Accounting for production operations. Methods for calculating production costs. The custom-made method of cost accounting and calculation is applied ... Methods of distribution and accounting of production costs
The method of accounting for production costs means a set of techniques and methods used to calculate the cost of products (works, services). For accounting of production costs, it is possible to use various methods of accounting for production costs.
Accounting methods are subdivided depending on the accounting methodology and the object of calculation.
Depending on the accounting methodology, accounting for actual costs and the normative method are distinguished.
Accounting for actual costs provides that accounting reflects all costs actually incurred. Only actual cost estimates are made and based on them, the cost of production and the cost of sales are determined. The costs are reflected directly in the accounting registers on the basis of primary documents confirming the actual costs incurred. At the same time, standard estimates are not compiled or are compiled for purposes other than accounting. The write-off of the cost price from the cost accounting accounts to the "Finished goods" account is carried out directly at the actual cost price.
The normative method of accounting for costs and calculating the cost of production is based on accounting for costs at current rates. Separately, they keep records of deviations of actual costs from the norms, indicating the place of their occurrence, causes and culprits; fix the changes in the norms as a result of the implementation of organizational and technical measures and determine the impact of these changes on the cost of production. The actual cost of production is made up of the sum of costs according to current norms, deviations from norms and changes in norms. In accounting registers, each actual amount of expenditure is divided into two parts: an amount within the normal range and an amount representing a deviation from the norm. Costs within the norm and deviations from the norms are transferred separately from one accounting ledger to another. So at the standard cost from account 20 "Main production" to account 43 "Finished goods" the cost of production of finished goods is written off, and deviations of the actual cost from the standard are written off separately. To account for deviations on account 43, a separate subaccount can be opened.
An intermediate method is possible, in which only actual costs and write-offs based on actual calculations are reflected in the accounting registers, and standard costs and standard cost estimates are used in management accounting registers.
Depending on the object of the cost estimate, a distinction is made between cost estimates for individual products or types of products, the order-by-order method, the line-by-line method, and the process-by-process method.
When calculating the cost of individual products, cost estimates are compiled for each unit of finished goods produced in the organization. In a complex technological cycle, when production is divided into stages assigned to various structural divisions, calculations are made for the products of these structural divisions. For the final product, the production of intermediate stages is a semi-finished product (parts, assemblies, etc.). When calculating estimates for finished products, the results of intermediate calculations are added taking into account the inclusion of intermediate elements in the final product. Direct costs are determined directly for each product. Indirect costs are allocated between items. The distribution base is usually the sum of direct wages - wages accrued to the main production workers. Other ways of allocating indirect costs are also possible.
The custom-made method of accounting for costs and calculating the cost of production is as follows. The accounting and costing object is a separate production order. An order is understood as a product, small series of identical products or repair, installation, experimental and other work. In the manufacture of large products with a long production process, orders are issued not for the product as a whole, but for its units, units, which are complete structures.
To account for the costs for each order, a separate analytical account is opened with an indication of the order code. The cost of an order is determined by the sum of all production costs from the day the order is opened until the day it is executed. Accounting for direct costs for individual orders is carried out on the basis of primary documents for accounting for production, material consumption, etc., in which the corresponding order code must be indicated. Indirect costs are allocated between individual orders in a conventionally accepted way in a given production or industry.
The custom-made method is used in individual and small-scale production (construction, turbine, blooming, aircraft, etc.). In addition, it is widely used in auxiliary industries, especially in repair work.
With the order-based method, all costs are considered work in progress until the end of the work on the order. The reporting cost estimate is drawn up only after the order has been completed; the time of drawing up it does not coincide with the time of drawing up the periodic reporting.
The alternate method of accounting for costs and calculating the cost of production is used in industries in which there are technological redistributions (metallurgy, textile production, etc.)
Redistribution is understood as a set of technological operations for the production of an intermediate product (semi-finished product) or finished product (at the last redistribution).
This method is used in industries with the complex use of raw materials, as well as in industries with mass and large-scale production, where the processed raw materials and materials pass through several stages of processing - redistribution.
With the integrated use of raw materials or semi-finished products, the manufactured products of various grades and brands are converted to a conventional grade using a system of coefficients. When several products are made from the same raw material, the main product is isolated. The rest are treated as incidental and priced at fixed prices. The value of the appraised by-product is deducted from the total cost of production, and the remaining costs are charged to the cost of the main product.
Distinguish between non-semi-finished and semi-finished versions of the transverse method of accounting for production costs and calculating the cost of production.
In the first option, as already noted, they are limited to taking into account the costs for each redistribution. In the accounting records, the movement of semi-finished products is not reflected. Their movement from one redistribution to another is monitored by the accounting department according to the data of the operational accounting of the movement of semi-finished products in kind, which is carried out in the shops. In accordance with this procedure for accounting for costs, the cost of semi-finished products after each redistribution is not determined, but only the cost of the finished product is calculated.
In the second option, the movement of semi-finished products from shop to shop is made out with accounting records and the cost of semi-finished products is calculated after each redistribution, which makes it possible to identify the cost of semi-finished products at various stages of their processing and thereby provide more effective control over the cost of production.
With the semi-finished accounting method, account 21 "Semi-finished products in production" is used.
The process-by-process (simple, one-stage) method of accounting for costs and calculating the cost of production is used in organizations with the following characteristics of the production process:
Mass production of one or more types of products;
Brief period of the technological process;
There is no work in progress or it is insignificant.
Such organizations should include the organizations of the extractive industries (coal mining, oil production, etc.), the construction materials industry, power and heating plants, etc. The process-by-process method is widely used in the energy facilities of auxiliary industries.
In the process-by-process method, costs are accounted for according to established costing items throughout the entire production process or, in addition, for individual stages of the production process. At the end of the reporting period, the total costs of the production process are divided by the number of units of output and the cost of one calculation unit is calculated.
The cost of production is the most important indicator of the economic activity of a commercial organization. To calculate the cost of production, you must select the method of accounting for production costs and calculating the cost of production.
Regardless of the purpose for which the cost should be calculated, it should be established:
The cost of which accounting object needs to be determined (manufactured products, technological process, separate order);
What costs will be included in the cost (calculation of total (absorption costing) or reduced cost (direct costing));
On the basis of what data the cost price will be determined (standard or actual costs);
How to distribute indirect costs and take them into account in the cost of finished goods.
In accounting, depending on the stage and completeness of formation, various indicators of the cost of production are distinguished: the cost of goods sold (full cost), production cost, truncated production cost, etc.
The cost of goods sold is the cost of producing and selling a product.
The production cost is the cost of manufacturing the manufactured product. At the same time, there are indicators of full and incomplete production costs.
The total production cost is calculated taking into account all costs incurred by the organization. When using the full cost allocation method, both variable and fixed costs are included in the unit cost. The use of this method is justified in cases where it is necessary to analyze the profitability of products, form an optimal product range or develop a pricing policy based on the cost plus principle. In other words, the price is defined as the total cost plus the required profitability.
Truncated cost assumes that only variable costs are included in unit cost. A fixed part of general production costs, as well as selling and general expenses, are deducted from revenue at the end of the reporting period without allocation to manufactured products.
Determination of the truncated cost is justified in those cases when it is necessary to make a decision on the release or termination of production of a particular product.
Some organizations do not allocate non-production overhead costs to products, believing that the distribution of such costs, apart from many uncontrolled distortions of data on profitability and costs, both at the planning stage and in accounting, does nothing.
An entity's financial results calculated using the trimmed cost may differ from those obtained using the full cost method.
The method of accounting for production costs and calculating the cost of production is understood as a set of developed methods for organizing documentation and accounting of costs, which ensure the determination of the actual cost of production and control over its formation.
The choice of a cost accounting and costing method depends on the industry characteristics of the organization, the type of production, the duration of the production cycle, the presence of work in progress, the range of products, as well as the needs of the organization's management in the information necessary for cost management.
Methods for accounting for production costs and calculating the cost of production are classified according to various criteria (Figure 12.1).
Rice. 12.1. Classification of cost accounting and costing methods
Depending on the cost accounting objects, a distinction is made between custom-made, per-process, alternating methods and the ABC costing method.
The custom-made method of calculating the cost of production has the following main characteristics:
1) measuring costs for each completed batch of products or for an order, and not over a period of time;
2) the order execution period does not coincide with the reporting period;
3) maintaining only one account "Main production" in the general ledger (individual orders are reflected in analytical accounting on order forms).
An order is understood as a product, small series of identical products or repair, installation and experimental work.
The main characteristics of the process-based method of calculating the cost of production:
1) grouping of production costs by separate divisions or production areas without regard to individual orders;
2) write-off of costs for a calendar period, and not for the time required to complete a separate order;
3) opening several analytical accounts to the "Main production" account for each division or production site (by types of manufactured products).
In the process-by-process method, costs are accounted for according to established costing items throughout the entire production process and, in addition, for individual stages of the production process. At the end of the reporting period, the total costs of the production process are divided by the number of units of output and the cost of one calculation unit is calculated.
The alternate method of accounting for costs and calculating the cost of production involves accounting for production costs not only by types of products and calculation items, but also by redistribution.
Redistribution is understood as a set of technological operations for the production of an intermediate product (semi-finished product) or finished product (at the last redistribution). So, in ferrous metallurgy, redistributions are pig iron smelting, steel smelting, rolling; in the textile industry - yarn production, fabric production and dyeing.
The transverse method is used in industries with the complex use of raw materials, as well as in industries with mass and large-scale production, where the processed raw materials and materials pass sequentially through several stages of processing - redistribution.
With the integrated use of raw materials or semi-finished products, the manufactured products of various grades and brands are converted to a conventional grade using a system of coefficients. When several products are made from the same raw material, the main product is isolated. The rest are considered as incidental and deducted from the total cost of production, and the remaining costs are attributed to the cost of the main product.
Distinguish between non-semi-finished and semi-finished versions of the transverse method of accounting for production costs and calculating the cost of production.
