.
Explicit costs include all costs incurred by the firm to pay for the factors of production used. The classical factors of production are labor, land (natural resources) and capital. The sum of all explicit costs acts as the cost of production, and the difference between the market price and the cost - as profit. Profit, in its broad sense, is a set of net factor incomes, because the company's income from the sale of products is spent mainly on the costs of production factors, and profit in its narrow sense is income from such a factor of production as real capital. However, the sum of production costs, if they include only explicit costs, may be reduced, and the profit will be correspondingly overestimated. For a more accurate picture, in order for the firm's decision to start or develop production to be justified, the costs should include not only explicit, but also implicit (temporary, alternative) costs.
The costs that should be taken into account when making economic decisions are always opportunity costs, i.e. opportunity cost (value) of resources at the best alternative variant of their application. Often the firm uses resources that belong to itself (equity capital in cash, own production facilities, professional skills of the owner of the firm, etc.). The firm does not incur direct cash costs to pay for these resources, they are, as it were, "free" for it. However, each resource has its own opportunity cost. Therefore, the use by the firm of such a "free" resource is actually associated with the refusal to receive income in its alternative use, i.e. with certain costs. Such opportunity costs of using resources owned by the firm itself are called implicit costs. Although implicit costs are not reflected in the financial statements, they must be taken into account when making economic decisions, which makes it possible to effectively use all the resources involved in the production process. Proceeding from this, the concept of economic costs should include the opportunity cost of all resources used, including normal profit, as the minimum income of an entrepreneur necessary to attract and retain this resource in a given production process. Some explicit costs. However, they are not taken into account when making economic decisions. These are the so-called sunk costs - one-time costs that cannot be returned even when the enterprise is closed. Sunk costs include, for example, the cost of making a sign with the name of the company. Sunk costs have no opportunity cost and are not included in economic costs.
There are significant differences between the concepts of accounting and economic profit. Accounting profit is the difference between a firm's revenue and explicit costs. Economic profit is the difference between a firm's revenue and all costs. Thus, economic profit is income earned in excess of normal profit.
The division of costs into explicit and alternative is one of their possible classifications. There are other types of classifications, such as the division of costs into direct and indirect, fixed and variable. Direct costs are those costs that can be fully attributed to the product or service. It includes:
ь cost of raw materials and materials used in the production and sale of goods and services;
ь wages of workers (piecework) directly involved in the production of goods;
l other direct costs (all costs that are somehow directly related to the product).
Indirect costs are costs that are not directly related to a particular product, but relate to the company as a whole. These include:
l expenses for the maintenance of the administrative apparatus;
l rent;
l depreciation;
b interest on a loan, etc.
The criterion for dividing costs into fixed and variable is their dependence on the volume of production. Fixed costs FC are costs that do not depend on the volume of production. Variable costs VC are costs that depend on the volume of production. For the most part, the direct costs of the firm are always variable, and overhead costs are fixed. The sum of fixed and variable costs is the gross TC, or total, cost of the firm. (fig.1)
Rice. 1
The uneven change in gross costs leads to the fact that as the volume of production grows, so do the costs per unit of output, or average costs. Allocate:
1. average fixed costs AFC;
2. average variable costs AVC;
3. average gross costs and total unit cost of ATC product.
Average cost is equal to gross cost divided by quantity produced (AC=TC/Q). This type of cost is of particular importance for understanding market equilibrium. The average cost curve is usually U-shaped (Figure 2).
Rice. 2
At first, average costs are very high. This is due to the fact that large fixed costs are allocated to a small amount of production. As production increases, fixed costs fall on an increasing number of units of production, and average costs fall rapidly, reaching a minimum at point M. As the volume of production grows, the main influence on the value of average costs begins to be exerted not by fixed, but by variable costs. Therefore, due to the law of diminishing returns, the curve begins to go up.
Note that the average cost curve is directly related to the average fixed cost (AFC) and average variable cost (AVC) curves. Fixed costs remain constant over the short run, so as the quantity of output increases, average fixed costs decrease. As for the average variable costs, they are initially lower than the average fixed costs, but then they begin to grow, approaching the average gross costs. Since TC=FC+VC, then, dividing both sides of this equation by Q, we get: AC=AFC+AVC.
