How to find fixed costs formula example. How to calculate variable costs. The meaning of marginal cost

marginal cost() is the cost of producing an additional unit of output.

MC = ∆TC / ∆Q

Marginal cost reflects the change in cost that an increase or decrease in production by one unit would entail.

Comparison of average and marginal production costs is important information for the management of the firm, determining the optimal size of production. At point B, the supply price coincides with average and marginal cost. This point represents the equilibrium of the firm.

When moving from point B to the right, an increase in production leads to a decrease in profit, because additional costs increase for each unit of goods. Going beyond point B leads to the instability of the company's finances and in the end its behavior will be determined by the flight from market structures.

marginal revenue

In modern market economy the calculation of production efficiency involves comparing marginal revenue and marginal cost.

There are two ways to determine the best production volumes. Both are based on a comparison of marginal revenue and marginal cost.

1st method: accounting and analytical

How to determine the marginal cost of producing a third good? To answer this question, we take column 4 with the designation of gross costs. With the transition from the second product to the production of the third, the costs increased (355-340=15). This is the marginal cost associated with the production of the third good.

The most profitable volume of production is at the 6th position, after it the marginal cost already exceeds the marginal revenue, which is clearly unfavorable for the firm.

2nd way: graphic

Based on a comparison of marginal cost and marginal revenue.

The benchmarks for the firm are as follows:

• If marginal revenue is higher than marginal cost, production can be expanded.
• If marginal revenue is less than marginal cost, production is unprofitable and must be curtailed.

The equilibrium point of the firm and maximum profit is reached in the case of equality of marginal revenue and marginal cost.

Firm equilibrium under conditions perfect competition, when it chooses the optimal output, assumes the following equality:

P = MS + MR

where: P is the price of the good, MC is the marginal cost, MR is the marginal revenue.

Average cost

In order to more clearly define the possible volumes of production at which it protects itself from excessive growth, the dynamics of average costs is examined.

If the gross costs are attributed to the quantity of output, we get average cost(curve ).

This type of average cost curve is determined by the following circumstances: Average costs are:

Average fixed costs are fixed costs per unit of output.

Average variable costs- represent variable costs per unit of production.

Unlike average fixed costs, average variable costs can both decrease and increase as output grows, which is explained by the dependence of total variable costs from the volume of production. Average variable costs!!AVC?? reach their minimum at a volume that provides the maximum value of the average product.

Let's prove this position:

Average variable cost (by definition), but

and the output volume.

In this way,

If , then , , which was to be proved.

Average total costs (total) costs - show the total cost per unit of output.

The company's costs in the long run

AT long term all resources of the firm are variable. The firm can hire new equipment, rent new workshops, change the composition management personnel, use new technology production.

The lack of permanent resources in the long run leads to the fact that there is no difference between fixed and variable costs. The analysis of the long-term activity of the company is carried out through consideration of the dynamics long run average cost (LATC). And the main goal of the company in the field of costs can be considered the organization of production of the "required scale", providing a given volume of production with lowest average cost.

Long run average cost

To construct long-run average costs, suppose that a firm can organize production of three sizes: small, medium and large, each of which has its own short-run average cost curve (respectively SATC1, SATC2, SATC3), as shown in Fig. one.

Rice. 1. Long run average cost curve

The choice of one project or another will depend on estimates of projected market demand on the company's products and on what capacities are needed to provide it.

If the projected demand corresponds to Q1, then the firm will prefer the creation of a small production, since its average costs in this case will be much lower than in larger enterprises. As seen in fig. one,

ATC1(Q1)2(Q1),

and correspondingly

ATC1(Q1)3(Q1).

If demand is expected to be Q2, then project 2 (medium enterprise) will be the most preferable, providing lower costs, or

ATC2(Q2)1(Q2),

ATC2(Q2)3(Q3).

Similarly, when assessing demand in Q3, the firm will choose a large enterprise.

Combining the segments of the three short-run cost curves that provide the optimal production size for each output, shows us the firm's long-run average cost curve. On fig. 1 is represented by a solid line.

Long run average cost curve shows the minimum cost per unit of output produced at each possible volume of production.

If the number of possible sizes ( Q1, Q2,...Qn) approaches infinity (n → ∞), then the long-run average cost curve becomes flatter, as shown in Fig. 2.

Rice. 2. Curve of long-run average costs with an unlimited number of possible sizes of the enterprise

In this case, all points on the LATC curve are the least average cost at a given output, provided the firm has enough time to change all the required inputs.

Minimum efficient enterprise size

Analysis of long-term average costs reveals optimal enterprise size (Q*), i.e. the amount of production that ensures the minimum cost per unit of output in a given sphere of production. If the LATC curve has a horizontal section, as is the case in Fig. 2, enterprises of several sizes can be considered equally efficient.

The smallest firm size that allows a firm to minimize its long-run average cost is called the minimum efficient size of the enterprise.

Depending on the specifics of production and technological features, the minimum effective size can vary within very different limits. Thus, it is estimated that in the production of footwear this indicator is 0.2% of the total output of the industry, in the production of cigarettes - 6.6%, and in the production of cars - 11%.

If the minimum efficient size of one enterprise provides almost 100% of the market needs for a given product, then the firm that owns such an enterprise turns out to be natural monopoly(more details in the topic "Pure monopoly").