With non-semi-finished products, they are limited to taking into account the costs for each redistribution. In the accounting records, the movement of semi-finished products is not reflected. Their movement from one redistribution to another is monitored by the accounting department according to the data of the operational accounting of the movement of semi-finished products in kind, which is carried out in the shops. In accordance with this procedure for accounting for costs, it is not the cost of semi-finished products after each redistribution that is determined, but only the cost of the finished product.
In the case of a semi-finished product, the movement of semi-finished products from shop to shop is made out with accounting records and the cost of semi-finished products is calculated after each redistribution, which makes it possible to identify the cost of semi-finished products at various stages of their processing, providing more effective control over the cost of production.
In the last decades of the XX century. in the West, a new approach to management and accounting was actively developed, based on the management of operations - integral parts of the processes taking place at the enterprise. It includes ABC (Activity-Based Costing) - per-operational costing. The ABC method is used for reengineering business processes as an information basis for management in flexible organizational structures, as well as management decisions that require information on the most accurate production cost. The use of the ABC method allows you to more accurately determine the cost of a specific product, especially in a situation where indirect costs exceed direct ones.
AV costing, or per-operational calculation, is a new direction for both domestic and Western accounting. Although his ideas originated in the West in the first half of the 20th century, the domestic methods of distributing the costs of maintaining and operating equipment in proportion to the estimated rates are close to the described method of the accounting model. The name of the Activity-Based method is translated by Russian economists in different ways: calculating by operations, calculating by actions, calculating by function, functional cost accounting, etc. This method is used in multi-product industries with a high proportion of indirect overhead costs in enterprises with a flexible form of management organization. ...
The ABC method is based on the fact that costs are incurred as a result of performing certain operations. The process of calculating the cost of goods (works, services) using this method involves calculating costs in three stages:
Allocation of resource costs;
Transferring the cost of resources to operations;
Allocation of the cost of basic operations to cost objects.
In accordance with the sign of the completeness of the inclusion of costs in the cost price distinguish between the method of accounting and calculating the full cost (cost absorption method) and the method of accounting and calculating incomplete cost ("direct costing").
Calculation of the cost by the cost absorption method consists in the distribution of both direct and indirect production costs between types of products, that is, all production costs (both variable and fixed) are involved in the cost formation process. For domestic accounting practice, it is traditional to calculate the total cost of production, which includes all the costs of the enterprise (direct and indirect) associated with the production and sale of products.
The method of accounting for costs and calculating the reduced cost of production (direct-costing) was first applied in Germany (in the 30s of the XX century). In recent years, it has been widely used in most developed countries. Initially, using the direct costing method, the production cost of production was calculated only in terms of direct variable costs, but in the process of development of the method, it began to be calculated also in terms of indirect variable costs.
In domestic practice, the reduced or incomplete production cost of production is calculated only in terms of variable and conditionally variable costs. Direct variable costs are immediately taken into account in the accounts for accounting for production costs and the calculation of the cost of production (20 "Main production", 23 "Auxiliary production", 29 "Service production and facilities"). Conditional variable costs during the month are accounted for on accounts 25 "General production costs" and at the end of the month are debited to the accounts for accounting for direct variable costs (20, 23, 29). Fixed costs are accounted for during the month on account 26 "General expenses", from which at the end of the month they are debited to account 90 "Sales". This means that general operating costs are not included in the production cost of products.
When calculating the reduced cost of production, the indicator of marginal income is used. Marginal income is determined by subtracting the amount of variable costs from the proceeds from the sale of products or the cost of manufactured products.
According to the efficiency of accounting and control, costs can be taken into account by the method of calculating the actual cost price and the method of calculating the standard cost price.
To use the normative method of accounting for costs and calculating the cost of production, you must:
Draw up normative calculations for each type of product (work, service);
Keep track of changes in cost rates;
Reveal deviations of actual costs from the normative ones and determine the causes and culprits of these deviations;
Calculate the actual cost of certain types of products (work, services) by adding to the standard costs deviations of actual costs from the norms and changes made to the cost norms.
When using the normative accounting method, all costs of the organization are divided into standardized and non-standardized. Direct costs are usually standardized. The use of the "standard cost" method also assumes that rationing and subsequent accounting are carried out according to quantitative and cost criteria.
The regulatory method provides for the observance of the following principles:
1) preliminary compilation of the calculation of the standard cost for each product based on the current standards and estimates in force at the enterprise;
2) maintaining, within a month, accounting of changes in existing standards to adjust the standard cost, determine the impact of these changes on the cost of production and the effectiveness of measures that caused the change in standards;
3) accounting of actual costs during the month, dividing them into costs according to the norms and deviations from the norms;
4) the establishment and analysis of the causes, as well as the conditions for the occurrence of deviations from the norms in the places of their occurrence;
5) determination of the actual cost of manufactured products as the sum of the standard cost, deviations from the norms and changes in the norms.
Normative support is usually subdivided into four main groups: planning tasks, normative documents for technical preparation of production, norms of resource consumption and auxiliary normative materials.
Standard cost estimates are multipurpose. In planning, they are used to calculate the planned cost of production, cost estimates for production, determine sales prices for products, transfer prices, and cost estimates for responsibility centers. In accounting, normative calculations are necessary to assess work in progress and product rejects, control the cost of production, calculate the actual cost of individual types of products and all products in general.
The number and structure of standard estimates depend on the complexity of the technological process and the level of organization of production. In mass and large-scale production, normative calculations are drawn up for parts, assemblies, workshop machine sets, semi-finished products, assembly processes of assembly units, for products. In auxiliary industries, they are compiled according to orders for technological equipment, production of standard tools, for units of repair complexity, energy carriers, transport works, a group of spare parts, etc.
The standard-cost system is a direct cost management tool. Several variants of this system are used. In one option, costs are collected on the debit of the Production account and are valued at a standard cost, finished goods are debited from this account at a standard cost, and work in progress is valued at a standard cost. The essence of another option lies in the fact that the costs summarized on the debit of the "Production" account are assessed at their actual cost, and the finished product is debited from the credit of the account at the standard cost. Work in progress is assessed at standard cost, taking into account deviations from actual costs in one direction or another.
The "standard-cost" system has specific features. First, the basis for identifying deviations from standards in the process of spending funds is the accounting records in special accounts, and not their documentation. Managers are tasked with not documenting deviations, but not allowing them. Secondly, not all organizations reflect the identified deviations in accounting - only those of them that use the current standards do this. Thirdly, special synthetic accounts are allocated to account for deviations - by calculation items, by deviation factors.
The advantages of the "standard-cost" system include the provision of information about the expected costs of production and sale of products; setting a price based on a pre-calculated unit cost; drawing up a report on income and expenses, highlighting deviations from the standards and the reasons for their occurrence.
The following features are common to systems "standard-cost" and regulatory accounting:
The systems are based on standards (norms);
Both systems improve the quality of operational and tactical control by detecting deviations through the mechanism of signal documentation;
Both systems are used for budgeting;
Deviations are reflected in special accounts;
It is possible to classify deviations as costs for a period with a one-time write-off to the profit and loss account.
The following features are distinctive:
Detailing and method of setting standards (norms);
At the output of the systems, different costs are calculated:
With the standard method - the actual cost is equal to the cost of norms ± changes in norms ± deviations from norms;
With the "standard cost" method, the actual cost is equal to the standard cost;
Reflection on accounts of deviations for cost items by factors: under the standard method - only for finished products and materials; with the "standard cost" method, deviation accounts are opened for each cost item and in the context of items by factors, for example, deviation by materials - the factor of norms; material deviation
lam - price factor;
The assignment of deviations to periodic costs in regulatory accounting is officially allowed only for finished products (should be provided for by the accounting policy); with the "standard cost" method, any deviations can be attributed to recurring costs or proportionally distributed between work in progress, the cost of finished and sold products.
We bring to your attention the journals published by the "Academy of Natural Sciences"
The cost of production is one of the main indicators of the enterprise. The calculation of the cost of production is called costing. Distinguish between planned, estimated, standard and reporting (actual) cost estimates.
Standard cost estimates determine the average cost of production for the planning period. They are compiled based on the consumption rates of raw materials, materials, fuel, energy, labor costs, equipment use and cost rates for organizing production services. For the planning period, the cost rates are average.
Estimated costing is a type of planned cost estimate, which is made up for a one-time product or work to determine the price, settlements with customers, etc.
Standard cost estimates are compiled on the basis of the rates of consumption of raw materials, materials and other costs in force at the beginning of the month. These are called current cost rates. The current cost rates correspond to the production capabilities of the enterprise at this stage. At the beginning of the year, the current cost rates are usually higher than the average cost rates included in the planned cost estimate. At the end of the year, the current cost rates are lower. Naturally, the standard production cost at the beginning of the year will be higher than the planned one, at the end of the year - lower.
Reporting or actual cost estimates are based on accounting data on the actual costs of manufacturing products, they reflect the actual cost of production, (The actual cost of production also includes non-planned non-production costs.)
Calculate the cost of production by different methods. The costing method is understood as a system of techniques used to calculate the cost of a unit of production. The choice of the method is determined by the type of production, the presence of work in progress, the duration of the production cycle, the range of products manufactured, and the complexity of production.
In industry, they use standard, order-by-order, by-pass and process-by-process (simple) methods of accounting for costs and calculating the actual cost of production.
Normative method used, as a rule, in the manufacturing industries with mass and serial production of various, complex products. The essence of the method is as follows.
All types of production costs are taken into account at the current rates provided for by standard calculations; separately keep an operational record of deviations of actual costs from current norms, indicating the area of occurrence of deviations, causes and culprits of deviations; take into account the changes made to the current cost rates as a result of the implementation of organizational and technical measures, and determine the impact of these changes on the cost of production. The actual cost is determined by adding the sum of costs according to the current norms with the magnitude of deviations from the norms and the magnitude of changes in the norms:
Z f = 3 n + O + I,
where З ф - actual costs;
3 n - standard costs;
О - the amount of deviations from the norms;
And - the magnitude of changes in norms.
