Cost price– these are the costs (costs) of producing products, performing work or providing services. As a rule, the cost consists of expenses directly attributable to the manufactured products, but it is also possible to calculate the cost, in which management costs are also distributed to the cost of the manufactured products.

Cost of sales is one of the key indicators in the financial statements (Profit and Loss Statement), coming immediately after Revenue. Revenue minus Cost of Sales is Gross Profit (Loss). Other general business (administrative) expenses are also part of the financial result from sales, but depending on the accounting method chosen by the enterprise, they may not be highlighted in the Profit and Loss Statement as a separate line, but taken into account as part of the Cost of Sales. In this case, in accounting, general business costs are distributed to cost accounting accounts instead of directly written off to the sales account as semi-fixed ones.

Classification

Cost can be considered in terms of cost elements and costing items.

The following cost elements are distinguished:

• material costs (raw materials, supplies, components, overhead costs, etc.);
• wages (employees of the enterprise);
• deductions from wages (social, pension insurance, etc.)
• depreciation of fixed assets;
• other expenses.

The classification of cost by cost item depends on the industry characteristics of the enterprise. Typically, the following cost items are identified:

• raw materials and materials
• returnable waste (subtracted)
• purchased components, semi-finished products and production services;
• fuel and energy for technological purposes;
• labor costs for workers directly involved in the production process;
• deductions from wages for social needs;
• expenses for preparation and development of production;
• general production expenses;
• general running costs;
• losses from marriage;
• other production costs;

Cost Analysis

Cost is the most important indicator for analysis in order to improve production efficiency. The analysis can be performed in several sections. For example, all costs are divided into variable (which depend on the volume of output) and constant (or conditionally constant, which within a certain range do not depend on the quantity of products produced). This analysis makes it possible to determine the production volumes at which the enterprise reaches cost recovery (break-even point).

The source of information for analyzing product costs is accounting, warehouse and production accounting. As a rule, it is possible to analyze production costs based on public accounting data only in the most general form (growth or fall in costs, changes in sales profits). For a more in-depth analysis, data from the enterprise accounting system is required.

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Cost price: details for an accountant

• Options for calculating cost in "1C: Accounting 8", ed. 3.0

  Distribution base Description Planned cost of production Proportional to the planned cost... of a production nature. When calculating the actual cost of products (operation "Closing the month... step, directly calculating the actual cost. Calculations are performed in several... by the following reports: reference-calculation "Cost calculation"; reference-calculation "Distribution of indirect... expenses"; reference-calculation "Cost of production". Standard report "Reference-calculation...

• Management accounting of the cost of paid services

  General business costs included in the cost of public services are set directly by the founder... the ability to use the method of incomplete production cost - direct cost. To do this... the institution can form the full production cost, distributing all general business costs. ... textbooks. When calculating the actual cost of a service, work, product for... The composition of overhead costs when forming the cost of a service (work, product) corresponds...

• Can interdependent legal entities sell goods to each other at their cost?

  Goods to each other at its cost, and to third parties - at market... goods to each other at its cost, and to third parties - at market... for organizations to sell goods at cost and does not set a minimum price... to controlled, sales goods at cost when goods are sold to third parties...

In addition, distributed production overheads are included in the cost... general production costs are included in the cost of finished products in proportion to the coefficient... fixed production costs that inflate the cost of production when production facilities are not fully loaded... the enterprise forms an incomplete production cost. Moreover, all these indicators... form an incomplete production cost of the finished product. Product costs include...

• Accounting methodology in ferrous and non-ferrous metallurgy

  Products (works, services), calculating the cost of production, the accountant should be guided by... ferrous metallurgy. The uniformity of cost calculation allows for a comparative analysis...; – depreciation of fixed assets; – cost of by-products – management costs... of products are set in proportion to the average cost of production from homogeneous raw materials,... the total planned cost of the relevant products is determined by summing...

• How to speed up the release of reporting in retail by automating transformational adjustments

  By excluding financial expenses from the cost of unsold inventories and reclassifying part of... the current market value and the actual cost of inventories (if it... relates, that is, the cost of goods for which retrospective bonuses should be adjusted... receipt of goods are taken into account according to actual cost on account a4101, without using... receipt of goods are recorded at actual cost 2. Goods are written off at average...

