≡× MENU

• Repair
• Repair
• Interior Design
• About everything
• About plumbing

Variable production costs. variable costs

variable costs These are costs, the value of which depends on the volume of output. Variable costs are opposed to fixed costs, which add up to total costs. The main sign by which it is possible to determine whether costs are variable is their disappearance during a stop in production.

Note that variable costs are the most important indicator of an enterprise in management accounting, and are used to create plans to find ways to reduce their weight in total costs.

What is variable cost

Variable costs have a major distinguishing feature- they vary depending on the actual production volumes.

Variable costs include costs that are constant per unit of output, but their total amount is proportional to the volume of output.

Variable costs include:

raw material costs;

Consumables;

energy resources involved in the main production;

salary of the main production personnel (together with accruals);

the cost of transport services.

These variable costs are directly charged to the product.

In value terms, variable costs change when the price of goods or services changes.

How to find variable costs per unit of output

In order to calculate the variable costs per piece (or other unit of measure) of the product manufactured by the company, you should divide total amount variable costs incurred per total finished products, expressed in natural values.

Classification of variable costs

In practice, variable costs can be classified according to the following principles:

According to the nature of the dependence on the volume of output:

proportional. That is, variable costs increase in direct proportion to the increase in output. For example, the volume of production increased by 30% and the amount of costs also increased by 30%;

degressive. As production increases, the company's variable costs decrease. So, for example, the volume of production increased by 30%, while the size of variable costs increased by only 15%;

progressive. That is, variable costs increase relatively more with output. For example, the volume of production increased by 30%, and the amount of costs by 50%.

Statistically:

are common. That is, variable costs include the totality of all variable costs of the enterprise across the entire product range;

average - average variable costs per unit of production or group of goods.

According to the method of attribution to the cost of production:

variable direct costs - costs that can be attributed to the cost of production;

variable indirect costs - costs that depend on the volume of production and it is difficult to assess their contribution to the cost of production.

In relation to the production process:

production;

non-production.

Direct and indirect variable costs

Variable costs are either direct or indirect.

Production variable direct costs are costs that can be attributed directly to the cost of specific products based on primary accounting data.

Production variable indirect costs are costs that are directly dependent or almost directly dependent on changes in the volume of activity, however, due to the technological features of production, they cannot or are not economically feasible to be directly attributed to manufactured products.

The concept of direct and indirect costs is disclosed in paragraph 1 of Article 318 of the Tax Code of the Russian Federation. Thus, according to tax legislation, direct expenses, in particular, include:

expenses for the purchase of raw materials, materials, components, semi-finished products;

wages of production personnel;

depreciation on fixed assets.

Note that enterprises can include in direct costs and other types of costs directly related to the production of products.

At the same time, direct expenses are taken into account when determining the tax base for income tax as products, works, services are sold, and written off to the tax cost as they are implemented.

Note that the concept of direct and indirect costs is conditional.

For example, if the main business is transport services, then drivers and depreciation of cars will be direct costs, while for other types of business, the maintenance of vehicles and the remuneration of drivers will be indirect costs.

If the cost object is a warehouse, then the storekeeper's wages will be included in direct costs, and if the cost object is the cost of manufactured and sold products, then these costs (storekeeper's wages) will be indirect costs due to the impossibility of unambiguously and in the only way to attribute it to the object costs - cost.

Examples of Direct Variable Costs and Indirect Variable Costs

Examples of direct variable costs are costs:

for the remuneration of workers involved in the production process, including accruals on their wages;

basic materials, raw materials and components;

electricity and fuel used in the operation of production mechanisms.

Examples of indirect variable costs:

raw materials used in complex production;

expenses for research and development, transportation, travel expenses, etc.

conclusions

Due to the fact that variable costs change in direct proportion to the production volume, and the same costs per unit of finished product usually remain unchanged, when analyzing this type of cost, the value per unit of production is initially taken into account. In connection with this property, variable costs are the basis for solving many production problems related to planning.

Still have questions about accounting and taxes? Ask them on the accounting forum.

Variable Costs: Accountant Details

• Operational leverage in the main and paid activities of the BU

  They are useful. Management of fixed and variable costs, as well as the operating costs associated with them ... in the cost structure of fixed and variable costs. The effect of operating leverage arises... variable and conditionally constant. Conditionally variable costs change in proportion to the change in the volume of provided ... constant. Conditionally fixed costs Conditionally variable costs Maintenance and maintenance of buildings and ... the price of the service falls below the variable costs, it remains only to curtail production, ...

Example 2. In the reporting period, variable costs for the release of finished products, reflected .... The cost of production includes variable costs in the amount of 5 million rubles... Debit Credit Amount, rub. Reflected variable costs 20 10, 69, 70, ... Part of general factory costs added to the variable costs that form the cost 20 25 1 ... Debit Credit Amount, rub. Variable costs are reflected 20 10, 69, 70, ... Part of general factory costs is added to the variable costs that form the cost price 20 25 1 ...

• Financing the state task: examples of calculations
• Does it make sense to divide costs into variable and fixed costs?

  It is the difference between revenue and variable costs, shows the level of compensation for fixed ... costs; PermZ - variable costs for the entire volume of production (sales); permS - variable costs per unit...increased. Accumulation and distribution of variable costs When choosing a simple direct costing ... semi-finished products of own production are taken into account at variable costs. Moreover, complex raw materials, with ... Full cost based on the distribution of variable costs (by output) will be ...

• Dynamic (temporary) profitability threshold model

  For the first time he mentioned the concepts of "fixed costs", "variable costs", "progressive costs", "degressive costs". ... The intensity of variable costs or variable costs per working day (day) is equal to the product of the value of variable costs per unit ... total variable costs - the value of variable costs per unit of time, calculated as the product of variable costs by ... respectively, total costs, fixed costs, variable costs and sales. The above integration technology...

