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The total cost is determined as: Formula for calculating cost of goods sold

Cost price represents the current expenditure of an organization expressed in monetary form, which is aimed at the production and sale of goods.

Cost price is an economic category that reflects the production and economic activities of an enterprise and shows the amount of financial resources spent on the production and sale of products. Cost affects the profit of the enterprise, and the lower it is, the greater the profitability.

Cost formula

The cost price includes the sum of all expenses for the production of goods. To calculate using the cost formula, you need to sum up all the costs that were incurred during the production (sales) process:

The cost formula is as follows:

Full = Spr + Rreal

Here Full is the full cost,

Spr – production cost of a product, calculated by the sum of production costs (labor, depreciation, material costs, etc.),

Rreal – costs of selling products (storage, packaging, advertising, etc.).

If you need to determine the cost of a unit of production, then the formula for the cost of goods produced is calculated by simple calculation. In this case, the price of a unit of goods produced is determined by dividing the sum of all costs for the corresponding period by the quantity of goods produced during this time.

Cost structure

The cost formula includes the following components:

Raw materials needed in the production process;
Energy calculations ( various types fuel).
Expenses for equipment and machinery that are necessary for the operation of the enterprise.
Salaries of company employees, including payment of all payments and taxes.
General production expenses (office rent, advertising, etc.).
Expenses for depreciation of fixed assets.
Administrative expenses, etc.

Features of cost calculation

There are several various methods calculating the cost of goods. They can be applied according to the nature of the work, services or products produced. There are two types of product costs:

Complete, including all expenses of the enterprise.
Trimmed cost, which refers to the unit cost of variable costs.

Actual and standard costs are calculated based on the expenses incurred by the company. At the same time, standard cost helps control costs for various resources and, in the event of deviations from the norm, timely provision of all necessary measures. The actual cost per unit of output can be determined after calculating all costs.

Types of cost

Costs are of the following types:

Full (average) cost, implying the entire set of expenses, including commercial costs for the production of products and the purchase of equipment. The costs of creating a business are divided into periods during which they are repaid. Gradually, in equal parts, they are added to general production costs.
The marginal cost, which is directly dependent on the quantity of products produced and shows the cost of each additional unit of goods. This indicator reflects the effectiveness of subsequent expansion of production.

Also, the cost can be:

Shop cost, which includes the total costs of all departments of the enterprise that are aimed at producing new products;
Production cost, which makes up the workshop cost, including target and general expenses.
The full cost price, which includes not only production costs, but also expenses incurred by the company in the process of selling goods.
General business (indirect) cost, consisting of business management expenses and not directly related to the production process.

The essence and types of cost. Cost classification

The cost of production is the enterprise's expenses for its production and sale, expressed in monetary terms. Calculation and analysis of product costs is the most important task any enterprise and is included in the management accounting system, because It is cost that underlies most management decisions.

There are planned and actual costs. The planned cost of production includes only those costs that, given the level of technology and organization of production, are necessary for the enterprise. They are calculated on the basis of planned standards for the use of equipment, labor costs, and material consumption.

The reported cost is determined by the actual costs of manufacturing the product.

According to the sequence of formation, they distinguish between technological (operational) cost, shop cost, production cost and total cost. Technological cost is used to economically evaluate options for new technology and select the most effective one. It includes costs that are directly related to the performance of operations on a particular product. The workshop cost is more than wide range costs: in addition to technological costs, includes costs associated with organizing the work of the workshop and managing it. Production cost includes the production costs of all workshops involved in the manufacture of products and the costs of general enterprise management. The total cost includes production costs and non-production (commercial) expenses.

The identification of such types of costs as individual and industry average allows you to create a basis for determining selling prices (wholesale). The total cost of an individual enterprise for the production and sale of products constitutes the individual cost. The average industry cost characterizes the cost of producing a given product on average for the industry.

By economic essence costs of production and sales of products are divided into costs by economic elements and costing items.

The following economic elements are distinguished:

material costs (less returnable waste);
labor costs;
deduction for social needs;
depreciation of fixed assets;
other costs.

Material costs include:

the cost of raw materials purchased from outside;
cost of purchased materials;
the cost of purchased components and semi-finished products;
the cost of production work and services paid to third parties;
cost of natural raw materials;
the cost of fuel of all types purchased from outside, used for technological purposes, production of all types of energy, heating of buildings, transport work;
the cost of purchased energy of all types, spent on technological, energy, motor and other needs.

