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named after N.P. OGAREVA
Faculty of Economics
Department of Economics and Logistics
COURSE WORK
ANALYSIS OF FACTORS AFFECTING PRODUCTION COST REDUCTION
Specialty 080105-65 finance and credit
Designation term paper KR-02069964-080105-65-25-08
Work manager
cand. economy Sciences, art. teacher *.*. ********
Saransk 2008
GOUVPO "MORDOVA STATE UNIVERSITY
named after N.P. OGAREVA
Faculty of Economics
Department of Economics and Logistics
TASK FOR COURSE WORK
Student *** group ******* **********
1 Topic Analysis of factors affecting the reduction of production costs (on the example of a specific product)
2 Deadline for submission of work for defense ___________
3 Initial data for scientific research works of domestic and foreign authors, textbooks, periodicals, statistical data
4.1 Theoretical aspects of the analysis and management of production costs
4.2 Analysis of factors affecting the cost of production by example
ZAO MPK Saransky
4.3 Proposals to reduce the cost of production
Head of work ____________________________________**** *****
The task was accepted for execution by ______________________________
The course work contains 54 pages, 9 tables, 53 references, 3 applications.
COST, COSTS, COST CALCULATION, FACTORS AFFECTING COST, COST ANALYSIS.
Object of study: analysis of the cost of production in CJSC MPK Saransky
The purpose of the work is an objective assessment of the level and dynamics of the cost of production, identifying ways to reduce it, as well as identifying reserves aimed at reducing the costs of production and sales of products.
Research methods: analytical and statistical.
The results obtained: the theoretical aspects of the analysis of the cost of production were studied, the factorial analysis of the cost of production of CJSC MPK Saransky was carried out, and the main proposals for reducing the cost were identified.
The degree of implementation is partial.
Scope - in the practical activities of CJSC MPK Saransky.
Introduction 5
1Theoretical aspects of the analysis and management of production costs 8
1.1 Concept, economic content and types of cost 8
1.2 Classification of costs that form the cost.
Product costing 11
1.3 Factors affecting the cost of production 18
1.4 Importance and objectives of cost analysis and management 22
2 Analysis of factors affecting the cost of production
on the example of CJSC MPK Saransky 25
2.1 Analysis of the dynamics and structure of production and sales costs
products 25
2.2 Factor analysis of production costs 31
2.3 Cost effectiveness analysis 39
3 Proposals to reduce production costs 43
3.1 Reserves for reducing the costs of production and sales of products 43
3.2 Proposals for changing the structure of production costs 45
Conclusion 49
References 51
Appendix
INTRODUCTION
Currently, production is developing in Russia, and with it the market and the country's economy. If earlier in the early nineties, with a shortage of goods, there was no acute problem of selling products, today we can say that it exists. With the process of filling the market with goods and services, competition is growing, which makes each market participant fight for its place. In competition, the winner is the one with the highest quality and the lowest price for a product or service. It is these two main factors that influence the outcome of the struggle, and the reserve for improving these factors is precisely included in the cost price.
Most commercial enterprises, before starting their production, they set profit as the main goal. The profit of an enterprise largely depends on the price of products and the costs of its production. The price of products on the market is a consequence of the interaction of supply and demand. Under the influence of the laws of market pricing, in conditions of free competition, the price of products cannot be higher or lower at the request of the manufacturer or buyer - it is leveled automatically. Another thing is the costs that form the cost of production. They can increase or decrease depending on the amount of labor and material resources consumed, the level of technology, the organization of production and other factors. Naturally, the higher the costs, the lower the profit and vice versa. That is, there is an inverse functional relationship between these indicators. Consequently, the manufacturer has many levers to reduce costs, which he can bring into play with skillful management.
The study of the cost of production allows us to give a more correct assessment of the level of profit and profitability indicators achieved at the enterprise. In a generalized form, the cost of production reflects all aspects of the economic activity of enterprises, their achievements and shortcomings. It can be noted that the cost is used to calculate the national income across the country, is one of the main factors in the formation of profits, is one of the main parts of economic activity and, accordingly, one of the most important elements of management. The cost of production is inextricably linked with almost all indicators of the economic activity of the enterprise, and they are reflected in it. From this point of view, this indicator summarizes the quality of the entire work of the enterprise.
The success of the company depends on the formation of the cost for several reasons:
1) the cost of producing the product is essential element in determining a fair and competitive selling price;
2) information on the cost of production is the basis for forecasting and managing production and costs;
3) knowledge of the cost is necessary to determine the profitability of individual types of products and production as a whole, determine wholesale prices for products, and implement internal production cost accounting.
The cost of production reflects the achievements and shortcomings in any area of economic activity of the enterprise. The importance of this indicator is especially enhanced due to the large volume of production and its continuous growth, since the reduction of one of the cost elements of the cost leads to an increase in the competitiveness and profitability of products. It is known that a 5.9% cost reduction would have the same effect if sales were increased by 33%.
Cost reduction is a factor in increasing profitability, increasing cash accumulation, achieving an economic effect and, consequently, the success of an enterprise. A significant part of the costs of expanding and improving production is carried out on the means of savings obtained by reducing the cost. Each enterprise should pay increased attention to the analysis and management of production costs, understanding the role of this indicator in assessing its activities.
The problem of cost analysis and management is faced by many enterprises, including meat processing companies.
The basis for choosing the topic “Analysis of factors affecting the reduction of production costs” using the example of CJSC “Meat Processing Complex Saransky” was not only the interest in studying the factors that can affect the cost of production, but also the interest in the enterprise itself. CJSC MPK Saransky produces about 25 types of products, the volume of costs incurred during the operation of the complex is huge, and this emphasizes the importance and importance of studying this topic using its example.
The purpose of the study is an objective assessment of the level and dynamics of the cost of production, identifying ways to reduce it, as well as identifying reserves aimed at reducing the cost of production and sales of products.
The subject of the course work is the factors affecting the reduction of production costs;
The object of study in this course work is the analysis of the cost of production at CJSC MPK Saransky.
The main objectives of the course work are:
1. To study the theoretical aspects of the analysis of the cost of production;
2. Identify factors that affect the cost, and make a factor analysis;
3. Identify reserves to reduce the cost of production;
4. Determine the main proposals for cost reduction;
1 Theoretical aspects of the analysis and management of production costs
1.1 Concept, economic content and types of cost
In the process of economic activity, the enterprise incurs costs (material, labor, financial). The costs of the enterprise consist of the total amount of costs for the production of products and their sale. These costs, expressed in monetary terms, are called the cost price and are included in the cost of the product. Thus, the cost price is part of the price of the goods, and it reflects most the cost of production and depends on changes in the conditions of production and sale of products. The cost price is one of the most significant indicators of the efficiency of economic activity. It represents the costs of the enterprise for production and circulation, serves as the basis for comparing costs and income, that is, self-sufficiency. If the cost is not known, then it is almost impossible to determine profit. And for the formation of the selling price, it is impossible to do without the cost price. The cost price shows what the company's products cost, how much you can earn on the sale of products or what kind of "cheat" to make in excess of the cost, that is, it is the basis of pricing. If the cost of goods sold is greater than the cost price, then expanded production takes place. If in the process of realization the products are less than the cost price, then even simple reproduction is not ensured. Without exaggeration, this indicator most sensitively reacts to the situation that is developing at enterprises, in the production of certain types of products and in entire industries.
In the economic literature, there is often a definition that quite briefly and clearly expresses the concept of cost:
The cost price is the current costs of the enterprise for the production and sale of products (works, services) expressed in value form.
In the Regulation on the composition of costs for the production and sale of products (works, services), approved by the Decree of the Government of the Russian Federation of August 5, 1992 No. No. 552, the cost price is defined as the valuation of products (works, services) used in the production process natural resources, raw materials, fuel, materials, energy, fixed assets, labor resources, as well as other costs for its production and sale.
When planning, accounting and calculating the cost of production, the enterprise has the right to sum up into the cost also other expenses and payments made by it that are not directly related to the production and sale of products. The "legislator" allowed these expenses to be attributed to the cost price, and which in the future are an integral part of the formed price of the goods, i.e. will be compensated to the enterprise by the consumer of its products.
Conventionally, the cost of products manufactured by the enterprise can be considered from economic and legal positions. From an economic perspective, the cost of production represents as a value expression of any costs for its production and sale, called costs. In a legal context, the cost of expenses incurred by the enterprise should be taken into account only when the law allows it.
a) accounting and control of all costs for the production and sale of products;
b) the basis for the formation of the wholesale price for the company's products and the determination of profit and profitability;
in) economic justification the expediency of investing real investments in the reconstruction, technical re-equipment and expansion of an existing enterprise;
d) definition optimal sizes enterprises;
e) economic justification and adoption of any management decisions, etc.
The cost of production is not only the most important economic category, but also a qualitative indicator, since it characterizes the level of use of all resources (variable and constant capital) at the disposal of the enterprise. The total cost includes costs associated with:
Directly with production (raw materials, purchased products and semi-finished products, fuel, energy, etc.);
With maintenance of the production process and its management;
with salaries and contributions to the fund social protection, as well as payments for property insurance;
With the cost of repairing fixed production assets;
With depreciation deductions for the full restoration (renovation) of fixed assets;
With the cost of selling products.
Moreover, it should be noted that all components are accounted for at actual costs, regardless of whether they are produced within the limits established by the current legislation or exceed them. That is, these components are the costs of past labor already completed. This circumstance is especially important for reasonable taxation of profits.
In domestic theory and practice, depending on the object for which costs are determined, the following types of cost are distinguished:
a) the cost of all products, which is understood as the total cost of its production and sale. At the same time, a distinction is made between the full production cost and the full (commercial) cost of production.
1) total production cost - this is the total amount of direct and indirect costs for the production of goods or services.
2) the full (commercial) cost includes the full production cost, as well as the amount of non-production (commercial) expenses.
b) individual cost, i.e. the cost of a particular unit of production. It is determined exclusively in the case of a single production, for example, in the construction of a ship or in the manufacture of unique equipment.
c) average cost - this indicator can be calculated for individual enterprises and for industries is determined as a weighted average and characterizes the average cost per unit of output.