The average cost curve is of great importance for the entrepreneur, because it allows you to determine at what volume of production the cost per unit of output will be minimal.
Analysis of production costs
Costs -- this is the monetary expression of the cost of production factors necessary for the implementation of industrial and commercial activities by the enterprise. Costs are presented using the cost indicator ...
Analysis of the structure of costs and expenses of the enterprise Faber LLC
There are external and internal costs. External ones are related to the fact that the company pays employees, fuel, components, that is, everything that it does not produce itself to create this product ...
Distribution costs of a trade enterprise: analysis and economic justification (on the materials of LLC "Renaissance")
Classification involves an orderly study of complex economic phenomena according to certain essential features. It is well known that selling expenses (distribution costs) are precisely a complex economic category ...
Distribution costs of a trade enterprise: characteristics and planning in modern conditions (based on the materials of Sonet LLC)
In domestic practice, more than twenty approaches to the classification of costs are used. The criteria for a comparative analysis of cost classifications can be: universality, practicality, resource intensity, objectivity ...
production costs
Production and distribution costs
The main task of the analysis of the costs of catering enterprises is to identify ways, opportunities and reserves to reduce costs and develop measures to optimize costs ...
Costs of production and circulation in catering establishments and hotels and ways to reduce them
From an economic point of view, the costs of production and distribution represent the cost of the costs of the catering enterprise (except for the cost of raw materials and goods). Catering enterprises perform the functions of producing their own products ...
Production costs and ways to minimize them
The division of distribution costs according to the totality of various features and characteristics is called their classification. The development of a scientifically based classification of distribution costs allows you to purposefully manage the process of their formation ...
Trading activity planning
The enterprise develops a production and distribution cost plan on its own and is the most important section of the business plan, is the basis for drawing up a financial plan. Currently, due to the economic crisis...
Increasing the efficiency of the use of fixed production assets in the organization JSC "Gastellovskoye"
For the implementation of the production process in the agro-industrial complex, the presence of three elements is necessary: labor, means and objects of labor. In agriculture, land is the main means of production...
The concept and composition of production and circulation costs
As A.M Fridman rightly notes: “The production of products requires various costs, which are production costs or the cost of production. Production costs include the costs of raw materials, materials, process fuel ...
Calculation of the economic efficiency of the restaurant "Buono" for 80 seats in Ulan-Ude
Reserves for cost reduction and improvement of financial results of the construction industry enterprise
Production costs are the costs of resources for the production of goods and services, expressed in monetary terms. Depending on the sphere of occurrence, costs are distinguished: production; non-production (advertising...
Economics of a printing company
Each firm in determining its strategy focuses on maximizing profits. At the same time, any production of goods or services is unthinkable without costs. A firm spends money on acquiring factors of production...
Table of contents
Introduction
2
1. Costs of production and circulation.
3
- 1.1.Role and essence of production and circulation costs.
3
- 1.2. Classification of production and circulation costs.
5
- 1.3. Distribution cost level
12
- 1.4. Factors affecting the costs of production and circulation.
14
- 2.1. Planning distribution costs for the enterprise.
18
- 2.2 Planning costs by items.
23
- 3.1 Calculation of expenses for individual items.
32
Bibliography 41
Introduction
The activities of the catering enterprise and the use of labor, material and financial resources. Resources are consumed and converted into costs. The classification of costs allows you to determine the reserves of the economy of material, labor and financial resources of the enterprise, reduce the cost of services, increase profitability.The purpose of this course work is to identify the components of production and distribution costs in catering establishments. The costs of production and sale of services, expressed in monetary terms, constitute the cost of services. They are reimbursed from the proceeds in each cycle. Therefore, knowledge of the economic nature of the cost is an important condition for the effective development of production, since the cost of services has a direct impact on the amount of profit and profitability. In addition, in a market economy, when catering enterprises independently develop tariffs for basic and additional services, the importance of cost as the basis for pricing a manufactured product increases even more.
The economic performance of commercial enterprises is affected by economic control over costs. The classification of costs allows you to open up reserves for saving material, labor and financial costs of a catering enterprise, reduce the cost of own production, and increase profitability. In addition, it is important for catering and hotels, as it allows you to determine the effect of the operating (production) leverage and, on its basis, maximize profits.