The costs of material resources included in the cost of production exclude the cost of sold waste.

Industrial waste refers to the remains of raw materials, materials, semi-finished products, coolants and other types of material resources generated during the production process, which have lost completely or partially the consumer qualities of the original resource. They are sold at a reduced or full price material resource, depending on their use.

Labor costs include the cost of remunerating key production personnel, including bonuses, incentives and compensation payments. Contributions for social needs include mandatory contributions to social insurance, to the employment fund, pension fund, for health insurance.

Depreciation of fixed assets is the amount of depreciation charges for the complete restoration of fixed assets.

Other costs - taxes, fees, deductions to extra-budgetary funds, loan payments within the limits of rates, business travel costs, training and retraining of personnel, rent, depreciation of intangible assets, repair fund, payments for compulsory property insurance, etc. .

Based on the classification of costs by economic elements, it is impossible to determine the costs directly related to the production of a specific product; therefore, costs are grouped according to costing items.

The following cultural articles are distinguished:

Raw materials and supplies, minus sold waste.
Purchased semi-finished products and components.
Fuel and energy for technological purposes.
Main wages production workers.
Additional wages for production workers.
Contributions for social needs.
Wear and tear of tools and devices for specific purposes and other special expenses.
Expenses for the maintenance and operation of technological equipment.
________________________
Total technological cost
Shop expenses.
________________________
Total workshop cost
Factory overhead production costs. Total production cost
Non-production expenses.
________________________
Total total cost

When forming the actual cost, the costs of warranty repair and warranty service for products for which a warranty period is established, losses from downtime due to internal production reasons, shortages material assets in production and warehouses in the absence of perpetrators, benefits in connection with loss of ability to work due to industrial injuries, paid on the basis of court decisions, payments to employees released from enterprises and organizations in connection with their reorganization, reduction in the number of employees and staff, and also losses from marriage.

The classification of costs by costing items underlies other classifications of costs included in the cost of production.

The following classification criteria are distinguished when subdividing costs:

attitude to the production process;
attribution to cost;
dependence on production volume.

In relation to the production process, costs can be basic and overhead; by attribution to cost - direct and indirect. Depending on the volume of production, expenses can be conditionally variable (proportional) and conditionally constant (non-proportional).

Product cost calculation

Costing is one of the main tasks of management accounting in an enterprise. In cost calculations, material costs of fuel and energy, purchased semi-finished products and components are direct costs and are included according to current consumption standards and product prices.

The basic wages of production workers include wages per product, calculated by labor intensity or hours worked, prices and tariff rates. Additional wages take into account payment for time not worked.

Social contributions include social insurance, pension fund, employment fund, compulsory health insurance and is carried out in accordance with current legislation.

Wear and tear of tools and special-purpose devices and other special expenses are included in the cost of production on a monthly basis depending on the standard service life of the tool and equipment.

The costs of maintaining and operating equipment are complex costs, they include:

costs of maintaining equipment and remuneration of workers involved in servicing the equipment, mandatory deductions, repair costs and depreciation;
compensation for wear and tear of low-value and fast-wearing instruments and costs for their restoration;
other expenses.

Expenses for the maintenance and operation of equipment (RSEO) can be included in the cost in proportion to the basic wages of the main production workers (OPW) or using the method of estimated (standard) rates calculated on the basis of machine-hour ratios. The estimated rate is the amount of costs for the maintenance and operation of equipment per hour of operation of the equipment on which the product is manufactured.

The calculation is carried out in the following order. For each workshop, technological equipment is united into homogeneous groups. Based on them, the amount of operating costs per hour of equipment operation is established. For each product (part, unit), the time spent on processing (operations) for this type of technological equipment is standardized. In accordance with this time, the cost of maintaining and operating technological equipment for this product is included in the calculation.

Shop expenses include:

wage fund for shop personnel with deductions;
maintenance of buildings, structures and equipment for workshop purposes, including property insurance, repairs and depreciation;
expenses for rationalization and inventive work;
labor protection costs;
compensation for wear and tear of low-value and rapidly wearing equipment; other expenses.

Shop costs are included in the unit cost of production in proportion to the amount of the basic salary of the main production workers and the costs of maintaining and operating the equipment.