Comparison of short and long run average cost curves

Average costs in both the long run and short term represent the firm's costs per unit of output and are calculated using the same formula:

ATC=TC/Q.

However, there are also fundamental differences:

if in the short run average total costs break down into average fixed and average variable costs

SATC=AVC+AFC,

then in the long run this division does not take place, since all costs are variable;

in the short term U-shaped curves ATC and AVC determined law of diminishing returns variable resource; in the long run, when all resources are variable, the shape of the curves LATC is determined;

for a rationally operating firm choosing the optimal size of the enterprise, long-run average costs are always less than or equal (in other words, no more) than short-run average costs,

SATC≤ LATC (Q*)

where Q*- optimal production size.

Graphically, this means that the long-run cost curve bends around the short-run cost curves from below.

Scale effect of production

• Main article:

Let's talk about the fixed costs of the enterprise: what is the economic meaning of this indicator, how to use and analyze it.

Fixed costs. Definition

fixed costs(English Fixed cost, FC, TFC or total fixed cost) is a class of enterprise costs that are not related (do not depend) on the volume of production and sales.

At each moment of time they are constant, regardless of the nature of the activity.

Fixed costs combined with variables, which are the opposite of fixed costs, constitute the total costs of the enterprise.

Formula for calculating fixed costs/costs

The table below lists possible fixed costs. In order to better understand fixed costs, we compare them with each other.

Fixed Costs = Payroll Costs + Rent of Premises + Depreciation + Property Taxes + Advertising;

Variable Costs = Raw Materials + Materials + Electricity + Fuel + Bonus W/P;

Total Costs = Fixed Costs + Variable Costs.

It should be noted that fixed costs are not always fixed, because an enterprise, with the development of its capacities, can increase production areas, the number of personnel, etc.

As a result, fixed costs will also change, which is why management accounting theorists call them (conditionally fixed costs).

Similarly, for variable costs - conditionally variable costs.

An example of calculating fixed costs in an enterprise inexcel

We will show clearly the differences between fixed and variable costs. To do this, in Excel, fill in the columns with "production volume", "fixed costs", "variable costs" and "total costs".

Below is a graph comparing these costs with each other. As we can see, with an increase in production, the constants do not change with time, but the variables increase.

Fixed costs do not change only in the short run. In the long run, any costs become variable, often due to the impact of external economic factors.

Two Methods for Calculating Costs in an Enterprise

In the production of products, all costs can be divided into two groups according to two methods:

• fixed and variable costs;
• indirect and direct costs.

It should be remembered that the costs of the enterprise are the same, only their analysis can be carried out using different methods. In practice, fixed costs are strongly intersected with such a concept as indirect costs or overhead costs. As a rule, the first method of cost analysis is used in management accounting, and the second in accounting.

Fixed costs and the break-even point of the enterprise

Variable costs are part of the break-even point model.

As we determined earlier, fixed costs do not depend on the volume of production / sales, and with an increase in output, the enterprise will reach a state where the profit from the sold products will cover variable and fixed costs.

This state is called the break-even point or critical point, when the company becomes self-sufficient. This point is calculated in order to predict and analyze the following indicators:

• at what critical volume of production and sales the enterprise will be competitive and profitable;
• how much sales need to be made in order to create a zone of financial security for the enterprise;

Marginal profit (income) at the break-even point coincides with the fixed costs of the enterprise. Domestic economists often instead of contribution margin use the term gross income.

The more marginal profit covers fixed costs, the higher the profitability of the enterprise. You can study the break-even point in more detail in the article “Break-even point.

Graphs and an example of calculating the model in Excel. Advantages and disadvantages".

Fixed costs in the balance sheet of the enterprise

Since the concepts of fixed and variable costs of an enterprise relate to management accounting, there are no lines in the balance sheet with such names. In accounting (and tax accounting), the concepts of indirect and direct costs are used.

In the general case, fixed costs include balance lines:

• Cost of goods sold - 2120;
• Commercial expenses - 2210;
• Management (general) - 2220.

The figure below shows the balance sheet of OJSC “Surgutneftekhim”, as we can see, fixed costs change every year. The fixed cost model is purely economic model, and it can be used in the short term, when revenue and production volume change linearly and regularly.

Let's take another example - OJSC ALROSA and look at the dynamics of changes in conditionally fixed costs. The figure below shows how costs have changed from 2001 to 2010. It can be seen that the costs were not constant over 10 years. The most stable costs throughout the period were selling expenses. The rest of the costs have changed in one way or another.

Summary

Fixed costs are costs that do not change with the volume of production of the enterprise.

This type of cost is used in management accounting to calculate the total costs and determine the break-even level of the enterprise.

Since the company operates in a constantly changing external environment, then fixed costs in the long run also change and therefore in practice they are often called conditionally fixed costs.

Ph.D. Zhdanov Ivan Yurievich

Cost: calculation formula, types and types of cost, calculation examples

One of the most demanded concepts of commerce, economic science and entrepreneurship is the formula for the cost of production and sale of products. The indicator is explained as the total number of funds spent by the company on the production and subsequent sale of a service or product, in strict dependence on the sector of the economy in which the company operates.