- Costs of production and circulation.
- The role and essence of production and circulation costs.
The activity of a trading enterprise since its inception is associated with a variety of costs of labor, material and financial resources. By the nature of the costs are divided into two types - current and long-term.
The current costs of a trading enterprise are associated with tactical tasks solved in the course of economic activity - purchase, transportation, storage, underworking, sorting, packaging, advertising, sale of goods, etc.
Long-term costs (investments) are associated with the solution of strategic tasks - construction, reconstruction, purchase of new types of machinery and equipment, etc.
The current costs of a trading enterprise are represented mainly by distribution costs.
The distribution costs are understood as the costs of labor, material and financial resources expressed in monetary form for the implementation of trade and production activities of the enterprise.
The role of distribution costs for commercial enterprises is very significant. They have an impact on profit, since in quantitative terms, profit is a residual indicator, which is the difference between gross income and distribution costs. In this regard, distribution costs can be defined as a tool with which the company regulates the process of profit formation, sets the size of the trade markup to the price of the goods sold.
If we consider distribution costs from the point of view of making economic decisions, then costs are always opportunity costs, i.e. opportunity cost (value) of resources at the best alternative variant of their application. A trade enterprise must have a clear idea of the effectiveness of each type of cost.
Distribution costs are of great social importance, since they are used to pay social payments established by law.
According to their economic nature, distribution costs are conventionally divided into net and additional. Net distribution costs are the costs of a commercial enterprise associated with trade services, with the sale of goods and the change in value forms. These costs are socially necessary, inherently productive in market conditions and create a new use value - a trade service. They are reimbursed at the expense of the price of the trading service - the trading allowance.
Additional circulation costs are the costs of a trading enterprise for performing operations related to the continuation of the production process in the sphere of circulation, the transformation of the production range into a commercial one: the costs of transportation, storage, refinement, packaging of goods, etc. The commodity as a use value is preserved, transformed, brought to the consumer while increasing its value.
Trade enterprises do not keep separate records of net and incremental distribution costs. Their ratio can be identified according to special sample surveys. It cannot be the same for all commercial enterprises, since the costs are different, determined by the type, product specialization, location of the enterprise, the volume and structure of its turnover, the size of the trading area, and the number of employees employed. At present, the share of net distribution costs in their total amount is increasing, which is due to market requirements for improving the culture of customer service and the competitiveness of enterprises.
1.2. Classification of production and circulation costs.
Different types of costs react differently to the processes of distribution and sale of goods. Their formation has its own specifics. For a deeper understanding of the essence of costs and providing the ability to manage them, a system for classifying costs has been developed, i.e. their grouping according to some previously developed or accepted feature. Classification allows you to continuously monitor and analyze distribution costs by their varieties, monitor their dynamics, identify changes and trends, and improve the validity of planned indicators.
Distribution costs are classified according to the following main features:
- by cost type
according to the degree of dependence on changes in turnover
according to the degree of expediency of the costs incurred
according to the method of attribution to specific results of activities and other features
- According to the types of costs, distribution costs are divided into elements and articles.
- An economic element is usually called a primary homogeneous type of cost for the sale of goods, which at the level of a trade organization cannot be decomposed into its constituent parts.
- In accordance with Art. 253 of the Tax Code of the Russian Federation for all enterprises, a single and mandatory grouping of expenses by economic elements is established:
2) labor costs
3) the amount of accrued depreciation
4) other expenses
- The costs of a trading enterprise in terms of their economic content are presented in the diagram:
Rice. 1.1. The cost structure of a trading enterprise
- The element-by-element grouping of costs shows how many of these or those types of costs were incurred in the whole trade organization for a certain period of time, regardless of where they arose and for the sale of which specific product they were used.
- Material expenses include the cost of non-capital materials and component parts, fuel and lubricants, building materials and spare parts used up (consumed) in the course of the operating activities of trading enterprises, for the maintenance of fixed assets and other non-current assets, containers and packaging materials, goods for own use (without subsequent sale) or selected for quality assessment and some other similar ongoing material costs.
- A feature of material costs in trade is that they do not include the cost of purchased goods.