1.2 Classification of costs that form the cost.
Product costing
The cost of production includes the cost of the means and objects of labor consumed in the production process (depreciation, the cost of raw materials, materials, fuel, energy, etc.), part of the cost of living labor (wages), the cost of purchased products and semi-finished products, the cost of production services third party organizations. Expenses for equipping workplaces with special devices, for providing special clothes, footwear, creating lockers for special clothes, dryers, rest rooms and other conditions provided for by special requirements, are included in the cost price. Many of these costs can be planned and accounted for in kind, i.e. in kilograms, meters, pieces, etc. However, in order to calculate the sum of all expenses of the enterprise, they must be reduced to a single meter, i.e. presented in monetary terms. expression .
Additionally, the cost of industrial products includes: social insurance contributions (in proportion to wages), interest on a bank loan, costs of maintaining fixed capital in a working state, bonus payments provided for by the provisions on bonuses at enterprises and other costs. For tax purposes, the costs incurred by the organization are adjusted taking into account the approved in in due course limits, rules and regulations. In this manner, for example, advertising costs, hospitality expenses, training and retraining of personnel on a contractual basis with educational institutions, business trip costs related to production activities, compensation costs for the use of personal cars for business trips, emissions payments ( discharges) of pollutants into the environment, etc. .
The cost of manufactured products does not include all costs of the enterprise. So, for example, expenses of non-industrial facilities (kindergartens, clinics, hostels, schools, clubs, etc., which are on the balance sheet of the enterprise), expenses for health protection and recreation activities, expenses not directly related to the participation of employees are not included. in the production process, one-time material incentives for employees are not included in the cost of production and are carried out at the expense of funds allocated for social needs from profit.
All costs that form the cost of production are grouped in connection with their economic content according to the following elements (items):
Material costs (minus the cost of returnable waste);
Labor costs;
Deductions for social needs;
Depreciation of fixed assets;
Other costs.
It can be noted that for all five elements, grouped in accordance with the economic content, as the main condition for including costs in the cost price, there is a criterion for the need for their participation in the production process and sales of products. These are costs directly related to the production of products, due to the technology and organization of production, associated with the use of natural raw materials, maintenance of the production process, ensuring normal working conditions and safety.
For in-house analysis and identification of reserves to reduce the cost of production, it is necessary to know not only total amount the costs of each enterprise for a particular economic element, but also the amount of costs depending on the place of their occurrence. This possibility is provided by the classification of costs by cost items, which can be represented in the following form:
1. raw materials and materials;
2. components, semi-finished products and services of an industrial nature purchased from other enterprises;
3. fuel and energy of all kinds for technological purposes;
4. returnable (used in production) waste (deducted from the cost and accounted for at the price possible use, which the company determines independently);
5. loss from marriage;
6. wage(main and additional) production workers;
7. deductions for social needs (to compulsory insurance funds);
8. costs for the maintenance and operation of equipment;
9. general production (workshop) costs (overhead costs)
10. general business (general factory or general factory) costs; :
11.non-production (commercial) costs for the sale of products.
As a result of the sequential addition of the listed calculation items, a system of cost indicators is obtained:
a) production cost (PS) = 1+2+3-4+5+6+7;
b) shop cost (CS) \u003d PS + 8 + 9;
3) full production or factory cost (FZS) = TS + 10;
4) full (commercial) cost (CF) = FZS + 11.
The first three indicators are the characteristics of production, and the fourth includes the costs associated not only with the production of products (which is reflected in the name of this unit), but also with the process of its implementation. These are, for example, the costs of direct operations for the sale of products, i.e. associated with the change of ownership of the goods (for example, the cost of all types of advertising, including participation in exhibitions, payment of interest on loans), referred to in the economic literature as net costs. In addition, non-production costs include additional costs, i.e. the costs of carrying out operations directly related to the continuation of the production process in the sphere of circulation. These costs are included in selling expenses and include: costs for tare and packaging; expenses for the transportation of products (expenses for the delivery of products to the station or pier of departure, loading into wagons, ships, cars, etc.); commission fees and deductions paid to sales enterprises and organizations in accordance with agreements; advertising costs, other distribution costs (expenses for storage, underworking, sorting).
General production and general business expenses are classified as overhead costs. General production overheads are the costs of maintaining and managing production.
General manufacturing overhead costs include:
a) the cost of maintaining and operating the equipment;
b) shop management costs.
The cost of maintaining and operating equipment is the depreciation of equipment and Vehicle; costs for the operation of equipment in the form of expenses for lubricants, cleaning, cooling and other similar materials; wages of workers servicing equipment and social contributions; costs of all types of energy, water, steam, compressed air, services of auxiliary productions; equipment repair costs, technical inspections, maintenance; expenses for intra-factory movement of materials, semi-finished products, products; depreciation of low-value and wearing tools and fixtures and other costs associated with the use of equipment.
Shop management costs include: wages of the shop management apparatus with deductions for social needs; costs for depreciation of buildings, structures, inventory, maintenance and repair of buildings, structures, ensuring normal working conditions and safety precautions, for overalls and safety shoes; depreciation of low-value and high-wearing tools and other similar costs associated with the management of production units.
Each of these groups of overhead costs has its own specifics - they are planned and accounted for in the places of their occurrence, i.e. by business unit rather than by product type. Both of these groups are complex costs, indirectly distributed between individual types of products and between finished products and work in progress.
General overhead costs associated with the function of management, management, which are carried out within the enterprise, company, firm as a whole. These expenses include several groups: administrative and managerial, general business, taxes, mandatory payments, deductions, etc.
Grouping by cost items, in addition, gives us the possibility of subsequent division of costs into direct and indirect.
Direct (technological) costs are characterized by a direct connection with the production process and can be quite easily distributed among specific types of products.
Indirect costs cannot be directly attributed to a specific type of product or service produced. The relevant costing items are complex. In particular, these are administrative and management expenses, property insurance expenses, etc.
The division into direct and indirect costs occurs in the case of the production of a wide range of goods, with simple production, all costs are considered as direct.
The classification of costs into variable (variable costs) and fixed (fixed costs) reflects the direct proportional dependence of the volume of output and, accordingly, the cost of its production on the degree of utilization of production capacities. Variable costs are those whose value is a derivative of the level of capacity utilization. These are, for example, the cost of raw materials and materials, labor costs. Costs are recognized as fixed, the amount of which is not linked to the volume of production and the level of use of production capacities - equipment costs, rent industrial premises, payment of the administrative apparatus. At the same time, per unit of output, the size of fixed costs is inversely proportional to the growth in output as a result of an increase in the utilization of production capacities. This grouping is given Special attention in international practice of cost accounting.
Important for the analysis and management of production costs at the enterprise in order to reduce them is the classification of costs into conditionally fixed and conditionally variable.
Semi-fixed costs - costs that do not change or change slightly depending on changes in the volume of production. These include: depreciation of buildings and structures, costs of managing production and the enterprise as a whole, rent, etc.
Conditionally variable costs - costs that change in direct proportion to changes in the volume of production. These include: piecework wages of workers, the cost of raw materials, materials, components, process fuel and energy, etc.
The calculation of the unit cost of production (works, services) in current practice is called costing, and the document in which this calculation is drawn up is called costing. Purpose of costing:
ensure the determination of the cost of products and all manufactured products; create a base for setting prices; promote the opening and use of production reserves. Industrial enterprises organize the calculation of the cost of industrial products on the basis of industry instructions for planning, accounting and calculating the cost of production, developed in accordance with the basic provisions for the use of this indicator.
This document establishes the procedure for determining the composition of costs that form the cost, the use of fundamentally common principles and methods for their planning at enterprises of all industries.
There are normative, planned and reporting cost estimates. Normative costing of a unit of production is the cost of a unit of production, calculated on the basis of the norms and standards for resource consumption, accounting prices and approved cost estimates for servicing production and managing it, in force at the beginning of each month. These costs (according to estimates) are included in the costing in accordance with the accepted methodology for their distribution. The standard cost estimate is essentially the starting point for the calculation of the standard cost estimate.
The planned cost estimate for a unit of production is compiled on the basis of direct costs according to the standard cost estimate of this product at the beginning of the planned year, taking into account the planned change in these costs in the planning period, due to the plan of organizational and technical measures. Indirect costs are credited to the planned cost in accordance with the cost estimates for them and the accepted methodology for their distribution. Planned costing is developed, as a rule, for 1 year, and in some cases for a quarter.
Calculation objects can be parts, assemblies and products. Normative cost estimates for parts and assemblies are compiled according to direct items, and for the product as a whole - for all items of costing.
Reporting estimates are compiled on the basis of actual production costs in the reporting period.
Costing items are single-element (wages of production workers, etc.) and complex (general workshop, general factory expenses, etc.), i.e. made up of a number of elements. When calculating the cost of production, the following should be taken into account:
with a large range of manufactured products, planned cost estimates can be compiled for a group of similar products;
products and auxiliary productions are also subject to calculation, especially if it is sold to the side.
1.3 Factors affecting the reduction of production costs
Factors affecting the level of cost reduction reflect a set of private causes (circumstances) that cause a change in production conditions in the directions of their impact on the production process in order to reduce them. They are associated with cost savings for all types of resources (for all items and elements). Cost reduction for products (works, services) is necessary for the following:
Increasing profits from the sale of products, through which the entrepreneur can develop own production to stimulate more individual workers, pay more income (dividend) to shareholders and solve social problems;
Increasing the competitiveness of manufactured products due to the possibility of establishing a lower contract price compared to their competitors;
Production of new products and introduction of advanced technologies;
Reducing production costs is a unity of two sides: factors of production and economic relations. The main directions for reducing costs in the field of production are:
Technical progress;
Improving the organization and management of production;
Use of efficient raw materials, materials, machinery and equipment, technological processes;
Reducing the cost of products, works, services depends on several groups of factors: technological, organizational and economic. Technological factors are related to technique and production technology. They provide:
a) increasing the progressiveness and quality of products, works, services;
b) the use of more modern and high-performance equipment and technology (machines and mechanisms);
c) increasing the degree of mechanization and automation of production;
d) application of resource and energy saving technologies;
e) increasing the level of technical and energy equipment of labor;
f) accelerating the implementation of achievements new technology and tools;
g) the use of highly efficient materials.