Calculation: existing types and types of cost of waste

Today, the cost is divided into marginal and average (in other words, the full cost).

The full cost implies the volume of all production expenses of the enterprise, including commercial ones, aimed exclusively at manufacturing process.

The marginal cost indicator is the cost per unit of product created.

Key types of cost:

• Workshop. It implies the total amount of all expenses of the company incurred by all its production structures that have a direct impact on the creation of the product.
• Production. The expenses of the company, made by all the involved structures of the company, as well as general and targeted expenses, are taken into account.
• Complete the cost implies that in addition to the expenses of the enterprise for the organization of the entire production process for the release of a product or service, the line of waste includes money intended for the final sale of the released products. In other words, the production cost of waste is added to the costs necessary to build logistics, deliver goods to the end consumer.

In addition to the above types, such concepts as industry average, individual, actual, and also full cost are often used.

Structure

The company’s waste cost architecture is built on the basis of the following structural indicators:

• Wage. Depending on the deductible cost, wage can be taken into account for auxiliary personnel, the main class of workers, junior service and intellectual personnel.
• Deductions aimed at depreciation of the main assets of the enterprise (repair of buildings, improvement of the adjacent territory).
• Expenses for organizing and holding social events.
• Company expenses. The following types are included: purchase of raw materials, electricity, overhead costs, purchase of components and production equipment.
• Expenses for the development and implementation of a marketing strategy.

The following balance sheet items are taken into account in the calculation process:

1. Electricity and fuel used in the process of creating the manufactured product.
2. The approved salary of the main personnel of the company.
3. Key materials used in the production process of the product (for example, components, semi-finished products, units).
4. General production costs aimed at delivering the product to consumers (sales), paying employees involved in the repair of production facilities and the company's main assets (premises), waste of an internal production nature.
5. Depreciation deductions in favor of the main production fund.
6. Social expenses of the company.

It also takes into account the costs of paying for the services of counterparties, travel allowances and administrative expenses for the maintenance of the administrative apparatus. The calculation of the cost of spending on the creation of a product may be different depending on the sector of the economy in which the enterprise operates.

Available methods for calculating the cost of waste

The formula for calculating the cost of production costs in the vast majority of cases is generated on the full amount of the costs taken into account.

Several calculation methods are available, such as: per-order, per-order, per-process, normative.

Each of the presented calculation methods is based on the classical variation of identifying the total cost of waste.

For ease of understanding, you can use the hypothetical company Quantum, which produces high-tech products.

To obtain an indicator of the total cost of manufactured products, it is worth summing up the values ​​​​of all workshop, commercial and general production waste.

The following balance lines are included in the workshop cost of waste:

• and practical use of equipment.
• Waste for electricity and process fuels used in the production process.
• Payments for social obligations, as well as wages for the main workers.
• The whole range of workshop expenses (depreciation of fixed assets, maintenance of inventory, deductions to employees).

Under the general production waste of the company, it means the salary of the management team, expenses for business trips, guards, as well as the salary of the management department.

General production expenses include depreciation deductions for the maintenance of buildings, maintenance of inventory and facilities for general plant purposes, labor protection, training of new specialists, as well as other general business expenses.

Therefore, the calculation occurs in the following sequence:

• Variable costs are identified, for the creation of one unit of the product, taking into account waste.
• Isolation in general factory waste of those types of expenses that are directly related to the type of product produced.
• All associated costs are summed up, which in no way relate to the waste of the production process.
• The resulting value participates in the full cost and price generation is already fully finished products sent to the end consumer.

In the case of an increase in the value of the total cost of production, an increase in the price of its sale is observed, which has a negative impact on the competitiveness of the product in the market and, as a result, the position of the company in the industry.

Formulas

The method of calculating the cost of creating a product directly depends on the degree of readiness of the product itself. The calculation formula looks like this:

1. Production costs: C \u003d M3 + A + Tr + other costs:
   • Where, A - depreciation;
   • C - cost of expenses;
   • MZ - material costs of the company;
   • Tr - waste on wages to employees of the company.
2. The full cost of production is the calculation formula: С = expenses for the creation of the product + expenses of a non-productive nature.
3. Cost of goods sold (cost of sales) - calculation formula: C = full cost + selling expenses - balances of unsold product.
4. Production cost: С = price of gross product - changes in WIP balances.
5. The cost of gross output: C = production costs - non-production waste - expenses of the future.

The calculation of the cost of manufactured products has a huge impact on building a company's future development strategy, its position in the industry and the degree of consumer confidence.

Calculation example

Let's consider an example of calculating the cost by the formula.

As an example, the cost structure for expense items of the balance sheet per one thousand products is used:

• Waste sorting and logistics of the final product - five percent of the production cost.
• Waste of a general economic nature - twenty percent of the wages of production workers.
• Wage line expenses - forty percent of the payment of the main production workers;
• General production expenses - ten percent.
• Purchase of electricity and fuel for technological purposes - 1.5 thousand rubles.
• Purchase of materials, as well as raw materials used in the production process - three thousand rubles;
• The salary of the main workers is two thousand rubles.

The task is to determine the level of the manufacturer's cost per unit of production, as well as the amount of income from its sale, in the case of an acceptable level of profitability within 15 percent.