- A trading enterprise buys already produced goods, spending money only on bringing them to the consumer. Funds for the purchase of goods are constantly in circulation. They are invested, advanced in commodity stocks at the expense of their own funds and stocks (short-term bank loans, attracting money from shareholders or shareholders, loans from other enterprises, etc.). Finally, they are reimbursed from the profits received as a result of commercial activities.
- Labor costs include all types of payments of the basic and additional wages of full-time and freelance employees of a trading enterprise, attributable to distribution costs. Forms of material incentives for personnel at the expense of profit are not included in the current costs.
- The amounts of accrued depreciation include the amount of depreciation deductions, taking into account the established groups of depreciable property and the procedure for calculating depreciation amounts.
- Other expenses include all other types of distribution costs of a trade enterprise.
- These cost elements are discussed in detail in Art. 254-264 of the Tax Code of the Russian Federation.
- The division of costs by elements helps to highlight the costs of living and materialized labor, deepen the analysis and give a more objective assessment of the results of the enterprise, but it does not allow to identify the direction and purpose of individual costs. To solve this problem, enterprises carry out accounting, analysis and planning of distribution costs according to the nomenclature of articles. The nomenclature of distribution costs is a set of costs in the section of individual articles.
- The list of articles of distribution costs is established by the enterprise independently in accordance with Article 252 of the Tax Code of the Russian Federation. At the same time, it is possible to use the nomenclature of the main cost items recommended by the Guidelines for Accounting for Costs Included in Distribution and Production Costs and Financial Results at Trade and Public Catering Enterprises approved by Roskomtorg and the Ministry of Finance of Russia on April 20, 1995 No. 1-550, 32 -2.
- Traditionally, the following items are included in the costs of trade and public catering enterprises:
- Fare
Labor costs
Deductions for social needs
Expenses for rent and maintenance of buildings, structures, premises, equipment and inventory
Depreciation of fixed assets
Expenses for the repair of fixed assets
Wear of sanitary and special clothing, table linen, dishes, appliances
Costs for fuel, gas and electricity for production needs
Expenses for storage, part-time work, sorting and packaging of goods
Advertising expenses
Losses of goods and technological waste
Container costs
other expenses
- According to the degree of dependence on changes in the volume of trade, distribution costs are divided into fixed and variable.
Fixed distribution costs are types of costs that at any given moment do not directly depend on the size and structure of the turnover. These include: the cost of renting and maintaining buildings, structures, premises, equipment and inventory; depreciation of fixed assets; expenses for the repair of fixed assets; wear of sanitary and special clothing, table linen, dishes, appliances; labor costs of administrative and managerial personnel; a number of cost elements under the item "other expenses". These distribution costs are constant only in a short period of activity. They do not depend on sales volumes until their further increase is required, and thereby an increase in production capacity, number of personnel.
Average fixed costs (the sum of fixed costs per unit of turnover) tend to decrease as the volume of turnover increases. Therefore, an increase in turnover, ceteris paribus, leads to a decrease in the level of distribution costs for the enterprise.
Fixed costs can be residual and start-up. They are taken into account when considering the termination or resumption of the activities of the enterprise.
The residual includes that part of the fixed costs that the enterprise continues to incur during the period of termination of its activities for the sale of goods (payment for renting premises, utility bills, payment of wages to employees in the amount of the minimum amount or part of the salary, etc.). If the enterprise stops working for a long time, then residual costs should be reduced by refusing to rent premises, reducing the number of staff, etc.
Start-up costs include that part of the fixed costs that arise with the resumption of the process of selling goods (expenses for electricity, for cleaning premises, for wages at rates and salaries, etc.).
Variables are called distribution costs, the value of which is directly dependent on the volume and structure of trade. The essence of these costs can be expressed as follows: the variables include the costs associated with the use of production factors, the value of which is determined by changes in the sale of goods (services). These distribution costs include: transportation costs, expenses for fuel, gas, electricity for production needs; advertising expenses; loss of goods and technological waste; packaging costs; labor costs of sales and operational personnel; a number of cost elements under the item "other expenses".
Social contributions are charged to fixed and variable costs in proportion to the respective labor costs.
The nature of the dependence of the variable costs of circulation on the volume of sales has a different degree of elasticity. In cases where variable distribution costs change in the same proportions with the volume of trade (the elasticity coefficient between them is equal to one), they are called proportional distribution costs. These include salaries of sales and operational personnel, transportation costs, etc.