• Director's questions to which the chief accountant should know the answers

  Equality: revenue = fixed costs + variable costs + operating profit. We are looking for... products = fixed cost / (price - variable cost/unit) = fixed cost: marginal... fixed cost + target profit) : (price - variable cost/unit) = (fixed cost + target profit ... equation: price = ((fixed costs + variable costs + target profit) / target sales ... , in which only variable costs are taken into account. Marginal profit - revenue ...

Conditionally fixed and conditionally variable costs

In general, all types of costs can be divided into two main categories: fixed (conditionally fixed) and variable (conditionally variable). According to the legislation of the Russian Federation, the concept of fixed and variable costs is present in paragraph 1 of Article 318 of the Tax Code of the Russian Federation.

Semi-fixed costs(English) total fixed costs) - an element of the break-even point model, which is the costs that do not depend on the size of the volume of output, as opposed to variable costs, which add up to total costs.

In simple words are expenses that remain relatively constant over a budget period, regardless of changes in sales volumes. Examples are: management expenses, expenses for rent and maintenance of buildings, depreciation of fixed assets, expenses for their repair, time wages, on-farm deductions, etc. In reality, these expenses are not permanent in the literal sense of the word. They increase with an increase in the scale of economic activity (for example, with the emergence of new products, businesses, branches) at a slower pace than the growth in sales volumes, or grow in leaps and bounds. Therefore, they are called conditionally constant.

This type costs in many ways intersect with overhead, or indirect costs that accompany the main production, but are not directly related to it.

Detailed examples of semi-fixed costs:

• Interest obligations during the normal operation of the enterprise and maintaining the volume of borrowed funds, a certain amount must be paid for their use, regardless of the volume of production, however, if the volume of production is so low that the enterprise is preparing for bankruptcy , these costs can be neglected and interest payments can be stopped
• Enterprise property taxes , since its value is fairly stable, are also mainly fixed costs, however, you can sell the property of another company and rent it from it (form leasing ), thereby reducing property tax payments
• depreciation deductions with a linear method of accrual (evenly for the entire period of use of the property) according to the chosen accounting policy, which, however, can be changed
• Payment guards, watchmen , despite the fact that it can be reduced with a decrease in the number of employees and a decrease in the load on checkpoints , remains even when the company is idle, if it wants to keep its property
• Payment rent depending on the type of production, the duration of the contract and the possibility of concluding a sublease agreement, it can act as a variable cost
• Salary management personnel in the conditions of the normal functioning of the enterprise is independent of the volume of production, however, with the accompanying restructuring of the enterprise layoffs ineffective managers can also be reduced.

Variable (conditionally variable) costs(English) variable costs) are expenses that change in direct proportion in accordance with an increase or decrease in the total turnover (sales proceeds). These costs are associated with the operations of the enterprise for the purchase and delivery of products to consumers. This includes: the cost of purchased goods, raw materials, components, some processing costs (for example, electricity), transportation costs, piecework wages, interest on loans and borrowings, etc. They are called conditional variables because the direct proportional dependence on sales volume actually exists only in a certain period. The share of these expenses may change in some period (suppliers will raise prices, the rate of inflation of selling prices may not coincide with the rate of inflation of these costs, etc.).

The main sign by which you can determine whether costs are variable is their disappearance when production is stopped.

Examples of Variable Costs

In accordance with IFRS standards, there are two groups of variable costs: production variable direct costs and production variable indirect costs.

Production variable direct costs- these are expenses that can be attributed directly to the cost of specific products on the basis of primary accounting data.

Production variable indirect costs- these are expenses that are directly dependent or almost directly dependent on changes in the volume of activities, however, due to the technological features of production, they cannot or are not economically feasible to be directly attributed to manufactured products.

Examples direct variables costs are:

• The cost of raw materials and basic materials;
• Energy and fuel costs;
• The wages of workers engaged in the production of products, with accruals on it.

Examples indirect variables costs are the costs of raw materials in complex production. For example, when processing raw materials - hard coal– produces coke, gas, benzene, coal tar, ammonia. When milk is separated, skimmed milk and cream are obtained. In these examples, it is possible to divide the costs of raw materials by types of products only indirectly.

Break even (BEP - break even point) - the minimum volume of production and sales of products at which costs will be offset by income, and in the production and sale of each subsequent unit of production, the enterprise begins to make a profit. The break-even point can be determined in units of production, in monetary terms, or taking into account the expected profit margin.

Break-even point in monetary terms- such a minimum amount of income at which all costs are fully paid off (the profit is equal to zero).

BEP= * Sales proceeds

Or what is the same BEP= = *P (see below for a breakdown of the values)

Revenue and expenses must refer to the same time period (month, quarter, six months, year). The break-even point will characterize the minimum allowable sales volume for the same period.

Let's look at the example of a company. Cost analysis will help you visualize the BEP:

Break-even sales volume - 800 / (2600-1560) * 2600 \u003d 2000 rubles. per month. The actual sales volume is 2600 rubles/month. exceeds the break-even point, this is a good result for this company.

The break-even point is almost the only indicator about which one can say: “The lower the better. The less you need to sell to start making a profit, the less likely you are to go bankrupt.

Break-even point in units of production- such a minimum quantity of products at which the income from the sale of this product completely covers all the costs of its production.

Those. it is important to know not only the minimum allowable revenue from sales as a whole, but also the necessary contribution that each product should bring to the total profit box - that is, the minimum required number of sales of each type of product. To do this, the break-even point is calculated in physical terms:

VER = or VER = =

The formula works flawlessly if the company produces only one type of product. In reality, such enterprises are rare. For companies with a large range of production, the problem arises of allocating the total amount of fixed costs to individual types of products.