Deviations of actual costs are determined by the documenting method (inventory method). The current accounting of costs according to the norms and deviations is carried out according to direct costs (raw materials, materials, wages). Deviations for indirect costs are apportioned among the products after the expiration of the month. Analytical accounting of production costs is kept in cards or turnover sheets, which are made up for individual types or groups of products.
The normative method of accounting for costs and calculating the cost of production provides operational control over production costs according to current norms, as well as control of deviations from the norms and accurate calculation of production costs.
Custom method accounting for costs and calculating the cost of production is used for repair work and some others. In this case, the accounting and costing object is a separate production order. An order can be a product, repair, installation or experimental work. Orders may be issued not for the product as a whole, but for its units or assemblies, which represent complete structures.
To account for the costs for each order, a separate analytical account is opened with an indication of the order code. Accounting for direct costs is carried out on the basis of primary documents for accounting for production, material consumption, etc. Indirect costs are distributed between individual orders conditionally according to the methods adopted in this production.
With the order-by-order method of cost accounting, the accounting estimate is drawn up after the order has been completed.
Alternating method accounting of costs and calculating the cost of production is used in industries with the integrated use of raw materials and in industries with mass and large-scale production, where raw materials and materials go through several stages of processing (redistribution). Costs are taken into account not only by product type and costing items, but also by redistribution.
With the integrated use of raw materials or semi-finished products, products of various grades and brands are converted to a conventional grade using a system of coefficients, and when several products are made from the same type of raw material, the main product is isolated. The rest of the products are treated as by-products and are priced at fixed prices. The cost of by-products is deducted from the total cost of production, and the remaining costs are charged to the cost of the main product.
With the transverse method, the most important elements of the normative method are used - the systematic identification of deviations of actual costs from current norms (planned cost) and taking into account changes in these norms. In the primary documentation and operational reporting, the actual consumption of raw materials, materials, semi-finished products, energy and other types of costs is compared with the standard. The use of elements of the normative method allows you to control production costs, to reveal the reasons for deviations from the norms, to identify reserves for reducing the cost of production.
A step-by-step (simple) method accounting for costs and calculating the cost of production are used in industries with a narrow range of products and where there is no work in progress in whole or in part.
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Federal Agency for Education
Russian Federation
Belgorod State University
named after V.G. Shukhov
Department of Economics and Organization of Production
Course work
in the discipline "Enterprise Economics"
Theme: "Methods for accounting for production costs."
Belgorod 2006
Introduction.
1. Chapter # 1. Concept and classification of production costs ………………………………………………………… ... 3-6
2. Chapter No. 2. Methods of accounting for production costs
2.1. Traditional methods.
2.1.1. Normative method of accounting for production costs ………………… ... 7-8
2.1.2. Process method ………………………………………… ......... 8-10
2.1.3. Transitional method ……………………………………………… 10-12
2.1.4 Custom method ……………………………………………… ..... 12-13
2.2 Modern methods of accounting for production costs.
2.2.1. Standard-cost ………………………………………………… .......... 13-16
2.2.2. Direct costing …………………………………………………… ... 16-18
2.2.3. JIT ……………………………………………………………… ........ 18-22
2.2.4. FSA ………………………………………………………………… ..22-24
2.2.5. SCA ………………………………………………………………… ..24-27
2.2.6. ABC ………………………………………………………………… ..27-29
2.2.7.LCC ……………………………………………………………… ....... 29-31
Conclusion.
List of used literature.
Introduction
Each company, before starting production activities, decides what costs it will face. For the production of any type of product, three elements are required: means of labor, objects of labor and labor power.
The formation of the costs of production and circulation, their accounting are important for the entrepreneurial activity of organizations. This is important not only in relation to the current tax legislation, but also in accordance with the place of accounting in the organization's management system.
Production costs are one of the most important indicators characterizing the activities of an enterprise. Their value affects the final results of the enterprise and its financial condition. A certain level of costs in the enterprise is formed under the influence of the processes taking place in its production, economic and financial spheres. So, the more efficient the use of material, technical, labor and financial resources in production and the more rational the methods of management, the more opportunities appear for reducing the cost of production in the economic mechanism of the enterprise.
The main goal of any industrial commercial enterprise is to maximize profit, this is the difference between the funds received for the shipped products and the costs of their production and sale. Thus, the costs of the enterprise directly affect the formation of the amount of profit. The lower the cost of manufactured products, the more competitive the enterprise is, the more affordable the products are for the consumer and the more tangible the economic effect of selling them.
One of the main tasks of enterprises is to take up stable positions in the domestic and international markets. In order to withstand intense competition and win the trust of buyers, a company must stand out favorably against the background of companies of the same type. It is well known that the buyer is interested in the quality of the product and its price. The higher the quality and the lower the price, the better and more profitable for the buyer.
Nowadays, in commercial enterprises, special attention is paid to reducing and optimizing production and sales costs. This requires systematic control of production costs. To control costs, information is needed on costs by places of their use, by types of products, by the enterprise as a whole, and for this, cost accounting is used, which can be carried out in various methods, both traditional and modern. The choice of the method is made by the enterprise itself, depending on the characteristics of the production process, its complexity, the presence of work in progress, the duration of the production cycle, the range of products produced.
And in order to understand which method is the most rational, easy to use, you need to analyze all existing methods of cost accounting, identify their strengths and weaknesses, and adaptability to use in various industries.
This is the purpose of this course work, because in modern conditions the economic process of making managerial decisions of a tactical and strategic nature is based on information about the costs and financial results of the enterprise.
Chapter No. 1. Concept and classification of production costs.
Expenses- this is the value of the material, labor, financial and other resources used in the economic activity of the organization for the reporting period. Costs can be charged to either assets or expenses of the organization.
It is recommended to group costs in the following main areas:
types of production (main, auxiliary, non-industrial);
to the structural divisions of the enterprise (cost centers, responsibility centers);
Types, product groups (cost carriers);
Economic cost elements;
Estimated expense items.
For accounting and planning the costs of production and sales of products, two complementary classifications are used: item-by-item and calculation (by item of expenditure).
Costs are called economic elements if they are homogeneous in their economic content, regardless of the place of implementation and purpose.
The element-by-element classification of costs is necessary to determine the tasks for reducing the cost of production. By elements, costs are grouped that are homogeneous in economic content (material, labor, costs that have the nature of complex cash receipts).
In accordance with the Basic Provisions on the composition of costs included in the cost of products (works, services), the grouping of costs contains the following elements: material costs (minus the cost of returnable waste), labor costs, social contributions, depreciation of fixed assets and other costs ...
The element "Material costs" reflects the cost of raw materials, materials, components and semi-finished products, fuel and energy of all types, transport services of third-party organizations, works and services of a production nature, wear and tear of low-value and wearing out items.
The element "Costs of labor" includes the cost of labor of the main production personnel of the enterprise.
The element "Social deductions" reflects the obligatory deductions (according to statutory norms) to the social insurance bodies, the pension fund from all types of remuneration of workers employed in the production of products.
The element "Depreciation of fixed assets" contains all depreciation deductions for the full restoration of fixed assets based on their book value and established norms, including accelerated depreciation of their active part.
The element "Other costs" includes all other costs that are not included in the previously listed cost elements: taxes, fees, deductions to budget funds, attributed to the cost of production; payments for compulsory insurance of the company's property; interest payments for short-term bank loans within the legislatively established rates, as well as payment for communication services, training, advertising, fire fighting and other costs within the legislatively established norms.
The costing classification reflects the cost center and is used to record and calculate the costs of production and sale of all products (works, services). The grouping of costs by items is carried out depending on their functional role in the production process: the costs caused by the production consumption of resources, and the costs associated with the organization, maintenance, management and sales.
The basic provisions for planning, accounting and calculating the cost at industrial enterprises have established a typical grouping of costs according to the following main calculation items:
1) raw materials and supplies;
2) returnable waste (deducted);
3) purchased semi-finished products and services of a production nature of third-party enterprises and organizations;
4) fuel and energy for technological purposes;
5) wages of production workers (basic and additional);
6) deductions for social needs;
7) expenses for preparation and development of production;
8) general production costs;
9) general expenses;
10) losses from marriage;
11) other production costs;
12) business expenses.
The sum of the first eleven items forms the production cost of production, and the sum of the twelve items - the total cost of production.
Depending on the time of occurrence and attribution to the cost price, the costs are divided into expenses of the current period, expenses of future periods and future expenses.
Under expenses of the current period understand the costs associated with the production and sale of products in a given period. To expenses of future periods includes costs that have arisen in this period, but are subject to repayment in the following reporting periods (development of new enterprises, industries, etc.). TO upcoming expenses includes reserved expenses (vacation expenses, etc.).
According to the economic role in the production process, costs are divided into basic and overhead. Basic costs are directly related to the production process, and waybills- with the organization, management, technological preparation of production and its maintenance.
In terms of composition (homogeneity), costs are divided into single-element (simple) and complex (complex). Single-element (simple) costs are homogeneous in their economic content, complex (complex) consist of several economic elements.
According to the method of inclusion in the cost of production, costs are divided into direct and indirect. Direct costs are associated with the production of certain types of products and relate directly to these products on a direct basis. Indirect costs associated with the production of products of several types and distributed among them proportionally.
In relation to the volume of production, costs are divided into conditionally fixed and conditionally variable. Conditional fixed costs- these are costs, the absolute value of which with a change in the volume of production
changes insignificantly (general production, general and commercial expenses). Notional variable costs change in direct proportion to the growth in production.
According to the frequency of occurrence, costs are divided into current and non-recurring. Running costs- these are expenses that have a frequent frequency of occurrence (consumption of raw materials and materials, etc.). One-time costs - these are the costs of preparing and mastering the release of new types of products, launching a new production, etc.
In terms of efficiency or degree of expediency, costs are divided into productive and unproductive. Production costs - these are the costs of producing products of the established quality with rational technology and organization of production. Overhead costs are the result of shortcomings in technology and organization of production.
By participation in the production process, costs are divided into production and commercial.
