Variables are considered cost items and the purpose of which. What are fixed and variable costs

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Topic 5 Enterprise costs and production costs

1. The economic essence of the concept of "enterprise costs"
2. Composition of enterprise costs
3. Cost of goods sold and production cost
4. Determination of the relationship between cost, profit and production volume
5. Mixed costs and methods for their separation
6. Methodological foundations enterprise cost management

1. The economic essence of the concept of "enterprise costs"
The production process at the enterprise is a continuous interaction of three main factors: labor resources and means of production, which in turn are subdivided into means of labor and objects of labor. The total cost of living and materialized labor is production costs , which are necessary condition implementation of economic activity.
concept "expenses" is one of the most general economic categories that can be used to different ways production in any business environment.
The economic essence of the concept of "costs" can be considered in different ways, depending on the specific goals and objectives of the study.
Thus, "costs" are often defined as a measure in monetary terms of the amount of resources used to achieve a particular goal. The concept of "costs" is also used to solve a wider range of problems, primarily to justify management decisions. For tax purposes, "costs" are the amount by which the amount of income subject to tax, etc., is reduced.
Thus, when solving various issues, take into account different types costs. One approach to cost calculation is used to estimate stocks and determine the amount of income; for planning and control - another; to determine the amount of tax payments - the third, etc.
Sometimes the terms "expenses", "costs" .
AT enterprise economics these concepts are considered as identical, and costs are understood as the monetary expression of the use production factors resulting in the production and sale of products.
According to NP(S)BU, costs are a decrease in economic benefits in the form of disposal of assets or an increase in liabilities that lead to a decrease in equity (with the exception of a decrease in capital due to its withdrawal or distribution by owners).
A variety of approaches to defining the essence of the concept of "costs" is reflected in the allocation various kinds costs, which is carried out on the basis of the following features.

1. Role in the production and management process:

a) production costs;
b) non-production (administrative) costs.

1. Economic content (economic uniformity of costs) :

a) economic elements ;
b) costing items .
The economic elements are the most common economically homogeneous cost groups taken at the level of the entire enterprise. There are five main economic elements of enterprise costs:
material costs;
labor costs;
contributions to social events;
depreciation;
other operating expenses.
Into the element "Material costs" includes the cost spent in production (except for products of own production).
Into the element "Payroll Expenses" includes wages at salaries and tariffs, bonuses and incentives, material assistance, compensation payments, vacation pay and other unworked hours, other labor costs.
Into the element "Deductions for social events" includes: contributions to pensions, contributions to social insurance, insurance premiums in case of unemployment, contributions to individual insurance of the enterprise's personnel, contributions to other social measures.
Into the element "Depreciation" includes the amount of accrued depreciation of fixed assets, intangible assets and other non-current tangible assets.
Into the element "Other operating expenses" includes operating expenses that are not included in the elements above.
Costing articles represent economically homogeneous groups of costs allocated to certain object expenses. Cost object- production (redistribution), products, works, services or type of activity of the enterprise, which require the determination of the costs associated with their production (fulfillment).
Separation of costs by calculation items (calculation) carried out with greater accuracy and detail than economic elements. Calculation is carried out according to cost objects determined by the enterprise on one's own , the composition of costing items is also determined by the enterprise on one's own .

1. Relation to changes in production volume or other functional characteristics:

a) variable costs (change in proportion to the volume of production);
b) fixed costs (do not change when the volume of production changes);
in) mixed costs (contain a constant and a variable part).

1. By cost attributable objects:

a) product costs;
b) period costs.

1. The degree of impact on the value of costs by the enterprise:

a) adjustable costs;
b) unregulated costs.

1. Normative validity of costs:

a) standard costs (cost standards);
b) excess costs .

1. Ways to plan and control costs :

a) technological costs (costs that depend on output and are set by rationing (materials, energy, labor costs), which are planned for short-term periods and have a short feedback cycle);
2) adjustable costs (costs within a fixed amount for a period (usually a year) that do not have a clearly defined dependence on the volume of production);
3) fixed costs (costs associated with existing property, land, fixed assets, which are planned on the basis of a long-term perspective and which are associated with the greatest risk in terms of return on investment).

2. The composition of the costs of the enterprise
The formation of enterprise costs is carried out at five levels (Fig. 1):

1. at the level of costs of the enterprise as a whole;
2. at the level of costs associated with ordinary activities;
3. at the level of operating costs;
4. at the level of the cost of products and goods sold;

1. at the production cost level.