Fig.1. Classic CVP Analysis of Cost, Profit and Sales Behavior

Additionally:

BEP (break even point) - break even,

TFC (total fixed costs) - the value of fixed costs,

VC(unit variable cost) - the value of variable costs per unit of output,

P (unit sale price) - the cost of a unit of production (realization),

C(unit contribution margin) - profit per unit of production without taking into account the share of fixed costs (the difference between the cost of production (P) and variable costs per unit of production (VC)).

CVP-analysis (from the English costs, volume, profit - expenses, volume, profit) - analysis according to the "costs-volume-profit" scheme, an element of managing the financial result through the break-even point.

overhead costs- the costs of doing business that cannot be directly related to the production of a particular product and therefore are distributed in a certain way among the costs of all manufactured goods

Indirect costs- costs that, unlike direct costs, cannot be directly attributed to the manufacture of products. These include, for example, administrative and management costs, staff development costs, costs in the production infrastructure, costs in social sphere; they are distributed among various products in proportion to a reasonable base: the wages of production workers, the cost of materials used, the volume of work performed.

Depreciation deductions- an objective economic process of transferring the value of fixed assets as they wear out to a product or service produced with their help.

©2015-2019 site
All rights belong to their authors. This site does not claim authorship, but provides free use.
Page creation date: 2017-11-19

Variables expenses defined as costs, the amount of which varies depending on the volume of production. Variable costs include expenses for raw materials, materials and components, salaries of production personnel, travel expenses, awards, expenses for fuel, water and electricity. The purpose of accounting for variable costs is to save them. The sum of variable costs, which is brought to the unit of product, is actually continuous at different volumes of production.

You will need

• – Data on the volume of output in natural units
• - Data accounting on the costs of materials and components, equipment, wages, fuel and energy sources for the period.

Instruction

1. Based on documents on the write-off of raw materials and materials, acts on the implementation production work or services performed by support departments or third parties, determine the amount of physical costs for the production of products or services for the period. From physical expenses, exclude the amount of returnable waste.

2. Determine the amount of labor costs, which consists of piecework and time wages of the main production workers and maintenance personnel, bonuses, allowances and additional payments, contributions to social insurance funds.

3. Determine the amount of expenses for electricity, water and fuel used for technological needs, based on the data of the actual consumption and the price of receipt.

4. Determine the amount of transport and procurement costs and the cost of packaging products.

5. By adding all the above sums, you will determine the global variables expenses for all products produced during the period. Knowing the number of products produced, by dividing, find the amount of variable costs per unit of output. Calculate the dangerous tier of variable costs per unit of production using the formula P-PZ / V, where P - the price of production, PZ - continuous expenses, V is the volume of output in natural units.

What is the minimum capital you need to open own business, depends on what you want to open. But there are costs that are typical for almost all types of business. Let's take a closer look at these costs.

Instruction

1. At the current time, it is absolutely realistic to open a business and with the most minimum investment or almost without them. Let's say an online business. But if you are still leaning towards the “usual” form of business, then it would be more possible to single out three indispensable items of expenditure: registering a company or individual entrepreneur, renting premises and purchasing goods (equipment).

2. If you register an LLC or an individual entrepreneur on your own, then all your costs are the state fee and notary expenses. The state duty for registration of a legal entity currently amounts to 4,000 rubles. Individual can register itself as individual entrepreneur by paying 800 rubles. Up to 1500 rubles goes to the notary. However, doing registration independently, you will save money, but spend a lot of time, so it is more advantageous to hire a specialized company to register your business. The company will register you for 5000-10000 rubles.

3. The cost of renting a room depends on the location of your office or store. Accordingly, the closer to the center of Moscow or to prestigious areas the higher the rental price. On average, you will pay from $400 per square meter of rented premises per year. This will be the cost of a class C office (rather low class) in the Central Administrative District. The cost of renting a class A office can reach up to $1,500 per square meter per year, depending on the location. A room for a store of 200 sq.m in the same Central Administrative District will cost you an average of around 500,000 rubles per month.

4. The cost of equipment or goods (if you decide to open a store) depends, of course, on the type of your business. In any case, you will need to equip the office with just one computer (if you don’t have employees yet), a telephone and other office equipment, as well as “little things” - paper, stationery. Store owners should take care of cash registers.

5. Sooner or later your business will expand and you will need colleagues. Every office needs a secretary. His salary now starts at an average of 20,000 rubles a month. It is allowed to hire a part-time student for 15,000. Accordingly, the more qualified the worker, the more he will have to pay. The salaries of sellers and cashiers now start from 10,000-15,000 rubles, but this is the minimum for the fact that low-skilled workers will work.

Variables are recognized costs, which directly depend on the volume of calculated production. Variables costs will depend on the cost of raw materials, materials, and on the cost of electrical energy, and on the number of wages paid.

You will need

• calculator
• notebook and pen
• a complete list of the company's costs with a specified amount of costs

Instruction

1. Add it all up costs enterprises that are directly dependent on the volume of products produced. Let's say that the variable costs of a trading organization that sells consumer goods can be attributed to: Pp - the volume of products purchased from contractors. Expressed in rubles. Let trade Organization bought goods from contractors in the amount of 158 thousand rubles. Uh - the cost of electrical energy. Let the trade organization pay 3,500 rubles a month for electricity. Z is the salary of sellers, which depends on the number of goods sold by them. Let the average payroll in a trade organization amount to 160 thousand rubles. Thus, the variables costs trade organization will be equal: VC \u003d Pp + Ee + Z \u003d 158 + 3.5 + 160 \u003d 321.5 thousand rubles.

