Preparation of cost estimates for the production of products (classification of costs by economic elements). Economic Costs The cost estimates include the following elements
According to the economic content, they are grouped according to the following economic elements: material costs, labor costs, deductions for social needs, depreciation of fixed assets, other costs. Their structure is formed under the influence of various factors: the nature of the products produced and the consumed material and raw materials, the technical level of production, the forms of its organization and location, the conditions for supplying and marketing products, etc.
According to the functions of the enterprise in the production management system, the costs are divided into:
- supply and procurement;
- production;
- commercial and marketing;
- organizational and managerial.
The division of costs by activity functions allows, in planning and accounting, to determine the amount of costs in the context of the departments of each area, which is one of the important conditions for the organization of on-farm settlement.
According to the economic role in the production process, costs are divided into basic and overhead.
Main costs directly related to the technological process of production are called: raw materials and materials, fuel and energy for technological purposes, labor costs for production workers, etc.
Overheads are formed in connection with the organization, maintenance of production and management. They consist of complex overhead and general business expenses. The amount of these costs depends on the management structure of departments, shops and enterprises.
By way of inclusion In the cost of production, costs are divided into direct and indirect.
Direct costs
associated with the production of a certain type of product and can be, based on the data of primary documents, directly and directly attributed to its cost.
Indirect costs are associated with the release of several types of products, for example, the costs of managing and maintaining production.
The choice of the distribution base is determined by the peculiarities of the organization and production technology and is established by industry instructions for planning, accounting and calculating the cost of production.
In practice, the costs of the enterprise are traditionally grouped and accounted for by composition and types, places of origin and carriers.
Composition costs are divided into single-element and complex.
single element called costs, consisting of one element - materials, wages, depreciation, etc. These costs, regardless of their place of origin and purpose, are not divided into different components.
Comprehensive refers to costs that consist of multiple elements, such as shop floor and general plant costs, which include salaries of relevant personnel, depreciation of buildings, and other single-element costs.
Accounting by cost type classifies and evaluates the resources used in the process of production and sale of products. On this basis, costs are classified according to costing items and economic elements.
The composition of the costs included in the cost of production is regulated by the relevant regulations.
A single list of economically homogeneous enterprises has been established for all enterprises. cost elements:
- material costs;
- labor costs;
- deductions for social needs;
- depreciation of fixed assets;
- other costs.
Under the economic element of costs, it is customary to understand an economically homogeneous type of costs for and sale of products (works, services), which at the enterprise level cannot be decomposed into separate components.
The grouping of costs by economic elements is an object of financial accounting and shows what exactly is spent on the production of products, what is the ratio of individual elements in the total amount of costs. It allows you to determine and analyze the structure of current production and distribution costs. To conduct this kind of analysis, it is necessary to calculate the share of one or another element in the total cost.
The grouping of costs by economic elements is the amount of current production or distribution costs incurred by the organization for a given reporting period, regardless of whether the product is finished or the work is done. The significance of this classification increases as the prerequisites for the division of the accounting system of enterprises into financial (accounting) and internal (production, management) subsystems are created.
To calculate the cost of certain types of products, manufacturing enterprises use cost grouping according to costing items.
Calculating the cost of products (works, services) is the calculation of the amount of costs per unit (output) of products. The statement in which the calculation is made per unit of production is called costing.
Estimated expenses are carried out on special forms, which reflect data on planned and actual costs for cost items for the entire output of marketable products for the reporting period. The document in which these costs are entered is called costing, and the calculation system for determining the cost of production is called costing. Unlike grouping by economic elements, costing allows you to take into account the costs directly related to the production of a particular type of product. These costs include both material costs and the costs of creating, maintaining and managing the production of this type of product. On the basis of cost calculations, its workshop, production and full cost is determined.
Each organization establishes the nomenclature of articles for itself, taking into account its specific needs. Their approximate list is established by industry instructions for accounting and calculating the cost of production.
In its most general form, the nomenclature of costing items is as follows:
- "Raw materials and basic materials".
- "Semi-finished products of own production".
- "Returnable Waste" (subtracted).
