- Cost Essence
- Realized and marketable products
- The formula for the cost of the ruble of commodity products
- Cost effectiveness
- Cost factors
- Method of determination
- Cost reduction
- Practical example
Any manager of an operating enterprise engaged in the production of any goods has an idea of costs, expenses, and costs. For the success of a company, it is necessary to control costs accurately and strictly, to be able to manage them, and to strive to reduce them continuously.
Simply put, costs represent the monetary expression of resources spent on the production, storage and marketing of products. It is very important to track where and in what amounts the material, labor and economic resources of the company are spent. If this is treated with disdain, then the organization will eventually collapse.
If the manager does not take into account the fact that the cost of the products he produces is growing, and the profit does not increase or decrease, this indicates a crisis in the life cycle of the enterprise. Therefore, it is required to conduct a regular cost study, cost analysis for 1 ruble of marketable products and strive to reduce them by various methods.
At the moment there are quite a lot of types and cost classifications. They are distinguished depending on:
- elements - material, wages, deductions, depreciation, other;
- costing items - each industry has its own specific costs, an approximate list is presented in the figure below;
- relationship to cost - direct and indirect;
- relations to the level of business activity are variable and constant;
- cost recognition method - the cost of products (including the cost of the ruble of marketable products) and costs for the time interval;
- sales - realized and marketable;
- the number of elements - single-element and multi-element;
- adjustability is adjustable and unregulated;
- relations to production - production and non-production.
Realized and marketable products
Represents the entire volume of goods produced, which were sold to the buyer and for which the company received revenue. This indicator is expressed in monetary terms. To find the value of this indicator, it is necessary to add the sum of marketable products to the remnants of unsold products at the beginning of the period and subtract the remnants of unsold products at the end of the period. Realized products do not differ in composition from the product. But there are differences in the amount.
And commercial products are all products, including those that are still unrealized in warehouses.
The formula for the cost of the ruble of commodity products
If you want to determine the cost per ruble of commodity output, you need to divide its total cost by the amount of sales. The latter in this case is used in wholesale prices, that is, without specifying the value added tax.
This indicator, which characterizes the level of costs per ruble of marketable products, can be interpreted in two variations: these are the costs that are needed to produce 1 ruble of marketable products, as well as the ratio indicator, which characterizes the cost and its structure.
If, as a result of calculating the cost per ruble of marketable products, the indicator turned out to be lower than one, then such production is determined as profitable, if it is higher, it is unprofitable.
In general, it is important not only to know the magnitude of the cost per ruble of marketable products, but also to understand how cost-effective the costs are in principle. Profitability of costs characterizes the amount of profit received from 1 ruble of products sold. The source of the data for the calculations will be the balance sheet.
The formula for the balance sheet is the profit before tax divided by the total cost of goods. If viewed from the point of view of codes for balance sheet items, the calculation formula is as follows:
(2200/2120) * 100%
The change in the indicator suggests that you need to take action against the pricing policy or cost.
Profitability of expenses can decrease in two cases: when the cost price grows and profit decreases. And also when the management of the company purposely reduces prices in order to stimulate sales. At the same time increasing the administrative costs of sales.
If profitability grows, it means that OPF and current assets began to return faster.
Cost analysis for the ruble of marketable products may show dynamics over the period. This explains to us that some factors influence the changes. In particular, they include:
- staffing of the enterprise with modern and high-quality equipment, its equipment, serviceability;
- the dynamics of purchase prices for materials and services in cost items;
- seasonal factor (depending on the type of goods or services);
- indicators of qualitative and quantitative labor (productivity, reject rate);
- the dynamics of selling prices for a product or service that the company offers;
- dynamics of the volume and range of product catalog;
- change in the size of costs per unit of production.
In order to understand which factor influenced the growth or reduction of costs, factor analysis is carried out aimed at identifying that particular structural unit in the composition of costs.