2. Divide the resulting amount of variable costs by the volume of products sold. This indicator can be found in the balance sheet of a trading organization. The volume of goods sold in the above example will be expressed in quantitative terms, that is, by the piece. Let the trade organization manage to sell 10,500 pieces of goods. Then the variables costs taking into account the number of goods sold, they are: VC \u003d 321.5 / 10.5 \u003d 30 rubles per unit of goods sold. Thus, the calculation of variable costs is carried out not only by adding up the organization's expenses for the purchase and sale of goods, but also by dividing the amount received by unit of goods. Variables costs with an increase in the number of goods sold, they decrease, which may indicate the effectiveness of the organization's activities. Depending on the type of activity of the company, the variables costs and their types can change - be added to those indicated above in the example (costs for raw materials, water, one-time transportation of products and other expenses of the organization).

Variables costs are types of costs, the value of which can only change in proportion to the change in the volume of production. They are contrasted with continuous costs, which add up to total costs. The main sign by which it is permissible to determine whether any costs are variable is their disappearance when production is stopped.

Instruction

1. According to IFRS standards, there are each two types of variable costs: production variable indirect costs and production variable direct costs. Production variable indirect costs - costs that are actually or entirely directly dependent on changes in the volume of the enterprise's activities, however, due to production technological features, they are not economically feasible or impossible to directly attribute to manufactured products. Production variable direct costs are those costs that can be easily attributed to the cost of certain products on the basis of data in primary accounting. The indirect variable costs of the first group are: all the costs of raw materials needed for complex production. Direct variable costs are: the cost of fuel, energy; expenses for basic materials and raw materials; workers' wages.

2. If the company does not produce products, then the variables costs will be equal to zero. To discover variables costs, you need to know how much is the total costs and continuous costs at this enterprise.

3. In order to find the mean variables costs, we need global variables costs divided by the desired number of products produced.

4. Let's calculate the variables costs for example: Price per unit of manufactured product A: materials - 140 rubles, wages for one manufactured product - 70 rubles, other costs - 20 rubles. Price per unit of manufactured product B: materials - 260 rubles, wages for one manufactured product - 130 rubles, other expenses - 30 rubles. Variables the cost per unit of product A will be equal to 230 rubles. (add all costs). Accordingly, variable costs per unit of product B will be equal to 420 rubles. Keep in mind that variable costs are invariably associated with the release of the entire unit of the product being manufactured. Variables costs - those values ​​that change only when the number of a given product is changed and include various types of costs.

In the absence of a real idea of ​​the physical costs of the production of goods (costs), it is unrealistic to determine the profitability of production, which, in turn, is a fundamental collation for the development of a business in the aggregate.

Instruction

1. Familiarize yourself with the three main ways of calculating physical costs: boiler, order and per-order. Choose one of the methods, depending on the object of calculation. So, with the boiler method, such an object is production in the aggregate, in the case of the order-by-order method, only a separate order or type of product, and with the alternate method, a separate segment (technological process) of production. Accordingly, all physical expenses either not distributed, or correlated by products (orders), or - by segments (processes) of production.

2. Use different units of calculation when applying any of the calculation methods (natural, conditionally natural, cost, units of time and work).

3. When using the boiler calculation method, do not forget about its low information content. The information obtained as a result of calculations by the boiler method can be justified only in the case of accounting for single-product industries (for example, at oil production enterprises for calculating its cost). Physical expenses are calculated by dividing the total amount of existing spending by each volume of production in natural terms (barrels of oil in this example).

4. Use the order-by-order method per unit of production for small-scale or even single-piece production. This method is also perfectly suitable for calculating the cost of huge or technologically difficult products, when it is physically unthinkable to calculate any segment of the production process. Physical expenses are calculated by dividing the cost of each order by the number of units produced and delivered in accordance with this order. The conclusion of the cost calculation by this method is the acquisition of information about the financial results of the implementation of any order.

5. Use the line-by-line method if you are calculating the cost of a mass production that is characterized by a sequence technological processes and repeatability of separately executed operations. Physical expenses are calculated by dividing the sum of all expenses for a certain period of time (or for the execution of the entire individual process or operation) by the number of units of products released for this period (or for the duration of the process or operation). The total cost of production is the sum of physical costs for each of the technological processes.

In production, there are costs that remain identical with hundreds and tens of thousands of dollars in revenue. They do not depend on the volume of output. They are called ongoing expenses. How do you calculate ongoing costs?

Instruction

1. Determine the formula for calculating continuous costs. It calculates the continuous costs of all organizations. The formula will be equal to the ratio of all continuous costs to each cost of works and services sold, multiplied by the basic income from the sale of works and services.

2. Count all ongoing expenses. These include: advertising costs, both internal and external; administrative and management expenses, i.e. salaries of top administrators, table of contents of company cars, table of contents of accounting departments, marketing, etc., expenses for depreciation of non-current assets, expenses for the use of various information databases, for example, postal or accounting.

3. Calculate deductions for depreciation of fixed assets in non-current assets, such as land, capital expenditures for the improvement of land, buildings, structures, transmission devices, machinery and equipment, etc. Do not forget about library collections, natural sources, rental items, as well as capital investments in objects that have not been put into operation.

4. Make a calculation of each cost of implemented works and services. This will include revenue from the core sale or from the services provided, for example, a hairdresser and the work performed, say, construction organizations.

5. Calculate the basic income from the sale of works and services. Basic income is a conditional return per month in value terms per unit of physical indicator. Please note that “domestic” services have a solid physical indicator, and “non-residential” services, for example, renting out housing and transporting passengers, have their own physical indicators.

6. Substitute the obtained data into the formula and get continuous costs.

In an economic market overview financial condition enterprises takes on special significance. This is related to the fact that management decisions determine its outcome. At the same time, one of the most primitive ways of financial review of operational or tactical planning is an operational review, one that traces the connection between the financial results of the company from costs, as well as production volumes. To complete this review, it is necessary to subdivide all expenses to variables and permanent .