- "Auxiliary Materials".
- "Fuel and Energy for Technological Purposes".
- "Expenses for the wages of production workers."
- "Deductions for social needs".
- "Expenses for the preparation and development of production."
- "Expenses for the operation of production machinery and equipment."
- "Shop expenses".
- "General running costs".
- "Loss of Marriage".
- "Other operating expenses".
- "Business expenses".
The total of the first ten articles allows you to get the shop cost, the total of the first thirteen articles forms the production cost, and the total of all fourteen articles - the total cost of production.
The list of cost items, their composition and methods of distribution by types of products (works, services), as well as the procedure for evaluating the balance of work in progress and finished products are determined by industry guidelines. In principle, each industry has its own calculation articles. In some industries, for example, transportation and procurement costs (due to the large specific weight), depreciation deductions (due to the high capital intensity of production), etc. are allocated.
By place of origin costs are grouped and accounted for by production, workshops, sections, departments and other structural divisions of the enterprise, i.e. by responsibility centers.
Cost grouping is important in relation to the volume of production. On this basis, costs are divided into fixed and variable.
fixed costs do not depend on the dynamics of the volume of production and sales of products, that is, they do not change when the volume of production changes.
variable costs depend on the volume and change in direct proportion to the change in the volume of production (or business activity) of the company. As it increases, variable costs also grow, and vice versa (for example, the wages of production workers manufacturing a certain type of product, the costs of raw materials and materials).
Variable costs calculated per unit of output are a constant value.
In addition, there are mixed costs.
The division of costs into production and periodic is based on the fact that only production costs should be included in the cost of production. They, as necessary, form the production cost of products and are used to calculate the cost of a unit of production.
Production costs include:
- direct material costs;
- direct labor costs with contributions for social needs;
- losses from marriage;
- manufacturing overhead.
Production overheads consist of the costs of operating the production machinery and equipment and shop floor costs.
Recurring expenses subdivided into:
- commercial;
- general;
- administrative.
These include a significant part of the total cost of management, maintenance of production, sales of products, which does not depend on the volume of production and sales, but on the organization of production and commercial activities, business policy of the administration, the duration of the reporting period, the structure of the enterprise and other factors.
According to technical and economic purpose distinguish between basic (technological) and overhead costs.
The main (technological) costs are directly related to the production and provision of services, they include the first six cost items: labor costs, the cost of materials, fuel, electricity, and other costs associated with a specific calculation object.
Overhead - associated with the maintenance of individual units (shops, sections) or the organization as a whole and their management.
Important in costing and evaluating finished products is the grouping of costs depending on the time of their occurrence and attribution to the cost products. On this basis, the costs are divided into:
- current;
- future reporting period;
- upcoming.
Current costs include the costs of production and sales of products of this period. They have generated income in the present and have lost the ability to generate income in the future.
Deferred expenses are expenses incurred in the current reporting period, but subject to inclusion in the cost of products that will be produced in subsequent reporting periods.
Upcoming costs include costs that have not yet been incurred in this reporting period, but to correctly reflect the actual cost, they are subject to inclusion in production costs for this reporting period in the planned amount (expenses for paying workers' vacations, paying a one-time remuneration for length of service and other costs that have periodic character).
In the process of making managerial decisions, he must have sufficient information that would promise a benefit to the enterprise from the production of a particular type of product. Under these conditions, the division of costs into the following types is of particular importance:
- alternative (imputed);
- differential;
- irrevocable;
- incremental;
- margin;
- relevant.
According to the degree of regulation costs are divided into fully, partially and poorly regulated.
The degree of controllability of costs depends on the specifics of a particular enterprise: the technology used; organizational structure; corporate culture and other factors. Therefore, there is no universal methodology for classifying costs according to the degree of controllability; it can only be developed in relation to a particular enterprise. The degree of cost controllability will vary depending on the following conditions:
- the duration of the period of time (with a long period, it becomes possible to influence those costs that are considered given in the short period);
- powers of the decision maker (costs that are given at the level
Depending on the prevailing share of individual cost elements, the following types of industries and industries are distinguished: material-intensive, labor-intensive, capital-intensive, fuel- and energy-intensive, and mixed. The cost structure does not remain constant, it is dynamic.
