total cost of production. What costs are included in the production cost of a product? Formation of production cost

Theoretically, it is quite acceptable to use the term "costs" as a synonym for cost. Both that, and another is a cost estimate of all invested funds necessary for the manufacture and marketing of products. They directly affect the profit of the enterprise: when they grow, the profitability of the business falls.

What it is?

The total costs of the enterprise consist of two parts:

• direct production costs production cost;
• costs for the sale of finished products - cost of sales.

These two figures add up to full cost, which is also called middle. It is calculated for the entire volume of production and sales. If it is divided by the number of manufactured units of production, then the costs for a separate product will be determined. They determine the cost of producing each subsequent unit. This is marginal cost.

Production costs are all expenses for the organization of the production process. They mainly include:

• costs of raw materials, materials used;
• payments for fuel, electricity;
• salary of all employees of the enterprise;
• deductions for the repair of fixed assets, their maintenance;
• insurance costs, storage of goods in warehouses;
• depreciation of fixed assets;
• mandatory contributions to various state funds (pension, etc.).

Sales costs include costs at the stage of selling finished products. This is first of all:

• spending on packaging finished products;
• transportation costs for their delivery to the distribution warehouse or to the buyer;
• marketing costs and other expenses.

Calculation methods

There are many ways to calculate the indicator. Each approaches a specific enterprise, taking into account its production technology, specifics, and features of the products. The accounting department selects the most suitable option.

Two of the most common methods are used for ongoing cost analysis. All the rest are varieties.

Process method

It is used in industries with a mass continuous type of production: primarily by enterprises in the energy, transport, and extractive industries. They are characterized by the following factors:

• Nomenclature limited.
• The presence of products of uniform properties, characteristics.
• The short duration of the production cycle.
• Insignificant volumes of work in progress, semi-finished products or their complete absence.
• The object of calculation is the final product.

In the absence of stocks of finished products, as, for example, in energy enterprises, it is convenient to use a simple calculation formula:

C=Z/X, where

• C - unit cost of production;
• Z - total costs for a specific period;
• X is the number of units produced in the same period of time.

Normative method

It is used in serial and mass production with constantly repetitive operations. There, every month, quarter, year, they check the ratio of the standard and planned costs, and if they do not match, they make appropriate adjustments.

Cost rates, as a rule, are developed according to data from previous years. The advantage of the method is the prevention of irrational spending of financial, material and labor resources.

Custom method

Here, the costing object is a separate order or work that is performed to meet the requirements of the customer. This method is used:

• with a single or small-scale production, in which each unit of expenditure differs from all others made earlier;
• in the manufacture of large, complex products with a long production cycle.

It is used by enterprises of heavy engineering, construction, science, furniture industry, repair work. For each individual order, the costs are determined individually according to the calculation card, which is constantly adjusted in connection with the current change in any costs.

The disadvantage of this method is that there is no operational control over the level of spending, in the complexity of inventorying work in progress.

Calculation method

It is selected by each enterprise depending on the characteristics of its production and product. For example, in a confectionery factory, when choosing a calculation method, the shelf life of products and the associated energy costs are of paramount importance. For a furniture manufacturing company, the most important factors are the high costs of materials, as well as the transportation of bulky goods.

A cost estimate is a statement for calculating the costs for a single unit of production. In it, all expenses for homogeneous elements are grouped into separate items, of which the most important are:

• Payment for the energy and fuel required for the production.
• The cost of semi-finished products supplied from other enterprises.
• Depreciation of equipment, depreciation of fixtures, tools.
• Salary, social benefits to employees.
• Total production costs for the shop.

The itemized method is used to calculate the so-called shop cost. To do this, the sum of all accounting costs should be divided by the number of units of the product produced. This, in fact, will be the cost of production of each individual product.

They are inversely related to production volumes. The more products the shop produces, the lower the production costs per unit. This is the essence of the so-called economies of scale.