Calculations are made in absolute terms of indirect expenses of the company, given in percentage definitions of wages to key employees per one thousand created product:

1. Salary line expenses = 2,000 rubles x 40 percent / 100 percent = 800 rubles.
2. General economic expenses \u003d 2000 rubles x 20 percent / 100 percent \u003d 400 rubles.
3. General production expenses of the company \u003d 2000 rubles x 10 percent / 100 percent \u003d 200 rubles.

The production cost of the company's waste is determined on the basis of all costs: 1000 = 400 + 3000 + 800 + 200 + 2000 + 1500 = 7.9 thousand rubles

• Company spending on packaging and logistics = 7,900 x 5 percent / 100 percent = 395 rubles.
• The total cost of the created product (thousand products) = 7,900 + 395 = 8,295 rubles.
• The total cost is an average of 8.3 rubles.
• The cost of one product = 8.3 rubles + 8.3 rubles x 15 percent / 100 percent = 9.5 rubles.

In addition to the above factors, which have a huge impact on the process of generating the value of products, tax deductions can play a significant role.

The vast majority of companies engaged in the production of various products always take into account tax deductions in the process of forming a single price. The only exception may be the presence of any tax privileges or tax holidays for a certain time interval.

Conclusion

The cost of waste is one of the most accurate and effective tools for analyzing everything production cycle companies, regardless of whether products are created or a certain set of services is provided.

One of the distinguishing features of the cost formula is its temporal universality.

The calculation can be made in any convenient time frame, which gives ample opportunities to determine the profitability of the development strategy followed, taking into account the seasonal factor.

A qualitatively carried out calculation of the cost of production of goods and services can have a significant and positive influence for the entire further process of the company's development, because it is the price of the goods that plays a key role in the level of consumer confidence, the competitiveness of the company, as well as the profit received at the end of each reporting period.

on the topic

Fixed costs: what is included, calculation formula - Plan-Pro

The activity of any organization (not only commercial) is not complete without a constant need for investment, costs.

But for an enterprise that aims to make a profit, it is especially important to conduct a deep analysis of all types of costs and strive to optimize them.

Therefore, in this article we will analyze such a type of enterprise expenses as fixed costs: we will give a definition of this phenomenon, explain the distinctive features and, most importantly, we will try to understand what is the importance of analyzing fixed costs for the successful operation of an enterprise.

What are the fixed costs of a business

fixed costs- this is part of the total costs of the enterprise associated with production activities and maintenance of related processes. Fixed costs got their name due to the fact that their value in the structure of all production costs remains unchanged regardless of how many goods were manufactured or how many services were provided.

List of destinations fixed costs includes expenses that can be called mandatory, because without them it will be impossible to create any production, without them, investments in variable costs (for example, the purchase of raw materials and materials) become simply meaningless.

Also note that the calculation of the costs of the enterprise can be carried out by various methods. And in some calculation methods, you may not come across the concept of “ fixed costs". Then their analogues, most likely, will be such cost items as “indirect” (in the classification indirect / direct) or overhead costs.

Why should a firm analyze fixed costs?

Categories such as “price”, “cost”, “profit per unit” (as the difference between price and cost) are directly related to the analysis various kinds enterprise costs. Particularly important in this analysis are fixed costs.

Despite the fact that these costs are fixed, in the case when we are talking about the total value of production costs. But their influence on the cost structure of a unit of production is just the same very changeable.

So, with an increase in production, the value fixed costs per unit cost becomes less. This relationship has received a stable definition of "scale economies of scale" (scale effect).

For example, the value fixed costs at the enterprise for a given period of time is fixed and amounts to 150 thousand rubles. Then, in the production of 1000 products, the value fixed costs in the cost of each product will be 150 rubles.

Let's assume that the market demand for manufactured products has increased and production capacity allow to produce 1500 finished products. Then the share of fixed costs in the cost of each product will already be equal to 100 rubles.

As a result, you can charge a lower price (which will cause more more demand) without loss of profit per unit of output.

Thus, the "stretching" of fixed costs for an increasing volume of goods and services produced is one of the main ways to reduce the cost and price of products. But to carry out an increase in volumes without changing fixed costs is also impossible, because then the quality of the goods produced will suffer, and this problem can become especially acute in the provision of services.

In order to correctly determine this fine line and the optimal values fixed costs and production volume, cost planning needs to be done and done better within the framework of a single business plan for the project.

Which production costs are considered fixed costs?

Usually included in fixed costs includes the following types of costs:

The wages of the "transactional" sector;

Fixed part of the wages of production workers (salary);

Part of payments for utilities;

Security costs;

The cost of various developments.

Fixed Cost Examples

Wages of non-production personnel. This includes such departments of the organization as accounting, legal department, technical group. support, security guards and other categories of personnel not directly involved in the production of goods and services, but ensuring the support of all business processes of the enterprise.

Payment of utility services. Part of utility bills will depend on production volumes, for example, related to the use of water for industrial purposes.

But for any enterprise there is a certain minimum of consumed electricity, water supply, etc., which are necessary even if the company does not produce anything.

First of all, this includes lighting of premises, water supply not intended for the manufacture of products, heating, etc.

The security system of an organization includes cost items related to the operation of video surveillance, alarm systems, etc.