At the first level, out of the entire set of costs of the enterprise, costs that are directly and directly related to the ordinary activities of the enterprise, and costs associated with emergency events. Value and specific gravity the latter indicate the degree of influence of unplanned and uncontrolled events on the activities of the enterprise in the reporting period. Such a distinction allows you to immediately distinguish from the composition of the costs of the enterprise costs that cannot be taken into account when assessing the effectiveness of economic activity.
At the second level, in the costs of ordinary activities, first of all, costs associated with operating and financial activities. In general, it is difficult to single out any criteria for the rationality of the cost ratio at this level. However, a significant proportion of the costs financial activities may indicate a wide variety of activities of the enterprise, the combination of which within the framework of one legal entity does not always seem appropriate and may require its separation.
Value "other costs" (this group primarily includes the costs associated with the maintenance social sphere) also indicates the presence in the enterprise of objects of expenses that are not related to the main activity, and, as a result, with the main source of cost recovery.
At the third-fifth levels, the study of the structure operating costs on economic elements and articles of calculation.
Operating costs include all expenses of the enterprise associated with the production or sale of products (goods, works, services). The difference between the costs of core and operating activities is that the former do not include current expenses for the implementation of investment or financial activities.
The main indicator reflecting the cost structure of the operating activities of the enterprise is the ratio of material, energy costs and wage costs . The costs of these elements determine the total amount of consumption of all the main types of resources necessary to maintain the normal economic activity of the enterprise.
Products in which material costs predominate (for raw materials and materials) are called material-intensive , fuel and energy - energy intensive , labor costs labor intensive .
In the process of analyzing the costs of operating activities by economic elements, it is determined specific gravity each element in the total cost for the planned volume of operations. Then, by comparing the proportion of actual costs for the relevant elements with planned indicators or indicators for previous periods, deviations and the reasons that caused them are identified.
When studying the structure and dynamics of costs by items, one should not confuse "Expenditures" With "calculation articles".
In the first case, we are talking about the grouping of operating costs for various accounting objects (production of products or services; enterprise management as a whole, commercial and marketing activities for the sale of manufactured products or services); trade (resale) of goods). In this case, the accounting objects are various operational activities , and the costs are grouped by homogeneity of their purpose (by analogy: economic elements are the homogeneous essence of the costs themselves; cost items are their homogeneous purpose).
In the second case, the costs, which will be only a part of the costs of operating activities, are grouped into one accounting object - by product or service . At the same time, earlier (before the adoption of NP (S) BU) in accounting and reporting, expenses that were economically heterogeneous in purpose were automatically combined:
for the production of specific products;
for the sale of products;
for enterprise management.
Thus, operating costs, in turn, include:
cost of goods sold or services;
operating costs;
cost of goods sold.
Operating costs include:
administrative costs,
marketing costs;
other operating costs.
When analyzing the costs associated with operating activities, an assessment is made of the total value and structure of the costs of this group, their share in the costs of operating activities and the costs of the enterprise as a whole, and qualitative conclusions are made about the significance and appropriateness of costs for this article. In addition, actual data are compared with planned indicators, deviations are determined and their causes are clarified. Special meaning to determine the feasibility of spending on this item, it has to compare the rate of change in costs with the rate of change in the volume of operating activities (for example, the growth rate of sales costs with the growth rate of product sales). The optimal situation for the enterprise is when these indicators will change proportionally.

3. Cost of goods sold and production cost
concept "enterprise costs" closely related to the concept "cost". Cost plays a leading role in common system indicators characterizing the efficiency of the economic activity of the enterprise and its structural divisions.
The cost price is a general indicator of the use of all types of enterprise resources . The cost price also provides for the replacement of these resources, which is necessary to continue the production process. The level and dynamics of the cost allow assessing the feasibility and rationality of the use of resources that are at the disposal of the enterprise. In the cost of production are reflected technical level and organization of production, economic efficiency in general .
The economic essence of the cost is that, firstly, it reflects the costs of material and monetary resources in the form of wages necessary for the production of goods. Secondly, the cost price provides compensation for the resources spent in the process of circulation of production assets, since the cost price itself participates in this cycle, is its integral part. integral part.
According to NP (S) BU No. 16, for goods and services involved in the economic turnover at the enterprise, three types of cost can be distinguished:

1. the cost of goods;
2. cost of goods sold;
3. production cost.

The cost of goods is determined in accordance with NP(S)BU 9 "Stocks". Analysis of the cost of goods is carried out in three main areas:
the share of costs for commercial operations in the cost structure of operating activities;
comparison of planned and actual values ​​of costs, determination of deviations and their causes;
determination of the effectiveness of commercial operations (comparison of the costs of acquiring, storing and selling goods and the cost of selling).
Analysis of the cost of goods sold (costs grouped by cost items) allows you to determine the total amount and structure of production costs certain types products and services, establish a direct impact various factors on the level of these costs and, on this basis, to identify reserves for their reduction.
The production cost of products (works, services) sold during the reporting period includes only direct costs. Thus, the production cost of production includes only those overhead costs that can be distributed among all types of products (works, services).
The cost of goods sold includes:
production cost;
excess costs;
unallocated overhead costs.
Excess costs arise as a result of unreasonable excess of consumption rates of direct costs (direct material, direct labor costs, other direct costs). The value of excess costs, therefore, directly indicates the losses of the enterprise, the occurrence of which was due to violations of the requirements of the technological process, defective products, etc. Excess costs are defined as the difference between planned (normative) and actual indicators of direct costs:
SNZi=PZp(n)i-PZPi,
where: SNZі - excess costs for the i-th type of direct costs;
ПЗп(н)і - planned (standard) costs for the i-th type of direct costs
ПЗФі - actual costs for the i-th type of direct costs.
Unallocated overhead costs occur with sharp unforeseen fluctuations in production volumes. The value (or share in the cost structure) of unallocated overhead costs indicates the losses of the enterprise associated with errors in planning production output, overestimation of the value of overhead costs, and irrational commercial activities.
Variable overhead costs include the costs of maintenance and management of production (shops, sites), which change directly (or almost directly) in proportion to the change in the volume of activity. Variable general production costs are allocated to each cost object using the distribution base (labor intensity, wages, activity volume, direct costs, etc.), based on the actual capacity of the reporting period.
To fixed overhead costs include the costs of maintenance and management of production, which remain unchanged (or almost unchanged) when the volume of activity changes. Fixed manufacturing overheads are allocated to each cost object using an allocation base (man hours worked, wages, activity volume, direct costs, etc.) at normal capacity.
Unallocated fixed overhead costs are included in the cost of goods sold (works, services) in the period of their occurrence.
Attribution of overhead costs to fixed or variable normative documents not regulated, but since the list and composition of variable and fixed overhead costs are elements of accounting policy, they are established by the enterprise independently.
The process of allocating costs should be guided by general rule: the sum of distributed and unallocated fixed overhead costs cannot exceed their actual value.
Used to allocate costs. following algorithm .
1. The distribution base is determined by normal power, i.e. the expected average volume of activity under normal business conditions is established.
For example, normal capacity (or expected average activity under normal business conditions) is 25,000 machine hours.
2. Based on the economic nature of overhead costs and specific conditions the activity of the enterprise is determined by the total value of variable and fixed costs at normal power.
The value of general production costs with such a volume of activity will be UAH 100,000, and in accordance with the list and composition of variable and fixed costs established by the enterprise total amount distributed as follows:
variable costs - UAH 70,000;
fixed costs - 30,000 UAH.
3. The rate of variable and fixed overhead costs per unit of the expected volume of activity is determined.
variable cost rate: 70,000: 25,000 = 2.8 UAH / machine hour;
fixed cost rate: 30,000: 25,000 = 1.2 UAH / machine hour.
4. The base for the distribution of costs by actual capacity is established.
In fact, according to accounting data, 30,000 machine hours were worked out for the period.
5. The value of variable overhead costs is determined as the product of the distribution base for actual capacity by the rate of variable costs.
30,000 x 2.8 = 84,000 UAH
6. The size of the constant part of overhead costs corresponds to the difference between the total amount of costs and their variable part.
The total amount of general production costs for the reporting period is UAH 125,000, then the value of the constant part of the costs will be equal to:
125000 - 84000 = 41000 UAH
7. The amount of fixed costs to be distributed is determined as the product of the distribution base by actual capacity and the rate of fixed costs:
30,000 x 1.2 = 36,000 UAH
In our case, the size of the distributed part of fixed costs is less than the total amount of fixed costs, but if, according to the calculation, it would be more than the total fixed costs, the amount to be distributed would correspond to the total amount of fixed costs.
8. The amount of fixed unallocated costs is determined by the balance method as the difference between the total fixed costs and their distributed part:
41000 - 36000 = 5000 UAH
9. Next, the distribution of overhead costs by cost objects is carried out in order to attribute them to the production cost of goods sold.