From the point of view of an individual enterprise, costs are divided into individual and social. Individual costs represent the costs of a specific economic entity, public - the cost of producing a certain volume of some product from the point of view of the entire national economy.
Systematic determination and analysis of the structure of costs in the enterprise are very important, primarily for cost management in order to minimize them.
The cost structure allows us to draw a conclusion about what type of production the enterprise belongs to (material, energy, fuel, capital, labor-intensive, etc.), and also to determine the main directions of reducing production costs.
Under structure of production costs means the ratio of costs by elements or items or their share in the total cost. It is in motion, and it is influenced by many factors: the specifics of the enterprise, the acceleration of scientific and technological progress, the geographical location of the enterprise, inflation and changes in the interest rate of bank loans, etc.
The structure of costs allows you to identify the main reserves of reduction and develop specific measures for their implementation at the enterprise. The structure of costs as a whole for industry and its branches changes annually
Chapter 2. Methods of accounting for production costs.
2.1 Traditional methods.
2.1.1 Regulatory method of accounting for production costs.
The normative method of accounting for production costs and calculating the cost of production is used, as a rule, in manufacturing industries with mass and serial production of various and complex products.
Its essence is as follows: certain types of production costs are taken into account according to the current rates provided for by normative calculations; separately keep an operational record of deviations of actual costs from current norms, indicating the place of occurrence of deviations, the reasons and culprits of their formation; take into account the changes made to the current cost rates as a result of the implementation of organizational and technical measures, and determine the impact of these changes on the cost of production. The actual cost of production is determined by the algebraic addition of the sum of costs according to the current norms, the magnitude of deviations from the norms and the magnitude of the change in norms:
Z f = Z n + O + I,
З f - actual costs;
З n - standard costs;
O - the amount of deviation from the norms;
And - the magnitude of the change in norms.
In this case, the actual cost can be established in two ways: by direct and by direct calculation. If the object of accounting for production costs is certain types of products, then deviations from the norms, as well as their changes, can be directly attributed to these types of products. The actual cost of these types is determined by the method of direct calculation according to the above formula.
If the object of accounting for production costs is a group of homogeneous types of products, then the actual cost of each type of product is established by the distribution of deviations from the norms and changes in norms in proportion to the standard costs for the production of types of products.
The application of the normative method of accounting for production costs and calculating the cost of production requires the development of normative estimates based on the main costs in force at the beginning of the month, and quarterly estimates for the expenditure and maintenance of production and management. In organizations differing in the relative stability of technological processes, cost rates rarely change, so the planned cost differs little from the normative one. In these organizations, you can use planned cost estimates instead of standard cost estimates.
Deviations of actual costs from the established norms for individual costs are determined by the documenting method or the inventory method.
The current accounting of costs in accordance with the norms and deviations from them is, as a rule, only for direct costs (raw materials and materials, wages). Deviations in indirect costs are allocated between the types of products after the expiration of the month. Analytical accounting of production costs is carried out in cards or a special kind of turnover sheets, compiled for individual product groups.
The normative method of accounting for production costs and calculating the cost of production is designed to perform two functions: to provide operational control over production costs by accounting for costs according to current standards and separately - deviations from the norms and their changes.
However, some organizations and industries restrict the use of this method to using it only as a technique for calculating the cost of production. In this case, this method does not fulfill its main function - operational control over production costs.
2.1.2. Process method.
The process-by-process method of calculating the cost of production is usually used in enterprises that are characterized by a mass production, one or more types of products, a short period of the technological process and in most cases the absence of work in progress. An example is the enterprises of the extractive industries, power and heating plants, some enterprises of the chemical industry, the building materials industry, etc.
The essence of the process-by-process method lies in the fact that direct and indirect production costs are accounted for according to items of calculation for the entire output. In this regard, the average cost per unit of production (work, service) is determined by dividing the sum of all production costs for the month (as a whole for the total and for each item) by the amount of finished products for the same period. Cost accounting objects are often the same as costing objects. To strengthen control over production costs and places of their occurrence in many enterprises, the production process is subdivided into stages. In this regard, changes are being made to the nomenclature of items, according to which production costs are taken into account. At the same time, the latter become, as a rule, direct and it becomes possible to reflect them in terms of economic elements.
The listed characteristics of production determine the essence of the process-by-process method. Therefore, in the accounting literature, this method is often referred to by different names: simple, one-step, step-by-step, etc.
Complex items of expenditure are formed in connection with the need for accounting
and control of the costs of ancillary production (repair and preparatory work) and management costs. Production costs are distributed by stages in the case when accounting is organized not for production as a whole, but for individual processes, for example, harvesting of logs, skidding of timber, cutting of timber at final warehouses is allocated for logging.
If products of the same type are mined or produced and there is no work in progress, the total amount of production costs for the month is determined and represents the cost of the monthly production. In most cases, however, it becomes necessary to distribute production costs.
Scope of application.
Depending on the production conditions, one of three options for the distribution of production costs is applied
First option(distribution of production costs between output and work in progress)
It is used in industries with a long production cycle, where work in progress is formed by the end of each period. The most characteristic representatives of these industries are enterprises of the peat and logging industries. Accounting for production costs at these enterprises is carried out by processes, but without calculating the cost of production of each process. When carrying out an inventory of work in progress at each process, its residues are estimated at the standard (estimated) cost, depending on the process. Then the actual cost of production is calculated: the actual costs of production for the month are added to the costs in work in progress at the end of the month. The actual unit cost is determined by direct calculation.
Second option(distribution of production costs between several types of products) is used at enterprises of industries in which work in progress is absent or is not taken into account due to insignificance, but several types of products are produced simultaneously, for example, at power plants (simultaneous generation of electricity and heat), oil industry enterprises (oil and gas production) and building materials industry (simultaneous extraction of sand and gravel). At enterprises of this type, production costs are accounted for by processes (stages). In this case, the production costs related to a certain type of product are taken into account separately, while the total costs are distributed between individual types of products using one of the calculation methods listed above. Thus, in the production of oil and gas, oil includes costs for electricity, well depreciation, costs for routine repairs of underground equipment of wells, costs for increasing reservoir recovery, demulsion, pumping and storage of oil; for natural gas - the cost of collecting and transporting it. The remaining general expenses are allocated in proportion to the mass of gross oil and gas production.
The third option(summation of production costs by processes) is used in the coal and mining industries, coal preparation, a number of industries in the building materials industry (brick and slate). Here is the summation of production costs by processes and their distribution to the volume of output.
When using the process-by-process method to control the cost of production, the indispensable conditions should be: availability of rates of consumption of material, labor and financial resources, standards for the use of means of production, estimates of production costs; organization of accounting for deviations of actual costs from norms and standards. This is facilitated by the fact that enterprises using the process-by-process method extract (produce) for a long period of time simple homogeneous products, have an established regulatory economy, that is, they have reasonable current standards. Due to this, as well as stable technology and a clear organization of production and labor, the current norms and standards change during the year relatively rarely, and if they do change, then only slightly.
2.1.3 The alternating method.
Many industries are characterized by the consistent processing of industrial and agricultural raw materials to obtain a finished finished product based on chemical-physical, biological and thermal processes. A feature of such industries is the presence of sequential technological stages, which are called redistribution.
Redistribution- This is a set of technological operations, which ends with the production of an intermediate product (semi-finished product) or the receipt of a finished finished product.
The object of accounting for production costs in such industries is each independent redistribution. The list of redistributions is determined on the basis of the technological process, depending on which the system for the formation and accounting of production costs, the assessment of work in progress and the calculation of the cost of production are built.
All of these features predetermine the essence of the transverse method, which is as follows. Direct costs are reflected in the current accounting not by types of products, but by redistributions or stages of the production process, even if in one redistribution it is possible to obtain products of different types. Consequently, the object of accounting for production costs is usually redistribution.
Since in such industries the process of producing finished products consists mainly of several sequential technologically completed redistributions, then, as a rule, the cost of production of each redistribution is calculated, that is, not only the finished product, but also semi-finished products, since they can be partially (sometimes in significant amounts) to be sold as a commercial product. In addition, in many cases it is necessary to draw up cost estimates for individual types or groups of products, especially if they are made from the same or homogeneous feedstock. This means that the object of the calculation is the type or group of products of each redistribution.
Accounting for production costs by the transfer method is carried out for each separate transfer. The organization of accounting for production costs using this method is similar to the process-by-process method. It should be borne in mind the following: the more redistributions, the more difficult it is to organize the accounting of production costs by the transfer method.
The alternating method is mainly used in enterprises and industries with repetitive, homogeneous in terms of raw materials, materials and the nature of the release of mass products. At the same time, products are manufactured under conditions of a uniform, continuous and, as a rule, short technological process or a number of sequential processes, each of which or a group of them constitutes an independent redistribution. From this it follows that this method is used at enterprises of such industries as oil refining, metallurgical, chemical, pulp and paper, cotton, textile, etc.
With certain sectoral differences in the application of the transverse method, there are a number of common features: the production in which it is applied, as a rule, is very material-intensive. Therefore, accounting for material costs of production is organized in such a way as to ensure effective control over the use of materials in production. For this, balances of raw materials are most often used, calculations of the output from each redistribution of a product or semi-finished products, scrap and waste;
semi-finished products obtained in one redistribution serve as the starting material in the next redistribution. In this regard, there is a need for their cost estimate for transfer to subsequent redistribution, that is, in the use of a semi-finished version of the consolidated accounting production costs. As noted earlier, the valuation of self-produced semi-finished products is also necessary because they can be sold as marketable products to other enterprises (for example, in ferrous metallurgy - iron and steel, in the textile industry - yarn). Semi-finished products of our own production are transferred from processing to processing at their actual cost. In many industries, an estimate is adopted at the selling prices of an enterprise;
accounting of production costs is organized by technological redistribution, which allows you to determine the cost of semi-finished products and organize accounting by places of origin of production costs and centers of costs and responsibility;
production costs are grouped and accounted for by aggregates if several aggregates operating in parallel are used in the redistribution. The accounting procedure for aggregates is determined by sectoral instructions, where it is envisaged in a number of industries to take into account expenses in the context of aggregates by types or groups of homogeneous products;
balances of work in progress at the end of the month are identified on the basis of an inventory of the corresponding redistribution;
the unit cost of each type of finished product is calculated, as a rule, in a combined or one of proportional ways.