3. According to the degree of expediency of the costs incurred, useful and useless distribution costs are distinguished.
Useful distribution costs include types of costs that give a useful result: the cost of selling goods provides the company with a turnover.
Waste distribution costs are the costs that are associated with servicing the unused part of the labor, material and financial resources of a commercial enterprise. For example, payment of wages to employees performing public duties; depreciation deductions for unused equipment. Useless costs do not give a useful result, but they are inevitable in the process of carrying out an enterprise's activities - the loss of goods in the form of natural loss.
4. According to the method of attribution to specific results of activities (sale of specific groups of goods, activities of specific structural units), distribution costs are divided into direct and indirect.
Direct costs are costs that can be fully attributed to one or another specific result of the enterprise. For example, the loss of a particular product from natural wastage is directly related to the result of its sale.
Indirect costs cannot be fully attributed to a particular result of the enterprise, which is associated with the complexity of their implementation by the enterprise or its structural divisions. Indirect costs include: wages of administrative and managerial personnel of the entire enterprise; expenses for the maintenance of office departments of the enterprise; the cost of transporting a consignment of goods, consisting of several product groups, when they are distributed by groups of goods sold.
Indirect costs are distributed to sections, departments, services of the enterprise, as well as between product groups in proportion to any indicator - sales area, turnover volume, wages of sales and operational workers, etc.
1.3. Distribution cost level
The distribution costs of a commercial enterprise are taken into account, analyzed and planned in absolute terms and in relative terms. The absolute indicator characterizes the total amount of expenses of the enterprise for a certain period. However, it does not give an idea of the result obtained for each ruble of costs, i.e. about the effectiveness of the costs incurred. To characterize the effectiveness of costs and their effectiveness, such an indicator as the level of distribution costs is used, which is the ratio of their amount to turnover, expressed as a percentage. In retail trade, the level of costs is determined as a percentage of retail turnover, in wholesale - as a percentage of wholesale turnover with participation in settlements, in public catering - as a percentage of the gross turnover of a public catering enterprise. It can be calculated not only for the entire volume of trade, but also for individual commodity groups.
The level of distribution costs is one of the most important qualitative indicators of commercial enterprises and shows, on the one hand, what percentage of distribution costs in the retail value of goods, and on the other hand, the amount of costs per 100 rubles. turnover. The level of distribution costs characterizes the cost intensity of trading activities.
The level of costs can be considered a generalizing indicator for assessing the efficiency of the use of resources: fixed assets, working capital, labor. The optimal value of this indicator corresponds to the most rational combination of resources used. You should not strive to necessarily reduce the level of costs, as this can lead to a decrease in the quality of service and, ultimately, to a decrease in sales and profits. An increase in the amount and level of costs is justified when it helps to accelerate the turnover of goods, increase the prestige of the enterprise and increase its share in the market capacity.
The level of distribution costs of retail trade enterprises is much higher than its value in wholesale trade. In retail (compared to wholesale), the level of costs associated with the maintenance of the material and technical base is higher, and material losses are higher (costs for packaging, loss of goods and technological waste). These differences are due to the presence of smaller economic structures in retail trade (shops, tents, etc.) compared to wholesale (warehouses), the sale of goods by wholesale enterprises in large quantities, slower turnover of goods in the retail sector, and a relatively high level of mechanization of labor of workers wholesale trade and other factors.
The costs of public catering enterprises differ significantly in level and structure from the distribution costs of retail trade enterprises. The costs of public catering include production costs (except for the costs of raw materials), distribution costs and costs associated with the organization of consumption, since it simultaneously produces its own products, sells and organizes the consumption of these products, as well as purchased goods. The production of own products involves the cost of fuel, gas, electricity for production needs. With the organization of the consumption of public catering products directly at public catering establishments, the costs of wearing out table linen, dishes, appliances and other expenses are associated.
Due to the large labor costs for food preparation, the level of labor costs in catering establishments is higher than in trade enterprises. Therefore, the average level of production and distribution costs in public catering exceeds its value in retail trade.