Cost grouping is used in the preparation of cost estimates for the production of all manufactured products. The estimate is necessary not only to reduce the costs of their elements, but also to draw up material balances, rationing working capital, development of financial plans.
Cost estimate for the production and sale of products is a document in which the current costs attributable to the cost of production are grouped by economic elements of the same name without dividing the costs by type of product and service. Costs of the same name imply that this element takes into account all the costs of consuming this type of resource.
According to the cost estimate, the cost of gross, marketable and sold products, the change in the balance of work in progress are calculated, costs are written off to non-production accounts, profit (or loss) of sold products and costs per ruble of marketable products are established. The estimated breakdown of costs allows you to determine the total amount of consumed types of resources, determines the need for working capital.
The cost estimate for production is a summary calculation that summarizes the costs of production and marketing of products. The estimate is compiled according to economic elements, the list and composition of which is the same. This ensures the reduction of costs by elements as a whole and allows you to monitor changes in the cost structure.
Budgeting begins with determining the cost estimate for auxiliary workshops, i.e. auxiliary workshops is consumed by the main workshops, the costs are included in the cost of the main workshops. The cost estimate for auxiliary workshops includes: own costs of the auxiliary workshop, the cost of works and services performed or provided to them by other workshops, the cost of works and services for other workshops. Then they make estimates for the maintenance and management of production (general production, general economic, non-production expenses), as well as estimates for certain types of special costs (estimates for commissioning for the development of products, transportation and procurement costs). The presence of these estimates allows you to proceed to the preparation of cost estimates for production for the main workshops, which allows you to determine the cost estimate for the business entity as a whole.
Management decision-making by management and managers of various levels of an economic entity is facilitated by the selection of various classification signs of costs and analysis based on them. To determine the structure of costs for the production of products of an economic entity allows the division of costs into cost elements.
Composition of costs by elements
By elements, the costs are divided into the following categories, presented in the table.
Table. Classification of costs by economic elements
| Cost element name | What is included |
|---|---|
| Material | This element includes the costs incurred by the business entity:
|
| For wages | This cost element reflects the costs incurred by an economic entity for the following purposes:
|
| For social contributions | This element of costs includes the costs of an economic entity aimed at deductions to off-budget funds, namely:
|
| depreciation | This element reflects the costs associated with depreciation deductions of an economic entity for fixed assets and intangible assets. At the same time, the costs for these purposes are reflected here both for their own fixed assets and for those that were leased by the business entity. |
| Other | This element includes those costs that are not included in the previous cost elements. For example, this element reflects taxes, fees, deductions, which are included in the cost of production. |
For example, as can be seen from the table, the element “labor costs” reflects compensatory payments to employees of the enterprise, which take into account a certain mode of work or special working conditions. These include payments for:
- the time when an employee of an economic entity combined professions;
- the time when an employee of an economic entity worked at night;
- time when an employee of an economic entity performed work that was overtime, etc.
Grouping costs by elements allows you to determine the cost structure. It is the same for all sectors of the economy and makes it possible to determine how much and what funds are spent, regardless of where they are produced and what they are spent on. This grouping is used to estimate production costs.
Cost elements are similar (homogeneous) costs of economic entities incurred by them in the production and sale of products.
Consumed resources (in monetary terms) in the production and sale of products of an economic entity are collected in homogeneous types, called elements.
When classifying costs by elements, costs are collected and grouped in value terms for all costs incurred by an economic entity. Based on these data, the cost of specific types of products will then be calculated.
Purpose of cost classification by economic elements
This classification is useful in the following cases:
- when the planning of the production activity of an economic entity is carried out;
- when the cost estimates are generated;
- when planning and determining how much resources will be needed;
- when an analysis of the financial activity of an economic entity is carried out.
Elements of production costs are grouped on a homogeneous basis, the cost of production.