At enterprises using the alternate accounting method, the most important elements of the regulatory method are spreading, primarily the accounting of production costs according to the norms and deviations from the current norms and standards.
2.1.4 Custom method.
The essence of the custom-made method is as follows. All direct basic production costs are taken into account in the context of the established items of the calculation sheet for individual production orders issued for a predetermined number of products (products) of this type. The rest of the production costs are accounted for by places of origin, by purpose, by items and are included in the cost of individual orders in accordance with the established distribution base. Therefore, the costing object in this method is a separate production order, the actual cost of which is determined after it has been executed. Until the order is fulfilled, all related production costs are considered work in progress.
Thus, an indispensable condition for the application of the order-by-order method is the system of production orders, which are opened by the relevant departments of the enterprise. They fill in the order form ("order is opened") - in essence, an order for the execution of a production order.
Orders accepted for execution are registered, and they are assigned regular numbers from the beginning of the year, which become their codes until the end of execution. After opening an order for a product or work, all primary technological and accounting documentation must be drawn up with the obligatory indication of the code (code) of the order. A copy of the notice of the opening of the order is sent to the accounting department. On its basis, a map for analytical accounting of production costs is started (corresponding statements are drawn up) for this order.
At the end of the manufacture of the product or the completion of the work, the order is closed. After the message about the closure of the order, there should be no release of materials and payroll on it. In these cases, not the average, but the individual cost of a unit of production (order or work) is determined. In small-scale production, after the order is closed, the actual unit cost is calculated by dividing the sum of production costs by the quantity of products manufactured for that order.
The enterprises should organize proper control over production costs and the compilation of primary documents in accordance with the detailed and operational norms for the consumption of materials and money for wages. This control is intended to prevent the execution of work not provided for by the technological process, as well as to ensure the correct assignment of production costs to the corresponding orders.
Scope of application custom method .
The custom-made method is mainly used in individual production
with mechanical processes for processing materials, in the manufacture of non-repeating or rarely repeated copies of complex types of products (turbines, blooming mills, ships, etc.), in industries in which prototypes of products are produced, as well as in auxiliary industries (production of special tools, production repair work). It is used in enterprises with physicochemical processes in the production of certain types of products of a limited amount (for example, in the chemical industry in the manufacture of individual orders for chemical reagents, in precast concrete enterprises when fulfilling individual orders for original reinforced concrete products, etc.). The scope of the custom-made method is also small-scale production with the release of a predetermined number of products.
Its scope should be mainly limited to individual production. However, the relative simplicity of calculating the cost of production with this method contributed to its spread in small-scale, serial and even large-scale production. This is reflected in the fact that even in the manufacture of products in large batches, the calculation of the cost of production is based on the use of constant, most often annual orders. The costs of manufacturing certain types of products throughout the year are collected on separate orders, and the cost of products released per month is determined by dividing the sum of production costs minus the cost of work-in-progress balances by the number of units produced.
2.2 Modern methods of accounting for production costs.
2.2.1.Standard-cost.
In modern economic conditions, the process of making managerial decisions of a tactical and strategic nature is based on information about the costs and financial results of the enterprise. One of the effective tools in cost management of an enterprise is the standard-cost accounting system, which is based on the principle of accounting and control of costs within the established norms and standards and but deviations from them.
The first mentions of the "Standard-Cost" system are found in the book by G. Emerson "Labor productivity as the basis of operational work and wages". At that time, the supporters of traditional accounting reduced the entire calculation procedure to the search for "historical", i.e. actual cost. G. Emerson suggested replacing the actual cost with a reasonable one. He believed that traditional accounting has the disadvantage that it does not establish any relationship between what is and what should have been. In his opinion, the real purpose of accounting is to increase the number and intensity of warnings. He emphasized that "warnings" are needed to find the correct course for the economic activity of the enterprise. Their essence is in fixing all deviations from the norm. Accounting should be directed towards the future, for to foresee is to warn.
Since its inception, the Standard-cost accounting system has successfully developed and is now widely used by many leading firms in countries with developed market economies.
The term standard-cost consists of two words: "standard", which means the amount of necessary production costs (material and labor) for the release of a unit of production or the pre-calculated costs of producing a unit of product or rendering of services, and the word "cost" is the costs incurred per unit of production. Thus, standard cost in the full sense of the word means standard costs. This system is primarily aimed at controlling the use of direct production costs, and related cost estimates - to control overhead costs.
The Standard-cost system satisfies the needs of the entrepreneur and serves as a powerful tool for controlling production costs. Based on the established standards, the amount of expected costs can be determined in advance.
rat pa arbitrariness ™ "and the sale of products, calculate the unit cost of the product to determine prices, as well as draw up a report on the expected income of the next year. With this system, information about the existing deviations is used by the management to make operational management decisions.
The standard-cost system is based on the preliminary (before the start of the production process) rationing of costs by cost item:
♦ basic materials;
♦ remuneration for the main production workers;
♦ production overhead costs (wages of auxiliary workers, auxiliary materials, rent, depreciation of equipment, etc.);
♦ commercial expenses (sales expenses, product sales).
Pre-calculated rates are viewed as fixed rates in order to bring actual costs in line with standards through skillful enterprise management. When deviations occur, the standard rates do not change, they remain relatively constant for the entire specified period, with the exception of serious changes caused by new economic conditions, significant increases or decreases in the cost of materials, labor, or changes in conditions and production methods. Deviations between actual and estimated costs arising in each reporting period are accumulated throughout the year on separate variance accounts and are completely written off not to production costs, but directly to the financial results of the enterprise.
When setting standards, physical (quantitative) standards are widely used to measure in kind the consumption of material, the amount of labor and the amount of services required to manufacture a given product. These physical standards are then multiplied by monetary factors to give the standard cost rates.
The rates of consumption of materials and production wages are usually set per one product. To control overhead costs, estimated rates are developed for a certain period, the outcome ;: from the planned volume of production. Overhead estimates are ongoing. However, when production fluctuates, variable standards and rolling estimates are created to control overhead costs.
The establishment of rolling estimates of overhead costs is based on the classification of costs depending on the amount of output into fixed, variable and semi-variable. Explore, in turn, broken down into their constant and variable building blocks. As a result, the estimated rate (rate) of overhead costs is determined as the sum of their variable part at predetermined rates per unit of output and fixed costs.
The standard costs of materials, labor, and overheads are added together to calculate the standard cost of production.
The main thing in the standard cost is control over the most accurate identification of deviations from the established cost standards, which contributes to the improvement of the cost standards themselves. In the absence of such control, the use of standard cost will be conditional and will not give the desired effect.
The principles of this system are universal, therefore their application is advisable for any method of cost accounting and method of calculating the cost of production.
However, this system has its own drawbacks. In practice, it is very difficult to draw up standards according to the production flow chart. Changes in prices caused by the competition for the markets for goods, as well as inflation, complicates the calculation of the value of the balance of finished goods in the warehouse and work in progress. Not all production costs can be set and hence local control is always weakened. Moreover, when a manufacturing company fulfills a large number of orders of different nature and type, it is practically impossible to calculate the standard for each order in a relatively short time. In such cases, instead of scientifically based standards for each product, an average cost is set, which is the basis for determining the price of the product.
Despite these shortcomings, managers of firms and companies use the standard-cost accounting system as a powerful tool for controlling production costs and calculating production costs, as well as for managing, planning and making the necessary decisions.
2.2.2. Direct costing
In the conditions of developing market relations, the effective management of the organization's commercial activities increasingly depends on the level of its information support. The current domestic accounting system in many respects is still taking into account the directive economy and performs the functions of a risk-even of the taxable base. Until now, our enterprises use the cost-based accounting method, which provides for the accounting and calculation of the full actual cost of a unit of production (work, services). However, the entire world experience testifies to the effectiveness of using the marginal accounting method - the Direct Costing accounting system, which is based on the calculation of reduced production costs and the determination of marginal income.
At the first stages of the practical application of the direct costing system, the prime cost included only direct costs, and all types of indirect costs were written off directly to financial results. Hence the name of the system - Direct Costing System (direct cost accounting system). Later, direct costing was transformed into such an accounting system, when the cost is calculated not only in terms of direct variable costs, but also in terms of variable indirect costs. Hence follows some convention and name.
Modern direct costing has two options:
1) simple direct costing based on the use of data only on variable (operational) costs in accounting;
2) developed direct costing (verible costing), in which, along with variable costs, direct fixed costs for the production and sale of products are included in the prime cost.
Generally, the essence of the direct costing system is to subdivide costs into their fixed and variable components, depending on the change in the volume of production. In these conditions, the cost of production is planned and taken into account only in terms of variable costs. The difference between the proceeds from the sale of products and the variable costs is the margin income. With this system, fixed costs are not included in the calculation of the cost of production and are written off directly to a decrease in the profit of the enterprise.
The following features are characteristic of the direct-cost accounting system and the generalized form:
♦ constant focus of accounting primarily on determining the intermediate result of marginal income;
♦ accounting of products only in the context of variable costs and determination of its production cost;
♦ determination of marginal income as the basis for the operational management of prices and pricing;
♦ determination of the relationship and interdependence between the volume of sales, cost and profit;
♦ establishing a break-even point at which the amount of proceeds from the sale of products is equal to its full cost.
The main advantages of the direct costing accounting system can be summarized as follows:
1) simplification and accuracy of calculating the cost of production, since the cost is planned and taken into account only in terms of production costs;
2) the absence of procedures for drawing up complex calculations for the conditional distribution of fixed costs between types of products. They are not included in the cost of production and are written off directly to reduce the financial result;
3) the ability to determine the threshold of profitability (break-even point, threshold sales volume), the safety margin of the enterprise and the lower limit of the price of a product or order;
4) the ability to conduct a comparative analysis of the profitability of various types of products;
5) the ability to determine the optimal program for the release and sale of products;
6) the ability to choose between own production of products or services and their purchase from outside.