4. Determination of the relationship between cost, profit and production volume
Ratio Analysis "costs - output - profits" (break-even analysis), together with data on the dynamics of costs, allows you to identify patterns of changes in profits and costs in relation to changes in production volume. With the help of equilibrium analysis, which is an integral part of the break-even analysis, it is determined point of equilibrium sales volume (break-even point).
Break even - the volume of production at which the enterprise no longer incurs losses, but also does not make a profit.
Two methods are commonly used to calculate the break-even point: equations and graphic image. The use of the graphical method seems more appropriate given the approximate nature of the break-even point determination and a large number assumptions made in the calculation.
The graphical method can be used in two ways − per unit of production (fig.2.1) and for the entire production (fig.2.2).
When evaluating the results, it must be taken into account that the analysis is carried out using a number of assumptions .

1. Selling prices and prices for consumed production resources are taken unchanged.
2. Production costs are strictly divided into fixed, which remain unchanged with significant changes in volume, and variables, which change in proportion to volume.
3. Incoming revenue is proportional to the volume of sales.
4. There is one point of critical production. (This assumption follows from the above. In fact, the relationship of indicators is much more complicated and there may be several points of critical production.)
5. The range of products is constant. This assumption is made when producing several products. The value of marginal income in this case will depend on the range of products, and therefore the point of critical production volume at the same level of volumes will differ for a different range of production or sales.
6. The volume of production is equal to the volume of sales.

In addition, all relationship graphs are built, as a rule, on the measurement of volume in physical units. In practice, such a calculation is possible for a production that produces products of the same type.
In practice, often in order to generalize the volume of production of heterogeneous products, the output of products in natural units is summed up. Because of this, when constructing a graph of the point of the critical volume of production, the volume in physical units can express the total number of different products.
Other units of measurement of the volume of production and sales can be the percentage of capacity, machine hours, standard hours.
The correspondence of these assumptions to reality, as well as their potential impact on the process of making managerial decisions, determines the need to detail the ratio "costs - production volume - profit".
The key to the analysis of cost dynamics is selection of normal power at production output . Normal power in this case determines the range of relevant costs, limited alternative options planning. For each of these options, there will be individual cost rates. Significant deviation of real output

production from normal capacity will certainly cause a deviation of actual costs from the norms provided for by the plan. However, in this case, it should be understood that the reasons for such deviations are not associated with the process of forming the costs of the enterprise (overspending or wasteful use of resources), but with changes in external business conditions or with errors in the sales forecast.

5. Mixed costs and methods of their separation
Variable and fixed costs differ depending on the relationship of their changes with fluctuations in the volume of production. Variable and fixed costs are only two types of cost behavior out of many real ones. To divide the various costs between these categories, linearity and cost relevance area assumptions.
The assumption of a certain area of ​​relevance applies to both fixed and variable costs, since the latter are not always directly proportional to volume. So, with a small or high output will be spent Additional materials and labor hours. The concept of cost linearity is acceptable within the scope of relevance.
Many types of costs in reality are mixed . The value of mixed costs varies with fluctuations in the volume of production, but unlike variable costs - not in direct proportion. These costs contain both a fixed and a variable component (telephone - monthly fee and hourly payment).
To justify the plans of the enterprise and management decisions, mixed costs must be divided into variable and fixed components. Because mixed costs include fixed and variable elements, the analysis of their relationship takes the form of a mathematical expression called formula of costs and production volume:
y = a + b*x,
where y - decomposed mixed costs;
x - any functional indicator of activity (labor costs, machine time, production volume);
a - component of fixed costs;
b is the variable per unit x.
Separation of mixed costs into constant and variable components similarly to the definition of parameters a and b. There are two main ways to split mixed costs:
1) minimax;
2) regression analysis.
In the minimax method, to determine the values ​​of a (constant component of costs) and b (variable indicator), extreme values indicators, i.e. the maximum and minimum representative values ​​of the x-y pair. Their choice is determined to a greater extent by the x value of the activity level than by the y value of the value of mixed costs.
The minimax method is used in next sequence :