Method of determination
In the result of the analysis of the cost of the ruble of commodity products can be divided conditionally into 3 groups:
- The first group reflects the costs of materials and raw materials.
- The second contains information about the means of labor.
- The third - information about the cost of labor.
And depending on whose share of the three groups is larger, the type of production is determined by the nature of the costs. Namely:
And based on the resulting picture, it is necessary to draw a conclusion and find a solution about reducing the costs of a particular group.
So where does the cost analysis start? First we need a table of production costs, broken down by cost element. From it we will see the dynamics and deviations of indicators. And also find out the cost structure and determine the type of production.
Next, create a table and calculate the cost of the ruble of commodity and sales. The table contains data on the volumes of commodity and sales and their cost, the cost of each ruble.
You can then determine the change in costs for the costing items and carry out a factor analysis.
Tezisno consider the main ways to reduce costs in a manufacturing enterprise. There are 2 ways to reduce costs:
- The first is the reduction of semi-variable costs: the rationalization of the use of raw materials and materials, semi-finished products, fuel and energy, an increase in the level of labor productivity and the improvement of the use of working time.
- The second direction is the reduction of conditionally fixed costs (maintenance of machinery and equipment, sales expenses and general business expenses). Mechanization and automation of production will play a positive role in this matter.
In the struggle to reduce costs, the introduction of economy mode in the enterprise is important. Also, to reduce costs, it is necessary to regularly review and evaluate the administrative apparatus and the cost of its maintenance. The effective work of Quality Control Department helps to reduce losses from marriage.
As an example, take Ardon Ltd., engaged in the production of small-sized cabinet furniture. Consider table 1, characterizing the composition and cost structure for 2010-2012.
Table 1. The composition and cost structure of LLC "Ardon" for 2010-2012.
|Cost element||Value, thousand rubles||Value, thousand rubles||Value, thousand rubles||Deviation +/-||Structure, %||Structure, %||Structure, %||Deviation +/-|
|2010||2011||2012||2012 from 2010||2010||2011||2012||2012 from 2010|
|Material costs||9125||14569||11692||+2567||88, 8||81.5||80.1||-8, 7|
|Other costs||556||2123||732||+176||5.4||11.9||5.0||-0, 4|
After analyzing the data, we can calculate the cost per ruble of marketable products. The data are systematized in table 2.
Table 2. Analysis of the cost of the ruble of commodity and sales.
|Indicators||2010||2011||2012||2012 to 2010, %|
|Commodity products, thousand rubles||14985||21052||22300||148, 8|
|Cost of TP, thousand rubles||10268||17885||14592||142.1|
|Realized products, thousand rubles||14203||20607||21712||152.9|
|The cost of the RP, ths. Rub.||13120||16821||17676||134.7|
|The cost of 1 ruble TP, cop.||68.4||85.0||65.4||95.6|
|The cost of 1 ruble RP, cop.||92.4||81.6||81.4||88.1|
Based on the data in the table, we see that costs are reduced, despite the jump in costs in 2011. This indicates a rational use of resources, an increase in production volumes and efficient operation of fixed assets.
Next, we turn to table 3 to consider the cost dynamics.
Table 3. The dynamics of the cost of 1 ruble of commodity products.
|Cost element||Cost, thousand rubles||Cost, thousand rubles||Cost, thousand rubles||Costs for 1 rub.||Costs for 1 rub.||Costs for 1 rub.||Deviation +/-|
|2010||2011||2012||2010||2011||2012||2012 from 2010|
|TP, thousand rubles||14985||21052||22300||-||-||-||-|
|Material costs||9125||14569||11692||60.9||69.2||52.4||-8, 5|
|Other costs||556||2123||732||3.7||10.1||3.3||-0, 4|
|Cost price||10268||17885||14592||68.5||85.0||65.9||-2, 6|
After analyzing the example, you can see how proper management of the enterprise increases its profitability. Thus, we considered an example of calculating the cost of a ruble of marketable products, and also calculated the dynamics of costs in the period under study.