Development costs involve a wide range of activities. This includes scientific and technical developments aimed at improving production processes, and the development advertising campaign and promotion strategies, and much more.

This list of fixed costs is not limited. Everything will depend on the specifics of each particular enterprise. For example, in many cases, the write-off of costs associated with the depreciation of equipment can also be included here.

Formula to find fixed costs (what needs to be done)

fixed costs= Payment of wages + Payments for rent + Depreciation deductions + Tax payments + Expenses for advertising + The amount of additional costs depending on the specifics of the enterprise.

We add that it is sometimes difficult to single out fixed cost items "in their pure form." Therefore, when classifying expenses in an enterprise, the concept of semi-fixed expenses is used. These can be called costs that will be treated as constant only up to certain limits.

For example, payment for lighting will be a fixed cost if we are talking about a small enterprise, where no matter how many machines one light bulb illuminates, it is necessary anyway.

But for example, if this light bulb will function on each machine and their number will depend on the volume of production, then in this case we will already be talking about variable costs.

Cost analysis as part of a business plan

Cost analysis - capital (investment), fixed and variable - is an essential component of the business planning process. After all, for example, the “survivability” of the project depends on whether we can even cover the amount of the resulting costs.

Determining the optimal production volume depending on the allowable dimensions permanent and variables costs connects such an indicator of investment analysis as a "break-even point". And the value of another important parameter - marginal profit (income) - at the break-even point coincides with the fixed costs of the enterprise.

The required amount of income, profit per unit, based on this price and payback period, and other parameters - it all depends on proper planning and distribution of costs. Therefore, it is equally important to properly embed expenditure part into the overall financial model of the business plan.

To correctly find fixed costs, you need to

Let's list some mistakes that entrepreneurs make when determining the cost structure. To correctly find the amount of fixed costs, it is better not to make the following mistakes:

1) understatement fixed costs and

2) inflated variables

3) incomplete accounting of all directions fixed costs

Incorrect allocation of costs to fixed and variable can lead to a number of errors when conducting economic analysis. First of all, these are errors related to the cost structure.

For example, as already noted, fixed costs are one of the main sources of savings and cost reduction.

If most of the costs are incorrectly attributed to fixed costs, then this source of cost reduction may “disappear”.

conclusions

Concluding the article, we summarize the above. I think it became clear that the determination of the magnitude of the constants

gatherings is an extremely important and responsible matter. The success and efficiency of the subsequent economic analysis depends on the competent planning of the expenditure part of the project.

In order to correctly draw up a business plan for your project, we advise you to apply for the service of developing this document to specialists in this field. You can also do it yourself, which will be more difficult.

2.2 Calculation of current costs of the enterprise

After determining the production program of the enterprise, it is necessary to evaluate its current costs associated with the production and sale of products.

The costs of basic and auxiliary materials for production are calculated based on the consumption rates per unit of production and the price of a unit of materials:

Rm i = Qi M(o, c)i Tsm i ,

where M (o, c) i is the consumption rate of basic or auxiliary materials for the production of a unit of output of the i-th type, kg .;

Tsm i - the price of 1 kg of materials, rub.

Other costs for the main production, maintenance and production management costs are calculated in a similar way: wages (basic and additional) of production workers; deductions for social needs; electricity for technological purposes; expenses for the maintenance and operation of equipment; general business expenses.

Table 4

Calculation of the cost of basic and auxiliary materials for the production of products

	Consumption rate per unit, kg	Output per month, units	Production output per year, units	The price of 1 kg of materials, rub.	Consumption of materials, kg	Cost of materials, rub.
Consumption of basic materials
Consumption of auxiliary materials

Fixed costs include depreciation of equipment and intangible assets, the cost of renting premises, marketing research and advertising, administrative and other expenses.

The total amount of fixed costs is determined by the formula:

Rp \u003d AP + ANMA + AOPF + Rpost,

where AP - payment for renting premises per year, r .;

ANMA - the amount of depreciation of intangible assets, r.;

AOPF - the amount of depreciation of fixed production assets, r.;

Rpost - other fixed costs of the enterprise, p.

The amount of depreciation of intangible assets is determined by the formula:

ANMA = SNMA / Tsl,

where SNMA is the value of the company's intangible assets, p.; in this case, intangible assets include the cost of a license;

Tsl — period of use of the license, years.

ANMA \u003d 14/3 \u003d 4.7 thousand rubles.

The amount of depreciation deductions is determined for each group of fixed assets of the enterprise, based on their value and depreciation rate.

AOPf No. 1 \u003d 110 * 10% \u003d 11 thousand rubles.

AOPf No. 2 \u003d 90 * 12% \u003d 10.8 thousand rubles.

AOPf No. 3 \u003d 65 * 8% \u003d 5.2 thousand rubles.

The total amount of depreciation of fixed production assets:

AOPF \u003d 7 + 9.6 + 11.2 \u003d 27.8 thousand rubles.

So the total fixed costs are:

Rp = 16 + 4.7 + 27 + 19 = 66.7 thousand rubles.

Using the initial data and calculation results, it is necessary to determine the total cost of production. The calculation is carried out in the form of Table. 5.