1. choose extreme pairs of values;
2. define the variable b by the formula:

B = (Ymax - Ymin)/(Xmax - Xmin)
3) determine the fixed component of costs:
A=Y-B*X
The minimax method is simple and easy to use. Its disadvantage is that the use of only two extreme values ​​of the available indicators may, under normal conditions, not be representative.
One of the common ways to estimate the dependence of costs on the volume of production is regression analysis - statistical procedure for the mathematical calculation of the average value of the ratio of dependent and independent variables. Unlike the minimax method, regression analysis includes all observations to determine the line of best fit when calculating the variable and fixed costs. To find this line, the least squares method is used, which is applied in the following sequence:
1) determine the variable b by the formula:

B = n*Σ(x*y) – (ΣX)* (ΣY) / n*Σx 2 – (Σx) 2

2) determine the fixed component of costs:
A = Y - B*X,
where: n is the number of pairs of X, Y values;
X is the average value of the X indicator for the period n;
Y - the average value of the indicator Y for the period n.

5. Methodological foundations of enterprise cost management
Cost management - this is the process of developing and implementing managerial actions regarding the formation and regulation of enterprise costs in accordance with its strategic and current goals.
Cost management is an important element of the management accounting system. In management accounting, the level of costs is an indicator of the efficiency of using all types of resources necessary for an enterprise to achieve certain goals.
Cost management originated in the United States in the 1930s and 1950s on the basis of production accounting . At that time, in the world practice of cost accounting in a market economy, there were two main directions: American (production accounting) and European .
In production accounting, more attention was paid to operational control and cost management . operational control created opportunities for rapid intervention in the process of forming the cost of production and reducing the costs of the enterprise. In European countries (first of all, in Germany and France), cost accounting was reduced to the preparation of cost estimates, to the accounting and analysis of the causes of deviations of actual costs from planned indicators. Thus, in the United States, production records were used to financial management enterprise, and the results of cost accounting in European countries - for compiling financial statements and cost planning.
Initially, production accounting included the following methods:
standard costing (standard-costing), which provided for a comprehensive rationing of the company's variable costs;
direct costing (direct-costing), according to which the fixed costs of the enterprise were attributed directly to the sale of products without distribution by its individual types.
Due to the complex use of these methods in production accounting, accuracy and high efficiency in determining costs were achieved.
The improvement of these methods was carried out in the methods margin costing (marginal-costing), Veribl Costing and Absorption Costing (absorption-costing).
When using the margin costing method in cost management, the concept of "marginal income" , which was the difference between the revenue and the variable costs of the enterprise.
According to the verbal costing method, the variable part of the fixed costs of the enterprise began to be attributed to the cost of production. According to the absorption-costing method, the calculation of the cost of production began to be carried out with the distribution of fixed costs of all types between the sold products and the balance of goods in warehouses.
The cost planning methodology has also been improved through the formation of flexible (designed for different production volumes) budgets (plans) of costs. The use of flexible budgets made it possible to adapt cost management to sudden changes in production volumes.
A necessary condition for effective cost management is the formation of a set of procedures internal control . Internal control- a complex of accounting and management control, which helps to ensure that the decisions made in the organization comply with their implementation in practice.
Accounting control covers methods and techniques that relate to ensuring the safety of valuables, verifying the accuracy of accounting documents. Accounting control helps to avoid inventory errors, fraud and other violations.
Managerial (administrative) control includes a set of instructions, as well as methods and techniques that help manage, plan, and control the business activities of an organization.

To variables costs include costs that vary in proportion to the volume of production, i.e. increase or decrease and depend on the business activity of the enterprise. In turn, variable costs, depending on the change in the volume of production, are divided into proportional and non-proportional. Proportional costs include material costs, labor costs for workers involved in the production of products, fuel and energy costs for technological purposes, costs for containers and packaging. finished products and products.

The absolute sum of variable proportional costs is:

Z / \u003d f v xQ,

And when calculating per unit of production:

Z / = f v .

On fig. 2.2.3 and 2.2.4, the dynamics of the behavior of the absolute and relative values ​​of proportional costs is considered.

Y

Rice. 2.2.3. The absolute value of proportional costs.

The absolute value of proportional costs is equal to the value of proportional costs per unit of output.

The relative value of the proportional costs is constant, so it is represented as a straight line parallel to the x-axis.

Disproportionate costs are divided into progressive and degressive. Progressive disproportionate costs increase faster than output. If the increase in the amount of disproportionate costs is less than the change in the quantity of production, such costs are degressive.

Rice. 2.2.4. Relative value of proportional costs.

It is almost impossible to make a clear distinction between variable and fixed costs in practice, since some of them are semi-permanent or semi-variable. Therefore, they are often called conditionally constant or conditionally variable. This is of no small importance for managing costs in order to reduce them.

Conditionally permanent costs do not change until a certain volume of production is reached, but when further growth can change abruptly, in the form of a scalloped curve. For example, all the production capacities of the enterprise are used at 100%, but at the same time, the market capacity requires an increase in production volume. In this case, enterprises have to purchase and put into operation additional fixed assets, which accordingly increases the cost per unit of output by increasing the amount of depreciation.

On fig. 2.2.5 reflects the dependence of semi-fixed costs on production volumes, where Q 1 and Q 2 - the volume of production.

Considering fig. 2.2.5, it should be noted that with an increase in production volumes, the cost per unit of production in this case also increases.

In the performance of managerial tasks important place engages in forecasting the activities of the enterprise. In the course of forecasting, costs are considered in short-term and long-term time periods. This explains the division of costs into short-term and long-term.

Rice. 2.2.5. Dependence of semi-fixed costs on production volumes.

Like forecasting, the planning process plays an important role in management. For this purpose, costs are grouped into planned and unplanned.