Direct costing allows the management to focus on the change in marginal income both for the enterprise as a whole and for various products: to identify products with high profitability in order to switch, mainly to their release, since the difference between the selling price and the sum of variable costs is not hidden as a result of writing off fixed costs to the cost of individual products. The system enables production to respond quickly to changing market conditions. In these conditions, it also becomes an integral part of marketing - an enterprise management system in a market and free competition.
Another important advantage of the direct costing system is that limiting the cost to only variable costs makes it possible to simplify the processes of rationing, planning, accounting and control of costs, since the cost becomes more transparent, and individual costs are better controlled.
In addition, the direct costing accounting system contributes to the implementation of operational control over constant costs, since in the process of cost control, standard (normative) costs are used (i.e., direct costing is organized in combination with standard cost). or flexible estimates. By applying standards in the direct costing system, they establish norms for both variable and fixed costs. When exercising control on the basis of flexible estimates, they are guided primarily by the division of costs into fixed and variable. Along with this, it must be borne in mind that with a full cost accounting system, a part of the unallocated amount of overhead costs moves from one period to another, so control over them weakens. In these circumstances, direct costing helps to reduce the labor intensity of allocating overhead costs.
At the same time, theoretical and practical studies of the direct costing system allow us to highlight the following disadvantages inherent in it.
1. In the case of using dumping in the competitive struggle - selling goods at deliberately low prices in order to achieve a privileged position on the market for individual products, there is a danger that the mass of indivisible fixed costs cannot be covered by marginal income, i.e. the enterprise falls into a loss zone.
2. Opponents of the direct costing system argue that in practice there are difficulties in dividing costs into fixed and variable costs. It largely depends on the duration of the considered period of time and on the analyzed range of output volumes. In addition, it is argued that fixed costs are also involved in the production of products and, therefore, should be included in its cost. In their opinion, direct costing does not answer the question of how much the manufactured product costs and what its total cost price is. Therefore, an additional distribution of conditionally fixed costs is required when it is necessary to know the full cost of finished goods or work in progress. Otherwise, their cost is underestimated.
3. Keeping records in the context of only production costs, that is, according to a reduced nomenclature of items, does not meet the requirements of the domestic accounting system, since there is no calculation of the total cost of production required by law.
Organization of accounting practice of domestic enterprises according to the direct costing system is not a tribute to fashion, but a requirement of today. Its application would help to increase the efficiency of production and commercial activities of enterprises, to strengthen control, analyticity and reliability of calculated indicators and to more fully identify and use reserves for reducing the cost of production.
2.2.3. JIT
In modern conditions, the activities of domestic manufacturers should be focused on the production of high-quality and competitive products with the maximum reduction in production costs. Therefore, the use of advanced forms and methods of labor organization and production management, used in economically developed countries, is of particular importance. In this regard, the method of production management according to the JIT system ("just-in-time", ie "just in time") is of particular interest to us.
The JIT system originated in Japan in the mid 70s of the XX century. in Toyota and is currently used with great success in many industrialized countries. This system is referred to in Japan as "kanban" meaning "card" or "visual recording system". The term "JIT" is simply an English expression adopted in Japanese business circles and may not have a Japanese equivalent.
The essence of the JIT system is reduced to the refusal to manufacture products in large batches. Instead of this, a continuous-flow object production is created. At the same time, the supply of production workshops and sections is carried out in such small batches that in essence it turns into piece-by-piece. This system considers the presence of inventories as an evil, the existence of which makes it difficult to solve many problems. Requiring significant maintenance costs, large inventories negatively affect the lack of financial resources, agility and competitiveness of the enterprise. From a practical point of view, the main goal of the JIT system is to eliminate any unnecessary costs and efficiently use the production potential of the enterprise.
The JIT system is more demand-driven than the traditional "throw-in-the-market" method. Under this system, the principle applies: to produce products only when they need them, and only in such quantities as the customers require. Demand accompanies products through the entire production process. With each operation, only what is required for the next operation is performed. The production process does not start until a signal is received from the place of the subsequent operation to start production. Parts, assemblies and materials are delivered only at the time of their use in the production process.
The JIT system provides for the reduction of the size of the processed lots, the practical elimination of work in progress, the minimization of the volume of inventories and the fulfillment of production orders not by months and weeks, but by days and even hours. In these conditions, the production accounting system is also simplified, since it becomes possible to carry out accounting of materials and production costs on one joint account. In addition, when using this system, part of the enterprise's costs from the category of indirect ones goes into the category of direct ones. For example, in the context of the organization of production according to the JIT system, workers on production lines engaged in the release of products are also required to perform maintenance, repair and adjustment work, which under traditional conditions are carried out by other workers and are classified as indirect costs. This, in turn, increases the accuracy of the unit cost calculation.
Value management differs from production accounting in that it here refers to the regulation of the level of costs, regardless of whether they have a direct impact on inventories or financial statements or not. Applying JIT principles simplifies the process of accounting for production costs and helps managers regulate and control costs. This simplification results in better production quality, better service and better cost estimates.
In the context of the JIT accounting system, direct labor costs and factory overheads are not written off to production accounts. Direct labor is seen as an additional part of the plant-wide overhead. Moreover, the factory overheads themselves, together with direct labor costs, are written off directly to the cost of goods sold. Writing them off to the production cost of products, that is, their reflection through the account "Resources in work in progress", in these conditions does not make any sense.
Most of the costs related to the category of indirect, under the JIT accounting system are transferred to the category of direct costs (table)
Classification of costs for direct and indirect
| Cost types |
||
| With traditional |
under the system |
|
| Direct labor costs Direct material costs Material handling Repair and maintenance Power supply Current deliveries Quality control Depreciation of buildings and structures Insurance payments, taxes and fees Rent of premises Depreciation of technological equipment Production maintenance and management |
Direct Indirect Indirect Indirect Indirect Indirect Indirect Indirect Indirect |
Direct Indirect Indirect Indirect Indirect |
In traditional bookkeeping, when organizing purchases, many firms focus on accounting for deviations from the purchase price of materials. Acceptable deviations from the estimated price are usually achieved through the purchase of large quantities of materials with corresponding discounts or through low quality purchases. In the context of JIT, the emphasis is on quality, availability and total cost of operations, not just the level of purchase prices.
The potential benefits of a JIT system are numerous. First, its application leads to a decrease in inventory levels, which means less capital investment in inventories. Since the system requires a minimum quantity of materials on hand for immediate use, the overall inventory level is significantly reduced.
Secondly, in the conditions of using the JIT system, the reliability of order fulfillment increases significantly, since much less time is allotted for the purchase and storage of materials. Shorter lead times and higher lead times also help to significantly reduce the need for safety stock, which is additional inventory holdings held to guard against possible shortages. In these conditions, the production schedule within the planned production perspective is also reduced. This allows you to gain the time required to react to changes in market conditions. Manufacturing products in small batches also contributes to greater flexibility through faster transition to normal operating conditions.
Thirdly, with the application of this system, an improvement in the quality of production is noted. When the quantity ordered is small, the source of quality problems
easily identified and corrected immediately. Under these conditions, workers in many firms have a greater understanding of the importance of quality, which, in turn, leads to an improvement in the quality of production in the workplace.
Other advantages of the JIT system include:
♦ reduction of capital costs for the maintenance of storage facilities for stocks of materials and finished products;
♦ reducing the risk of obsolescence of stocks;
♦ reduction of losses from rejects and reduction of rework costs;
♦ reduction in the volume of documentation;
♦ reducing the cost of basic production materials by improving their quality.
In addition, the JIT system affects the nature of production accounting. In the conditions of its application, part of the indirect costs becomes direct. This transformation reduces the frequency of using dissimilar cost objects to allocate costs between products, thereby increasing the accuracy of costing. In this system, production accounting is being transformed into a value management system, which is used to meet the needs of managers in making effective management decisions about the type, price, cost, composition and distribution of products, contributing to the further improvement of production and commercial activities.
2.2.4 FSA
In a market economy, improving the quality and increasing the competitiveness of products while reducing the cost of manufacturing them is one of the urgent tasks of economic development. In solving this problem, an important role is assigned to the functional cost analysis (FSA),
allowing to cover all factors of the movement of products from the moment of its inception to the moment of consumption and disposal.
Functional cost analysis is a method of systematic study of the functions of an object (product, process, structure), aimed at minimizing costs in the areas of design, production and operation of an object while maintaining (increasing) its quality and utility.
FSA refers to the promising methods of economic analysis. It successfully uses advanced techniques and elements of engineering, logical and economic analysis. A distinctive feature of this method is its high efficiency. As practice shows, with the correct application of FSA, production costs are reduced by an average of 20-25%.
The FSA method was developed in the USA in 1947 at the General Electric Company by a group of engineers led by L. Mais and is currently used in many industrialized countries.
In foreign practice, FSA is used under the name "cost analysis" and "engineering cost analysis". The first term is used when it comes to the analysis of existing products, the second when designing new ones. However, the targeting of both analyzes is the same: both are designed to provide equivalent product performance at a lower cost. Increasingly, the term "value management" or "value management" is used to denote this method in foreign literature.
Our country has also accumulated vast experience in using the VAS method. There are theoretical developments and methodological materials on its application in mechanical engineering, electronic, electrical, coal industry and other sectors of the national economy. A significant contribution to the theoretical substantiation and practical application of the FSA method in our country was made by domestic scientists-economists: M.G. Karpunin, B.I. Maidanchik, N.K. Moiseeva, A.D. Sheremet and others.
At the time of its inception, the FSA method was considered only as a tool for finding unnecessary costs in existing products. But as it was mastered and spread, it began to be used as a means of preventing the emergence of ineffective solutions already at the stage of design and production of products, in the field of organizing and managing various works.