Organizational factors are related to the organization of production and labor and their management and include:
a) increasing the level of concentration, specialization and cooperation;
b) shortening the duration production cycle;
c) ensuring the rhythm of production and other conditions for the rational organization of labor;
d) reduction and complete elimination of manufacturing defects, downtime of equipment and workers;
e) advanced training of employees and selection of personnel according to the technical level of production.
Economic factors consist in raising the level of management and management methods. They include:
a) improvement of the production structure of the enterprise;
b) increasing the level of planning, accounting, control and analytical work;
c) improvement of social living conditions labor collective;
d) improving the culture of production and the state of industrial aesthetics;
e) increasing the competence of administrative and managerial personnel (managers) of the enterprise.
All factors influencing the level of cost reduction can be divided according to the scale of their action: nationwide, intra-industry and intra-production.
National ones are connected with the government's policy in the field of economic relations. Intra-industry factors in the conditions of economic reform play an insignificant role and can be represented by the process of improving the standards of the price system for products and in the field of planning production activities, adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are solved by the enterprise itself.
Intra-production factors are associated with improving the use of all the material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise, may also be independent of them.
In addition to the above groupings, factors according to the signs of use are divided into promising and current, and according to the methods of detection - explicit and hidden.
From the point of view of the influence of factors on this phenomenon, factors of the first, second, K-th order are distinguished from objectively determined factors; subjective factors should be distinguished. They are further subdivided into external and internal and, main and secondary.
Classification of factors determining economic categories and indicators of cost reduction for products (works, services) is the basis for the classification of production reserves. Reserves should be understood as unused opportunities to reduce costs at a given level of production and economic relations. The elimination of all kinds of losses and irrational costs is the main way to use production reserves. Another way is associated with great opportunities for accelerating scientific and technological progress and using the achievements of science and technology as the main lever for increasing production efficiency.
Reserves also affect the final results of the enterprise's production activities by changing the nature of production and the transition from extensive methods to intensive methods. Cost reduction factors affect reserves, while increasing the volume of products (works, services), improving their quality, improving the structure and range of products. They also create conditions for increasing the profitability of the enterprise, increasing its profitability and strengthening the financial position. Their action is determined by many factors of industrial, economic and organizational order. In mechanical engineering, high specific gravity work in progress. At food and light industry enterprises, the main cost is occupied by raw materials and materials. In enterprises where a large number of tools, fixtures, devices, the proportion of low-value and wearing items is high.
In the extractive industries, there are practically no stocks of raw materials and basic materials, but the proportion of deferred expenses is large. In addition, for example, in the oil industry, an increased share is made up of auxiliary materials, spare parts for the repair of fixed assets.
Under cost management understand the actions of managers aimed at changing the factors affecting the cost of production. Such as product output structure, production volume, distribution and cost accounting, quality and raw materials used, etc. Cost management is associated with the implementation of the enterprise functions of planning, control and decision-making. The value of the analysis of the cost of production is determined by the fact that it is the most important qualitative indicator characterizing the economic efficiency of production, and that only on the basis of its comprehensive analysis it is possible to identify reserves and determine ways to increase the final results with minimal cost labor, material and financial. Cost analysis allows you to find out the trends in this indicator, the implementation of the plan according to its level, determine the influence of factors on its growth and, on this basis, evaluate the work of the enterprise in using opportunities and establish reserves for reducing production costs.
The objectives of cost analysis are as follows:
Determining the amount of costs for specific products, services or departments of the organization;
Managing the cost of production, based on obtaining accurate data on the cost of production and using them to make decisions on such issues as pricing, composition of products, production technology;
Cost analysis, study of data on costs, presenting them in the form of information suitable for management planning and control, decision-making of short and long-term action.
Cost analysis:
a) designed to provide necessary information management personnel of the enterprise, which is responsible for planning, for monitoring business operations and making various administrative decisions;
b) is aimed at identifying opportunities to improve the efficiency of the use of material, labor and financial resources in the process of production, supply and marketing of products;
c) provides data necessary for management purposes, determining performance indicators, making strategic decisions on pricing, product composition, technological process, product development. It is on the basis of analysis that specialists and managers make tactical decisions and actions.
Cost management and cost analysis are an integral part of management, which operates with cost data. Costs are an indicator of the past or future ability to dispose of economic resources in the interests of achieving a specific goal. The management and analysis process is divided into the following main stages:
a) cost planning - determining the goals of the organization and its divisions in the form of setting production objectives and choosing the means for their implementation. Plans are specified in estimates, including indicators in monetary terms. For example, a cost estimate is prepared as a plan of expected costs.
b) cost control - setting baselines against which performance indicators can be determined. Cost control helps to identify the reasons for deviations from the plan and make appropriate adjustments.
c) cost management for decision making - evaluation of accurate and meaningful cost data and analysis of this information for decision making. The decision-making process, which can also be called the problem-solving process, is by and large a process of choosing between alternative actions (whether to start production of a new product, whether to suspend the production of products or the production of some services). The cost management system is designed to assist management in making optimal solutions relating to product development, pricing, marketing, product range, and to encourage continuous improvement.
In this chapter, the theoretical aspects of the analysis and management of production costs were considered. As a result of the chapter, it can be noted:
a) the cost is one of the most important indicators of the economic activity of the enterprise;
b) the cost is one of the main factors in the formation of profit, which means that the financial stability of the enterprise and the level of its competitiveness depend on it;
c) planning, control, management, and at the same time costing of products is one of the capacious areas of the management of any enterprise, therefore, any enterprise must first pay special attention to the importance of analyzing and managing the cost of production, through its comprehensive study;
2 Analysis of factors affecting the cost of production
on the example of CJSC MPK Saransky
2.1 Analysis of the dynamics and structure of production costs
and sales of products
In the Republic of Mordovia, one of the largest meat processing enterprises is CJSC Meat Processing Complex Saransky. It was created in 2001 on the basis of the Saransky meat processing plant. In the same year, the enterprise became part of the agro-industrial holding "Talina" and has been operating to this day. The complex has a warehouse of the main raw materials, two buildings of administrative and amenity buildings, buildings of a block of workshops, a canteen, a repair and construction site, storage facilities, and treatment facilities. The territory of the enterprise (about 2 hectares) has its own access railway track. The number of employees is 450 people. The main activity is the production of various types of sausages (boiled, raw smoked, semi-smoked), as well as semi-finished products (dumplings, pancakes, cutlets) and other products. The complex is capable of processing up to 12 thousand tons of beef and pork meat per year. On the territory of CJSC MPK Saransky there is the Motor Transport Enterprise LLC Talina-Avtotrans, which, in turn, delivers the finished products of the complex.
The following workshops operate at the enterprise: a culinary workshop, a semi-finished products workshop, a hot and cold smoking workshop, a packaging workshop, a mechanical workshop, a cooking workshop, an ammonia refrigeration unit workshop and a sausage workshop, which will be the object of analysis. The choice of the sausage shop was not accidental. Firstly, this workshop is the largest workshop in the enterprise. Secondly, the sum of costs and profits of the sausage shop far exceeds the costs and profits of other shops. This is due to a large margin of time for the production of raw smoked sausage, since the period of its production is 35 days, and this allows you to produce a large amount, and then sell it within six months. And the shelf life, for example, of culinary products (dumplings) is only 72 hours (under conditions of deep freezing), which limits their sale.
Among the most important tasks that an economist sets himself in the analysis of cost, the study of the composition of costs, or, in other words, the cost structure, is rightly attributed. This is a question, the study of which is of particular practical importance.
The cost structure is understood as its composition by elements or articles and their share in the total cost. It is in motion, and it is influenced by the following factors:
Specificity (features) of the enterprise. Based on this, they distinguish: labor-intensive enterprises (a large share of wages in the cost of production); material-intensive (a large share of material costs); capital-intensive (a large share of depreciation); energy-intensive (a large share of fuel and energy in the cost structure);
Acceleration of scientific and technological progress. This factor affects the cost structure in many ways. But the main influence lies in the fact that under the influence of this factor the share of living labor decreases, and the share of materialized labor in the cost of production increases;
Location of the enterprise;
Inflation and change in the interest rate of a bank loan.
Which of the above factors affect the cost of the enterprise under study? We can say that all of them, of course, have an impact on the cost structure. The peculiarity of meat processing enterprises is that they are material-intensive and most of the cost is occupied by material costs (raw materials).
CJSC MPK Saransky has a good location. Near the railway, within the city, it has a convenient developed infrastructure. One can certainly note the disadvantage of the location of the enterprise. For example, remoteness from resource supply enterprises.
It would be nice to introduce a technical innovation to the enterprise. For example, it would be nice to at least partially mechanize the process of deboning and trimming meat (cutting half-carcasses, separating meat from bones, and separating meat by grade). The introduction of a mechanized process of deboning meat would, first of all, save on human labor resources. It would also be nice to purchase new equipment for smoking sausages, which would also save on electricity, since the efficiency of smoking is higher, reduce the number of workshop staff and the space occupied by this equipment in the workshop. This equipment is several times more compact than the current one.
The problem of inflation and credit is also acute not only for the meat complex, but also for other enterprises. Inflation in Russia is 13%, the average rate on industrial loans is 14-15% per annum (depending on the bank, term, amount and risk). In countries with developed economies, the interest on a loan is 6 - 10%. It is not difficult for the complex to take out a 15% loan, as there are large stocks of fixed assets that can be used as collateral. The difficulty is that the profitability from the production and sale of products is small and in the case of a loan, the profitability is sharply reduced and the complex works, as it were, not for itself, but for the bank.
A systematic analysis of the cost structure at an enterprise is very important, first of all, for managing costs in order to minimize them, identifying the main reserves for their reduction and developing specific measures for their implementation at the enterprise. At each enterprise, the cost structure should be analyzed both item by item and item by item. This is necessary to manage costs in the enterprise in order to minimize them.