Planned costs- these are costs calculated for a certain volume in accordance with the cost estimate for production and included in the planned cost of production.

Unplanned costs- these are non-productive expenses (losses), which are reflected only in the actual cost of production.

According to the degree of control costs are divided into adjustable and unregulated. The degree of adjustability is directly dependent on the specifics of the enterprise, organizational structure and other factors.

Adjustable costs - These are the costs recorded by responsibility centers that are affected by the manager's actions.

Unregulated costs - these are costs that arise in all functional areas over which the manager cannot influence.

It is impossible not to say about the importance of the control system in management, to ensure which costs are divided into controlled and uncontrolled. To controlled include costs that can be controlled by the managers of the enterprise.

Uncontrollable - these are expenses that cannot be controlled and do not depend on the actions of managers. As a rule, these are external factors (changes in current prices for energy carriers, inventory items, etc.)

To organize management accounting, it is necessary to take into account the organizational structure of the enterprise, its volume, as well as the specifics of the work performed by departments. Building cost accounting in accordance with organizational structure allows you to link the activities of a separate unit with the responsibility of specific employees. At the same time, it becomes possible to evaluate the performance of each department and determine the effectiveness of the performance of the enterprise as a whole.

Cost centers are separate structural divisions of an enterprise in which you can organize rationing, planning, accounting for costs, profits and investments to control and manage costs.

For effective work cost control systems in the enterprise, it is necessary to create responsibility centers, which are certain departments of the enterprise that control the costs incurred and the income received. Of course, the head of the center bears full administrative responsibility for the formation of this information. The responsibility center can be defined as a separate segment of the enterprise, for the results of which its leader is responsible. Each cost center should have its own area of ​​responsibility. Accounting for responsibility centers is organized in order to obtain data on costs and revenues for each responsibility center, on deviations from the plan.

In an enterprise, the functions of responsibility centers are often divided. Sometimes the enterprise responsibility center combines:

The cost center, which is formed on the basis of production units, while controlling the amount of costs and achieving the main goal - minimizing costs;

A revenue center is a responsibility center whose management is accountable for revenue generation only and controls the amount of revenue (gross revenue). The tasks of the center include, first of all, attracting new customers and increasing the volume of sales. Thus, it is possible to influence prices and sales volume. The main goal is to maximize income;

An investment center that is responsible for capital investments, income and expenses, and the introduction of new types of business. The goal is to maximize profits and implement effective investment activities;

Profit center, the main purpose of which is to control income, expenses and financial results (profit or loss) and the directions of use of both profit and loss. The goal is to maximize profits.

Introduction

Chapter 1. Essence of cost: concept, structure and types

Chapter 2. The essence of fixed and variable costs

Chapter 3. Methods for dividing costs into fixed and variable

Conclusion

List of sources used

Introduction

The classification of costs and the methodology for their collection and generalization in management accounting is gradually becoming a necessary tool for managers to perform management functions: planning; rationing; control; coordination; evaluation of the work of subordinates; compensation for work; improving the work of subordinates; exchange of information between managers of different levels of management, between departments in the conditions of both formal and informal relations; organizational activities aimed at raising the prestige of the company; staff motivation, which allows setting clear goals for each manager and compensating his work based on personal success.

Typically, costs are the resources consumed or the money that must be paid for goods and services. To manage, managers need information about the costs of something (a product or batch of it, services provided to a patient in a clinic or a client in a bank, machine hours, a social project, a mile of a mountain road). We call this something "cost accounting objects" and define it as an activity for which they are collected and measured.

Costing can be performed within an accounting system (an ordered regular process) or on demand (for example, the collection and measurement of the costs associated with the replacement of equipment). Of course, ongoing costing is more expensive than occasional costing, and deciding how detailed the system should represent on regular basis, is taken on the basis of a comparison of costs and revenues.

The most cost-effective approach to building a cost accounting system is to identify typical groups of decisions (for example, control over labor costs or the use of materials) and select the cost accounting objects corresponding to them (for example, products or departments).

Variable and fixed costs are the two main types of costs. Each is determined depending on whether the total costs change in response to fluctuations in the selected object (often referred to as volume fluctuations). Variable costs change in total in direct proportion to changes in volume. Permanent (fixed) - remain unchanged.

The purpose of this course work is to review and disclose the essence and methods of dividing fixed and variable costs.

In accordance with the purpose of the course work, the main tasks are:

To reveal the essence of the cost of production;

Define fixed and variable costs;

characterize methods of dividing fixed and variable costs;

Present conclusions and suggestions on the work done.

The work is presented in three chapters. In the first and second chapters, theoretical material is provided, revealing the topic of the work itself, and in the third, practical.

Chapter 1. Essence of cost: concept, structure and types

The cost of production is one of the most important economic categories. Its level largely determines the efficiency of the production and economic activities of the enterprise. The totality of costs has a decisive influence on the formation of all financial indicators of any business entity.

The cost of production in a generalized form is a cost estimate used in the process of its production and sale of natural, material, labor resources, fixed assets and other costs. The cost price reflects the amount of current costs that are of a production, non-capital nature, ensuring the process of simple reproduction at the enterprise. It is an economic form of compensation for consumed factors of production.

The cost of production characterizes the level of use of all resources (variable and constant capital) at the disposal of the enterprise.

accounting and control of all costs for the production and sale of products;

the basis for the formation of the wholesale price for the company's products and the determination of profit and profitability;

economic justification for the expediency of investing real investments in the reconstruction, technical re-equipment and expansion of an existing enterprise;

determination of the optimal size of the enterprise;

economic justification and adoption of any management decisions, etc.

The cost structure plays an important role in planning, accounting and costing, as well as in pricing. The cost structure is understood as the ratio of various elements or cost items in the total cost of production and sales of products.

The cost structure can be determined based on the classification of costs by economically homogeneous elements and costing items.