• Accounting for income and expenses in a budgetary institution

  To account for operations to form the cost of finished products, work performed, ... accounting policies, are distributed to the cost of finished products sold, rendered ... the result of the institution's activities. Formation of cost in the program “1C:BGU 8 ... cost indicators; Help-calculation “Cost calculation” (“Services, works, production” – “Reports”) ... the amounts of costs that formed the actual cost. It is recommended to generate specialized reports...

• Deferred expenses - examples according to the 2018 accounting rules

  This is necessary for the correct formation of the cost of goods produced or services provided... This is necessary for the correct formation of the cost of goods produced or services provided... to write off the received amount evenly to the cost. It is obviously ineffective to include... . Let's calculate how to write off the costs of repairing production equipment into the cost of production... allows you to: Effectively distribute costs among the cost of manufactured products. Show stable...

• Accounting for factoring companies attracting external financing

  000 Sales of products to the buyer 90/Cost (sales) 43 (finished products) 428 ... 571 429 Write-off of the cost of products sold 90/VAT (sales... 000 Sales of products to the buyer 90/Cost (sales) 43 (finished products) 428 . .. 571 429 Write-off of the cost of products sold 90/VAT (sales... 000 Sales of products to the buyer 90/Cost (sales) 43 (finished products) 428 ...

• Accounting for costs of allocated subsidies

  Income and expenses included in the cost of sales do not meet the requirements... who raises the problem of reliable formation of cost. A “collapsed” presentation or attribution... of expenses to the financial result understates the cost. The path chosen by the unitary enterprise contributes... from what sources are the costs included in the cost financed. Cases of income discrepancy... the enterprise has given priority to the reliable formation of costs, regardless of the sources of its coverage...

• Separate accounting of expenses and revenues when supplying products as part of the execution of state defense orders

  Others) are included directly in the cost price of a certain type of product manufactured by...) are included in the cost in proportion to the production cost of products manufactured by the state... products manufactured by the organization. Production cost includes direct... cost items that form the full cost of defense products supplied under the contract... accounting does not determine the correctness of the formation of the cost of work performed under the state defense order. ...

• How to account for expenses incurred from rental income?

  Expenses that do not form the cost of work and services. Costs that form the cost of work, services, finished goods... (general business expenses)). The list of costs that form the cost of work, services, and the procedure for distribution... as a result of income-generating activities, the cost of services, work is attributed to... Instruction No. 174n). Expenses that do not form the cost of work and services are reflected using... Instruction No. 174n provides for reflecting the generated cost of work and services in the debit of the account...

• Accounting for souvenirs

  Accounting at planned (normative-planned) cost. At the end of the month, the actual... of the museum) made in-house is determined. The cost of souvenirs includes the salary of the master, consisting of... 370 rubles). The actual cost of souvenirs exceeded the planned cost due to an increase... 370 The excess of the actual cost over the planned cost is reflected (33,900 - 30 ... the purchase of souvenirs is not taken into account in the cost of services provided within the framework of the state...

• Features of generating a financial results report (0503721) for autonomous institutions producing products

  Financial result at actual cost Dt 2 40110 130 Kt... analytical accounting of account 010960000 "Cost of finished products, work, services&... (210960000...) - in the amount of expenses that formed the cost of work performed, services provided in... adjusting entries according to deviations of the actual cost from the planned one, and in... the amount of products written off at the planned cost. Let's give an example of constructing the form... 226 9000 The actual cost has been generated 2 40110 130 2 ...

• Tax accounting of government agencies in 1C since 2017.

  In the Accounting Policy. Direct costs The cost of work performed, services provided is the sum... Direct costs, directly attributable to the cost of products, works, services, are taken into account on... allows you to calculate costs and formulate the cost of products (works, services) for... the activities of the institution. Choosing a method for calculating the cost of a unit of production (volume of work, services... two types: distributed (referred to as the cost of finished products sold (work performed...

If the definition of cost itself seems intuitive, then the formulas for its calculation are already strict mathematical expressions. To understand them, it is necessary to study the analysis methodology used in each specific case.

The first stage cost calculation always involves determining the costs of producing a product or service. This process is designated by the economic term: “product costing.” Costing can be planned, standard or actual. The first and second express an idea of ​​how the economic process should be structured. The actual calculation is made based on real data.

Calculation of product costs in the Republic of Belarus is a process regulated by many legislative and industry standards. This happens due to the practice of setting prices based on the value of the declared cost. In many cases, instead of market price changes, enterprises have to resort to regulating the cost calculation system through the redistribution of costs from one type of product to another in order to have the legal opportunity to raise/lower the price.