Let's consider the cost structure for the last years (2005 - 2007) in general for the production of CJSC MPK Saransky. Costs can be divided into five elements and all of them will form the full cost of sausage products:
Table 2.1 - Cost structure of ZAO MPK Saransky:
| Article name | Amount of expenses, in thousand rubles | Cost structure, in % | Growth rate in % to the previous year | ||||||||
| 2005 | 2006 | 2007 | 2005 | 2 006 | 2007 | 2006 to 2005 | 2007 to 2005 | 2007 to 2006 | |||
| Material costs | 48016 | 49621 | 53993 | 74,3 | 74,0 | 73,2 | 103,3 | 112,4 | 108,8 | ||
| Depreciation of fixed funds |
3467 | 3640 | 4504 | 5,3 | 5,4 | 6,1 | 105,0 | 129,9 | 123,7 | ||
| Salary | 5802 | 6166 | 7390 | 8,9 | 9,2 | 10,0 | 106,3 | 127,4 | 119,9 | ||
| Social contributions funds | 1530 | 1649 | 1967 | 2,3 | 2,5 | 2,7 | 107,8 | 128,6 | 119,3 | ||
| other expenses | 6 320 | 6231 | 5499 | 9,7 | 9,3 | 7,5 | 98,6 | 87,0 | 88,3 | ||
| variable costs | 47155 | 48938 | 52481 | 72,4 | 73,3 | 72,0 | 103,8 | 111,3 | 107,2 | ||
| fixed costs | 17980 | 17792 | 20403 | 27,6 | 26,7 | 28 | 99,0 | 113,5 | 114,7 | ||
| Total costs | 65 135 | 67 037 | 73 723 | 100,6 | 100,0 | 100,0 | 102,9 | 113,2 | 110,0 | ||
| Full cost | 65135 | 66 730 | 72884 | 100 | 100 | 100 | 100 | 100 | 100 | ||
An analysis of the data in this table makes it possible to determine that the share of material costs has decreased by 2.2% over the three years and in 2007 is 73.2%. Their structure in the total cost in 2006 amounted to 74.0%, and in 2007 to 73.2%. The decrease in material costs in the overall structure indicates their rational use and the growth of another predominant factor. The influence of material costs in general production occupy a key place, which means CJSC MPK Saransky is a material-intensive enterprise and the main reserve for cost reduction lies here.
The decrease in the share of material costs may mean that the complex in 2007 generally used cheaper raw materials. The total amount of material costs for 2007 is about 48 million rubles, and the deviation from 2006 to 2007 was almost 3 million rubles upwards. This indicator increased due to the increase in the volume of production in the sausage shop.
The element "Depreciation of fixed assets" occupies a small place in the cost structure. In 2006, 5.4% and in 2007, 6.1%. The increase in one year was 1.5%. This happened due to a change in the depreciation policy for sausage products by the management of the enterprise and the replenishment of the shop with new equipment. In 2006, the amount of deductions was 3 million 640 thousand rubles, and in 2007 it was 4 million 504 thousand rubles, which is 864 thousand rubles. more. Depreciation deductions tend to increase, which indicates the gradual wear and tear of equipment.
There was also an increase in wages in the structure. This is mainly due to the fact that the range and volume of products has increased over the past three years. The amount of labor costs in 2005 was 5 million 802 thousand rubles. per person, in 2006 - 6 million 166 thousand rubles, and in 2007 - 7 million 390 thousand rubles, that is, the change over three years amounted to 1 million 588 thousand rubles.
The share of wages in the structure is 8.9% in 2005, 9.2% in 2006 and 10.0% in 2007. The increase in wages and the increase in material costs in 2006 suggests that production volumes have increased over the year, since wages depend on the work done. The growth of this indicator in the structure amounted to 21.1% or 2,810,323.05 rubles. for 1 year.
Along with the growth of wages, there was an increase in contributions to social funds. This indicator is also a reserve for reducing the cost of production.
Contributions to social funds are accrued from wages. Consequently, with the growth of wages in 2007, deductions also increased. With an increase in wages by almost 1.6 million rubles, an increase in deductions amounted to almost two million rubles. This is to be expected, since there is the following dependence 1/3. This is due to the fact that contributions to the social protection fund come from the payroll in the amount of 36.7%, but this percentage of contributions varies depending on the benefits that apply to shop workers. The share of contributions to the social protection fund in the total cost structure is small - 2.3% in 2005, 2.5% in 2006 and 2.7% in 2007. The change in this indicator occurred due to wage growth.
The following factors influenced the cost structure for the analyzed period:
a) the use of cheaper raw materials and materials in production;
b) growth of wages and deductions, respectively;
c) revaluation of depreciation funds and their gradual wear and tear;
d) an increase in the share of loans and interest rates, which significantly increased the payment for the participation of borrowed capital in production;
e) an increase in the cost of energy and heat tariffs;
Over the three years, other expenses have significantly decreased by 10.3%. The change in "Other expenses" for 2007 amounted to 732 thousand rubles. This is the smallest change that has occurred of all cost elements. Other expenses take the second place in the cost structure after material costs. In 2005 their share was 9.7%, in 2006. 9.3%, and in 2007 7.5%.
Data on fixed and variable costs show that in the structure of the cost of sausage products in 2005, variable costs accounted for 72.4%, in 2006 - 73.3%, and in 2007. 72.0% change for amounted to 3.4%, and in monetary terms, variable costs increased by 5 million 326 thousand rubles. An increase in variable costs in the structure indicates the use of more expensive raw materials in the production of products, and an increase in monetary terms indicates an increase in production volume. The share of variable costs is almost 3 times higher than that of fixed costs in the cost of production: in 2005, fixed costs amounted to 27.6%, in 2006 - 26.7%, and in 2007 - 28%.
As a result, under the influence of the growth of all cost elements, the total cost of production for three years increased by 7 million 749 thousand rubles. This is due to the increase in production volume. This factor was the reason for the increase in all cost elements and, above all, material costs and wages.
2.2 Factor analysis of production costs
In order to conduct a factor analysis for the sausage shop, it is necessary to select certain types of sausage. The complex produces two main groups of sausages: boiled and raw smoked. For analysis, I chose a group of raw smoked sausages. More specifically, the following types: Madeira s / c, Brunswick s / c, salami Moscow s / c, Sergeevskaya s / c and Prestige s / c. This product takes heaviest weight in the total output for the two analyzed years (see Appendix B, Table 2.2 and Table 2.3). The share in the annual output of five types of raw smoked products reaches a high figure of 68.93% in 2006 and 65.0% in 2007.
Table 2.2 - The share of the main types of raw smoked products in the total output of CJSC MPK Saransky
Continuation of table 2.2
| Total total output for the year | 165120 | 100,00 | 100,00 | - |
As follows from Table. 2.1. In 2006 Madera s/k occupies the largest share, the output amounted to 25.46% in the total volume, also in 2007 Madera s/k 22.8%. This change occurred due to the fact that the demand for s / c Madera decreased slightly due to the release of new varieties of sausage (Anzhu, Pipperoni, Tatarskaya). The output structure of Braunschweig s / c decreased by 2.42% (1485 kg), this is also due to market demand. For other types of raw smoked sausage, the indicators of the share of the structure in the total output reach up to 9%. Therefore, the influence of the above five types of raw smoked products in the total output is significant.
Table 2.3 - Output of the main types of raw smoked products of CJSC MPK Saransky for 2006 and 2007
Continuation of table 2.3
| 5. Prestige s / c | 8490 | 10314 | 1824,00 | 8,1 | 9,6 | 1,5 |
| Total | 2116 | 100,00 | 100,00 | - |
To make a factor analysis of the cost, it is necessary to determine the number of factors that affect the cost. It is known that each factor affects the cost in its own way, some of the factors affect directly, while others indirectly, but each phenomenon can be considered as a cause and effect. Hence, an important issue in the analysis of economic activity is the study and measurement of the influence of factors on the magnitude of the studied economic indicators. Without a deep and comprehensive study of the factors, it is impossible to draw reasonable conclusions about the results of activities, identify production reserves, justify plans and management decisions.
Factor analysis is understood as a method of complex and systematic study and measurement of the impact of factors on the value of effective indicators.
The total cost of sausage products may change due to the volume of output, its structure, unit cost of production:
С=VPxDixSi (1.1)
where, C is the cost
VP - the volume of output
Di - cost structure
Ci - unit cost of production
In turn, the unit cost of production (Ci) depends on the resource intensity (Remk) - an internal factor and resource prices (Ci) - an external factor:
Сi = VpxDixRemk to xцi (1.2)
where, Сi - unit cost of production
VP - Issue volume
Di - cost structure
Remk - resource intensity - internal factor
Qi - resource prices - external factor
The total cost of raw smoked products is determined by the product of the volume of manufactured products by the cost of a unit of production:
where X is the volume of manufactured products
Сi - unit cost of production
The cost of a unit of production is determined by dividing the total costs for the reporting period by the number of products produced during this period and is calculated by the formula: Сi = (1.4) where Сi is the cost of a unit of production, rubles. З is the volume of manufactured products in monetary terms, rubles.
X - the volume of products produced for the reporting period
Table 2.4 - Initial data for factor analysis of the total cost of raw smoked products for 2007:
| Product types | Release volume, kg. | Unit cost of production, rub. | total cost of production. rub. | |||||||
| basis 2006 | fact 2007 | basis 2006 | fact 2007 | basis 2006 | fact 2007 | off | ||||
| quantity | specific weight,% | quantity | beats the weight, % | |||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 = 2x6 | 9 = 4x7 | 10 = 9 - 8 | |
| 1. Madeira s / c | 38847 | 36,9 | 37647 | 35,1 | 134,41 | 147,15 | 5 221 581,85 | 539 787,66 | 318 205,81 | |
| 2. Braunschweig s / c | 30385 | 28,9 | 28900 | 26,9 | 157,42 | 150,94 | 4 783 301,57 | 4 362 166,00 | - 421 135,56 | |
| 3. Salami Moscow s / c | 13753 | 13,1 | 15311 | 14,3 | 98,49 | 126,36 | 1 354 622,81 | 1 934 760,47 | 580 137,65 | |
| 4. Sergeevskaya s / c | 13677 | 13,0 | 15096 | 14,1 | 102,21 | 120,80 | 1 397 963,54 | 1 823 604,22 | 425 640,67 | |
| 5. Prestige s / c | 8490 | 8,1 | 10314 | 9,6 | 156,915 | 153,25 | 1 332 207,89 | 1 580 708,47 | 248 500,58 | |
| 100,0 | - | - | 14 089 677,67 | |||||||
Determination of the influence of factors on the change in the cost of sausage products:
1. С 0 = VP 0 xДi 0 xСi 0;