The structure of the cost of production is significantly affected by the location of enterprises in relation to sources of raw materials and fuel, changes in the level of prices for objects and means of labor.

Currently, changes in the cost structure are in the direction of reducing the share of direct costs (wages of the main production workers and basic materials for technological needs). However, the proportion of costs for management and sales of products has increased significantly. Therefore, it is necessary to abandon the previously existing system of allocation of indirect costs to the cost of production on the basis of direct costs and move on to a wider introduction of functional costing of products.

All indicators of the cost of production on an enlarged basis can be classified into groups:

Absolute;

Leveled;

Relative.

Absolute indicators reflect the total costs associated with the production and sale of products. Such indicators are calculated according to the estimates of production costs. For example, the cost of goods manufactured, the cost of goods shipped, the cost of goods sold.

Levels include:

unit cost of production;

Costs per ruble of produced (commercial) products;

Costs per ruble of sales volume.

Relative indicators characterize the change in level indicators over time. For example, the percentage of unit cost reduction is calculated as the ratio of the difference in the cost of the base and reporting periods to the cost of the base period, multiplied by 100%.

In the economic activity of the enterprise, various types of costs are used. According to the sequence and volume of inclusion of costs, technological, workshop, production and full cost are distinguished.

The technological cost includes only direct production costs for such items as: raw materials and materials, returnable waste (deducted), fuel and energy for technological purposes, the main wages of production workers. Technological cost is often called the district, because. the costs that make it up are added up at the production site.

Shop cost is the sum of the costs of all shops for the production of products. The shop cost includes technological and general production costs.

Production cost is the cost of the enterprise for the production of products. The production cost differs from the shop cost by the amount of general business and other production costs, as well as losses from marriage.

The total cost includes the production cost and commercial (non-manufacturing) expenses.

In addition, there are standard, planned and actual cost of production.

Normative cost - the maximum allowable costs for the production and marketing of products at scientifically based consumption rates of living and materialized labor.

The planned cost may be higher or lower than the standard cost, since in the planned period, due to the level of development of technology and technology, the rate of consumption of living labor may be higher or lower than those envisaged at the stage of the project's formation.

The actual or reporting cost is the cost determined on the basis of the actual costs of labor and material resources that have developed in the reporting period. Distinguish between individual and industry-average cost.

The cost price is one of the most significant indicators of the efficiency of economic activity. It represents the costs of the enterprise for production and circulation, serves as the basis for comparing costs and income, that is, self-sufficiency. If the cost price is not known, then it is impossible to determine the profit, to form a selling price. The cost price shows what it costs the company to produce its products, how much you can earn on the sale of products. If the cost of goods sold is greater than the cost, then the company can carry out expanded production. Otherwise, even simple reproduction is not ensured. The cost price most sensitively reacts to the situation that develops at enterprises, in the production of certain types of products and in entire industries.

In the activity of any enterprise, the adoption of correct management decisions is based on the analysis of its performance indicators. One of the objectives of such an analysis is to reduce production costs, and, consequently, increase the profitability of the business.

Fixed and variable costs, their accounting is an integral part of not only the calculation of the cost of production, but also the analysis of the success of the enterprise as a whole.

The correct analysis of these articles allows you to make effective management decisions that have a significant impact on profits. For analysis purposes in computer programs at enterprises, it is convenient to provide for automatic allocation of costs to fixed and variable based on primary documents, in accordance with the principle adopted in the organization. This information is very important for determining the "break-even point" of the business, as well as evaluating the profitability of various types of products.

variable costs

to variable costs include costs that are constant per unit of output, but their total amount is proportional to the volume of output. These include the cost of raw materials, expendable materials, energy resources involved in the main production, salary of the main production staff(together with accruals) and cost transport services. These costs are directly related to the cost of production. In value terms, variable costs change when the price of goods or services changes. Unit variable costs, for example, for raw materials in the physical dimension, may decrease with an increase in production volumes due, for example, to a decrease in losses or costs for energy resources and transport.

Variable costs are either direct or indirect. If, for example, the enterprise produces bread, then the cost of flour is a direct variable cost, which increases in direct proportion to the volume of bread produced. Direct variable costs may decrease with the improvement of the technological process, the introduction of new technologies. However, if the plant refines oil and as a result receives in one technological process, for example, gasoline, ethylene and fuel oil, then the cost of oil for the production of ethylene will be variable, but indirect. Indirect variable costs in this case, it is usually taken into account in proportion to the physical volumes of production. So, for example, if during the processing of 100 tons of oil, 50 tons of gasoline, 20 tons of fuel oil and 20 tons of ethylene are obtained (10 tons are losses or waste), then the cost of 1.111 tons of oil (20 tons of ethylene + 2.22 tons of waste) is attributed to the production of one ton of ethylene /20 tons of ethylene). This is due to the fact that in a proportional calculation, 20 tons of ethylene account for 2.22 tons of waste. But sometimes all the waste is attributed to one product. Data are used for calculations. technological regulations, and for the analysis of the actual results for the previous period.

The division into direct and indirect variable costs is conditional and depends on the nature of the business.

Thus, the cost of gasoline for the transportation of raw materials during oil refining is indirect, and for transport company direct, since they are directly proportional to the volume of traffic. Wages production personnel with accruals are classified as variable costs with piecework wages. However, when time payment labor, these costs are conditionally variable. When calculating the cost of production, planned costs per unit of production are used, and in the analysis, actual costs, which may differ from planned costs, both upwards and downwards. Depreciation of fixed assets of production, referred to a unit of output, is also a variable cost. But this relative value is used only when calculating the cost of various types of products, since depreciation charges, in themselves, are fixed costs / costs.