Instruction

1. continuous expenses are costs that do not change with changes in output. They depend on time. variables and permanent expenses in the sum determine the universal expenses .

2. continuous expenses include rent, property taxes, salaries of management personnel, security. Wherein permanent expenses are continuous for short-term review purposes only, because in the long term they change due to, for example, changes in the size of the company, financial arrangements, insurance and rental payments.

3. Because permanent expenses do not depend on the volume, the share of continuous costs in the cost of the entire unit of the product (goods) will decrease with an increase in volume and increase with a decrease in volume. In turn, this leads to a decrease or increase in value. At a certain volume, which is called the break-even point, the cost per unit of output can become such that revenue can only cover expenses .

4. When applied linear method or the declining balance method, it is allowed to calculate continuous costs in the following way: writing off the cost by the sum of the number of years of the useful life. That is, the rate of continuous expenses in this case is equal to the sum of all depreciation charges, ideal for fixed assets.

5. In production costs permanent expenses are divided into two groups: permanent expenses, which are determined by power, and control costs. In its turn, permanent expenses the first group are determined by the continuous costs of all costs incurred for the redistribution, and management costs are determined by the general business expenses of the enterprise.

6. It is also possible to find permanent expenses, if you derive this indicator from the formula, where revenue = permanent expenses minus variables (general) expenses. As a result, it turns out that permanent expenses= revenue plus variables (total expenses).

Related videos

In the course of business activities of organizations, some bosses are required to send their employees on business trips. In general, the representation of a “business trip” is a trip outside the workplace to resolve issues related to work. As usual, the decision to send an employee on a business trip is made by CEO. The accountant must calculate and subsequently pay the employee travel allowances.

You will need

• - production calendar;
• - time sheet;
• - payrolls;
• - tickets.

Instruction

1. First, it should be clarified that travel allowances are paid for all the days that a colleague was on a business trip, including weekends, holidays, and days spent on the road.

2. In order to calculate travel allowance, calculate the average daily earnings of an employee for the last 12 calendar months. If wages are different every month, then first determine the total amount of all payments for the billing period, include bonuses and allowances in this number. Please note that any physical support, as well as cash payments in the form of gifts, must be deducted from the total amount.

3. Calculate the actual number of days worked in 12 months. Please note that this number does not include weekends and solemn days. If the employee for some reason, even if it is respectful, was not present at the workplace, then exclude these days as well.

4. After that, divide the amount of payments for 12 months by the days actually worked. The resulting number will be the average daily earnings.

5. Let's say administrator Ivanov worked for the period from September 01, 2010 to August 31, 2011. According to the production calendar, with a five-day working week the total number of days for the billing period is 249 days. But Ivanov in March 2011 took a vacation at his own expense, the duration of which is 10 days. So 249 days - 10 days = 239 days. During this period, the administrator earned 192 thousand rubles. In order to calculate the average daily earnings, you need to divide 192 thousand rubles by 239 days, you get 803.35 rubles.

6. After calculating the average daily earnings, determine the number of business trip days. The preface and end of the business trip is the date of departure and arrival of the vehicle.

7. Calculate the travel allowance by multiplying your average daily earnings by the number of days you travel. Let's say that the same administrator Ivanov was on a business trip for 12 days. Thus, 12 days * 803.35 rubles = 9640.2 rubles (travel allowance).

Related videos

In the course of business activities, the heads of companies spend cash for any other need. All these expenses can be divided into two groups: variables and continuous. The first group includes those costs that depend on the volume of manufactured or sold products, while the latter do not change depending on the volume of production.

Instruction

1. To define variables costs, look at their purpose. Let's say you bought some material, the one that goes into production, that is, he naturally takes part in the release. Let it be the wood from which lumber is made different sections. The amount of lumber produced will depend on the amount of timber purchased. Such expenses are classified as variables.

2. In addition to wood, you use electricity, the amount of which also depends on the volume of production (the more you produce, the more kilowatts you spend), say, when working with a sawmill. All expenses, which you pay to the company supplying electricity, also refer to variable costs.

3. In order to produce products, you use a labor force that needs to be paid wages. These expenses refer to variables.

4. If you don't have own production, but act as an intermediary, that is, you resell previously purchased goods, then the total cost of the purchase is attributed to variable costs.

5. To define variables expenses, analyze the dynamics of the increase in all costs. As usual, they will increase when production volumes grow, and vice versa, decrease when efficiency decreases.

6. To understand what it means variables expenses, consider continuous. For example, the rent of the premises does not affect the volume of production. These expenses and are considered continuous. The wages of managerial personnel also do not invariably depend on the output of products, while the employee of the shop receives in proportion to the volume of manufactured products.

7. IN variables expenses include also deductions for public needs of production workers; payment for fuel, water. That is, everything that affects the volumes.

Every production involves the use different sources: natural, economic, informational, labor, etc. To simplify the general calculation, their expenses are converted into monetary form and divided into continuous and variables. To define variables expenses, it is necessary to take into account only those sources that are consumed in proportion to the volume of production.

Instruction

1. General expenses associated with the production of goods are divided into continuous and variables. The former represent a value that does not change depending on the volume of production, the latter, on the contrary, grow together with the number of units of goods. These include the cost of raw materials and starting materials, equipment and the energy/fuel it consumes, wages, etc.

2. The value of variable costs does not always change in direct proportion to the volume of production. In some cases, it lags behind various reasons. Let's say the difference in wages of different work shifts. In terms of growth rates, proportional, regressive- variables and progressive variables expenses.