General production expenses include:

costs associated with production management, including the wage fund of management personnel with deductions, travel costs, maintenance and servicing technical means and management (CC, communication centers, alarm systems), payment for consulting, information and audit services, bank services, entertainment expenses;
expenses for training and retraining of personnel;
expenses for tests, experiments, research, maintenance of general plant laboratories;
labor protection costs;
expenses for maintaining fire, paramilitary and security guards;
general business expenses - insurance, maintenance, current repairs and depreciation of fixed assets for general plant purposes;
taxes, fees and other mandatory deductions.

General production expenses include the cost of paying interest on bank loans within the rate established by law, as well as depreciation of intangible assets, including patents, licenses, know-how, and software products.

Commercial (non-production) expenses include costs for containers and packaging, costs for delivering products to the departure station, as well as maintaining personnel to ensure normal operation of the consumer within the established period.

Commercial non-production expenses are calculated as a percentage of production costs (3-7%).

Calculation methods

Calculation methods - method of calculation depending on the calculation unit. There are 2 groups of cost calculation methods: preliminary calculation methods and production calculation methods.

The first group of methods includes:

unit cost method;
aggregate method;
point method;
parametric method.

Second group of methods:

custom;
transverse;
normative.

Unit cost method. For a significant number of types of engineering products, there is a relationship (linear, power law) between one of the parameters of the machines and the costs of their production.

where Syi is the specific cost of the existing structure per unit of parameter, rub.; ni is the value of the defining parameter of the new design.

In mechanical engineering, specific costs per unit mass of a structure (metal-cutting machines, steam turbines) have been developed to the greatest extent; in the electrical industry - from technical parameters(power of electrical machines, etc.).

Aggregate method. On its basis, the cost is determined as the sum of costs for the production of individual structural parts and assemblies, the value of which is known. A unified system of automation tools - GSP - was created on a similar principle.

The scoring method consists of assessing, using points, each technical and economic indicator of a product that is associated with certain consumer properties of a new design. This assessment is performed using special rating scales, in which the number of points depends on the level of a particular product quality indicator.

The parametric method allows you to find the cost based on the relationship between the value of a set of technical parameters of similar products and the costs of their production. Such dependencies make it possible to build correlation models that establish corresponding connections in mathematical form.

The custom costing method is used primarily in individual and small-scale production at mechanical engineering and instrument making enterprises that produce non-repeating items or small batches of products. The essence of the order-by-order method is that production costs are taken into account for individual orders. The actual cost of an order is determined upon completion of the manufacture of products or work related to this order by summing up all costs. To calculate the cost per unit of production, the total cost of the order is divided by the number of products produced. The method has a drawback: the execution of the order usually does not coincide in time with the calendar periods adopted in the plan, and this causes significant fluctuations in the cost of products of the same name released in different months.

The cross-cutting method of calculation is used at enterprises of the metallurgical, chemical, oil, textile, paper and other industries (in industries with repeating products that are homogeneous in terms of source material and processing technology). Redistribution - part technological process. The cost is determined by individual stages of the technological process. Progressive costing is especially necessary in cases where the products of individual processing stages (semi-finished products) are supplied to other enterprises. The standard calculation method is used mainly in enterprises with mass and serial production in mechanical engineering and instrument making.

Standard cost estimates are based on reasonable consumption rates for all cost items; the actual cost is determined based on deviations from the standard cost. The method is used in all branches of production both for calculation purposes and for ongoing cost control.

Product price. Profit

Price is the monetary expression of the cost of a unit of goods. The price performs 4 main functions:

accounting;
distribution;
stimulating;
regulating

The accounting function of price is implemented in measuring the cost of goods, the distribution function is in the distribution of national income, the stimulating function is in stimulating scientific and technological progress and production development, and the regulating function is in regulating supply and demand. In practice, several price classifications are bottled:

turnover maintenance;
by area of operation;
by duration of action;
by the degree of freedom from state influence in their determination;
on the distribution of transport costs.

By servicing turnover, we distinguish between wholesale prices of enterprises, selling prices of manufacturing enterprises, retail prices, purchase prices, and tariffs. The wholesale price of the enterprise includes the full cost and profit.

The selling price is formed on the basis of the wholesale price, taking into account VAT (value added tax) and excise tax (on excisable goods).

Retail price is the selling price taking into account trade markups (margins), which include costs trade organizations, profit and value added tax on trade services. Diagram 1 shows the formation of the retail price.