2. With 1 speed \u003d VP 1 xDi 0 xSi 0;
3. With 2 speed \u003d VP 1 xDi 1 xSi 0;
4. C 1 \u003d VP 1 xDi 1 xSi 1.
The influence of factors on the change in the cost of production:
1. the volume of marketable products ∆С ∆VP = С 1 rate - С 0
2. structures of commercial products ∆С ∆ D i = С 2 speed - С 1 speed
3. unit cost of production ∆С ∆ С i = С 1 - С 2 fast
Table 2.5 - Calculation of the adjusted full cost: with the actual volume of marketable products, the basic structure of marketable products and the basic cost of a unit of production:
Table 2.6 - Calculation of the adjusted full cost: with the actual volume of marketable products, the actual structure of marketable products and the basic cost of a unit of production:
Table 2.7 - Scheme for carrying out analytical calculations to find the influence of the main factors on the total cost of canning products:
| Indicators | Amount, rub. | Cost drivers | ||
| output | output structure | unit cost |
||
| Base period cost | 14 089 677,67 | VP0 | Di0 | Сi0 |
| Adjusted cost: with the actual volume of marketable products, the basic structure and the basic cost of a unit of production | 14373367,61 | VP1 | Di0 | Сi0 |
Continuation of table 2.7
| Adjusted cost: at the actual volume, the actual structure of marketable products and the basic unit cost of production | 14279324,88 | VP1 | Di1 | Сi0 |
| actual cost | VP1 | Di1 | Сi1 |
From the data of Table 2.7, we reveal the influence of factors on the change in the cost of sausage products:
The volume of sausage products:
14373367.61 - 14089677.67= 14232470.83 (rub.)
Consequently, due to the increase in the output of sausage products in 2007, the cost increased by 14232470.83 (rubles). This growth is natural, since the volume of production from 2006 to 2007 for five types of raw smoked sausage increased by 2 .01% or 2116 kg (See Table 2.3).
The structure of commercial products:
14279324.88 - 14373367.61 = - 1294543.51 (rub.)
The change in the structure of the output of sausage products in 2007 had an impact on the reduction in prime cost. Table 2.3 indicates that the production of Madeira s/k slightly decreased, its share was 25.46% in the total output of raw smoked products in 2006 and 22.8% in 2007, there was also a decrease in the output of Braunschweig sausage. The decrease in production volumes is connected, first of all, with the start of production of new types of raw smoked products in 2007. It follows from this that, as a result of the reduction in the output of certain types of sausage, the total amount of costs as part of the cost price has decreased.
Unit cost of production:
15,241,026.83 - 14279324.88 = 961701.95 (rubles)
Due to the increase in the cost of a unit of production, the meat complex increased the cost of producing raw smoked products by almost a million rubles. It can be seen that this adversely affected the possibility of increasing the final financial result of the enterprise.
The sum of factor scores was:
14232470.83 + (-129454351.23) + 961701.95 = 12947544.34 (RUB)
This result suggests that in general in 2007 the meat complex increased the cost of raw smoked products by one million rubles compared to 2006, or by 8.2%. This is due to the fact that more expensive raw materials were involved in the material-intensive production, which sharply increased the unit cost of production.
2.3 Cost-benefit analysis
Cost effectiveness analysis is an analytical tool often used in business research to help decision makers evaluate and compare the cost and effectiveness of alternative ways to achieve goals. Cost efficiency analysis at CJSC MPK Saransky combines two clearly delineated processes:
a) analysis of the efficiency of the use of material costs.
b) Analysis of the effectiveness of the use of fixed production assets.
The most important is the efficiency of the use of material costs, and we will consider it first of all. The reason for the increase in cost may be the inefficient use of materials, their rise in price. The inefficient use of materials can be indicated by an increase in material consumption, which causes additional consumption of materials.
Table 2.8 Indicators of the efficiency of the use of material resources:
Increase in material consumption by 1.73 rubles. caused an additional consumption of materials by 7584.10 thousand rubles. = (0.0017 * 4372). Thus, while maintaining the previous level of material consumption, the cost of production would be lower by this amount. The change in cost is also influenced by the volume of production and the level of costs of a certain type.
The impact of production volume on the cost of production:
Szm \u003d ZM1 - ZM0 - * In (1.5)
where Szm - the cost of production depending on the volume of production;
ZM1 - material costs for 2007;
In - index of production volume (ЗМ1-ЗМ0);
Szm \u003d 53993 - 49621 * 1.08 \u003d 4721.76;
The impact of material costs on the cost of production:
Cn \u003d ZM0 * In - ZM0 (1.6)
where, Cn - the cost of production depending on the level of material costs;
ZM0 - material costs for 2006;
Cn \u003d 49621 * 1.08 - 49621 \u003d 3969.68;
The increase in material costs by 4372 thousand rubles increased the cost of production by 3969.68 thousand rubles, and the increase in production did not affect the cost reduction.
Next, we will analyze the efficiency of using fixed production assets. It finds an expression of the state of fixed assets in the cost price through the depreciation rate. The increase in costs is affected by depreciation intensity, i.e. depreciation deductions paired with capital productivity.
Table 2.9 - Analysis of the effectiveness of the use of fixed production assets:
The impact of depreciation on the cost of production:
SA= A1 - A0 * In (1.7)
where, SA - the cost of production depending on the volume of depreciation;
A1 - depreciation charges for 2007;
A0 - depreciation charges for 2006;
In is the production volume index;
SA \u003d 4504 - 3640 * 1.81 \u003d 1563.84 thousand rubles.
The cost of depreciation of fixed production assets remained at the same level of 1563.84 thousand rubles. and did not affect the change in cost, however, the decrease in capital productivity reduced the profitability of fixed production assets.
In this chapter, an analysis was made of the factors affecting the reduction in the cost of production. CJSC MPK Saransky is the largest meat processing plant in the Republic of Mordovia. An analysis of the cost structure of the sausage shop showed that the largest part in the cost of canning products is occupied by material costs of 74%. The factor analysis highlighted the main factors that influenced the change in production costs in 2007. The main factor in increasing the cost of production was the unit cost of production. This factor increased the production cost by 14,373,367.61 rubles.
3 Proposals to reduce production costs
3.1 Reserves for reducing the cost of production and sales of products
To reduce the cost of production and sale of products at the enterprise of CJSC MPK Saransky, it is recommended to carry out the following organizational and technical measures:
1. Improving the organization of production and labor. This process, in almost all cases, provides an increase in labor productivity, stimulates a better use of the labor resources available at the enterprise. Hence the reduction in production costs. At this stage, the enterprise is recommended to improve the ergonomics of the work of employees in every possible way by creating a full-fledged socio-psychological climate. It is proposed to introduce the position of a psychologist who will monitor the mental health of workers. Since most of the loss of working time is associated with various diseases, the most significant of which is the flu, it is necessary to create our own medical center that will monitor the health of workers.
2. Reducing the cost of production maintenance and management also reduces the cost of production. The size of these costs per unit of output depends not only on the volume of output, but also on their absolute amount. This can be achieved in two ways:
Improving the structure of the management apparatus. To implement this project, you can create a planning and economic department, one of the main areas of activity of which will be planning and forecasting the activities of the enterprise. At the moment, forecasting, development of targeted projects to improve the work of the enterprise is not given due attention. Therefore, on the basis of the economic department, it is proposed to organize a planning and economic department and focus its work on planning and forecasting the activities of the enterprise.
Improving the work of management personnel. At the moment, all departments related to the processing of economic information and management decision-making do not use computer software to a sufficient extent, replacing them with primitive calculators. Thus, it is necessary to improve the skills of managerial personnel and attract experts in the field of computer technology for permanent work. This will maximize management efficiency and ultimately reduce the cost of maintaining management personnel, and this, in turn, will lead to a reduction in the cost of production as a whole.
3. Organization of a full-fledged marketing service at the enterprise. Marketing is an integral part of a market economy and, in the conditions of constantly changing market conditions, has become a vital element in the management of such a business entity as production. At this stage of the existence of the enterprise CJSC MPK Saransky, one sales department is not able to solve the whole range of problems associated with positioning, promoting their own goods on the local market. These and other tasks are solved by the marketing department. Thus, the enterprise should take the following measures, which will allow it to further gain a foothold in the local market and increase production volumes, which will ultimately lead to a reduction in the cost of products:
Advertising. Since the company's products are of fairly high quality and its advertising, by all means mass media, including the Internet, will create or strengthen the image of the products of CJSC MPK Saransky as a high-quality product.
Sales network . The expansion of the network of branded stores will increase the company's share in the local market and thus increase the volume of sales.
Search for new suppliers. Raw materials and materials are included in the cost price at the price of their purchase, taking into account the cost of transportation, therefore right choice suppliers of materials affects the cost of production. Qualitatively new method search for partners can provide the Internet as an advanced system of worldwide communication. Any more or less serious enterprise places information about itself and its product on a site created specifically for this purpose, and communication with this manufacturer is possible within a few seconds.
3.2 Proposals to change the structure of production costs
The economic analysis, which was carried out on the example of CJSC MPK Saransky, revealed an increase in the cost of production. To reduce the cost, a number of measures can be proposed aimed at changing its main elements: material costs, wages, depreciation. Let's consider each of them separately:
a) Reducing the material costs of production, as a result of an increase in the technical level of production. This includes the introduction of new, progressive technology, mechanization and automation of production processes; improving the use and application of new types of raw materials and materials, as well as reducing prices for purchased raw materials; In particular, CJSC MPK Saransky can carry out the following activities:
Develop and apply innovative packaging for raw smoked sausage;
At least partially mechanize the process of deboning and trimming of meat;
Apply a new method of meat defrosting using the “hot steam” method;
b) Improving the organization of production and labor. Cost reduction can occur as a result of changes in the organization of production, with the development of specialization of production, improvement of production management and reduction of costs for it, improvement of the use of fixed assets, improvement of logistics, reduction of transportation costs, and other factors that increase the level of organization of production.
A serious reserve for reducing the cost of production is the expansion of specialization and cooperation. At specialized enterprises with mass-flow production, the cost of production is much lower than at enterprises that produce the same products in small quantities.