After determining the amount of costs and their distribution among expense items, it is time to calculate their specific value. Cost calculation formulas are used precisely for this purpose.

Costing is a universal procedure for any economic process. Such calculations are most difficult when analyzing industrial production. The largest number of different types of cost calculation formulas are used here. These formulas can be adapted for other economic processes.

Total cost formula

To generally assess the economic efficiency of an enterprise, the full cost formula is often used. In its simplest form it looks like this:

Total cost = sum of production costs + sales costs.

The full cost shows the largest amount of planned or actual expenses. The results of all other cost formulas are parts of this total value.

What is of great importance is not just the products produced, but the products sold. Therefore, the cost formula takes the following form:

Cost of goods sold = total cost - cost of unsold goods.

An example of calculating the full cost in expanded form, i.e. with individual elements selected, it will look something like this:

Total cost = Costs of raw materials and supplies + Energy costs + Depreciation charges + Salaries of key personnel + Salaries of management and support personnel + Deductions from wages + Sales and sales service costs + Transportation costs + Other costs.

Special formulas for calculating costs

Knowing the total cost of producing and selling a product or service does not provide sufficient information to understand and evaluate the individual elements of this system. Thus, the total cost does not show the cost per unit of production. The costs of an individual process remain uncertain. For this purpose, many specific cost formulas have been developed that calculate individual quantities.

Given that some costs depend on production volume, and some do not, it is customary to distinguish between variable and fixed costs.

The size of fixed costs is calculated by summing up the values ​​of some unavoidable costs of the enterprise. Calculation example:

Fixed costs = Fixed part of the salary + Expenses for rent and maintenance of premises + Depreciation deductions + Property taxes + Advertising expenses.

The methodology for calculating variable costs in general can be represented by the following formula:

Variable costs = Variable part of wages + Cost of raw materials and supplies + Cost of energy resources + Costs of transporting products + Variable part of business expenses.

The cost per unit of production in general can be found by simply dividing the sum of costs by the volume of output in physical terms:

Unit cost = Total costs/Number of units.

For the realities of a commercial organization, a more complex version of the same formula is more suitable:

Unit cost = Manufacturing costs/No. of units produced + Selling costs/No. of units sold.

There are many other formulas for calculating cost. Their exact number is difficult to determine, because... each of them is formed according to the requirements of the accepted calculation methodology.

In modern conditions of economic activity at enterprises of various industries, the problem of reducing production costs, increasing profits and profitability of production remains relevant. In connection with this, a critical area of ​​accounting at an enterprise is calculation, costing.

Concept and what is included in the cost

The cost of production is understood as the totality of all costs incurred by an economic entity for its production. The costs included in the cost of production include:

• the amount of raw materials or materials spent in the production of products;
• the amount of wages accrued to production workers engaged in production (both basic and additional);
• accrued amounts of deductions to extra-budgetary funds from the amount of wages of production workers engaged in production;
• the amount of fuel and electricity spent in the production of a certain type of product;
• the amount of expenses for the development and preparation of production of new types of products;
• the amount of general production and general business expenses attributed to a certain type of product in accordance with the calculated coefficient;
• costs incurred for packaging, transportation of finished products of a certain type, and other costs.

To calculate the cost of a product, it is necessary to add up all the costs associated with its production and sales.

Cost: formula

It should be noted that the following types of costs can be calculated:

• production;
• complete.

When calculating production costs, it includes all costs of production, with the exception of selling costs (selling expenses).

To calculate the full cost, the calculated production cost indicator is increased by the amount of commercial expenses (selling expenses).

Product cost - formula for calculating (1) production cost:

S/S production = M + P - V + E + T + ZPos + ZPdop + Report + RPOP + PB + PR + OPR + OHR, (1)

where M is the cost of raw materials;

P - costs for semi-finished products;

B is the amount of returnable waste;

E - electricity costs;

T - fuel costs;

ZPosn - costs of paying the basic wages of workers engaged in production;

ZPdop - costs of paying additional wages to workers engaged in production;

Report - the amount of contributions to funds that are extra-budgetary for the basic and additional wages of production workers;

RPOP - the amount of expenses for preparation and development of production;

PB - the amount of losses from defects;

PR - the amount of other costs;

OPR - part of general production costs;

OCR is part of general business expenses.

The total cost is calculated using formula 2:

C\C full = C\C production + RK, (2)

where С\С production - production cost;

RK - commercial expenses.