Cost estimate for production and sales of products represents a summary plan of all expenses of the enterprise for the forthcoming period of production and financial activities. It is compiled in order to determine the total cost of the enterprise (by economic elements) and to link this section with other sections of the business plan of the enterprise.
The cost estimate includes all costs of the main and auxiliary divisions of the enterprise involved in the production of industrial products, as well as the performance of works and services of a non-industrial nature both for the facilities of their enterprise (capital construction, etc.) and for third-party organizations.
The cost estimate also includes the costs of mastering the production of new products, the costs of pre-production, the costs of marketing products, etc.
In the estimate, production costs are grouped by primary elements on an economic basis. The cost estimate is made up for the year with distribution by quarters. According to the cost estimate, the structure of the cost of production is determined, in addition, the estimate is the basis for calculating working capital.
The costs in the estimate are grouped according to the following economic elements:
material costs (minus the cost of returnable waste);
labor costs;
contributions for social needs;
Depreciation of fixed assets;
other costs.
Material costs include:
The cost of raw materials of purchased semi-finished products;
Fare;
The cost of fuel, electricity.
Labor costs include:
Basic salary, bonuses, remuneration at the end of the year, bonuses for professional skills and extra pay for night hours, overtime, combination of professions, expansion of service areas, for work in difficult, harmful conditions;
The cost of utilities;
The cost of overalls issued free of charge; travel to the place of rest; payment of preferential hours for teenagers; breaks in the work of nursing mothers; performance of public duties;
Payments to employees in connection with the reduction; seniority pay; holiday pay for students.
Social contributions are 26% and include:
Social security contributions;
pension funds;
State Employment Fund;
Health insurance.
Depreciation of fixed assets:
The element "Depreciation of fixed assets" reflects the amount of depreciation deductions for the full restoration of fixed production assets (own and leased), as well as the amount of growth in depreciation deductions as a result of their indexation.
Other costs include:
Taxes, fees, property insurance;
Rewards for rationalization proposals; payments on loans, payment for work on certification of products; payment for fire protection; personnel training; payment for services of computer centers, banks; rent payment, repair fund.
The totality of these costs for the elements listed in paragraphs 1-5 is the total cost of production. However, the total amount of costs reflected in the cost estimate includes not only the costs of producing commercial products, but also costs associated with the increase in the balance of work in progress (including semi-finished products of own production), deferred expenses and the provision of services not included in commercial products. .
To determine the production cost of commercial products, it is necessary:
1) exclude from the total amount of production costs the costs attributable to non-production accounts (the cost of capital construction and overhaul of buildings and structures that were performed for your enterprise, transport services provided to third-party organizations, non-industrial facilities of the enterprise, the cost of research and development work performed for third parties, etc.);
2) take into account the change in the balances of deferred expenses (if they increase, the amount of the increase is subtracted from the amount of production costs, and if it decreases, it is added);
3) take into account the change in the balance of work in progress (in industries where it is planned): an increase reduces the cost of marketable products, a decrease increases it.
The amount received after making the changes provided for in paragraphs (1), (2) and (3) is production cost of a product. For determining full cost of commercial products it is necessary to add commercial costs to its production cost, which include costs for packaging products in a warehouse, transportation of products, commission fees and other costs associated with the sale of products. The total cost of a product is different from cost of goods sold, on the basis of which the amount of profit is determined, the presence of residues of unsold products. To determine the sold products, it is necessary to add the cost of the balance of unsold products at the beginning of the planning period to the full cost of commercial products and subtract the cost of the remains of unsold products at the end of the planning period.
The estimate of production costs is used in the development of the financial plan of the enterprise, to determine the need for working capital, when compiling a balance of income and expenses and determining a number of other indicators of the financial activity of the enterprise.
All estimates can be divided into two large groups:
Estimates of current costs;
capital cost estimates.
Current cost estimates - These are estimates that reflect current operations during the normal production process.
The main estimates of the current costs of the enterprise are:
· Sales program. This is the most important plan of the enterprise, since the volume of operations of any division directly depends on the volume of sales. All other plans are based on the sales program. The development of a marketing program must be given special attention. If you fail to make it as realistic as possible, then other estimates will be erroneous.