Transverse method

It is acceptable for production with several completed stages of processing of raw materials and materials. At each stage, semi-finished products are obtained, which are used at home or sold to other enterprises.

Costs are calculated at each stage, but there is only one indicator for the finished product.

Method of averages

Its essence is in calculating the specific weight of specific costing items in the structure of the total cost. This allows you to determine how changes in some costs affect the efficiency of the entire production.

If, for example, the share of transport costs is the highest, then their variability will have the greatest impact on the overall final result.

You can learn more about how the indicator is calculated from the following video:

Cost of services

The calculation of the indicator in the service sector can include many variable economic factors. Not always the end product of the service requires the cost of materials, components, transportation to the place of consumption. Often its profitability depends on the presence of a clientele, its orders.

The cost of the service is all the costs of the contractor, without which the work cannot be performed. They include:

• Direct costs directly related to the performance of the service. This is primarily staff salaries.
• Indirect costs are management salaries.
• Permanent payments, regardless of the volume of services performed. These are utility bills, depreciation of equipment, deductions to the pension fund.
• Variable costs - for example, the purchase of materials, are directly dependent on the number of services provided.

The need for indicator analysis

The calculation of costs is mandatory, since it is based on:

• work planning and control over the implementation of plans;
• preparation of financial statements;
• analysis of the economic efficiency of the enterprise, all its structural divisions;
• compiling data for financial reporting on finished and sold products and work in progress.

Without calculation, it is impossible to make effective management decisions. Based on it, a competitive price of the manufactured goods, a successful assortment policy are developed, which will ensure high profitability of production and business profitability.

Enterprises involved in the production of goods pay great attention to determining the cost of production. At different stages of production, shop, production and full costs are formed. The workshop includes the costs associated with a specific work area. The production cost consists of the sum of production costs, and the total cost includes those costs that go to the sale of finished products.

One of the cost classifications includes a breakdown by costing items. This is especially true for large-scale industries, where the production of products takes place not in one workshop, but in several at once. That is, for example, in one the primary processing of the tree takes place, in the other - its trimming, in the third - drying and pressing. Each stage is produced in a separate workshop. Based on their indicators, the shop cost is formed.

Production cost includes shop floor costs and other costs associated with production. This includes, for example, the cost of salaries to management personnel, the costs associated with servicing the entire production.

It is difficult to overestimate the importance of production costs. Economists use the resulting indicators not only to form costs and margins. Production costs and production costs also allow:

• identify possible cost reduction options;
• increase the profitability of production;
• determine the profitability of the release of specific types of products, the work of shops.

The resulting cost items are indicated not only in quantitative terms, but also as a percentage. As a result, the priority of existing expenses is determined, and options for changing them are searched.

What does it consist of?

If the actual production cost is determined, then the enterprise can use the accounting information. To do this, it is enough to add up the turnover on loans of the following accounts: 20, 21, 23, 25, 28, 29, 40, 43.

Most often, the production cost is determined element by element, depending on the costs. In this case, it is necessary to use the separation not at your own discretion, but in accordance with the Tax Code of the Russian Federation and the current RAS. The following formula is used to form the cost of production:

Production cost \u003d Material costs + Wages + Social. fees + other expenses

These elements belong to the first level of costs. Within each article, enterprises can summarize an unlimited number of articles.

Other expenses may include targeted, general production and industry-wide expenses.

Classification

The above formula is not the only way to determine the cost of production. There are many classifications used by various industries. Grouping the cost depends on the mass of signs:

• what kind of activity the enterprise is engaged in;
• how the production process is built at the enterprise;
• why the production cost is determined (how the costing results will be used - to evaluate the results, to form plans, etc.);
• what are the production volumes;
• how many types of products are produced at the enterprise;
• Are there ancillary industries?