The reduction in current costs occurs as a result of improving the maintenance of the main production, for example, the development of mass production, the streamlining of auxiliary technological work, the improvement of the tool economy, and the improvement of the organization of control over the quality of work and products. A significant reduction in the cost of living labor can occur with a reduction in the loss of working time, a decrease in the number of workers who do not fulfill production standards. Additional savings arise from the improvement of the management structure of the enterprise as a whole. It is expressed in the reduction of management costs and in the savings in wages and accruals on it in connection with the release of managerial personnel.
With the improvement of the use of fixed assets, the cost reduction occurs as a result of an increase in the reliability and durability of equipment, an improvement in the system of preventive maintenance of centralization and the introduction of industrial methods of repair, maintenance and operation of the main
funds. The improvement of material and technical supply and the use of material resources is reflected in a reduction in the consumption rates of raw materials and materials, a reduction in their cost by reducing procurement and storage costs. Transportation costs are reduced as a result of lower costs for the delivery of raw materials and materials, for the transportation of finished products.
Certain reserves for cost reduction are laid down in the elimination or reduction of costs that are not necessary in the normal organization of the production process (excess consumption of raw materials, materials, fuel, energy, additional payments to workers for deviation from normal working conditions and overtime work, payments on recourse claims, etc.). This also includes the most common production losses, such as losses from marriage. Identification of these unnecessary costs requires special methods and attention of the enterprise team. The elimination of these losses is a significant reserve for reducing the cost of production.
c) Relative decrease in depreciation charges. This is a change in the volume and structure of products, which can lead to a relative decrease in fixed costs, a change in the range and range of products, and an increase in its quality. Semi-fixed costs do not directly depend on the quantity of output. With an increase in production volume, their number per unit of production decreases, which leads to a decrease in its cost. With regard to CJSC MPK Saransky, the following can be proposed:
Modernization of existing obsolete equipment;
Increase in production volume;
Also, a number of other factors can influence the structure of the cost of production of ZAO MPK Saransky, such as complex expenses, expenses for the preparation and development of the production of new types of products, losses from marriage; other production expenses; non-manufacturing expenses. They can offer the following:
a) to improve the administrative apparatus, for example, to transform the administrative and economic department and the material and technical support group into a single administrative and technical department, which would be engaged in both ensuring production management and technical and economic support.
b) to tighten control over the production of products, to reduce the percentage of defects - to create a production laboratory.
c) to introduce and master new workshops and productions, for example, it was not bad to create the production of various other semi-finished products (cutlets, dumplings, cabbage rolls, etc.)
Conclusion
The cost price is one of the important indicators of the economic activity of the enterprise. It is one of the main factors in the formation of profit, which means that the financial stability of the enterprise and the level of its competitiveness depend on it. Planning, control, management, and at the same time the calculation of the cost of manufactured products is one of the capacious areas of management of any enterprise. A qualified economist, financier, accountant should pay special attention to the importance of analyzing and managing the cost of production, through its comprehensive study. Conducted cost analysis for traditional method made it possible to identify reserves and ways to reduce it.
CJSC MPK Saransky is a large meat processing enterprise in the Republic of Mordovia. Analysis of the cost structure of the sausage shop showed that most of the cost of sausage products is occupied by material costs 74%, variable costs 72.4% and fixed costs 27%. The factor analysis highlighted the main factors that influenced the change in production costs in 2007. The main factor in increasing the cost of production was the unit cost of production. This factor increased the production cost by 14,373,367.61 rubles. This is despite the fact that the volume of output in 2007 increased by 2116 kg for the analyzed products compared to 2006.
Based on all this, the complex needs to create an extensive network of trading houses or representatives in other regions and territories of Russia, create large customers for products, which would allow for a continuous process of production and marketing of sausage products.
Having studied in this paper the issues of analyzing the cost of production using the example of CJSC MPK Saransky, we can draw the following conclusions:
· The result of the cost analysis is the identification of reserves for further improvement of performance. The reserves should be summarized, mutually linked, their total amount and the main directions of implementation should be determined.
· The tasks of the analysis of the cost of production are: assessment of the validity and tension of the plan for the cost of production, production costs and circulation based on the analysis of the circulation of costs; establishing the dynamics and degree of implementation of the plan at cost; determination of the factors that influenced the dynamics of cost indicators and the implementation of the plan for them, the magnitude and causes of deviations of actual costs from planned ones; analysis of the cost of certain types of products; identification of reserves for further reduction of production costs.
· Analysis of the cost of production aimed at identifying opportunities to improve the efficiency of the use of material, labor and financial resources in the process of production, supply and marketing of products.
· The study of the cost of production allows you to give a more correct assessment of the level of profit and profitability achieved by the enterprise.
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Factors affecting the level of cost reduction reflect a set of private causes (circumstances) that cause a change in production conditions in the directions of their impact on the production process in order to reduce them. They are associated with cost savings for all types of resources (for all items and elements). Cost reduction for products (works, services) is necessary for the following:
Increasing profits from the sale of products, through which an entrepreneur can develop his own production, stimulate individual employees to a greater extent, pay more income (dividend) to shareholders and solve social problems;
Increasing the competitiveness of manufactured products due to the possibility of establishing a lower contract price compared to their competitors;
Production of new products and introduction of advanced technologies;
Reducing production costs is a unity of two sides: factors of production and economic relations. The main directions for reducing costs in the field of production are:
Technical progress;
Improving the organization and management of production;
Use of efficient raw materials, materials, machinery and equipment, technological processes;
Reducing the cost of products, works, services depends on several groups of factors: technological, organizational and economic. Technological factors are related to technique and production technology. They provide:
a) increasing the progressiveness and quality of products, works, services;
b) the use of more modern and high-performance equipment and technology (machines and mechanisms);
c) increasing the degree of mechanization and automation of production;
d) application of resource and energy saving technologies;
e) increasing the level of technical and energy equipment of labor;
f) accelerating the introduction of the achievements of new technology and tools;
g) the use of highly efficient materials.
Organizational factors are related to the organization of production and labor and their management and include:
a) increasing the level of concentration, specialization and cooperation;
b) reducing the duration of the production cycle;
c) ensuring the rhythm of production and other conditions for the rational organization of labor;
d) reduction and complete elimination of manufacturing defects, downtime of equipment and workers;
e) advanced training of employees and selection of personnel according to the technical level of production.
Economic factors consist in raising the level of management and management methods. They include:
a) improvement of the production structure of the enterprise;
b) increasing the level of planning, accounting, control and analytical work;
c) improvement of the social conditions of life of the labor collective;
d) improving the culture of production and the state of industrial aesthetics;
e) increasing the competence of administrative and managerial personnel (managers) of the enterprise.
All factors influencing the level of cost reduction can be divided according to the scale of their action: nationwide, intra-industry and intra-production.
National ones are connected with the government's policy in the field of economic relations. Intra-industry factors in the conditions of economic reform play an insignificant role and can be represented by the process of improving the standards of the price system for products and in the field of planning production activities, the adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are solved by the enterprise itself.
Intra-production factors are associated with improving the use of all the material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise, may also be independent of them.
In addition to the above groupings, factors according to the signs of use are divided into promising and current, and according to the methods of detection - explicit and hidden.
From the point of view of the influence of factors on this phenomenon, factors of the first, second, K-th order are distinguished from objectively determined factors; subjective factors should be distinguished. They are further subdivided into external and internal and, main and secondary.
The classification of factors that determine economic categories and indicators of cost reduction for products (works, services) is the basis for the classification of production reserves. Reserves should be understood as unused opportunities to reduce costs at a given level of production and economic relations. The elimination of all kinds of losses and irrational costs is the main way to use production reserves. Another way is associated with great opportunities for accelerating scientific and technological progress and using the achievements of science and technology as the main lever for increasing production efficiency.
Reserves also affect the final results of the enterprise's production activities by changing the nature of production and the transition from extensive methods to intensive methods. Cost reduction factors affect reserves, while increasing the volume of products (works, services), improving their quality, improving the structure and range of products. They also create conditions for increasing the profitability of the enterprise, increasing its profitability and strengthening the financial position. Their action is determined by many factors of industrial, economic and organizational order. In mechanical engineering, the proportion of work in progress is high. At food and light industry enterprises, the main cost is occupied by raw materials and materials. In enterprises where a large number of tools, fixtures, devices are used, the share of low-value and wearing items is high.
In the extractive industries, there are practically no stocks of raw materials and basic materials, but the proportion of deferred expenses is large. In addition, for example, in the oil industry, an increased share is made up of auxiliary materials, spare parts for the repair of fixed assets.
In this chapter, the structure of the cost of production is considered. As a result of the chapter, it can be noted:
a) the cost is one of the most important indicators of the economic activity of the enterprise;
b) the cost is one of the main factors in the formation of profit, which means that the financial stability of the enterprise and the level of its competitiveness depend on it;
c) planning, control, management, and at the same time costing of products is one of the capacious areas of management of any enterprise, therefore, any enterprise must first pay special attention to the importance of analyzing and managing the cost of production, through its comprehensive study.
For any organization, the quality of decisions made regarding cost management is a guarantee of its effective work.
For competent and effective cost management, you need to know what it depends on, i.e. what factors are influencing. However, knowing only what factors have an impact is clearly not enough; it is necessary to establish the nature of this influence and evaluate it in an acceptable quantitative interpretation. This problem is intended to be solved by an extensive methodological apparatus of economic analysis. The theory of factor economic analysis is based on a number of key concepts, among which the definition of a factor (factor attribute) and the resulting indicator is of interest for consideration in this paragraph of the project.
AT economic research a factor is usually understood as the conditions for the performance of economic processes and the reasons that affect them. The activities of enterprises are complex and multifaceted. It is a complex of interrelated business processes characterized by a system of indicators that depend on numerous and diverse factors. An in-depth study of the entire complex of factors that influenced the progress of the implementation of plans and the dynamics of management makes it possible to correctly evaluate the results of the work of enterprises, identify and use reserves for the growth of their economic potential, and increase the efficiency of social production.
The resulting indicator in our case is the cost of products, let's move on to a more detailed consideration of the factors that influence it.
At first glance, the main ways to change the cost of manufactured products, of course, is the saving of all resources used in the production process and sales. However, the cost of production is a complex concept, and it depends on the influence of a large number of different factors. Let's classify them.