Full cost
+
_______Profit_______
Enterprise wholesale price
+
VAT
+
______[Excise tax]______
Selling price of the enterprise
+
___________Trading markup__________
Retail price

Purchasing prices are the prices (wholesale) at which agricultural products are regulated by collective farms, state farms, farmers and the population. Prices are negotiable; their difference from holiday and retail prices is that they include VAT and excise tax, because they are not included in the cost of material and technical resources acquired by agriculture. Tariffs are divided into tariffs for freight and passenger transport and paid services to the population.

The classification of prices by territory of coverage distinguishes between unified (zone) and regional (zonal) prices. Uniform prices are established and regulated by federal authorities (gas, electricity). Regional prices are regulated by local governments ( public utilities, purchase prices, tariffs for paid services to the population.

Classification of prices according to the duration of action divides them into constant (relative to a certain period of time), temporary, seasonal, stepwise, “for a period”. Currently, there are no constant prices in the domestic economy, because the longest period of their validity is determined by the level of inflation. Temporary prices are set for the period of development of new products; seasonal prices are used in industries that process agricultural products. Stepped prices are associated with the stages of the product life cycle, reaching the maximum high values during a period of growth and a sharp rise in demand for a new, “pioneer” product. Prices “for a period of time” currently act as contract prices, if there is a contract for the sale of any product. Conclusion of a contract for next term implies their change. A type of contract prices are negotiated prices.

The degree of freedom of prices from the influence of the state when determining them distinguishes between free prices, price regulation and fixed prices. Free prices are formed on the market under the influence of supply and demand, regulated prices are also formed as a result of fluctuations in market conditions, but the state either directly limits them or regulates profitability. Fixed prices are set by federal authorities for a limited range of goods.

The classification of prices according to the distribution of transport costs is called the franking system (“free” - free from payment). The essence of the system is that the costs of transporting products to the destination specified in “free” are borne by the supplier of the products, and the rest by the buyer.

Unit cost- this is the cost estimate of the unit of product (work, service) used in the production process:

natural resources,
raw materials
materials,
fuel,
energy,
fixed assets,
other costs for its production and sale (marketing).

Calculation of unit cost of production

To calculate the cost per unit of production, the total amount of costs for the reporting period is related to the number of products produced.

To calculate the planned cost per unit of production, a cost estimate is made. Depending on what costs are included in the cost of a unit of production, it can be production and full.

Synonyms

Average costs

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Stage 1. All actual expenses incurred during the reporting period on the basis of primary documents on the consumption of materials, calculation and distribution of wages, depreciation of fixed assets and intangible assets for cash expenses are reflected in production accounts:

— D 20 K 10(51, 60, 69, 70, 96, etc.) - direct costs for the manufacture of products (performance of work, provision of services) of the main production - directly related to the manufacture of products, works, services.

— D 25 K 10(51, 60, 69, 70, 96, etc.) – maintenance and management costs structural unit organization (shop, production, workshop, etc.).

— D 26 K 10(51, 60, 69, 70, 96, etc.) – expenses for general maintenance and organization of production and management in general (general expenses).

— D 97 K 51(60, 76, etc.) – expenses incurred in the reporting period, but related to future periods.

— D 96 K 10(23, 60, 69, 70, etc.) – expenses incurred from the created reserves (for repairs of fixed assets, payment of employee vacations, etc.).

Stage 2. Costs are distributed according to their intended purpose after the end of the reporting period. First of all, costs are allocated auxiliary production. The actual cost of products (work, services) of auxiliary production, reflected in the debit of account 23, is written off from the credit of account 23 to the debit of accounts 25, 26, 29.

Deferred expenses are written off from the credit of account 97 to the debit of accounts 25, 26 in the share related to the reporting period.

Reserves for upcoming expenses and payments are being formed in accordance with planned calculations ( D 25 (26) K 96).

General production and general business expenses are distributed between certain types products, works and services. The basis for the distribution of these costs can be: wages of production workers, direct costs, etc.

General business expenses can also be written off as a total amount from credit 26 V debit 20, if the actual cost of each type of product is not determined by the enterprise. General production costs are distributed similarly.

Expenses recorded on accounts 25 and 26 are written off at the end of the reporting period in debit 20 With credits 25, 26.

According to PBU 10/99 organizations can adopt in their accounting policies the procedure for writing off general business expenses directly to debit 90 With credit 26.