FSA has a fundamental difference from conventional methods of reducing production and operating costs, as it provides for a functional approach. The essence of this approach is to consider an object not in its specific form, but as a set of functions that it must perform. Each of them is analyzed from the standpoint of possible principles and methods of execution using a set of special techniques. Evaluation of options for constructing an object is made according to a criterion that takes into account the degree of performance and significance of functions, as well as the amount of costs associated with their implementation at all stages of the life cycle.
The functional approach forces us to study not only the specific needs of customers, but also to analyze more deeply the quantitative and qualitative aspects of these needs, to rebuild production for them.
A function in the broadest sense is an activity, a duty, a job, an assignment, a role. In FSA, a function is understood as an external manifestation of the properties of an object in a given system of relations.
Functions performed by an object can be subdivided into basic, auxiliary, and unnecessary. The main functions determine the purpose of the product. Ancillary functions are functions that facilitate the performance of basic functions or supplement them. Unnecessary functions do not contribute to the fulfillment of the main purpose of the structure, but on the contrary, they worsen the technical parameters or economic indicators of the object.
The purpose of the FSA is to develop useful functions of the object with an optimal balance between their significance for the consumer and the costs of their implementation.
FSA must be carried out in several stages. At the first, preparatory stage, it is necessary to clarify the object of analysis - the cost carrier. This is especially important when the manufacturer's resources are limited. For example, choosing and developing or improving a mass-produced product can bring far more benefits to an enterprise than a more expensive, small-batch product. This stage ends if an option is found with a low cost price and high quality compared to others.
At the second, informational stage, it is necessary to collect data about the object under study (purpose, technical and economic characteristics) and its constituent components, details (functions, materials, cost). They come in several streams on the principle of an open information network from the design, economic departments of the enterprise and from consumers to the heads of the relevant services. Consumer assessments and wishes should be accumulated in the marketing department. In the course of work, the initial data should be processed, converted into the corresponding indicators of quality and costs, passing through all interested departments, and go to the project manager.
At the third, analytical stage, it is necessary to study in detail the functions of the product (their composition, degree of utility), its cost and the possibility of reducing it by cutting off secondary and useless functions. It can be not only technical, but also aesthetic and other functions of the product or its parts, assemblies. For this, it is advisable to use the Eisenhower principle - the ABC principle, according to which functions are divided into: main, basic and useful (A); secondary, auxiliary and useful (B); secondary, auxiliary and useless (C). In this case, you can use the tabular form of the distribution of functions, on the basis of which secondary and useless functions and costs are cut off.
The summary columns contain data on the number of secondary, auxiliary, useless functions by constituent components (parts), which allows us to make a preliminary conclusion about their need.
On the fourth, research, ethan, the proposed options for the developed product are evaluated.
Taking into account the importance of the functions of the product, its constituent components, and the level of costs through pricing based on knowledge of the demand for the product, the level of its profitability is determined. All this serves the purpose of making a decision on the choice of a specific product or directions for production and the scale of its improvement. As can be seen from the data given in table. 2.6, when choosing production options, preference should be given to products A, B, C and D. In them, the indicators of the significance of functions and the profitability of production meet the requirements to the greatest extent.
The result of the VAS, as an important tool for product quality management, should be a reduction in costs per unit of beneficial effect, which is achieved by: reducing costs while increasing the consumer properties of products; improving product quality while maintaining the level of costs; reducing costs while maintaining the level of quality; reducing costs with a reasonable decrease in technical parameters to their functionally required level.
2.2.5. SCA
Survival and effective operation of an enterprise in a market economy is largely determined by
the degree of development of management accounting. And if financial accounting is aimed at the compliance of the company's reporting with external requirements in relation to the company and its forms are regulated by the state, then management accounting is aimed at improving business management and methods of its implementation - the subject of choice for top managers of the company.
The simplest approach to the analysis of the activities of the enterprise is the financial and production cost calculation. According to this scheme, on debit? the "Production" account takes into account all production costs that are debited from the credit of resource accounts: "Materials", "Salary", etc. As soon as they are ready, products are debited from the credit of the "Production" account and the debit of the "Finished goods" account at cost. on the "Sales" account, the credit of which includes the cost of the sold products, and in the debit - its cost in correspondence with the "Finished goods" account. The resulting difference is debited to the "Profit and Loss" account. administrative costs (indirect costs).
However, experience shows that this model does not meet the needs of a modern leader in analytical information. To ensure effective enterprise management, an integrated method of analyzing and optimizing costs for all items of its activities is required. This method of management accounting was called Cost Management (CM) in the economic literature, in which the emphasis was shifted from calculating costs to planning and using their accounting systems. The change in views on accounting in management was a completely natural reaction to global changes in the economic system, such as the rapid development of information technologies, changes in the nature of production, and transnational competition.
In the 90s of the XX century, on the basis of the general theory of CM, a new method of management accounting was developed - Strategic Cost Analysis (SCA - strategic cost analysis).
Strategic cost analysis is an essential part of CM, based on the value chain term, which has become the central focus of strategic cost management.
According to the SCA method, the activity of a company is interpreted as a use value chain (a sequence of operations to create the value of a product). Each link in the chain is considered both from the point of view of its necessity in the production process, and from the point of view of the resources it consumes. Then the cost driver is determined - the driving factor, i.e. a parameter that characterizes the cost of performing a specific operation. By controlling cost drivers and restructuring the value chain, it is expected to achieve a sustainable advantage over competitors.
Such attention of specialists in the field of SCA to the work of the enterprise in the conditions of intense competition explains the fact that management accounting within the framework of this theory is actually subordinated to the goals of marketing. If, with traditional pricing, the cost of production is taken as a basis and it is perceived as a given, then the practice of target cost is based on marketing estimates of market capacity and competitive prices. Based on the volume of production and the retail price, the target cost is determined. The task of strategic cost analysis is to design such a value chain so that the real cost does not exceed the target.
price leadership strategy involves maintaining the same quality of products (services) as competitors, but at lower costs and, therefore, prices. Price leadership is achieved through savings in production volumes, careful control
costs, minimization of costs at the stages of NMOKR, service, sales and advertising.
In addition to price leadership, SCA provides for such a factor as "uniqueness", i.e. brand-name products, design, service.
The ability to pursue a particular strategy depends on how the firm manages its value chain (DSP) relative to its competitors. Thus, the analysis of DSP is necessary to determine the segment where costs can be reduced or use value can be increased. To achieve this goal, DSP should be considered on the scale of not only one firm, but also the industry, i.e. it is necessary to take into account the process of value formation from the extraction of resources to the provision of services for the repair of finished products. Such a scale will allow identifying that section of the industry DSP where the firm can potentially implement one of its strategies and synchronize the choice of its strategy with the industry environment.
It is the consideration of industry DSP that distinguishes the methodology of strategic cost analysis (or strategic cost management) from the analysis within the framework of traditional management accounting, the area of which was only the technology of adding value within the firm.
Industry indicators that have a strong impact on the market offerings of individual enterprises, in the case of using SCA, can be successfully analyzed and recorded.
DSP divides the industry into separate strategic links, so the starting point of cost analysis is to define the DSP of the industry, attributing costs, revenues and assets to its various links. Then the factors that determine the costs of each DSP link - cost drivers - are established. And, finally, a system of actions is formed, as a result of which the firm can obtain a competitive advantage.
The links of the industry DSP are the main arrays of costs in business processes, for example, the purchase of raw materials, transportation, etc. (of course, they are different for each industry). Cost drivers for each DSP link are also allocated separately.
Diagnosing cost drivers to understand the nature of costs at each link is the second step in creating and analyzing a DSP. Unlike traditional management accounting, where output is considered the only cost driver, strategic cost analysis considers the structural and operational types of cost drivers.
Structural cost drivers are determined by the specifics of the company's economic policy. SCA offers five criteria for selecting structural cost drivers:
♦ the scale of production, which determines the volume of investments in production, research and development, marketing;
♦ coverage - the degree of vertical integration;
♦ experience - what is the economic experience of carrying out the proposed operations;
♦ technologies and their specificity;
♦ complexity - the breadth of the range of products (services).
Operational cost drivers characterize a firm's ability to successfully implement its structural policy. The list of the main operating cost drivers contains;
♦ personnel involvement - to what extent the personnel are involved in achieving the overall goals of the firm;
♦ total quality control (TQM - Total Quality Management);
♦ the level of capacity utilization;
♦ efficiency of capacity location;
♦ product design;
♦ communication with suppliers and consumers.
The third step in DSP analysis is creating sustainable competitive advantage. For each DSP link, two key questions are formulated:
♦ can the costs of avi be reduced at the same level of use value (income);
♦ whether use value (income) can be increased without increasing costs.
So the idea is to better control costs than the competitor, or to reorganize the DSP to get more use value.
The SCA method can provide information for strategic decisions on issues such as estimating the cost of changing product attributes and measuring the cost of “barriers” that competitors need to overcome in order to create sustainable competitive advantage (investment volume).
Strategic cost analysis in terms of developing and evaluating DSP is closely related to accounting techniques and the specifics of a particular enterprise and requires a professional assessment and analysis of its activities.
2.2.6. ABC
The Activity Based Costing (or ABC) method has become widespread in European and American enterprises of various profiles. Literally, this method means labor cost accounting. It arose as a result of changes in the economic structure, in particular, the views on the methodology for accounting for costs and calculating the cost of production changed. Previously, the calculation of the cost was carried out taking into account the constant (absorption costing) and variable costs (direct costing). Variable costs are allocated to the cost of production, which thus reflects the total cost of production. Fixed costs are not included in the cost of production, but are written off as costs for the period. The cost of production in this case is equal to the marginal costs. However, in practice, in order to carry out the activities of an enterprise, a long-term attraction of resources to production, marketing, sales, and service is inevitably required. Therefore, despite the fact that, according to calculations, the equality of marginal costs and incomes brings the maximum income, the use of the direct costing method is effective only under certain conditions. Firstly, the direct costs of the enterprise "should account for most of the costs. Secondly, it must produce a narrow list of products (one, two types, for each of which almost equal fixed costs are required). If the enterprise does not meet such requirements, the indicators costs will inevitably be distorted; an underestimated markup for small-scale products and an overestimated one for large-scale ones, lower income indicators in financial accounting as compared to management accounting, the seemingly high profitability of technologically complex and innovative products compared to simple ones. and variable indicators are ineffective.