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In this way, total variable costs can be calculated using the formula:

Rperem \u003d C + ZPP + E + TR + X,

C - the cost of raw materials;

ZPP - salary of production personnel with deductions;

E - the cost of energy resources;

TR - transportation costs;

X - other variable expenses that depend on the profile of the company.

If an enterprise produces several types of products in quantities W1 ... Wn and, per unit of production, variable costs are P1 ... Pn, then the total amount of variable costs will be:

Pchange = W1P1 + W2P2 + ... + WnPn

If an organization provides services and pays agents (for example, sales agents) as a percentage of sales, then the remuneration of agents is a variable cost.

fixed costs

Fixed costs of production of the enterprise are those that do not change in proportion to the volume of production.

The share of fixed costs decreases with the growth of production volume (scale effect).

This effect is not inversely proportional to output. For example, an increase in production volume may require an increase in the number of accounting and sales departments. Therefore, they often talk about conditionally fixed costs. Fixed costs also include expenses for management personnel, maintenance of the main production personnel (cleaning, security, laundry, etc.), organization of production (communications, advertising, banking expenses, travel expenses, etc.), as well as depreciation. Fixed costs are expenses for, for example, the rental of premises, and the rental price may change due to changes in market conditions. Fixed costs include some taxes. These are, for example, the single imputed income tax (UTII) and the property tax. The amounts of these taxes may change due to changes in the rates of such taxes. The amount of fixed costs can be calculated using the formula:

Rpost \u003d Zaup + AR + AM + H + OR

Production costs are in fact the payment for the acquired factors. Their research should provide certain volumes of production in order to completely cover costs and provide an acceptable profit. Income is a dynamic driver of organizational activity, costs are an important component for economic analysis. Organizations approach profits and costs differently. Income should provide maximum production opportunities for a given value of costs. The greatest efficiency of production will be at the lowest cost. They will include the cost of producing the product. For example, the purchase of raw materials, electricity, payment of working hours, depreciation, organization of production. Part of the proceeds will be used to pay off the incurred costs of production, and the rest will remain profit. This allows us to state that the costs less price products for profit.

The above statements lead to the conclusion that production costs are the costs of obtaining goods, and one-time costs arise only during the initial organization of production.

Before the company there are many ways to make a profit and convert it into cash. For each method, the leading factors will be costs - the real costs that the organization incurs during production activities in order to obtain a positive income. If management ignores spending, then financial and economic activity becomes unpredictable. Profit in such an enterprise begins to decrease, and eventually becomes negative, which means a loss.

In practice, this happens due to the inability to describe production costs in detail. Even an experienced economist will not always understand the structure of costs, the existing relationships and the main factors of production.

To analyze the costs should begin with the classification. It will provide a comprehensive understanding of the main characteristics and properties of costs. Costs are a complex phenomenon and it is impossible to represent them with the help of one classification. Generally speaking, each enterprise can be considered trading, manufacturing or servicing. The information presented applies to all enterprises, but to a greater extent - production, as they have a more complex cost structure.

The main differences in the general classification will be the place where the costs appear, their relation to the areas of activity. The above classification is used to systematize expenses in profit reports, for comparative analysis required types of costs.

Primary types of expenses:

• Production

1. production invoices;
2. direct materials;
3. direct labor.

• non-production

1. selling expenses;
2. administrative expenses.

Direct costs are always variable. But in general production, commercial and general business costs, constant and variable costs coexist. A simple example: paying for mobile phone. The constant component will be the subscription fee, and the variable is determined by the amount of time agreed and the availability of long-distance calls. When accounting for costs, it is necessary to clearly understand the classification of costs and correctly separate them.

According to the classification used, there are non-production and production costs. Production costs include: payment of direct labor, use of direct materials, production overheads. Spending on direct materials consists of the costs that the company had when purchasing raw materials and components, in other words, what is directly related to production and transferred to finished products.

Under the costs of direct labor is meant the payment of production personnel and the efforts associated with the manufacture of goods. The payment of shop foremen, managers and equipment adjusters is a production overhead. It is necessary to take into account the accepted conditionality when determining in modern production, where "true direct" labor is rapidly declining in highly automated production. In some enterprises, production is fully automated, which does not require direct labor. But the designation "basic production workers" is retained, the payment is considered to be the cost of direct labor of the enterprise.

Production overheads include the remaining costs of providing production. In practice, the structure is polysyllabic, the volumes are scattered over a wide range. Typical manufacturing overheads include indirect materials, electricity, indirect labor, equipment maintenance, thermal energy, renovation of premises, part of the tax payments that are included in the gross costs and other things that are immanently associated with the release of products in the company.

Non-manufacturing costs are divided into implementation costs and administrative costs. The cost of selling a product consists of expenses that were directed to the safety of products, promotion on the market and delivery. Administrative costs are the totality of all expenses for the management of the company - the maintenance of the management apparatus: the planning and financial department, accounting.

Financial analysis implies a gradation of costs: variable and fixed. The division is justified by a contradictory reaction to a change in production volume. Western theory and practice of management accounting takes into account a number of distinguishing features:

• cost sharing method;
• conditional classification of costs;
• the impact of production volume on cost behavior.

Systematization is important for planning and analyzing production. Fixed costs remain relatively constant in magnitude. With an increase in production, they turn out to be an important component of cost reduction, with an increase in volume, their share in a unit of finished goods decreases.

variable costs

Variable costs will be costs, one hundred percent of which is directly proportional to the production volume. Variable costs are directly proportional to production volumes. Growth occurs with an increase in output and vice versa. However, per unit of output, variable costs will remain constant. They are usually classified by percentage changes depending on the volume of production:

• progressive;
• degressive;
• proportional.

Variable management should be based on economy. It is achieved with the help of organizational and technical measures that reduce the share of costs per unit of goods:

• productivity growth;
• reducing the number of workers;
• decrease in stocks of materials, finished products in a difficult economic period.