Losses from marriage with credit 28 V debit 20.

Upon completion of this stage, account 20 collects all direct and indirect costs for the production of products (works, services) for the reporting period.

3 (final) stage. The actual production cost of manufactured products is determined. To calculate it, it is determined work in progress at the end of the period, that is, products that have not passed all stages of processing, testing, acceptance, and are incomplete.

To determine work in progress, it is necessary to know the number of products, parts, blanks remaining in the shops at the end of the period unfinished processing, and the procedure for evaluating these products, parts of blanks. This quantity of products is identified through an inventory of work in progress. The cost of work in progress is assessed by cost items depending on the type of production.

To calculate income tax (Article 319 of the Tax Code of the Russian Federation), the procedure for assessing work in progress is established by the taxpayer on one's own.

Actual production cost finished products (works, services) ( With g.p) calculated as follows: C g.p = C n.p.n. + Z f. - About v. - Oh bro. – With n.p.k. ,

Where With n.p.n. , With n.p.c.– value of work in progress at the beginning and end of the reporting period, respectively, rub.; Z f. – actual costs of production for the reporting period, rub.; About in – returnable waste, rub.; About br.– actual cost of the final defect, rub.

IN simplified version The actual production cost is calculated as follows:

Actual net worth of finished products = WIP in + costs of the reporting period (D 20) – WIP k, Where

WIP in – cost of work in progress at the beginning of the reporting period; WIP to – cost of work in progress at the end of the reporting period.

The actual production cost of finished products is written off from account 20 depending on what is accepted in accounting policy organizing an accounting option:

1st option – to account 43 “Finished products”;

2nd option – to account 40 “Release of products (works, services)”.

Write-off of cost.

Debit 90 “Sales” subaccount “Cost of sales” Credit 43 “Finished products”– the cost of finished products in planned accounting prices is written off.

Classification of accounts by purpose and structure.

Characteristics of matching accounts. Basic operations and accounting entries for the formation of financial results from the sale of products.

Operating accounts, accounts economic processes.

Matching accounts intended for calculating financial result, both individual business processes and the enterprise as a whole by comparing debit and credit turnover recorded in these accounts. This is done by comparing debit and credit turnover by specific account. A peculiarity of the structure of these accounts is the reflection of one accounting object in two different estimates: in one - on the debit side, and in the other - on the credit side of the account.

Account data is divided into two subgroups:

1) Operational accounts are provided to summarize information about individual processes economic activity enterprises, as well as determination of the financial result for each of them.

These include accounts: 90 "Sales", 91 "Other income and expenses."

The debit of these accounts records: the cost of sold products, works, services; residual value of fixed assets and book value of other current assets; expenses associated with the disposal of assets, as well as fines, penalties, penalties and interest paid. The credit of accounts 90 and 91 reflects revenue and income from other operations. By comparing debit and credit turnovers, profit or loss from sales (account 90) and other operations (account 91) is determined.

These accounts do not have a balance; the balances received from them are written off monthly and included in the financial results from sales and other operations from subaccount 9 to the debit or credit of the account 99 "Profits and losses."

These accounts record expenses and income from operations related to the sale of products, performance of various works, provision of services, disposal of fixed assets, intangible assets, securities, materials.

2) Financial-resulting accounts are intended to determine the financial result of the organization’s economic activities. An example is the active-passive account 99 "Profit and loss" and account 98 “Deferred income” and account 848 “Retained earnings (uncovered loss)”. By account 99 reflected financial result(profit or loss) from the sale of various property items and other operations (operating and non-operating income, reduced by the amount of operating and non-operating expenses). By account credit 99 profit is recorded, and losses are recorded in debit.

By comparing the turnover of debit (loss) and credit (profit), the final financial result is determined: the credit balance shows profit, the debit balance shows loss.

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Cost at acceptance

Product cost- this is the amount of costs for its acquisition. In MySklad this is the price from the document Acceptance or Capitalization plus overhead costs.

Cost is calculated according to the FIFO principle (“first in, first out”). If the current balance of goods was formed by several purchases with different prices, then upon sale, the goods from the earliest acceptance will be written off first.

To calculate costs in this way, it is important that the purchasing document always comes before the sales document. Otherwise, it will be a sale of a missing product and its cost will be zero.

Changing the purchase price in the product card does not affect the cost of goods that are already in stock.