There is no universal concept of production cost. However, the company can independently choose which method to use. The following varieties can be distinguished (except for the element-by-element version, the formula of which has already been given):

• by the inclusion of costs in the cost - direct and indirect;
• according to the frequency of settlements - one-time, current and periodic;
• standardized and non-standardized;
• planned and unplanned;
• limited and unlimited;
• based on the level of readiness of goods - the costs associated with the production of finished products, semi-finished products or attributable to work in progress (especially often used in enterprises with several production cycles).

Complexities of calculations

In small enterprises, the cost of production is easily determined. But large factories have a harder time. Such organizations usually produce many types of products at once, for each you need to calculate your own cost. To do this, it is necessary to divide the costs into direct and indirect, main and overhead. And if direct ones are relatively easy to calculate, then indirect and overheads are usually calculated for the enterprise as a whole, and then divided into separate types of products, based on their volumes.

A trained person is required to produce at the enterprise. He must choose the correct calculation methods, depending on whether the planned or actual cost is to be determined. For example, for the planned one, the aggregate, point, parametric method, the method of unit costs can be used, while for the actual one, the standard, per-order, order methods are used.

The production cost of products includes costs for its creation, determined at the level of inclusion in them of costs directly related to production. Let's see what they are made up of.

What determines the composition of the production cost and what article is not included in it?

The cost of production can be formed in two ways:

• limiting this process to collecting only those costs that are directly related to production;
• including in it, in addition to production costs, the maintenance of the organization as a whole.

The cost price obtained by the first method is called production or incomplete, and the second - full. Thus, when collecting the production cost, it does not include costs that are not directly related to the process of creating products. That is, the cost, defined as production, does not include the item "general expenses".

The production cost consists of two types of costs:

• direct production costs, which can be definitely linked to the creation of a particular type of product;
• production overheads that are impossible or unreasonable to directly correlate with any particular type of product, but at the same time they ensure the operation of the production itself.

Formation of direct production costs

The direct cost of production is determined by two things:

• a planned cost estimate for a specific product that describes the amount of material and labor costs that the organization considers necessary to create a certain volume of this product (calculation unit);
• technological features of production and technical capabilities available in the organization.

Planned costing allows, in relation to one cost unit of production, to establish lists of the types and quantities of specific types needed for its production:

• basic (raw materials, components) and auxiliary materials;
• technological operations and time for their implementation.

It will depend on the technological features of production and its technical capabilities (technical equipment) in what costs (direct or overhead) certain operations will be taken into account. For example, if different types of processing can be performed on the same machine, using it to create different types of products, and these processes replace each other quite often, then there is no point in directly dividing the depreciation of this machine by calculation objects. It is better to take it into account in the overhead costs, which will be distributed to the calculation objects by calculation.

Direct costs in relation to the allocated calculation units are collected on the accounts intended for this by the Chart of Accounts, approved by order of the Ministry of Finance of the Russian Federation dated October 31, 2000 No. 94n, accounts:

• 20 - for the main production;
• 23 - for auxiliary production;
• 29 - for service production.

On each of these accounts, the costs are divided according to analytics, focusing on the list of direct cost items created for this purpose. As a rule, the list is made the same for all direct cost accounts, since it will consist of a rather limited number of items:

• basic materials (raw materials and components);
• semi-finished products of own production;
• auxiliary materials;
• returnable waste;
• workers' wages;
• workers' wage insurance premiums.

If it is possible to organize a link to calculation units, this list may also include:

• equipment depreciation;
• energy costs;
• Third-party company services.

Collection and accounting of production overheads

Production overheads are collected against each of the direct cost accounts for each production unit involved in the creation of a product. The chart of accounts of accounting intends account 25 to account for these expenses.