3. Based on the name, the pace of metamorphosis of proportional costs and increase in output coincide. This type of costs includes: the purchase of raw materials, materials, semi-finished products, piecework wages for the main working staff, the cost of a huge part of energy / fuel, obtaining containers and creating packaging.

4. The percentage of growth in regressive variable costs is less than the number of goods ready for sale. For example, with an increase in production by 5%, they can grow only by 3%. This may include the cost of urgent repair equipment, tools or transport, purchase auxiliary materials(lubricant, coolant, etc.), movement of semi-finished products and finished products within the enterprise, as well as bonus payments.

5. The slow dynamics of regressive costs is associated with their intermediate role. They can be considered as a transitional link between proportional and continuous costs, while the degree of regression can be different. For this reason, special indicators should be used, the so-called variators, which traditionally have a value from 1 to 10 (from 10 to 100%) and are set separately for a specific cost item.

6. Progressive variables expenses grow faster than the volume of production. These include surcharges for night shifts or work on holidays, overtime, payments of the slightest table of contents during downtime, etc. In other words, such costs arise when there is a violation of the production cycle or an overload of own capacities in connection with an order that is too large.

Costs production - these are the costs that are associated with the circulation of goods produced and production. In statistical and financial statements costs are shown as cost. The costs include: labor costs, interest on loans, physical costs, costs associated with the movement of goods on the market and its sale.

Instruction

1. Costs there are variables, continuous and universal. Continuous costs are those costs that in the short run do not depend on how much the company produces products. This is the cost of continuous factors of production of the enterprise. All total costs- this is all that the manufacturer spends for the purposes of production. Variable costs are those costs that invariably depend on the firm's output. This is the cost of variable factors in the production of the firm.

2. Continuous costs include the opportunity cost of the portion of financial capital that has been invested in the equipment of the enterprise. The value of this cost is equal to the amount for which the owners of the company would be able to sell this equipment and invest the proceeds in a particularly attractive investment case (for example, into a savings account or stock exchange). These include all costs for raw materials, energy, fuel, transport services, etc. The largest part of the variable costs, as usual, is brought to the cost of materials and labor. Because, as output grows, the costs of variable factors increase, and variable costs, respectively, grow with the growth of output.

3. Average costs are divided into average variables, average fixed and average total. In order to find the average continuous costs, it is necessary to divide the continuous costs by the volume of output. Accordingly, in order to calculate the average variable costs, you need to divide the variable costs by the volume of output. In order to find the average total cost, it is necessary to divide the total cost (the sum of variable and continuous costs) by the volume of output.

4. Average cost is used to decide whether to produce this product at all. If the price, which is the average revenue per unit of output, is less than the average variable cost, then the company will reduce its losses if it stops operating in the short run. If the price is below the average total cost, then the firm earns negative economic returns and needs to consider the probabilities of final shutdown. At the same time, if the average costs are below the market price, then the enterprise can work quite profitably within the limits of the executed production volume.

Every novice entrepreneur worries about how much it will cost him to open one or another business, only if it is associated with the release and production of products. The subsequent action of the enterprise will depend on how correctly the costs of production will be calculated.

Instruction

1. First, decide how much you will provide services or manufacture products. You must clearly know that this month you will produce, say, 200 pieces of goods or render service to 200 people.

2. Now calculate the variable costs (costs that change based on the volume of the service or output), for this you need: Calculate the cost of materials (the cost of the initial raw materials that you will purchase to manufacture the product). The cost of raw materials needed to produce a unit of goods must be multiplied by the volume of the planned output. If you provide a service, then in this case you will not have any expenses at this point.

3. Labor costs. Decide how many people you will have to work to meet the production plan or service plan, and how much wages you will pay them.

4. Contributions for public needs. As usual, these are deductions to the public protection fund and the compulsory insurance fund. Specify the percentage of deductions based on the law.

5. Now you need to calculate the continuous costs (they are not related to the volume of services provided or the production of goods). They consist of general production and general business costs (include the cost of renting premises, depreciation of purchased equipment and fixed assets, and so on), trading costs (expenses for advertising and delivery of goods to the buyer - if any).

6. All sums, variable and continuous costs must be added up. This will be your cost of production and production.

Note!
In terms of taxes, fees, other indispensable payments, the amount of which depends on the volume of production, a decrease in variable costs is permissible only if the legislative framework is changed.

Helpful advice
Variable costs will be reduced by an increase in labor productivity, a decrease in the number of employees in the main and auxiliary industries, a decrease in the volume of the reserve of raw materials and finished products, economical use of materials, the use of energy-saving technological processes, and the introduction of progressive management schemes.

Consider the variable costs of an enterprise, what they include, how they are calculated and determined in practice, consider methods for analyzing the variable costs of an enterprise, the effect of changing variable costs with different production volumes and their economic meaning. In order to understand all this simply, at the end, an example of variable cost analysis based on the break-even point model is analyzed.

Variable costs of the enterprise. Definition and their economic meaning

Enterprise variable costs (Englishvariablecost,VC) are the costs of the enterprise/company, which vary depending on the volume of production/sales. All costs of the enterprise can be divided into two types: variable and fixed. Their main difference lies in the fact that some change with an increase in production, while others do not. If the production activity of the company stops, then variable costs disappear and become equal to zero.

Variable costs include:

• The cost of raw materials, materials, fuel, electricity and other resources involved in production activities.
• The cost of manufactured products.
• Wages of working personnel (part of the salary depending on the fulfilled norms).
• Percentage of sales to sales managers and other bonuses. Interest paid to outsourcing companies.
• Taxes that have a tax base of the size of sales and sales: excises, VAT, UST from premiums, tax on the simplified tax system.

What is the purpose of calculating enterprise variable costs?