Overheads- the amount of additional costs for receiving the goods, in excess of the purchase price. They can be indicated in the document Acceptance and they will increase the cost of each product commensurate with price, weight or volume.

Cost in technical terms operations

The product assembled as a result of the technological operation will have a cost equal to the sum of the cost of materials plus production costs. If the finished products of those. operations are several different goods, then their cost will be the same.

Cost price in sales documents

In the document Shipments And Retail sales displays the cost per unit of the product and the sum of the cost for the entire quantity. If several identical goods are sold from different purchases, the average unit cost will be shown.

Profit in the sales document is calculated as the difference between the amount of the sales price and the amount of cost.

Please note that if the quantity of an item in the document is highlighted in red, then you are selling more than is in stock. The cost will be lower than the real one, and the profit will be overestimated.

By setting access rights, you can hide the display of costs in sales documents and reports from individual users.

Cost of goods after the buyer returns

Document Buyer Return returns the goods with the same cost, but a new date of arrival at the warehouse, this is important for calculating profit according to FIFO.

The price in the return document does not affect the cost of the product in any way, but only displays the amount for which it was previously sold.

Cost of travel

Moving goods from one warehouse to another does not affect its cost.

Cost of services

When selling services that require upfront costs, you can indicate their cost. Indicate it in the Sale, Shipment or Return document (without reason). If the cost of services is always the same, set the value of the purchase price in the service card. It will be automatically inserted into the documents in the column Unit cost. More information about the cost of services

Cost in reports

In the report Leftovers And Profitability The amount of cost and the average cost of one unit of goods are also shown, which is calculated as the amount of cost divided by the balance.

If you open the report details Leftovers, then you can clearly see which documents and at what cost make up the current balance of the goods. This will make it easy to identify the purchase document in which an error was made and the price of the goods was not indicated.

Report details Profitability will help you find sales in which the cost of the product is higher than the sales price or, on the contrary, zero.

In report detail Revolutions the cost price of the product is displayed in each document that changed its balance in the warehouse.

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Cost of manufactured products

Definition

In management accounting, the cost of goods manufactured ( English Cost of Goods Manufactured, COGM) is a calculation of production costs that were incurred in an accounting period. In other words, this is the cost of products that were produced during the accounting period.

Industrial enterprises transform raw materials and materials into finished products through the use of labor and factory equipment.

For example, a smelter produces pig iron by converting iron ore in a blast furnace. Preparing a profit and loss statement for an industrial enterprise requires calculating the cost of production. At the same time, trading companies do not calculate the cost of manufactured products, since they do not produce products themselves, but buy them from other companies for the purpose of further resale. Such companies calculate the cost of goods sold ( English Cost of Goods Sold).

As a rule, the calculation of the cost of goods manufactured becomes part of the calculation of the cost of goods sold, but for management purposes it can also be submitted as a separate report.

Formula

In general, the formula for calculating the cost of goods sold can be presented as follows.

In essence, it is the sum of direct costs of raw materials and supplies, direct labor costs and production overhead, which is adjusted for the net change in work in progress in the accounting period.

In this case, the direct costs of raw materials and supplies consumed for the production of products in the accounting period are calculated using the following formula.

At the same time, under pure purchase main raw materials are understood as the costs of their acquisition in the accounting period, minus returns (for example, due to non-compliance with the declared quality, manufacturing defects and damage during transportation) and discounts (for example, a discount may be provided for early payment).

Calculation example

The table shows an example of calculating the cost of manufactured products.

Direct costs for raw materials = 14750 + 2800 - 3500 = 14050 USD

Cost of manufactured products = (14050+5300+3700)+(5450-6280) = 22220 USD

Cost of goods manufactured and cost of goods sold

As mentioned above, the cost of goods manufactured is part of the cost of goods sold calculation.

Their relationship can be reflected using the following formula.

It should be noted that these two indicators may differ significantly. For example, companies that produce products with highly seasonal demand may stock products for weeks or even months without having to make sales. In this case, the cost of goods sold will be equal to 0, although production will continue.

Calculation of product costs with an example of calculation in Excel

Cost is a monetary reflection of the current costs of an enterprise for the production and sale of goods.

For the production sector, this indicator is the basis for pricing. The basis of calculation is the calculation of distribution costs. You can simplify the process using Excel.

Product cost calculation in Excel

It has already been noted that each company will have its own list of costing items. But you can substitute any data into the existing framework, change the formulas if necessary, and get a ready-made calculation.