Variable costs are used in the break-even analysis of production, the choice economic policy, business planning.

Fixed costs are costs that are not 100% determined by production. Fixed costs per unit of output will decrease when the volume of production is multiplied, and vice versa, increase when the volume decreases.

Fixed costs are associated with the existence of the organization and are paid even in the absence of production - rent, payment management activities, depreciation of buildings. Fixed costs, in other words, are called overhead, indirect.

The high level of fixed costs is determined labor characteristics, which depend on mechanization and automation, capital intensity of products. Fixed costs are less prone to sudden changes. In the presence of objective constraints, there is a great potential for reducing fixed costs: the sale of unnecessary assets. Reduction of administrative and management expenses, reduction of utility bills due to energy savings, registration of equipment for rent or leasing.

mixed costs

In addition to variable and fixed costs, there are other costs that do not lend themselves to the above classification. They will be constant and variable, called "mixed". The following methods of classifying mixed costs into variable and fixed parts are accepted in economics:

• method of experimental estimates;
• engineering or analytical method;
• graphical method: the dependence of the volume on the cost of goods is established (supplemented with an analytical calculation);
• economic and mathematical methods: least squares method; correlation method, the method of the lowest and highest point.

Each industry has its own dependence of each type of cost on production volume. It may turn out that some expenses in one industry are considered variable, and in another - fixed.

Use unified classification division of costs into variables or constants for all industries is impossible. The nomenclature of fixed costs cannot be the same for different industries. It should take into account the specifics of production, the enterprise and the procedure for attributing costs to prime cost. The classification is created individually for each area, technology or production organization.

The standards allow differentiating costs by changing the volume of production.

Fixed and variable costs are the basis of a common economic method. It was first proposed by Walter Rauthenstrauch in 1930. This was a planning option, which in the future was called the break-even schedule.

It is actively used by modern economists in various modifications. The main advantage of the method is that it allows you to quickly and accurately predict the main performance indicators of the company when market conditions change.

When constructing, the following conventions are used:

• the price of raw materials is taken as a constant value for the considered planning period;
• fixed costs remain unchanged in a certain range of sales;
• variable costs remain constant per unit of goods when the volume of sales changes;
• uniformity of sales is accepted.

The horizontal axis indicates production volumes as a percentage of the used capacity or per unit of goods produced. The verticals indicate income, production costs. All costs on the chart are usually divided into variable (PI) and fixed (POI). Additionally, gross costs (VI), sales proceeds (VR) are applied.

The intersection of revenue and gross costs forms the break-even point (K). In this place, the company will not make a profit, but also does not incur losses. The volume at the break-even point is called critical. If the real value is less than the critical value, then the organization works in the "minus". If production volumes are greater than the critical value, then profit is formed.

You can determine the break-even point using calculations. Revenue is the total value of costs and profits (P):

VR \u003d P + PI + POI,

AT break-even point P=0, respectively, the expression takes a simplified form:

BP = PI + POI

Revenue will be the product of the cost of production and the volume of goods sold. Variable costs are rewritten through the issued volume and SPI. Given the above, the formula will look like:

Ts * Vkr \u003d POI + Vkr * SPI

• where SPI- variable costs per unit of output;
• C- the cost of a unit of goods;
• Tue- critical volume.

Vcr \u003d POI / (C-SPI)

Break-even analysis allows you to determine not only the critical volume, but also the volume to obtain the planned income. The method allows you to compare several technologies and choose the most optimal one.

Cost and Cost Reduction Factors

Analysis of the actual cost of production, determination of reserves, economic effect from the decrease is based on calculations of economic factors. The latter allow you to cover most of the processes: labor, its objects, means. They characterize the main areas of work to reduce the cost of goods: productivity growth, efficient use of equipment, introduction of new technologies, modernization of production, cheaper procurement, reduction of administrative staff, reduction of marriage, non-production losses, expenses.

Savings on cost reduction is determined by the following factors:

• The growth of the technical level. This happens with the introduction of more advanced technologies, automation and mechanization of production, best use raw materials and new materials, revision of technological characteristics and product design.
• Modernization of labor organization and productivity. Cost reduction occurs when changing production organization, methods and forms of labor, which is facilitated by specialization. Improve management while minimizing costs. Reconsider the use of fixed assets, improve logistics and minimize transportation costs.
• Reduction of semi-fixed costs by means of changing the structure and volume of production. This reduces depreciation, changes the range, quality of goods. The volume of output does not directly affect the semi-fixed costs. With an increase in volumes, the share of semi-fixed costs per unit of goods will decrease, and, accordingly, the cost will also decrease.
• Better use of natural resources is required. It is necessary to take into account the composition and quality of the source material, changes in the methods of extraction and finding deposits. This is an important factor that shows the influence of natural conditions on variable costs. The analysis should be based on sectoral methods of the extractive industry.
• Industry factors, etc. This group includes the development of new shops, production and production units, as well as preparation for them. Reserves for cost reduction are periodically reviewed in case of liquidation of old and commissioning of new industries, which will improve economic factors.

Reducing fixed costs:

• reduction of administrative and commercial expenses;
• reduction of commercial services;
• load increase;
• sale of unused intangible and current assets.

Variable Cost Reduction:

• reducing the number of main and auxiliary workers by increasing labor productivity;
• use of a time-based form of payment;
• preference for resource-saving technologies;
• using more economical materials.

The listed methods lead to the following conclusion: cost reduction should mainly occur due to minimization of preparatory processes, development of a new range of technologies.

Changing the range of products to be an important factor, which determines the level of production costs. With excellent profitability, a shift in the assortment should be associated with improving the structure and increasing production efficiency. This can either increase or decrease production costs.

The classification of costs into variable and fixed has a number of advantages, which are actively used by many enterprises. In parallel with it, accounting and grouping of costs by cost is used.