Calculation of production costs in production: example

Let's consider an example of calculating the production cost indicator based on the initial data presented in Table 1.

Table 1. Initial data for determining the cost of production, thousand rubles.

Index	March 2017	April 2017
1. Raw materials and supplies	456356	480679
2. Purchased semi-finished products	127568	187654
3. Returnable waste	20679	21754
4. Electricity costs for technological purposes	4580	4860
5. Fuel costs for technological purposes	2467	2070
6. Basic wages for production workers	34578	35560
7. Additional wages for production workers	11098	10655
8. Contributions to extra-budgetary funds in the amount of basic and additional wages of production workers	13795	13957
9. Expenses for development and preparation of production of new types of products	3560	3890
10. General production expenses	6777	7132
11. General expenses	7907	7698
12. Selling expenses (commercial expenses)	3540	4135
13. Production cost (1+ 2 -3 + 4 + 5 + 6 + 7 + 8 + 9 +10 +11)	648007	732401
14. Full cost (13+12)	651547	736536

The calculated total cost (indicator 14) reflects the sum of all costs for the entire volume of production. Provided that the enterprise produces 560 thousand units in March 2017, and 550 thousand units in April. the total cost of one unit of production will be:

• March 2017: 651547 / 560 = 1163.47 rubles;
• April 2017: 736536 / 550 = 1339.15 rubles.

Costing

At the end of the reporting period, the costs are calculated in monetary terms for the entire production of a certain type of product or one unit of a certain type of product in special forms of documents; it is possible to use the capabilities of the software. In this case, the process of calculating the cost of production is carried out.

One of the main characteristics that economic analysis uses to identify the efficiency of an enterprise is the cost of sold and finished products: that is why it is especially important to know what cost is.

Cost refers to the summed costs of monetary, labor, natural, and material resources spent on production and sales of products.

Cost includes costs that are associated with business activities; with the activities of an entrepreneur; with the manufacture and sale of certain products; which are documented.

Costs are accounted for in the period in which they actually occur. This does not depend on when they are paid.

Information about the cost of products for analysis can be obtained from the “report of financial results”, as well as from the Appendix to the annual balance sheet of the enterprise.

Types of cost

Selfishness happens:

1. planned and actual, depending on the efficiency of formation;
2. workshop, general plant, full, depending on the inclusion of expenses;
3. units or full volume of products, depending on the volume of production;

Methods for calculating product costs depend on the level of readiness of the product itself

The calculation formula is as follows:

- according to production costs

C= MH+ A+ Tr.+ Other Costs,

MH – material costs,

Tr. – wages plus contributions to various funds

— gross output

C = production costs minus non-production costs and deferred costs

— finished products (production cost)

C = cost of gross product minus changes in the balance of work in progress,

WIP - work in progress

- full cost

C= production costs plus non-production costs

— sold products

С= full together with commercial expenses minus the balance of unsold products

As for the object of cost calculation, it is any specific type of product or work, service, or all products of the enterprise.

These calculation objects can be measured:

• in physical terms: pieces, tons, liters, kilograms, meters, etc.;
• in increased natural units. For example, twenty pairs of shoes.
• in conditional or conditionally natural measures. Here the ratio of the studied indicator relative to the generality is measured: the content of a substance relative to one hundred percent of something.
• in cost measures. For example, costs per ruble of finished products.
• in labor meters, such as standard hours;
• in conventional meters.

According to the efficiency of control, there are four types of cost accounting: standard, incremental, order-based, process-by-process.

1. The normative method involves a pre-compiled cost estimate for an individual product, tracking changes in relation to the standard cost throughout the month, accepting actual costs and identifying the reasons for deviations from the standards. After this, the actual cost is determined taking into account deviations from the standards (increase or decrease relative to the planned cost).
2. The process-by-process method is used in enterprises where mass production of one or several types of products is carried out, which is characterized by a short technological process, in which there is no work in progress. The process-by-process method is that direct and indirect costs for all items for the production of all products are taken into account. The average cost of one unit of product (or service, or work) is calculated by dividing production costs for the entire period (month) by the number of finished products for the same period (month). In order to effectively control production costs, the production process is divided into separate processes, which is why the method is process-by-process.
3. Some types of production are divided into several stages that raw materials go through before becoming a finished product. Such stages are called repartitions; there may be several of them. Together they form the production process. Hence the name of the method - transverse. The cost object with this method is redistribution. When this method is used, direct costs are attributed to current accounting by redistribution, and not by category of product, service or work. This methodology is applied despite the fact that several types of products can be obtained in one processing stage. In most cases, the object of cost accounting is individual types of products or their groups, and not the entire volume of products.
4. When the order-by-order method is used, direct costs are recorded on costing items for individual orders. Orders are determined by a specific quantity of a certain type of product. The remaining expenses will be taken into account depending on the place of origin, their purpose (purpose), as well as by item. They are taken into account in the cost of specific orders, according to the selected distribution base. The object of cost accounting for the order-by-order method is a specific production order, after the completion of which the actual cost will be formed.