For an example of costing and selling price calculation, let's take data from the following table:

Costing calculation scheme:

We calculate returnable waste from the costs of raw materials and materials (we take the specified percentage).
To determine the additional salary, we take into account the following data: if the basic salary is more than 200 thousand rubles, then the additional salary is equal to 10% of the basic salary; less than 200 – 15%.
Salary accruals - 30% of the amount of basic and additional wages (the additional 10%, which were introduced in 2015 for annual income of more than 600 thousand rubles, are not taken into account here).
Equipment maintenance costs are 5% of the basic salary.
General expenses – 9% of the average basic salary.
General production – 18% of (25% OZP + 75% DZP). WZP – basic salary, DZP – additional salary.
Production cost = the sum of expenses for the maintenance of equipment, raw materials and materials, fuel and energy, components, spare parts and additional costs, accruals for salary, general production and general expenses minus returnable waste.
Non-production costs (costs) – 3% of production costs.
Total cost = production cost + production costs.
We calculate the manufacturer's profit as a percentage of the total cost.
Wholesale price = full cost + manufacturer's profit.
VAT is calculated based on the wholesale price.
Selling wholesale price = manufacturer's wholesale price + indirect taxes (VAT in the example).

Based on the diagram, we will enter the data and formulas for calculation into an Excel spreadsheet.

how to make a Eurobook sofa

Instructions with video tutorials, drawings, dimensions and parts list.

I will tell you how to make the simplest Eurobook folding sofa. This time in the form of video instructions with comments, drawings for assembling the sofa and full list details.

This sofa has sleeping place size 2 X 1.5 meters. You can do it yourself, without transformation mechanisms, without expensive tools. All materials for production are available to everyone. We will make the most economical and ascetic sofa, but we will not forget about quality. When purchasing materials, I spent 6 thousand rubles (at that time about $85). In the first video I will talk about the advantages of this sofa, the materials and tools.

Based on my instructions you can easily change appearance sofa according to your taste.

For example, it won’t be difficult to make a sofa in the following options (top option in the video):

If you deposit more significant changes(enlarge the drawer), then you can make a sofa with armrests.

And even on the basis of a Eurobook, adding an ottoman, you can make a corner sofa. We have already discussed how to make armrests and an ottoman in the instructions for the corner sofa.

Below you can see how much and what material was needed to make the sofa. The cost of all materials was less than 6,000 rubles or $85 at that time ($1 = 70 rubles).

List of parts for assembling the Eurobook sofa:

AND total quantity material (all dimensions in millimeters)

Note: If you want to add armrests to the sofa, then read about the necessary changes on the next page of this instruction.

Disclaimer: All instructional material is free for anyone who wants to make a sofa themselves. Use as you wish. The author is not responsible for any consequences of using this instruction.

For those who have decided to start their own business, it will be necessary to study the question of how to calculate the full cost of production. This is important for its implementation. In order to understand this issue, you need to clearly understand what the cost of a product is.

Concept of cost

Cost is the total and partial amount of costs for the production and sale of a product. When producing a product, the following resources are required:

the material from which the product is directly produced;
fuel necessary for transporting materials for manufacturing or transporting finished products to points of sale;
repair work;
workers' wages;
rental of premises, if required.

Each product is individual and requires its own resources for production. And to figure out how to calculate the cost of production, you need to take into account each stage separately.

Economic concepts of cost

Full cost

This is the ratio of all costs to total production. This calculation is suitable for mass production. Costs include:

Employees' salaries.
Contributions to state funds.
Raw materials used to manufacture products.
Accounting for equipment wear and tear and repair costs (depreciation).
Advertising expenses.
Other expenses.

It is these costs that determine how to calculate the cost of finished products. Typically used in large, large-scale enterprises.

Marginal cost

This concept includes the cost of a manufactured unit of production. How to calculate the actual cost of finished products (also called full cost)? This can be done using the formula, but for this you need:

Calculate how many raw materials and materials are used to produce one copy of the product.
Calculate how much fuel, lubricants and electricity are consumed per unit of product.
Take into account the costs of semi-finished products purchased from other factories, if any.
Calculate how much an employee will receive by producing this type of product (taking into account all social payments).
Know the costs of repairs and depreciation of equipment.
Take tool wear into account.
Calculate the costs of maintaining the production premises.
Other costs.