· Production plan. This plan covers the production process. The total production volume is determined on the basis of the sales program. The amount of stocks of material resources required to start the next period is also determined.
· Estimate of overhead and general business expenses. This plan includes the costs of maintaining fixed assets in a normal state and the costs of managing the enterprise as a whole.
· These estimates include projected current assets - cash on hand, accounts receivable, inventories and projected short-term liabilities, ie accounts payable, bank overdraft and other short-term liabilities.
Capital cost estimates are compiled when planning long-term operations of the enterprise. They can be divided into two groups:
· Estimated requirements for fixed assets. They include investments in assets that will generate returns in future periods.
· Estimates of the need for working capital. Every major investment is usually accompanied by a corresponding investment in working capital. This is especially true for investment projects that are associated with the expansion of capacities or the development of new markets.
Preparing and evaluating capital expenditure estimates is an important part of financial management, as investments have a significant long-term impact on the future performance of an enterprise.
Calculation(from lat. calculatio - account, calculation) is the calculation of the cost of a unit of production - 1 piece, 1 ton, 1 thousand, etc. by cost items.
Grouping costs by economic elements reflected in cost estimate for the production and sale of products(works, services). It collects costs according to the generality of the economic content, according to their natural purpose. Thus, the element “Payment” shows the entire wage fund of the enterprise, regardless of which category of workers it is intended for: production workers, employees or junior service personnel. Depreciation of fixed assets also reflects the total amount of accrued depreciation from all types of fixed assets of the enterprise: machines on which products are manufactured; all types of industrial buildings, including plant management; trucks and cars, etc. The list of elements of the estimate characterizes the composition of costs according to their economic purpose. The cost estimate for the production and sale of products (works, services) is given in Table. one.
The estimate collects the total amount of resources used in the production process - "Total production costs". From this amount, costs not related to the production of products (works and services in the non-productive sphere, deferred expenses, etc.) are deducted and determined production cost of gross output. If we take into account (add or subtract) the change in the balance of work in progress in the cost of gross output, then we determine production cost of a product. After adding to it a group of non-production costs associated with the sale of products and the deduction of funds to higher organizations, we obtain the full cost of commodity - products. The estimate plans the result from the production and sale of products - profit or loss. All indicators of the estimate have a quarterly breakdown
The classification of costs by economic elements is important for the enterprise. The estimated cost breakdown allows you to determine the total amount of various types of resources consumed by the enterprise. The estimate reflects the costs of resources purchased from outside and paid to suppliers. The costs planned in the estimate provide for all the needs of the enterprise related to the production and sale of products, the creation of backlogs of work in progress, the provision of auxiliary production, service, auxiliary and side farms.
On the basis of the estimate, the sections of the production and financial plan of the enterprise are linked: for material and technical supply, for labor, the need for working capital is determined, etc. All types of business plans are based primarily on cost estimates. Economic relations of the enterprise with suppliers of resources, with financial and credit institutions are formed using estimates of production costs.
Table 1
Estimated costs for the production and sale of products for 200_
| Elements of the estimate | Plan for 20 | including quarters. | |||
| I | II | III | IV | ||
| Raw materials and basic materials (excluding waste) | |||||
| Purchased semi-finished products and components | |||||
| Auxiliary materials | |||||
| fuel side | |||||
| Energy from the side | |||||
| Salary basic and additional | |||||
| Deductions for social needs | |||||
| Depreciation | |||||
| other expenses | |||||
| Total production cost | |||||
| Costs for works and services of a non-productive nature | |||||
| Change in balances of deferred expenses (decrease<-», увеличение «+») | |||||
| Total cost of gross output | |||||
| Change in the cost of work in progress (increase "-", decrease "+") | |||||
| Production cost of commercial products | |||||
| non-manufacturing expenses | |||||
| Full cost of commercial products | |||||
| The volume of marketable products in sales prices | |||||
| Profit (+), losses (-) from the production of marketable products | |||||
| Change in the cost of the balance of unsold products (increase "-", decrease "+") | |||||
| Cost of goods sold | |||||
| The volume of products sold in sales prices | |||||
| Profit (+), loss (-) from products sold |
At the same time, on the basis of the estimated section, it is impossible to determine the specific direction and place of use of costs (production process, maintenance of the workshop, maintenance of plant management, etc.), which does not allow analyzing the efficiency of using costs, revealing reserves for their reduction. And most importantly, on the basis of the elements of the estimate, it is impossible to determine the cost of a unit of output in the context of the entire range, as well as each item, group, type. These tasks are solved by cost classification according to the calculation items.