The expenses collected on account 25 are also broken down by analytics, focusing on a directory of cost items for overhead costs specially developed for this purpose. Unlike the directory of direct costs, the list of items of overhead production costs is broader and, as a rule, multi-level, breaking down into groups of items, items and cost elements. For example, it is possible to select such groups and articles in them:

• Organization of the work of the department:
  • remuneration of shop managers;
  • wages of other shop personnel;
  • insurance premiums accrued on wages;
  • material costs;
  • depreciation;
  • rental of property;
  • insurance;
  • Information Support;
  • travel expenses.
• Maintenance and operation of the property:
  • maintenance and operation of real estate;
  • maintenance and operation of production machines and equipment;
  • maintenance and operation of vehicles;
  • maintenance and operation of other fixed assets;
  • energy costs;
  • transport service.
• Repair of fixed assets:
  • overhaul of fixed assets;
  • current repair of fixed assets.
• Product quality costs:
  • licensing of activities, certification of products;
  • costs for tests, experiments, research;
  • warranty service;
  • training.
• Occupational Safety and Health:
  • assessment of working conditions;
  • expenses for special equipment;
  • special treatment costs.

Each article, in turn, is divided into elements with the required level of detail, for example, by type:

• payments included in wages;
• used materials;
• depreciable property.

Services reflected in the directory, it is advisable to divide into those provided by their own divisions and third-party organizations.

Account 25 is closed monthly, distributing the amounts collected on it to the direct cost collection accounts and to the calculation units in respect of which these direct costs are formed. For such a distribution, it is necessary to choose a base. It can be either one of the types of direct costs, or their total value. If there is an internal provision of services by your own divisions (for example, you have your own boiler room or water intake), then you also need to approve the sequence for closing costs by divisions.

Results

The production cost of production is the cost formed at the level of inclusion in it of those costs that are directly related to production. Such costs are divided into two groups: direct, which can be definitely associated with a particular cost unit, and overheads, related to the unit that provides the operation of production, collecting direct costs. For each group of costs, their own reference books are developed, detailing them to the required extent.

The cost price can be formed at different stages of production. Distinguish shop, production cost and full. The structures directly involved in the production of products and the costs attributable to them form the shop cost. Production cost includes all costs associated with the production of products. The total cost is formed based on the costs of production and sales.

Classification of production costs

The production cost includes costs associated with production, namely materials, depreciation, wages, other expenses. Production costs are grouped by accounting items, classified according to a number of criteria. The grouping of production costs depends on the type of activity of the enterprise, the production and technological process, the tasks and purposes of calculating the production cost of products.

As a rule, allocate costs:

• by elements;
• on calculation items;
• by the method of inclusion in the cost (direct and indirect);
• by periodicity (one-time, current, periodic);
• standardized and non-standardized;
• planned and unplanned;
• limited and unlimited.

In addition, additional classifications are possible, for example, according to the degree of product readiness (costs for finished products, semi-finished products, work in progress).

Large industries with a large range of products, to determine the actual production cost, can group costs by type of activity or type of production. Allocate the main production, auxiliary and service production, where the main production is engaged in the production of core products that are sold to end consumers, and the auxiliary ensures uninterrupted operation, while it can be engaged in the provision of services to third-party consumers. The production cost of a product includes labor and material costs. In this case, the costs are divided into basic and overhead. The main ones are directly related to the production and provision of services, invoices are related to the organization and management of production in general or, in the case of shop accounting, associated with a specific structural unit of the enterprise.

When calculating the production cost, part of the costs can be directly attributed to the manufactured products - raw materials, materials, necessary energy resources, wages of production personnel. Part of the costs relates to the enterprise as a whole and is distributed proportionally, for example, depreciation of fixed assets, maintenance of real estate, salaries of management personnel.

How to calculate the cost of production

The production cost consists of fixed and overhead costs. For the calculation, it is necessary to determine the costs related to production. In particular, for material costs, these are the costs of acquiring the necessary raw materials and materials, payment for the work and services of third-party enterprises, and the costs of repairing equipment used to manufacture products. It also takes into account the wages of production personnel and insurance premiums accrued on wages, as well as other payments and allowances, including for work at night, on holidays, for working overtime, payment for external and internal part-time jobs, payment of bonuses and other incentive payments. The production cost of a product also includes other costs related to the production process.