After analyzing the data above, you can imagine how much raw material is needed to produce a unit of product. And if we add to all this: transport transportation; contributions to state funds; vacation pay for employees; taxes; expenses incurred by the organization due to unforeseen circumstances - all this will give you a complete picture of how to calculate the actual cost of production.

Types of cost

In addition to the main types of cost, there are also types characteristic of a particular production.

Aggregate cost. The cost of manufacturing a product on a specific machine, be it a technical machine or a woven one, is estimated.
Prime cost. In addition to estimating the costs of producing products in a workshop, the costs of maintaining and maintaining the territory itself are also taken into account: heating, security, alarm, fire protection, management structure.
General production costs. Consist of costs for depreciation and repair of equipment, advanced training of workers, taxes.
Full cost. Among other expenses, it includes costs for packaging, loading and unloading of products, and transportation services.

Why do you need to calculate the cost of production?

When opening their own business, not everyone rushes to immediately calculate the cost of production, thereby making a huge mistake. This mistake can lead you to at least losses, and at most to complete bankruptcy.

What a cost analysis will give you:

Shows the profitability of all your products. After all, it depends on it how efficiently raw materials and other, monetary and human, resources will be used.
Generates retail and wholesale prices. The correct effective pricing policy will allow you to make production competitive.
It will make it clear how efficiently the production process at the enterprise operates. The lower the cost of production is compared to the average statistical data in this industry, the more efficiently the company will work. Accordingly, the higher the costs, the lower the profitability and efficiency of the enterprise.
Will generate an indicator for reducing fixed and variable costs.

Your profit depends on the cost calculation. A circular system operates here: the lower the cost, the greater the profit, and the higher the cost, the less profit. Therefore, every manufacturer strives to reduce production costs in pursuit of profit. At the same time, the quality of the product may suffer. In order to properly run your business, you definitely need to calculate the cost of products; this is one of the main management elements in the enterprise.

How to calculate the cost of production using the example of a furniture workshop

As an example will be taken furniture company LLC "Divan" It is required to calculate the cost of a manufactured product for December. A total of 12 corner sofas, 10 book sofas, and 24 easy chairs were produced.

Total cost calculation table

Number	Cost item	Corner sofa	Sofa - book	Armchair
1	Raw materials used	192,000 rub.	60,000 rub.	72,000 rub.
2	Energy	21,000 rub.	16,000 rub.	18,000 rub.
3	Workers' salaries	36,000 rub.	15,000 rub.	16,800 rub.
4	Contributions to funds	4320 rub.	1500 rub.	1680 rub.
5	Equipment operation	10,000 rub.	7000 rub.	5000 rub.
6	Other costs	2000 rub.	2000 rub.	2000 rub.
Total:		RUB 265,320	RUB 101,500	RUB 115,480

Total:

The cost of one corner sofa is: 265,320: 12 = 22,110 rubles.
The cost of one book sofa is: 101,500: 10 = 10,150 rubles.
The cost of one chair is: 115,480: 24 = 4,812 rubles.

How to calculate cost of goods sold

Let's take as an example a sofa manufacturing company that is already familiar to us. In December, ten corner sofas, seven book sofas and twenty armchairs were sold.

Let's use the data above and calculate:

Ten corner sofas cost us 221,100 rubles (22,110 x 10).
Seven book sofas - 71,050 rubles (10,150 x 7).
Twenty chairs - 96,240 rubles (4812 x 20).

The total result was: 388,390 rubles.

Cost Features

In the process of its work, each organization strives to minimize its production costs. Therefore, the question of how to calculate the cost of production will depend on a number of factors. All expenses are directly included in the cost of production, up to and including heating the premises in the winter (not included in the summer). All this allows us to judge that the main management mechanism is the analysis and accounting of all aspects of the organization’s economic activity, which will allow us to judge proper operation companies. In this case, a specific estimate of the cost will depend on the inventory, technological features of the enterprise and on the managers themselves, who own this or that information about production.

Each enterprise has its own calculation method. For example, production confectionery according to the costing system will differ significantly from the cost calculation method in a furniture factory. In the first case, electricity and shelf life will be of paramount importance (it must be given special attention), and in the second case, the first place will be taken by large financial resources spent on raw materials and transportation of large-sized products. And, accordingly, for an enterprise producing sweet products, the calculation method is one, and for upholstered furniture - another.