The search for new methods of obtaining objective information about costs led to the emergence of the ABC method, according to which the enterprise is considered as a set of work operations that determine its specifics. In the process of work, resources (materials, information, equipment) are consumed, and some result arises. Accordingly, the initial stage of using ABC is to determine the list and sequence of work in the enterprise by decomposing complex work operations into the simplest components in parallel with the calculation of resource consumption. Within the ABC, three types of work are distinguished according to the method of their participation in the production of products: Unit Level (piece work), Batch Level (batch work) and Product Level (product work). Such a classification is based on the study of the relationship between costs and various production processes: the release of a unit of production, the release of an order (package), the production of a product as such. At the same time, one more important category of costs is not taken into account, which does not depend on production events - the costs that ensure the functioning of the enterprise as a whole. To account for such costs, a fourth type of work is introduced - Facility Level (general works). The first three categories of work, or rather their costs, can be directly attributed to a specific product. The results of general economic works cannot be accurately assigned to one or another product, therefore, different algorithms have to be proposed for their distribution.
To achieve optimal analysis, resources are also classified: supplied at the time of consumption and supplied in advance. The first include piecework wages; workers are paid for the number of work operations they have already completed; to the second - a fixed salary, which is negotiated in advance and is not tied to a specific number of tasks. This division of resources makes it possible to organize a simple system for periodic reporting of costs and revenues.
All resources expended on a work step add up to its cost. At the end of the first stage of the analysis, all the work of the enterprise must be accurately correlated with the resources necessary for their implementation. In some cases, the cost item corresponds to a job. For example, the item Purchasing Salary is included in the cost of the Purchasing work activity. At the same time, the item "Rent of office premises" should be distributed in proportion to the consumption of resources by cost items "Supply", "Production", "Marketing", etc. It often happens that a resource cannot be correlated with a work operation and, hence, it is wasted.
However, the simplicity of calculating the cost of certain works is not enough to calculate the cost of the final product. According to ABC, a work operation must have an index measuring the output result - a cost driver. So, the cost driver for the item "Supply" will be "Number of purchases"; for the article "Settings" - "Number of adjustments". The second stage of using ABC is to calculate cost drivers and their consumption indicators for each resource. This consumption figure is multiplied by the unit cost of the work output. As a result, we get the amount of labor costs for the manufacture of a specific product. The amount of work that is expended to produce a product is its cost.
These calculations), i constitute the third stage in the practical application of the ABC technique.
Representing an enterprise as a set of working operations opens up wide opportunities for improving its functioning, allows for a qualitative assessment of activities in such areas as investment, personal accounting, personnel management, etc.
Corporate strategy implies a set of goals that an organization wants to achieve. The goals of the organization are achieved as a result of the performance of its work. The construction of a model of work, the definition of their relationships and conditions for implementation provide the reconfiguration of the business process of the enterprise for the implementation of the corporate strategy. Ultimately, the use of ABC allows you to increase the competitiveness of the enterprise, since it provides access to operational information at all levels of management.
2.2.7. LCC
A great effect in optimizing the costs of an organization can be achieved by applying the Life Cycle Costing (LCC) method - the concept of life cycle cost management. This approach was first used in the United States in the framework of government projects in the defense industry. The cost of the complete product life cycle - from design to discontinuation - was the most important metric for government agencies, as the project was funded based on the full cost of the contract or program, not the cost of a specific product. New manufacturing technologies have triggered the shift of LCC techniques to the private sector. The main reasons for this transition are: a sharp reduction in the life cycle of products; an increase in the cost of preparation and launch into production; almost complete definition
increase in financial indicators (costs and revenues) at the design stage.
Technological advances have shortened the life cycle of many products. For example, in computer technology, the production time of a product has become comparable to the time of its development. The high technical complexity of the product leads to the fact that up to 90% of production costs are determined precisely at the R&D stage. Thus, the most important LCC principle can be defined as "forecasting and managing costs for the production of a product at the design stage." This approach clearly illustrates the commonality of approaches in various sections of cost management.
Example. Zavoy manufactures three types of products: A, B, C. At the design stage of a complex technical product A, the issue of the volume and level of detail of the technical description is resolved. Suppose it costs 25,000 rubles to develop detailed maintenance instructions. plus edition for each set of equipment - another 10 rubles. Moreover, the presence or absence of instructions will not in any way affect the sale price (10 thousand py6.J, since the warranty obligations include on-site service to the customer, i.e. the consumer will not be interested in the accompanying documentation because of the confidence in technical support. the enterprise operates on a salary basis, and its maintenance costs amount to 50 thousand rubles per month.
It follows from the condition that the life cycle of a product at our enterprise consists of the following stages: design; production (estimated circulation of 10 thousand items in two years); service.
The use of the marginal analysis method prescribes to abandon the issuance of maintenance instructions, as this will lead to a decrease in marginal income by 1 thousand rubles. from the unit of issue. If included in
cost of development costs, the effect will increase by 2.5 rubles. (250,000 / 10,000).
Application of cost-management methods involves analyzing the impact of issuing / not issuing instructions on costs throughout the entire life cycle of the product. With regard to our example, it is necessary to consider the stage of service, i.e. assess the impact of a management decision during design on service costs. This is the fundamental difference between simple cost accounting and cost management.
In the marginal analysis, service costs were taken as a constant value and, due to its insignificance, were not taken into account when making a decision. In cost management, this is a major oversight. The service maintenance accepted in the analytical scheme will require the solution of the following tasks: determination of factors affecting service costs (cost drivers); the attribution of service costs to the cost of the product life cycle in proportion to the consumption of the cost driver; calculation and analysis of the life cycle costs of a product, taking into account changes in its design (the appearance of instructions).
The scope of tasks shows the need for an integrated application of cost management methods. In this case, to use the LCC analysis, you need to rebuild the cost accounting technique - apply ABC.
Let's say that the cost driver for the activity of the service department is the number of calls per month. The average cost of one call is 400 rubles. (average travel costs plus hourly rate of staff multiplied by average call time), average number of calls is 100 per month, and they are distributed as follows: product A (release without service instructions) - 60; product B and C, 20 each (supplied with instructions).
The difference is 10 thousand rubles. (50,000 - 400 x 100) there is a reserve between the actual costs and the estimated ones: the maintenance of an additional 2 managers for emergency cases. Distributing the variable component of service costs to the cost of products in proportion to the use of the cost driver (and not to the volume of production or the size of direct production costs), we get an increase in costs for product A by 24 thousand rubles. per month (400 x 60). Applying the ABC accounting technique, it is possible to assess the effect of preparing instructions on the total cost.
From experience in the production and maintenance of products B and C, it follows that as a result of the issuance of operating instructions, the number of calls will decrease from GO to 20 per month, i.e. maintenance costs will be reduced by 16 thousand rubles. per month (40 x 400). The life cycle of product A is 2 years, so service costs will decrease by 384 thousand rubles for the entire cycle. (16,000 x 24). The total additional costs at the design and production stage will amount to 125 thousand rubles. (25,000 + 10 X 10,000), which is 259 thousand rubles less than the savings on the service. (384 - 125). Thus, the combined application of the LCC and ABC techniques revealed the necessity and effectiveness of issuing operating instructions.
Successful work in a competitive environment requires not only constant updating of the nomenclature and improving the quality of products, but also a thorough analysis of the enterprise's activities to reduce unnecessary or duplicate functions (work). Often, an enterprise, in pursuit of the goal of reducing costs, pursues a policy of total cost reduction. This decision is the worst, since as a result of such a policy, all jobs are subject to reduction, regardless of their usefulness. With a general reduction, the level of performance of the main work may decrease, which should lead to a deterioration in product quality and a decrease in the productivity of the enterprise. A drop in productivity will cause another wave of reductions, which in turn will lead to a decrease in the efficiency of his work. Efforts to get out of this vicious circle will force the enterprise to raise costs above the initial level. The ABC methodology, combined with value chain analysis, allows an enterprise not only to cut costs step by step, but to identify excess resource consumption and reallocate them in order to increase productivity.
Conclusion.
Having analyzed the existing methods of accounting for production costs, we can conclude that each of them has its own advantages and disadvantages and can be applied in a certain type of production, depending on the specifics of the production process.
It is advisable to apply the normative method in the manufacturing industries with mass or batch production of differentiated and complex products.
The process-by-process method is used in enterprises with a mass production, with one or several types of products, in most cases with work in progress, typical representatives of the application of this method are enterprises of the extractive industry, the building materials industry, etc.
Production, characterized by the sequential processing of various raw materials in order to obtain finished products, and the production process is based on chemical-physical, biological and thermal processes, can use the alternate method, as well as with small borrowings from the normative method.
The custom-made method can be used in individual production, in the production of complex products that require high costs and a long period of their creation (shipbuilding, aviation industry).
Along with the above, there are and are used accounting methods adopted from other developed countries.
Cost standard (cost per unit of production). This method is a powerful tool for controlling production costs. And the main idea of the method can be expressed in two fundamental theses:
All production costs in the accounting must be correlated with the standards;
Deviations identified when comparing actual costs to standards should be disaggregated for reasons.
Direct costing. It has characteristic features: accounting for products only from the position of variable costs and determining their production cost, the constant focus of accounting primarily on determining the intermediate result of marginal income. The main advantages: simplification and accuracy of calculating the cost of production, since the cost is planned and taken into account only in terms of production costs; the ability to carry out a comparative analysis of the profitability of various types of products; the ability to determine the optimal program for the release and sale of products.
The JIT system boils down to the refusal to manufacture products in large batches, which makes it more demand-driven than the usual way of "throwing products on the market."
Financial and value analysis. This method of systematic analysis of the functions of an object is aimed at minimizing costs in the areas of design, production and operation of an object while maintaining (increasing) its quality of utility.
To increase the efficiency of accounting, it is possible to use several methods together, because any method is not ideal.