For any economic indicator, coefficient and concept, one should see their economic meaning and the purpose of their use. If we talk about the economic goals of any enterprise / company, then there are only two of them: either an increase in income or a decrease in costs. If we generalize these two goals into one indicator, we get - the profitability / profitability of the enterprise. The higher the profitability of an enterprise, the greater its financial reliability, the greater the opportunity to attract additional borrowed capital, expand its production and technical capacities, increase its intellectual capital, increase its market value and investment attractiveness.

The classification of enterprise costs into fixed and variable is used to management accounting and not for accounting. As a result, there is no such stock as "variable costs" in the balance sheet.

Determining the amount of variable costs in the overall structure of all costs of the enterprise allows you to analyze and consider various management strategies to increase the profitability of the enterprise.

Amendments to the definition of variable costs

When we introduced the definition of variable costs / costs, we were based on a model of linear dependence of variable costs and production volume. In practice, often variable costs do not always depend on the size of sales and output, therefore they are called conditionally variable (for example, the introduction of automation of a part of production functions and, as a result, a decrease in wages for the production rate of production personnel).

The situation is similar with fixed costs, in reality they are also conditionally fixed, and can change with the growth of production (an increase in rent for production premises, a change in the number of personnel and a consequence of the volume of wages. You can read more about fixed costs in more detail in my article: "".

Classification of enterprise variable costs

In order to better understand how to understand what variable costs are, consider the classification of variable costs according to various criteria:

Depending on the size of sales and production:

• proportionate costs. Elasticity coefficient =1. Variable costs increase in direct proportion to the increase in output. For example, the volume of production increased by 30% and the amount of costs also increased by 30%.
• Progressive costs (similar to progressive variable costs). Elasticity coefficient >1. Variable costs are highly sensitive to changes depending on the size of output. That is, variable costs increase relatively more with output. For example, the volume of production increased by 30%, and the amount of costs by 50%.
• Degressive costs (similar to regressive variable costs). Elasticity coefficient< 1. При увеличении роста производства переменные издержки предприятия уменьшаются. Данный эффект получил название – «эффект масштаба» или «эффект массового производства». Так, например, объем производства вырос на 30%, а при этом размер переменных издержек увеличился только на 15%.

The table shows an example of changing the volume of production and the size of variable costs for their various types.

According to the statistical indicator, there are:

• General variable costs ( EnglishTotalvariablecost,TVC) - will include the totality of all variable costs of the enterprise for the entire range of products.
• Average variable costs (English AVC, Averagevariablecost) - average variable costs per unit of production or group of goods.

According to the method of financial accounting and attribution to the cost of manufactured products:

• Variable direct costs are costs that can be attributed to the cost of production. Everything is simple here, these are the costs of materials, fuel, energy, wages, etc.
• Variable indirect costs are costs that depend on the volume of production and it is difficult to assess their contribution to the cost of production. For example, during the production separation of milk into skimmed milk and cream. It is problematic to determine the amount of costs in the cost of skimmed milk and cream.

In relation to the production process:

• Production variable costs - the cost of raw materials, materials, fuel, energy, wages of workers, etc.
• Non-manufacturing variable costs - costs not directly related to production: selling and management costs, for example: transportation costs, commission to an intermediary / agent.

Variable Cost/Cost Formula

As a result, you can write a formula for calculating variable costs:

Variable costs = Cost of raw materials + Materials + Electricity + Fuel + Bonus part of Salary + Percentage of sales to agents;

variable costs\u003d Marginal (gross) profit - Fixed costs;

The totality of variable and fixed costs and constants make up the total costs of the enterprise.

General costs= Fixed costs + Variable costs.

The figure shows a graphical relationship between the costs of the enterprise.

How to reduce variable costs?

One strategy to reduce variable costs is to use economies of scale. With an increase in the volume of production and the transition from serial to mass production, economies of scale appear.

scale effect graph shows that with an increase in production, a turning point is reached, when the relationship between the size of costs and the volume of production becomes non-linear.

At the same time, the rate of change of variable costs is lower than the growth of production/sales. Consider the causes of the "scale effect of production":

1. Reducing the cost of management personnel.
2. The use of R&D in the production of products. An increase in output and sales leads to the possibility of carrying out expensive research and development work to improve production technology.
3. Narrow product specialization. Focusing the entire production complex on a number of tasks can improve their quality and reduce the amount of scrap.
4. Release of products similar in the technological chain, additional capacity utilization.

Variable costs and the break-even point. Calculation example in Excel

Consider the break-even point model and the role of variable costs. The figure below shows the relationship between changes in production volume and the size of variable, fixed and total costs. Variable costs are included in total costs and directly determine the break-even point. More

When the enterprise reaches a certain volume of production, an equilibrium point occurs at which the amount of profit and loss is the same, net profit is zero, and marginal profit is equal to fixed costs. This point is called breakeven point, and it shows the minimum critical level of production at which the enterprise is profitable. In the figure and the calculation table below, it is achieved by producing and selling 8 units. products.

The task of the enterprise is to create security zone and ensure that the level of sales and production that would ensure the maximum distance from the break-even point. The further the company is from the break-even point, the higher the level of its financial stability, competitiveness and profitability.

Consider an example of what happens to the break-even point as variable costs increase. The table below shows an example of a change in all indicators of income and expenses of the enterprise.

As variable costs increase, the break-even point shifts. The figure below shows a schedule for reaching the break-even point in a situation where the variable costs for the production of one unit of the product became not 50 rubles, but 60 rubles. As we can see, the break-even point began to equal 16 units of sales / sales, or 960 rubles. income.

This model usually operates linear dependencies between output and income/costs. In real practice, dependencies are often non-linear. This arises due to the fact that the volume of production / sales is affected by: technology, seasonality of demand, the influence of competitors, macroeconomic indicators, taxes, subsidies, economies of scale, etc. To ensure the accuracy of the model, it should be used in the short term for products with stable demand (consumption).