All factors, firstly, can be divided into two main categories: external origin, i.e. located outside the enterprise, and internal order. To external factors include: changes in prices for materials, semi-finished products, fuel, tools and other valuables received by the enterprise for production needs; changing the established minimum wages, as well as all kinds of mandatory contributions, deductions and charges. The main internal factors are a decrease in the labor intensity of manufacturing products, an increase in labor productivity, a decrease in the material consumption of products, the elimination of losses from marriage, etc.
Secondly, the most important technical and economic factors affecting the level of production costs can be divided into four groups: factors determined by the technical level of production; factors determined by the level of organization of production, labor and management; factors associated with changes in the volume and range of products; national economic factors.
The first group of factors takes into account the impact of scientific and technological progress on reducing the cost of production through the introduction of new equipment, technology and modern resource-saving equipment, mechanization and automation of production processes, improvement of design and specifications manufactured products. The reduction in material consumption rates and the increase in labor productivity achieved as a result of technological progress makes it possible to reduce costs by reducing the cost of materials and wages with deductions from it.
The second group of factors affects the reduction of production costs by improving the methods of organizing production and labor, better use of working time, reducing the technological cycle of production and sales of products, improving production management, reducing management costs on this basis, etc. When assessing the impact of factors in this group the results of reducing downtime and loss of working time should be taken into account. This group of factors also includes improved use of fixed assets, leading to lower depreciation costs.
The third group of factors takes into account the impact of changes in the volume and range of products on the cost. So, for example, an increase in output on the same production areas and equipment leads to a decrease in the cost of production by reducing the share of fixed costs.
The fourth group of factors determines the impact on the cost of changes in prices, tariff rates, transport tariffs, tax rates, inflation, interest rates on bank loans, etc. The factors of the fourth group are external in relation to the industrial enterprise.
It seems that the above grouping of cost change factors seems to be quite rational from the point of view of analysis.
The degree of influence on the level and structure of production costs is different for each group of factors. For example, when increasing production up to a certain limit, cost reduction is achieved by reducing the share of fixed costs per unit of output, as well as by increasing labor productivity as a result of improving work skills. However, it should be noted that when this limit is overcome, the savings, i.e. cost reduction ceases to take place, which is associated with some leveling of the "economy of scale effect" due to growing production, storage and transportation costs.
An increase in the technical level of production can have significant impact to reduce production costs as a result of the introduction of advanced technology and production technology, modernization and replacement of obsolete equipment, mechanization and automation of production processes.
Factors affecting the cost level reflect a set of private causes (circumstances) that cause a change in production conditions in the direction of their impact on the production process in order to reduce them. They are associated with cost savings for all types of resources (for all items and elements). Cost reduction for products (works, services) is necessary for the following:
Increasing profits from the sale of products, through which an entrepreneur can develop his own production, stimulate individual employees to a greater extent, pay more income (dividend) to shareholders and solve social problems;
Increasing the competitiveness of manufactured products due to the possibility of establishing a lower contract price compared to their competitors;
Production of new products and introduction of advanced technologies;
All factors influencing the level of cost reduction can also be classified according to the scale of their action: nationwide, intra-industry and intra-production.
National ones are connected with the government's policy in the field of economic relations. Intra-industry factors in an imperfect market economy play an insignificant role and can be represented by the process of improving the norms of the price system for products and in the field of planning production activities, the adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are solved by the enterprise itself. Intra-production factors are associated with improving the use of all the material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise, may also be independent of them.
In addition to the above groupings, factors according to the signs of use are divided into promising and current, and according to the methods of detection - explicit and hidden.
From the point of view of the influence of factors on this phenomenon, factors of the first, second, K-th order are distinguished from objectively determined factors; subjective factors should be distinguished. They are further subdivided into external and internal and, main and secondary.
The classification of factors that determine economic categories and indicators of cost reduction for products (works, services) is the basis for the classification of production reserves. Reserves should be understood as unused opportunities to reduce costs at a given level of production and economic relations. The elimination of all kinds of losses and irrational costs is the main way to use production reserves. Another way is connected with great opportunities for accelerating scientific and technological progress and using the achievements of science and technology as the main lever for increasing production efficiency.
Reserves also affect the final results of the enterprise's production activities by changing the nature of production and the transition from extensive methods to intensive methods. Cost reduction factors affect reserves, while increasing the volume of products (works, services), improving their quality, improving the structure and range of products. They also create conditions for increasing the profitability of the enterprise, increasing its profitability and strengthening the financial position. Their action is determined by many factors of industrial, economic and organizational order. In mechanical engineering, the proportion of work in progress is high. In food and light industry the main place in the costs is occupied by raw materials and materials. In enterprises where a large number of tools, fixtures, devices are used, the share of low-value and wearing items is high.
To conduct an economic analysis of the cost of manufactured products: the resulting indicator - the cost and factors influencing it. The scientifically substantiated classification of factors in the context of groups of classification features, developed by domestic economists, was studied, the necessity of classifying factors as mandatory condition for cost analysis.
Let's move on to the consideration of the goals and objectives solved in the course of cost analysis, the information base for its implementation and the importance of cost analysis in the enterprise management system.
Ministry of Education and Science of the Russian Federation
Financial and Economic Institute
Coursework on the topic:
"Factors affecting the cost
enterprise products"
Fulfilled
Checked:.
Introduction……………………………………………………………3
1. The concept of production costs….…………………..4
2. The composition of the costs of the enterprise included in the cost of production…………………………………………………………..5
3. Types of production costs …………………..….....8
4. Classification of production costs…………..........10
5. Factors affecting the cost of production and their classification…………………………………………………….16
Conclusion…………………………………………………………15
Bibliography…………………………………………………… 16
Introduction
Currently, production is developing in Russia, and with it the market and the country's economy. If earlier in the early nineties, with a shortage of goods, there was no acute problem of selling products, today we can say that it exists. With the process of filling the market with goods and services, competition is growing, which makes each market participant fight for its place. In competition, the winner is the one with the highest quality and the lowest price for a product or service. It is these two main factors that influence the outcome of the struggle, and the reserve for improving these factors is precisely included in the cost price.
In a generalized form, the cost of production reflects all aspects of the economic activity of enterprises, their achievements and shortcomings. The cost level is related to the volume and quality of products, the use of working time, raw materials, materials, equipment, the expenditure of the wage fund, etc. The cost, in turn, is the basis for determining product prices. Systematic cost reduction of industrial products is one of the main conditions for increasing efficiency industrial production. It has a direct impact on the amount of profit, the level of profitability, as well as on the national monetary fund - the budget.
The purpose of the course work is to study the formation of the cost of production, the identification and analysis of factors affecting the cost of production.
1. The concept of production costs.
The cost of products, works or services is the monetary expression of the amount of costs required for the production and marketing of this product, or more precisely its unit. Costs are understood as monetary costs of all types of resources: fixed assets, natural and industrial raw materials, materials, fuel and energy, labor used directly in the process of manufacturing products and performing work, as well as to maintain and improve production conditions and improve it ( costs will be discussed in more detail below). The composition of the costs included in the cost of production, their classification by articles are determined by the state standard, and the calculation methods are determined by the enterprises themselves.
The cost of production, representing the costs of the enterprise for production and circulation, serves as the basis for comparing costs and incomes, i.e. self-sufficiency - a fundamental feature of market economic calculation. The cost price is one of the most important indicators of the efficiency of resource consumption.
The cost price is part of the cost of production and shows what it costs to produce products for the enterprise (firm), so the cost price is the main price-forming factor. The higher the cost, the higher the price will be, ceteris paribus. The difference between price and cost is profit. Therefore, to increase profits, you must either increase the price or reduce the cost.
The cost price is part of the price of the goods, and it reflects most of the cost of production and depends on changes in the conditions of production and sale of products. The cost is included
especially significant performance indicators of economic activity. It represents the costs of the enterprise for production and circulation, serves as the basis for comparing costs and income, that is, self-sufficiency. The cost price shows what it costs the company to produce
products, how much you can earn on the sale of products or what “cheat” to make in excess of the cost, that is, it is the basis of pricing. If the cost of goods sold is greater than the cost price, then expanded production takes place. If in the process of realization the products are less than the cost price, then even simple reproduction is not ensured. Without exaggeration, this indicator most sensitively reacts to the situation that is developing at enterprises, in the production of certain types of products and in entire industries.
2. The composition of the costs of the enterprise, included in the cost of production.
The structure of expenses of the enterprise is various. These are not only the costs of raw materials and materials, wages, depreciation, but also the costs of the enterprise associated with the payment of taxes, fines, the maintenance of housing on the balance sheet of the enterprise, the payment of vouchers for employees of the enterprise, the construction of new fixed assets, etc. Most the main costs of the enterprise, which are included in the cost of products (works, services). This includes costs:
Directly related to the production of products, due to
technology and organization of production;
Associated with the use of natural raw materials;
For the preparation and development of production (checking the readiness of units,
production of test samples of products, etc.);
Non-capital nature, related to the improvement of technology and organization of production, as well as to improve the quality of products, their reliability, durability, carried out during the production process;
Related to invention and innovation, including the costs of organizing exhibitions, competitions, paying royalties;
To service the production process (providing production with raw materials, materials, fuel, energy, as well as performing sanitary and hygienic security requirements and costs);
To ensure normal working conditions and safety measures, including the construction and maintenance of baths, showers, laundries, etc., as well as the cost of providing workers with overalls and food;
Current, related to the maintenance and operation of environmental funds. At the same time, payments for the maximum allowable emissions of pollutants are made at the expense of the cost of production, and payments for their excess - at the expense of net profit;
related to production management. This includes the costs of maintaining the management apparatus, the costs of logistics and transport services for their activities, operating costs for the maintenance of management buildings, offices, equipment, inventory, travel costs, payment for communication services, computer centers, banks, as well as services provided by third-party management organizations, payment for consultations, audit services, entertainment expenses. But for the purposes of taxation, the costs of maintaining official vehicles, compensation for the use of personal vehicles for business trips, travel and hospitality expenses are accepted within the limits established by law. The cost of production does not include the costs associated with an audit conducted at the initiative of one of the founders of the enterprise, as well as the costs of creating the improvement of systems and capital controls, the costs of installing and connecting telephones, etc.;
Associated with the training and retraining of personnel. For the purposes of taxation, payments under agreements with educational institutions for the training, advanced training and retraining of personnel are included in the cost of production no more than 2% of the cost of wages for industrial and production personnel of the enterprise;
Transportation of workers to the place of work and back in directions not served by public passenger transport;
Deductions to off-budget funds on the wages of employees engaged in the production of products (works, services);
Payments for voluntary insurance of the enterprise's property, as well as payments for the conclusion in favor of its employees of accident insurance contracts, medical insurance and contracts with non-state pension funds that have the appropriate license - within 1% of the volume of products sold;
To pay interest on bank loans received. For tax purposes, the tax authorities do not accept the cost of paying interest on overdue loans, and the payment of bank interest is accepted within the discount rate of the Central Bank of the Russian Federation, increased by 3 points;
related to the sale of products;
Depreciation deductions for the full restoration of fixed production assets according to the norms approved in the prescribed manner;
Amortization of intangible assets;
Payment for the lease of individual objects of fixed production assets, as well as leasing payments for financial leasing operations;
Taxes, fees, payments and other mandatory deductions made in accordance with applicable law;
Other types of costs included in the cost of products (works, services) in accordance with the procedure established by law.