Table 5

Calculation of the total cost of production and sales of products

Costs, thousand rubles
Name	By models
1. Raw materials and basic materials
2. Auxiliary materials
3. Electricity for technological purposes
4. Wages of production workers
5. Deductions for social needs
6. Other variable expenses
7. Total variable costs
8. Expenses for paying the rent of the premises
9. Depreciation of intangible assets and fixed production assets
10. Other fixed costs
11. Total fixed costs
12. Total full cost
13. Share in the cost structure, % variable costs fixed costs

f When filling out the table, the amount of fixed costs is distributed by type of product in proportion to the cost of wages for production workers.

For this, it is necessary to calculate specific gravity wages for each model in the total wage bill of production workers, and then use the calculated values ​​to allocate the total amount of fixed costs to the models.

2.3 Determining the selling price of products

An important issue in business planning is the determination of the selling price of products.

Typically, the initial basis for determining the price is the value of the cost of production and the size of the desired profit (average rate of return). If other factors (demand, competition) are not taken into account when calculating the price, then the following formula is used:

production program profitability price

Qi \u003d ci (1 + R / 100),

where ci is the cost of a unit of production of the i-type, rub.

The cost of a unit of production type A:

SA = 657.537/1320 = 0.498 thousand rub. = 498.1 rubles.

Unit cost of type B production:

SB 1410.232 / 1200 \u003d 1.175 thousand rubles. = 1175 rubles.

The cost of a unit of production of type B:

SV \u003d 694.047 / 840 \u003d 0.826 thousand rubles. = 826 rubles.

The average rate of return for all types of products is 25%, then the unit price of type A products will be:

CA \u003d 498.1 * (1 + 25/100) \u003d 622.6 rubles.

Central bank \u003d 515 * (1 + 25/100) \u003d 1469 rubles.

CV \u003d\u003d 430 * (1 + 25/100) \u003d 1032.8 rubles.

The above method of determining the price of products is included in the group of costly methods.

The second group of methods involves focusing on market factors, such as the dynamics and elasticity of demand, changes in consumer income, etc.

Therefore, when determining the price by the second method, we introduce correction factors that take into account the elasticity of demand for price (Kec) and consumer income (Ced), the change in consumer income (Id), market share enterprises in relation to the total volume of commodity mass in the market (?), change in the commodity mass supplied by competitors to the market (?).

In this case, the price is determined by the formula:

where Kp is a correction factor that takes into account market factors

For type A products:

For type B products:

For type B products:

Thus, taking into account the correction factor that takes into account market factors, the price for type A products will be:

TAp \u003d 622.6 * 1.2397 \u003d 772 rubles.

Central Bank \u003d 1469 * 1.6297 \u003d 2394 rubles.

TsVR \u003d 1032.8 * 1.3426 \u003d 1384 rubles.

Analysis production activities enterprises

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Allows you to calculate the minimum price of goods / services, determine the optimal sales volume and calculate the value of the company's expenses. Exist various methods calculation by types of costs, the main of which are given below.

Production Costs - Calculation Formulas

The calculation of production costs is easily performed on the basis of cost estimates. If such forms are not compiled in the organization, data from the reporting period will be required. accounting. It should be borne in mind that all costs are divided into fixed (the value is unchanged over the period) and variable (the value varies depending on the volume of production).

Total production costs - formula:

Total costs = Fixed costs + Variable costs.

This method of calculation allows you to find out the total costs for the entire production. Detailing is carried out by departments of the enterprise, workshops, product groups, types of products, etc. An analysis of indicators in dynamics will help predict the value of production or sales, expected profit / loss, the need to increase capacity, and the inevitability of reducing expenditures.

Average production costs - formula:

Average costs \u003d Total costs / Volume of manufactured products / services performed.

This indicator is also called the total cost of the product/service. Allows you to determine the level of the minimum price, calculate the efficiency of investing resources for each unit of production, compare mandatory costs with prices.

Marginal cost of production - formula:

Marginal Costs = Change in Total Costs / Change in Output.

The indicator of the so-called additional costs allows you to determine the increase in the cost of issuing an additional volume of GP in the most profitable way. At the same time, the value of fixed costs remains unchanged, variable costs increase.

Note! In accounting, the expenses of the enterprise are reflected in the expense accounts - 20, 23, 26, 25, 29, 21, 28. To determine the costs for the required period, you should sum up the debit turnovers on the accounts involved. Exceptions are internal turnovers and balances at refineries.

How to calculate production costs - an example

GP output volume, pcs.	Total costs, rub.	Average costs, rub.	Fixed costs, rub.	Variable costs, rub.

From the above example, it can be seen that the organization incurs fixed costs in the amount of 1200 rubles. in any case - in the presence or absence of production of goods. Variable costs for 1 pc. initially amount to 150 rubles, but the costs are reduced with the growth of production. This can be seen from the analysis of the second indicator - Average costs, the decrease of which occurred from 1350 rubles. up to 117 rubles. per unit of finished product. Marginal cost calculation can be determined by dividing the increase in variable costs by 1 unit of product or by 5, 50, 100, etc.

The variety of ways to make a profit for enterprises in any industry of production and sale of services, on the one hand, creates unlimited opportunities for the development of a particular business, on the other hand, each type of activity has a certain threshold of efficiency, determined by break-even.

In turn, the amount of revenue that guarantees a profit directly depends on the total costs of production and sale of products.

What it is?