Summary

In this article, we examined various aspects of the variable costs / costs of the enterprise, what forms them, what types of them exist, how changes in variable costs and changes in the break-even point are related. Variable costs are the most important indicator of the enterprise in management accounting, for creating planned targets for departments and managers to find ways to reduce their weight in total costs. To reduce variable costs, you can increase the specialization of production; expand the range of products using the same production capacity; increase the share of research and production developments to improve the efficiency and quality of output.

Each enterprise incurs certain costs in the course of its activities. There are different ones. One of them provides for the division of costs into fixed and variable.

The concept of variable costs

Variable costs are those costs that are directly proportional to the volume of products and services produced. If an enterprise produces bakery products, then as an example of variable costs for such an enterprise, one can cite the consumption of flour, salt, yeast. These costs will grow in proportion to the growth in the volume of bakery products.

One cost item can relate to both variable and fixed costs. For example, the cost of electricity for industrial ovens that bake bread would serve as an example of variable costs. And electricity costs for lighting production building are fixed costs.

There is also such a thing as conditionally variable costs. They are related to production volumes, but to a certain extent. With a small level of production, some costs still do not decrease. If the production furnace is loaded halfway, then the same amount of electricity is consumed as for a full furnace. That is, in this case, with a decrease in production, costs do not decrease. But with an increase in output above a certain value, costs will increase.

Main types of variable costs

Let's give examples of variable costs of the enterprise:

• Wages of employees, which depends on the volume of products they produce. For example, in the bakery industry, a baker, a packer, if they have piecework wages. And also here you can include bonuses and remuneration to sales specialists for specific volumes of products sold.
• The cost of raw materials, materials. In our example, these are flour, yeast, sugar, salt, raisins, eggs, etc., packaging materials, bags, boxes, labels.
• are the cost of fuel and electricity, which is spent on the production process. It could be natural gas, gasoline. It all depends on the specifics of a particular production.
• Another typical example of variable costs are taxes paid on the basis of production volumes. These are excises, taxes on tax), USN (Simplified Taxation System).
• Another example of variable costs is the payment for the services of other companies, if the volume of use of these services is related to the level of production of the organization. It can be transport companies, intermediary firms.

Variable costs are divided into direct and indirect

This separation exists due to the fact that different variable costs are included in the cost of goods in different ways.

Direct costs are immediately included in the cost of goods.

Indirect costs are allocated to the entire volume of goods produced in accordance with a certain base.

Average variable costs

This indicator is calculated by dividing all variable costs by the volume of production. Average variable costs can both decrease and increase as production volumes increase.

Consider the example of average variable costs in a bakery. Variable costs for the month amounted to 4600 rubles, 212 tons of products were produced. Thus, the average variable costs will amount to 21.70 rubles / ton.

The concept and structure of fixed costs

They cannot be reduced in a short amount of time. With a decrease or increase in output, these costs will not change.

Fixed costs of production usually include the following:

• rent for premises, shops, warehouses;
• utility bills;
• administration salary;
• the cost of fuel and energy resources that are consumed not by production equipment, but by lighting, heating, transport, etc.;
• advertising expenses;
• payment of interest on bank loans;
• purchase of stationery, paper;
• costs for drinking water, tea, coffee for employees of the organization.

Gross costs

All of the above examples of fixed and variable costs add up to gross, that is, the total costs of the organization. As production volumes increase, gross costs increase in terms of variable costs.

All costs, in fact, are payments for the acquired resources - labor, materials, fuel, etc. The profitability indicator is calculated using the sum of fixed and variable costs. An example of calculating the profitability of the main activity: divide the profit by the amount of costs. Profitability shows the effectiveness of the organization. The higher the profitability, the better the organization performs. If the profitability is below zero, then the costs exceed the income, that is, the organization's activities are inefficient.

Enterprise Cost Management

It is important to understand the essence of variable and fixed costs. With proper management of costs in the enterprise, their level can be reduced and more profit can be obtained. fixed costs it is almost impossible to reduce, therefore efficient work to reduce costs can be carried out in terms of variable costs.

How can you reduce costs in your business?

Each organization works differently, but basically there are the following ways to reduce costs:

1. Reducing labor costs. It is necessary to consider the issue of optimizing the number of employees, tightening production standards. Some employee can be reduced, and his duties can be distributed among the rest with the implementation of his additional payment for extra work. If the enterprise is growing production volumes and it becomes necessary to hire additional people, then you can go by revising production standards and or increasing the amount of work in relation to old workers.

2. Raw materials are an important part of variable costs. Examples of their abbreviations might be as follows:

• search for other suppliers or changing the terms of supply by old suppliers;
• introduction of modern economical resource-saving processes, technologies, equipment;

• cessation of the use of expensive raw materials or materials or their replacement with cheap analogues;
• implementation of joint purchases of raw materials with other buyers from one supplier;
• independent production of some components used in production.

3. Reducing production costs.

This may be the selection of other options for rental payments, the sublease of space.

This also includes savings on utility bills, for which it is necessary to carefully use electricity, water, and heat.

Savings on the repair and maintenance of equipment, vehicles, premises, buildings. It is necessary to consider whether it is possible to postpone repairs or maintenance, whether it is possible to find new contractors for this purpose, or whether it is cheaper to do it yourself.

It is also necessary to pay attention to the fact that it can be more profitable and economical to narrow down production, transfer some side functions to another manufacturer. Or vice versa, enlarge production and carry out some functions independently, refusing to cooperate with subcontractors.

Other areas of cost reduction may be the organization's transport, advertising, tax relief, debt repayment.

Any business must consider its costs. Working to reduce them will bring more profit and increase the efficiency of the organization.