1.4. Factors affecting the costs of production and circulation.
Fig.1.4. Production cost structureThe amount and level of costs of a catering enterprise is influenced by various factors, which can be divided into internal and external. External factors include:
- The economic situation in the country;
State tax policy;
pricing system;
The presence or absence of competition;
inflation;
exchange rate;
The cost of services in other industries.
- Volume, composition and structure of trade;
The structure of consumable raw materials and goods;
production program;
Labor efficiency and productivity;
Forms and systems of remuneration, bonus system;
Goods turnover;
The procedure for calculating depreciation, etc.
The composition of the turnover has a great influence on costs. The costs of production, sale and organization of consumption of products of own production exceed the costs of sale and organization of consumption of purchased goods per unit of turnover.
In addition, the cost of processing and selling individual groups of broths affects the costs of a food enterprise. Thus, the cost-intensiveness of potatoes is 4 times greater than that of meat and poultry. Therefore, the structure of consumed raw materials affects the costs of production and circulation.
As calculations show, the share of labor costs in the composition of costs can be over 30%. Therefore, an increase in the level of labor costs, the system of organizing wages at a catering enterprise can have an impact on production costs and circulation.
Organizational factors include:
- Enterprise size;
The mode of operation of the enterprise;
Specialization;
Type and category of catering establishment;
Equipped with equipment, cost of equipment, service life;
Visitor service methods;
Supply system for catering establishments with semi-finished products;
Organization of work of employees, scheduling for work, combining professions;
Storage conditions for raw materials and goods, etc.
The size of the enterprise has a significant impact on costs. The economic advantages of large-scale production lies in the possibility of a more rational use of material and labor resources. At catering enterprises with a large volume of output of their own production and turnover, fixed and working capital is used more rationally, better conditions are created for increasing labor productivity, introducing more modern forms of service, transportation and storage of goods, as a result of which a reduction in costs per unit of production is achieved. and for 1 rub. turnover. At hotel enterprises and catering enterprises of different types and categories, the level of costs is different. So, in restaurants and hotels of the 5-star category, the costs are higher than in all other enterprises. This is due to the wide range of dishes and services provided, the requirements for service, etc.
An important factor contributing to cost reduction is the use of various forms of customer service. Service by waiters to visitors sitting at tables can be supplemented by self-service elements of the "buffet" type. With self-service at catering establishments, savings in labor costs are achieved (by reducing the number of waiters), the throughput of halls increases, which leads to an increase in turnover and a decrease in costs. This is also facilitated by the development of catering by subscription, the acceptance of pre-orders, the organization of express tables, festive, off-site and banquet services, the release of dishes and culinary products at home.
Specialized enterprises have a lower level of costs due to higher labor productivity, a narrower range of dishes and services provided, and high turnover of places.
2.Planning production costs
2.1. Planning distribution costs for the enterprise.
Distribution cost planning is an integral part of the financial management of a commercial enterprise. In the planning process, one should proceed from the need to determine such an amount of costs that would allow the enterprise to carry out business activities uninterruptedly and at a high level, while maintaining reasonable savings in distribution costs.
When forming the costs of a trading enterprise, it is advisable to ensure that the following conditions are met:
- the increase in the total amount of costs should not exceed the increase in income. It is necessary to ensure the following proportions in the growth rates of profits, turnover and costs:
Where Ip, Io, Ii - indices of profit growth, turnover and distribution costs, respectively.
Profit maximization should be achieved when marginal costs are equal to marginal revenues;
- the minimum level of distribution costs should be achieved at such a volume of turnover, when the marginal costs correspond to the average in magnitude. A further increase in the volume of activities will lead to an increase in the size of the average cost, which is considered inefficient;
cost reduction should not lead to a deterioration in the quality of trade services and, as a result, to a decrease in demand, turnover, and an increase in costs for organizing the process of selling goods;
the amount of costs should be linked to the availability of resources, it is advisable to determine the forecast values of distribution costs, taking into account resource constraints, calculations should ensure the choice of the most optimal options for using resources;
it is recommended to observe the compliance of changes in costs with changes in the volumes and features of the activities of a trading enterprise, its targets, and customer requirements for the quality of service.
The maximum amount of distribution costs is their volume, which provides the enterprise with not profitable, but break-even work.