Work in progress includes all costs that occur in the process of fulfilling an order until it is completed. After registering an order, it is accepted for work, then numbers are assigned, which are registered from the beginning of the year. These numbers will be its code. A copy of the notice that the order has been opened is sent to the accounting department. The accounting department creates an accounting card in which the costs for this order will be recorded.

After the product is manufactured, the order will be closed. After this, the release of materials and the process of calculating wages to employees stops.

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The actual unit cost of the product will be determined after the order is completed by dividing the total cost by the number of products produced. This method allows us to understand what is cost in a fairly universal expression.

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Cost, what is it?

When producing something, an enterprise incurs certain costs that need to be repaid. To do this, the amount spent on the manufacture of goods or the required equipment for the provision of services is calculated.

Cost is in simple words

Cost in simple words is an estimate of the cost of producing a product or providing a service, taking into account all the materials required for this.

There are several types of cost:

• Full (average) includes all expenses, starting with the purchase of the required equipment, raw materials for production and other expenses;
• Such a cost as the marginal cost is formed from the quantity of goods produced or services provided, and also provides the opportunity to see the number of additional units.

It is with the help of marginal cost that an organization can determine the profitability of producing certain goods or providing services.

Types of cost

In addition to the main types, the cost includes various types, the main of which are the following:

• The shop floor includes all costs of production departments, workshops, etc., required for the manufacture of goods or provision of services;
• Production, supplemented by information from shop costs and expenses, both targeted and general;
• The full one includes production indicators together with the cost of expenses incurred by the enterprise to sell a product or service.

Indicators influencing cost

Any type or type of cost has certain components, consisting of the following indicators:

• Expenses for the purchase of required materials, etc., as well as for electricity and other resources required for production;
• Payment of wages to all existing employees;
• Depreciation of equipment and fixed assets, as well as their repair and maintenance;
• Expenses for advertising activities, etc.

Methods used in calculations

To carry out calculations and set prices, based on an analysis of production costs, calculation is used. Based on the specific focus of the enterprise, various calculation methods can be used to carry out calculations.

For industrial and other production, with the presence of various processing phases (processing) and other phases, the conversion method is used.

In turn, he has two calculation options:

• Non-semi-finished, in which the final cost of the product is not reflected step by step in the financial statements, but is formed and recorded only after it is ready for sale. At the same time, information for accounting about the availability of semi-finished products comes from the workshops through their operational accounting in kind;
• With semi-finished products, the cost of costs is calculated separately at each stage (redistribution). Then, to determine the final cost of the produced product, all the data obtained is summed up.

This method, as a normative one, is quite complicated in terms of calculations. At the same time, it makes it possible to have complete control over the costs for the required materials.

In addition, using this method, you can see whether everything is going according to certain standards, so that if you deviate from them, you can take the necessary measures.

The use of the process method is convenient for industries involved in the production of textiles, chemical production, mechanical engineering, etc. This method is characterized by determining the cost of not one unit, but the production of the entire series.

This method, as per order, is used when calculating the cost per unit of the final product. Most often, it is used by enterprises manufacturing equipment, little mass production or providing various types of services.

In this case, accounting is carried out only upon completion of all work related to the order.

How is the calculation done?

In many ways, the process of calculating the final cost of manufactured products depends on the direction of the enterprise’s activity and the method used for this.

Therefore, there is simply no universal formula or method for calculating the final cost of a product or service. But in general, if we simplify all the formulas, then the cost is calculated based on the amount of money spent on the production and sale by the enterprise of the goods produced or services provided.

Summarizing

Cost, in simple words, is an important indicator that affects the final cost of products sold or services provided by the organization.

At the same time, this indicator may change periodically and therefore you need to monitor it in order to adjust the cost of products so as not to go into the red and not go bankrupt.

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