The total expenses of the enterprise for the purpose of analyzing the break-even activity are usually divided into two main categories:

• - costs, the amount of which directly depends on the volume of production and sale of services (depending on the chosen direction of the company's operation), i.e., in fact, are directly proportional to any fluctuations in the volume of core activities carried out;
• fixed - these are costs, the amount of which does not change in the medium term (a year or more) and does not depend on the volume of the company's core activities, i.e. they will exist even if the activity is suspended or terminated.

Having considered fixed costs on the example of an enterprise, it is easier to understand their essence and interdependence with the volume of core activities.

So, they include the following items of expenditure:

• depreciation charges on fixed assets of the company;
• rent, tax payments to the budget, contributions to off-budget funds;
• bank expenses for servicing current accounts, loans of the organization;
• wage fund for administrative and managerial personnel;
• other general business expenses necessary to ensure the normal functioning of the enterprise.

Thus, the essence of the fixed costs of any organization is reduced to their functional necessity for the implementation of activities. They can and most often change over time, but the reason for this is external factors(changes in the tax burden, adjustment of bank service conditions, renegotiation of contracts with service organizations, change in tariffs for utilities, etc.).

Internal factors affecting the change in fixed costs are significant change corporate policy, personnel remuneration system, a significant change in the volume or direction of the company's activities (not just a change in volume, but a radical transition to a new level).

Under the influence of all these factors, there is a change in fixed costs, usually they are characterized by sharp fluctuations in the amount of expenses.

For the purposes of accounting and analysis, the expenses of an enterprise are usually divided into fixed and variable, using the following methods:

• Based on experience and knowledge, through managerial decision expenses are assigned to a certain category. This method good when the company is just starting its activities and there are simply no other ways to allocate costs. It is characterized by a high level of subjectivity and requires revision in the long term.
• Based on the data of the analytical work carried out on the search, evaluation and differentiation of all expenses by categories based on their behavior under the influence of the factor of changes in the volume of core activities. It is the most acceptable, since this method is more objective.

For information on which of the expenses to which group you need to determine, see the following video:

How to calculate them?

Fixed costs are calculated using the formula:

POSTz \u003d W salary + W rent + W banking services + Depreciation + Taxes + General Household, where:

• POSTz - fixed costs;
• W salary - the cost of salaries of administrative and managerial personnel;
• R rent - rental expenses;
• 3 banking services - banking services;
• General economic expenses - other general economic expenses.

To find the indicator of average fixed costs per unit of output, it is necessary to apply the following formula:

SrPOSTz \u003d POSTz / Q, where:

• Q - the volume of output (its quantity).

The analysis of these indicators must be carried out in dynamics, evaluating the retrospective of values ​​at different time intervals, including with a joint analysis of other economic indicators. This will allow you to see the relationship of processes specific to the enterprise, which means you can get a cost management tool in the future.

economic sense

Fixed cost analysis, performed both on an operational basis and for the purpose of strategic planning, allows you to assess the ability of the enterprise to improve the efficiency of its activities. This is the key economic meaning of this category.

The simplest and affordable way analysis of the effectiveness of the company's activity is an assessment of the break-even point indicator, including in dynamics. For calculations, data on the amount of fixed costs, unit price and average variable costs are required:

Tb \u003d POSTz / (Ts1 - SrPEREMz), where:

• Tb - breakeven point;
• POSTz - fixed expenses;
• C1 - price per unit. products;
• Avperemz - average variable costs per unit of output.

The break-even point is an indicator that allows you to see the boundary beyond which the company's activities begin to make a profit, as well as analyze the dynamics of the impact of changes in costs on the volume of production and profit of the organization. The decrease in the break-even point at constant variable costs is positively assessed, this signals an increase in the efficiency of the enterprise's expenses. The growth of the indicator should be assessed positively when it occurs against the background of an increase in sales volumes, that is, it indicates an increase and expansion of the scope of activities.

Thus, accounting, analysis and control of fixed costs, reducing their load per unit of output are mandatory measures necessary for each enterprise to achieve competent resource and capital management.

Every organization seeks to maximize profits. Any production incurs costs for the purchase of factors of production. At the same time, the organization seeks to achieve such a level that a given volume of production is provided with the lowest costs. The firm cannot influence the prices of inputs. But, knowing the dependence of production volumes on the number of variable costs, it is possible to calculate the costs. Cost formulas will be presented below.

Types of costs

From the point of view of the organization, the costs are divided into the following groups:

• individual (costs of a particular enterprise) and public (costs for manufacturing specific type output incurred by the entire economy);
• alternative;
• production;
• general.

The second group is further divided into several elements.

Total expenses

Before studying how costs are calculated, cost formulas, let's look at the basic terms.

Total Costs (TC) is the total cost of producing a given volume of products. In the short run, a number of factors (for example, capital) do not change, and part of the costs does not depend on output volumes. It is called total fixed costs (TFC). The amount of cost that changes with output is called total variable cost (TVC). How to calculate total costs? Formula:

Fixed costs, the calculation formula for which will be presented below, include: interest on loans, depreciation, insurance premiums, rent, salary. Even if the organization does not work, it must pay rent and debt on the loan. Variable costs include salaries, materials, electricity, etc.