The planning of distribution costs should take place in a complex linkage with the rest of the economic indicators of a commercial enterprise: turnover, gross income, profit. One of the principles for developing a distribution cost plan is the optimization of its performance. Such a plan of distribution costs is considered optimal, which, with a given turnover and an accepted pricing policy, will provide the enterprise with the required amount of net profit. Accordingly, the planned levels and the amount of distribution costs should represent the value of rational costs.
Planning of distribution costs can be carried out in any of two directions - from general to particular or from particular to general. Under private refers to the planning of distribution costs in the context of individual articles.
In the process of planning distribution costs, trading enterprises take into account:
¦ the results of the analysis of individual items of distribution costs and the identified reserves for their savings;
- indicators developed by trade enterprises for the planned period;
norms for spending funds, materials, current tariffs for freight transportation, utilities, etc.;
the main directions of saving distribution costs in the planning period.
TO economic-statistical methods of planning distribution costs include the method of planning based on the elasticity coefficient of costs from turnover, the method of planning based on the current rate of growth of costs, the method of moving average.
The calculation of distribution costs for the planned period should be carried out on the basis of the planned volume of trade, the division of costs into conditionally constant and conditionally variable, and the identified trends in their change.
Since the value of conditionally fixed costs remains almost unchanged with a change in the volume of trade, the amount of conditionally variable costs can be calculated according to elasticity coefficient And conditionally variable costs from the volume of trade. The calculation is performed in a certain sequence:
- :,
- ,
Yper - change in conditionally variable distribution costs in the reporting period compared to the base period, rub.;
Ibaz.lane - the amount of conditionally variable distribution costs of the base period, rub.;
ABOUT - change in turnover in the reporting period compared to the base period, rub.;
Obaz - turnover of the base period;
t Hyper - growth rates of the amount of conditionally variable distribution costs in the planning period, %;
Opl - growth rates of trade turnover in the planned period, %;
Ipl.lane, Iotch.lane -the amount of conditionally variable distribution costs, respectively, in the planning and reporting periods, rub.
Distribution cost planning method by cost growth rate is a modification of the above method. When planning distribution costs using this method, the following calculations are made:
- Hypost = Ibas.post t Hypost,
- Yper = Ibase.per,
Ibaz.post, Ibaz.per -sums of conditionally fixed and conditionally variable distribution costs in the base period, rub.;
t Hypost - average annual growth rate of semi-fixed distribution costs, in fractions of a unit;
ABOUT - increase in turnover in the planned period, in fractions of a unit;
TO - the ratio of the average annual growth rate of conditionally variable costs of distribution and turnover, in fractions of a unit.
The total amount of planned distribution costs is the sum of planned semi-fixed and semi-variable costs:
- I \u003d Hypost + Hyper.
- ,
Udvi - the share of the i-th item of distribution costs in the total cost of the reporting period,%
2.2 Planning costs by items.
The costs for each article of distribution costs can be calculated in the same way as the total amount of planned conditionally variable and conditionally fixed costs. At the same time, it is necessary to take into account the development trends identified during the pre-planning period and the relationship with the turnover for each item of distribution costs.
To calculate distribution costs under relatively stable business conditions, the
moving average method .
The methodology for calculating indicators using the moving average method is discussed in the course "Statistics". Alignment of the dynamic series should go in parallel on the total, conditionally fixed, conditionally variable distribution costs and turnover.
Planning the costs of trade and public catering enterprises using economic and mathematical methods involves solving a multifactor correlation-regression model of the form:
y \u003d a 0 + a l x l + a 2 x 2 + ... + a, rs p,
Where y -
planned level of distribution costs;
A
0
,
a l, A 2
,..., X
P
-
equation parameters;
x l, X 2
..., X
P
-
factors affecting the level of distribution costs.
The planned level of costs can be calculated using the hyperbole equation:
where a, b are the parameters of the equation; X
- volume of trade.
The most accurate is method of technical and economic calculations for individual items and elements of expenses in accordance with various cost standards, norms, rates, tariffs. Some of them are developed by the enterprise itself - norms for the number of employees, norms for inventory, etc., others are determined by transport organizations - tariffs for transportation, relevant ministries - tax and deduction rates, attrition rates, depreciation rates.
The total amount of distribution costs is determined by summing up the costs of individual items.
Each type of expenses is calculated in accordance with their content and the specifics of formation.
etc.................