The main task of determining the cost is to establish the optimal level of costs, the identification of savings reserves. The grouping of costs by economic elements is reflected in the cost estimate for the production and sale of products (works, services).
The estimate collects costs according to the general economic content. For example, the element “Basic and additional salary” shows the entire wage fund, regardless of which category of workers it is intended for.
Depreciation of fixed assets reflects the total amount of accrued depreciation from all types of fixed assets (equipment, industrial and administrative buildings, transport, etc.).
The cost estimate for production and sales is a summary generalizing document. Based on the estimate
the total costs of production and sales are summed up (for this, all production costs are summed up, the sum shows the total cost of production and sales.
According to the cost estimate, the cost of gross, marketable and sold products is calculated, the change in the balance of work in progress, costs are written off to non-production accounts, the profit (or loss) of sold products and costs per 1 ruble of marketable products are established. The estimated breakdown of costs allows you to determine the total amount of consumed types of resources, determines the need for working capital.
The cost estimate for production and sales is a summary calculation that summarizes the costs of production and marketing of products. The estimate is compiled according to economic elements, the list and composition of which is the same. This ensures the reduction of costs by elements as a whole and allows you to monitor changes in the cost structure.
Budgeting begins with determining the cost estimate for auxiliary workshops, i.e. production of auxiliary workshops is consumed by the main workshops, the costs are included in the cost of the main workshops. The cost estimate for auxiliary workshops includes: own costs of the auxiliary workshop, the cost of works and services performed or provided to them by other workshops, the cost of works and services for other workshops. Then they make estimates for the maintenance and management of production (general production, general economic, non-production expenses), as well as estimates for certain types of special costs (estimates for commissioning, product development, transport and procurement costs). The presence of these estimates allows you to proceed to the preparation of cost estimates for production for the main workshops, which allows you to determine the cost estimate for the business entity as a whole.
The amount of costs according to the estimate is more than the cost of gross output. To determine the cost of gross output, it is necessary to deduct the costs of performing works and services that are not included in gross output from the amount of costs according to the estimate (expenses associated with servicing household needs;
you for capital construction; losses from natural disasters) and take into account changes in deferred expenses:
VPs=Ism - Рne incl. vp + Irbp,
the increase is subtracted, and the decrease is summed up, while
VPs - the cost of gross output, ISM - the total according to the estimate;
Rne incl. VP - expenses not included in gross output;
Irbp - change in deferred expenses.
Based on the cost of gross output, the cost of commercial products is determined, which makes it possible to calculate the costs per 1 ruble of commercial products (31rp):
TPs - VPs + Rkom + Inzp.
When calculating the cost of commercial products, the cost of gross output is increased by commercial (non-production) expenses (Рkom) and adjusted for changes in work in progress (Inzp).
In conclusion, the cost of goods sold (RPS) is determined:
RPs = TPs + Igp.
The cost of goods sold is determined by adjusting the cost of marketable products for changes in finished goods in stock (Igp).
Waste losses are not planned, they are included in the actual cost. The cost estimate includes the costs of all departments.
The cost estimate is prepared without intra-factory turnover, i.e. it does not include the cost of own-produced products.
More on the topic Question 8.3. Classification of costs by economic elements. Cost estimate:
- DIFFERENT APPROACHES TO THE CLASSIFICATION OF PRODUCT QUALITY COSTS OF AN INDUSTRIAL ENTERPRISE
- Question 1.3. Entrepreneurship is the most important type of economic activity. Forms and types of entrepreneurship.