With the growth of output volumes, variable production costs, the calculation formulas of which are presented earlier:

• grow proportionally;
• slow down growth when the maximum profitable volume of production is reached;
• resume growth due to the violation of the optimal size of the enterprise.

Average costs

Wanting to maximize profits, the organization seeks to reduce the cost per unit of product. This ratio shows such a parameter as (ATS) average cost. Formula:

ATC = TC \ Q.

ATC = AFC + AVC.

Marginal Costs

The change in the total amount of costs with an increase or decrease in the volume of production per unit shows the marginal cost. Formula:

From an economic point of view, marginal cost is very important in determining the behavior of an organization in market conditions.

Relationship

Marginal cost must be less than the total average cost (per unit). Failure to comply with this ratio indicates a violation of the optimal size of the enterprise. Average costs will change in the same way as marginal costs. It is impossible to constantly increase the volume of production. This is the law of diminishing returns. At a certain level, variable costs, the formula for which was presented earlier, will reach their maximum. After this critical level, an increase in production even by one unit will lead to an increase in all types of costs.

Example

With information about the volume of output and the level of fixed costs, it is possible to calculate all existing species costs.

Issue, Q, pcs.	General costs, TC in rubles

Without being engaged in production, the organization incurs fixed costs at the level of 60 thousand rubles.

Variable costs are calculated using the formula: VC = TC - FC.

If the organization is not engaged in production, the amount of variable costs will be zero. With an increase in production by 1 piece, VC will be: 130 - 60 \u003d 70 rubles, etc.

Marginal costs are calculated using the formula:

MC = ∆TC / 1 = ∆TC = TC(n) - TC(n-1).

The denominator of the fraction is 1, since each time the volume of production increases by 1 piece. All other costs are calculated using standard formulas.

opportunity cost

Accounting costs are the cost of the resources used at their purchase prices. They are also called explicit. The amount of these costs can always be calculated and justified by a specific document. These include:

• salary;
• equipment rental costs;
• fare;
• payment for materials, bank services, etc.

Economic cost is the cost of other assets that can be obtained from an alternative use of resources. Economic costs = Explicit + Implicit costs. These two types of expenses often do not coincide.

Implicit costs are payments that a firm could receive if it were to use its resources more favorably. If they were bought in a competitive market, then their price would be the best of the alternatives. But pricing is influenced by the state and the imperfection of the market. Therefore, the market price may not reflect the real cost of resources and may be higher or lower. opportunity cost. Let us examine in more detail economic costs, cost formulas.

Examples

The entrepreneur, working for himself, receives a certain profit from the activity. If the sum of all expenses incurred is higher than the income received, then in the end the entrepreneur suffers a net loss. It, together with net profit, is recorded in the documents and refers to explicit costs. If the entrepreneur were to work from home and earn an income that would exceed his net profit, then the difference between these values ​​\u200b\u200bwould be an implicit cost. For example, an entrepreneur receives a net profit of 15 thousand rubles, and if he were employed, he would have 20,000. In this case, there are implicit costs. Cost formulas:

NI = Salary - Net profit\u003d 20 - 15 \u003d 5 thousand rubles.

Another example: an organization uses in its activities a room that belongs to it by right of ownership. Explicit costs in this case include the amount of utility costs (for example, 2 thousand rubles). If the organization leased this premises, it would receive an income of 2.5 thousand rubles. It is clear that in this case the company would also pay monthly utility bills. But she would also receive a net income. There are implicit costs here. Cost formulas:

NI \u003d Rent - Utilities \u003d 2.5 - 2 \u003d 0.5 thousand rubles.

Refundable and sunk costs

The entry and exit fee for an organization is called sunk costs. No one will return the costs of registering an enterprise, obtaining a license, paying for an advertising campaign, even if the company ceases to operate. In a narrower sense, sunk costs include the cost of resources that cannot be used in alternative ways, such as the purchase of specialized equipment. This category of expenses does not apply to economic costs and does not affect the current state of the company.

Costs and price

If the organization's average cost is equal to the market price, then the firm earns zero profit. If favorable market conditions increase the price, then the organization makes a profit. If the price corresponds to the minimum average cost, then the question arises about the feasibility of production. If the price does not cover even the minimum of variable costs, then the losses from the liquidation of the firm will be less than from its functioning.

International division of labor (MRI)

The world economy is based on MRI - the specialization of countries in the manufacture certain types goods. This is the basis of any kind of cooperation between all the states of the world. The essence of MRI is manifested in its division and unification.

One production process cannot be divided into several separate ones. At the same time, such a division will allow uniting separate industries and territorial complexes, establishing a relationship between countries. This is the essence of MRI. It is based on the economically advantageous specialization of individual countries in the manufacture of certain types of goods and their exchange in quantitative and qualitative proportions.

Development factors

The following factors encourage countries to participate in MRI:

• Volume of the domestic market. Large countries have more opportunities to find the necessary factors of production and less need to engage in international specialization. At the same time, market relations are developing, import purchases are compensated by export specialization.
• The lower the potential of the state, the greater the need to participate in MRI.
• The country's high endowment with mono-resources (for example, oil) and the low level of endowment with minerals encourage active participation in MRT.
• The greater the share of basic industries in the structure of the economy, the less the need for MRI.

Each participant finds economic benefit in the process itself.