Production costs (works, services) are included in
the cost of production of the reporting period to which they relate, regardless of the time of payment. It should be noted that part of the costs included in the cost of products (works, services) is normalized for tax purposes, for example, the costs of training, advertising, hospitality, etc. The cost includes the full amount of such costs, but when calculating taxable profit the costs incurred by the enterprise in excess of the norms are added to its actually received value. In addition, the cost of production includes losses from marriage, losses from downtime for internal production reasons and from a shortage of incoming material resources within the limits of natural wastage.
3. Types of production costs.
It is necessary to distinguish between the total cost of all manufactured products - the total amount of costs attributable to the manufacture of products of a certain volume and composition; individual cost - the cost of producing only one product (for example, for the manufacture of a unique unit, provided that no other types of products are simultaneously produced in this production link); and the average cost, determined by dividing the total cost by the number of products produced.
Depending on the volume of costs included in the cost price, there are operating, workshop, production and full costs. Operating (technological, aggregate) reflects the costs of performing this technological operation.
The shop cost includes the costs of manufacturing products within the shop, in particular, direct material costs for the production of products, depreciation of shop equipment, wages of the main production workers of the shop, social security contributions, maintenance and operation of shop equipment, and general shop expenses. The shop cost price is the initial basis for determining intermediate intra-factory planned and estimated prices when organizing intra-factory economic accounting.
The production cost (the cost of finished goods) covers the costs of the enterprise for the production of products. Apart from shop cost it includes overhead costs (administrative, managerial and general business costs) and the costs of ancillary production. The total cost (the cost of sold (shipped) products) includes all costs associated with the production and sale of products.
It differs from the production cost by the amount of non-production costs (commercial costs - the costs of packaging, storage, loading, transportation and advertising) and is calculated only for marketable products. It should be borne in mind that these costs depend on the volume of shipped products and are variable.
In addition, a distinction is made between planned and actual cost. The planned cost price is determined at the beginning of the planned year based on the planned expenditure rates and other planned indicators for this period. The actual cost is determined at the end of the reporting period based on accounting data on actual production costs. The planned cost and the actual cost are determined by the same methodology and for the same cost items, which is necessary for comparing and analyzing cost indicators. Comparison of the planned and actual cost allows you to objectively assess the degree of profitability of the enterprise and the rationality of the use of both material and intellectual resources.
4. Classification of production costs.
Of great importance for the correct organization of accounting for production costs is their scientifically based classification. The need to study the cost structure is due to the fact that the costs of the enterprise (firm) for the production of products are different in their economic nature and size, and therefore in their share in the total cost. Due to the diversity of production costs, it is customary to group them according to various criteria into qualitatively homogeneous aggregates.
Grouping costs by economic elements. To find out under the influence of what factors this level of cost was formed, to what extent and in what direction these factors influenced the total cost, it is necessary to divide the various costs into groups, or cost elements.
This grouping is based on the sign of the economic content of a particular expense. The costs of raw materials, fuel, wages and other expenses in this case are considered not just as components of the cost, but as a compensation for the costs of materialized and living labor - compensation for the consumed objects and means of labor and labor itself.
Production costs include the following:
· Material costs (minus the cost of returnable waste);
· Labor costs;
· Deductions for social needs;
· Depreciation of fixed assets;
· Other expenses.
Based on these elements, the enterprise draws up a “Production Cost Estimate”, which determines the total amount of all enterprise costs for the planned production volume. Let's look at these elements in more detail. The element "Material costs" reflects the cost of:
Acquired from the side of raw materials and materials that are part of the manufactured products;
Purchased materials used in the production process to ensure a normal technological process and for product packaging, as well as spare parts for equipment repair;
Purchased components and semi-finished products that are further processed at this enterprise;
Works and services of an industrial nature performed by other enterprises or productions of the same enterprise that are not related to the main type of activity;
Acquired from the side of fuel and energy of all types, spent for technological purposes.
The cost of material resources is formed on the basis of their consumption prices (excluding VAT), markups, customs duties, fees for transportation, storage and delivery carried out by other enterprises, etc.
The sum of all the above costs spent on the production of products is reduced by the cost of returnable production waste (residues of raw materials and materials arising in the process of converting the source material into finished products that have lost all or part of the consumer qualities of the source material, but can be reused by the enterprise as a material for production or sold to the side).
The labor cost element includes:
Labor costs for the main production personnel of the enterprise, including bonuses to workers and employees, as well as compensation in connection with price increases and income indexation within the limits prescribed by law;
Compensation paid in the amounts established by law to women who are on partially paid parental leave.
The element "Deductions for social needs" includes mandatory deductions in accordance with the norms established by law from the amount of labor costs.
The element "Depreciation of fixed assets" reflects the amount of depreciation deductions for the full restoration of fixed production assets, determined on the basis of the book value of the norms approved in the prescribed manner.
The element "Other costs" includes:
Depreciation on intangible assets;
Rent;
Rewards for inventions and rationalization proposals;
Mandatory insurance payments;
Interest on bank loans;
Taxes included in the cost of products (works, services);
Deductions to off-budget funds;
Payment for the services of advertising agents and audit organizations, communications, computer centers, private security etc. The distribution of costs by economic elements makes it possible to distinguish two main groups: the costs of past labor, embodied in the cost of consumed objects of labor (raw materials, materials, etc.) and means of labor (depreciation), and the costs of living labor (expenses for wages ). Of the other costs, usually two-thirds are related to material costs, and the rest - to the cost of living labor.
Thus, element-by-element cost analysis shows specific costs for the production of products, regardless of the place of their occurrence and does not reflect the process of formation of the cost of production at the stages of its production. These goals are met by the grouping of costs by calculation items, which takes into account costs at the place of their occurrence and direction, and therefore makes it possible to determine the level of cost for individual types of products.
The industry has adopted the following typical classification of costs by costing items:
1. raw materials and basic materials
2. auxiliary materials(purchased products, semi-finished products and services of an industrial nature)
3. returnable waste (subtracted from the cost price)
4. fuel and energy for technological purposes
Total: Materials
5. wages of workers
6. deductions for social needs
7. expenses for the maintenance and operation of equipment
8. reserve for repairs
9. depreciation of fixed assets
10. overhead costs
11. general business expenses
Total: Production cost
12. selling expenses
Total: Full cost
The items listed are subject to change, taking into account the nature and structure of the proceedings. According to these articles, the cost of production is calculated and estimates are compiled. Depending on the proportion of which costs prevail in their overall structure, labor-intensive industries (coal, mining, logging), material-intensive (many sectors of the light and food industries), energy-intensive ( non-ferrous metallurgy), as well as industries with a large share of depreciation costs (oil and gas industry). Such a classification is important, first of all, for determining ways to reduce costs. According to the nature of the connection with the technological process (with the volume of production), basic and overhead costs are distinguished.
The main costs are directly related to the technological process of production: raw materials and basic materials, auxiliary materials and other costs, except for general production and general business. The main costs, as a rule, are conditionally variable: their total value changes approximately in proportion to the change in the volume of output.
Overhead costs are associated with the processes of organization, management and maintenance of production. These costs are weakly related to the volume of production, they do not change proportionally to it, therefore they are called conditionally constant. This includes costs, the absolute value of which is limited by the workshop or the enterprise as a whole and is not directly dependent on the volume of the production program (expenses for heating and lighting of premises, salaries of management personnel).
Not all types of costs can be directly attributed to specific types of products, many of them must first be determined as a whole and only then distributed among various products. Therefore, according to the method of attribution to the cost of production, direct and indirect costs are distinguished, which can be distinguished by grouping costs according to costing items.
Direct costs are directly dependent on the volume of output or on the time spent on its manufacture and can be directly and directly attributed to its cost: raw materials and basic materials, losses from marriage, and some others.
Indirect costs cannot be attributed directly to the cost of certain types of products and are distributed indirectly, using conditional calculations, for example, in proportion to the wages of production workers:
overhead, general business, non-production costs, etc. Articles that combine indirect costs are called complex. The sum of all direct costs is the production cost of the product. The sum of all direct and indirect costs gives the cost of goods sold.
The division of costs into direct and indirect depends on industry characteristics, the organization of production, the accepted method of calculating the cost of production, for example, in the coal industry, where only one type of product is produced, all costs are direct.
According to the frequency of occurrence, expenses are divided into current and non-recurring. Current expenses have frequent periodicity (consumption of raw materials and materials). One-time (one-time) - expenses for the preparation and development of the release of new types of products.
5. Factors affecting the cost of production and their classification.
For any organization, the quality of decisions made regarding cost management is a guarantee of its effective operation. The cost of production is a complex concept, and it depends on the influence of a large number of different factors. All factors, firstly, can be divided into two main categories: external origin, i.e. located outside the enterprise, and internal order. External factors include: changes in prices for materials, semi-finished products, fuel, tools and other valuables received by the enterprise for production needs; changing the established minimum wages, as well as all kinds of mandatory contributions, deductions and charges. The main internal factors are a decrease in the labor intensity of manufacturing products, an increase in labor productivity, a decrease in the material consumption of products, the elimination of losses from marriage, etc.
Secondly, the most important technical and economic factors affecting the level of production costs can be divided into four groups: factors determined by the technical level of production; factors
determined by the level of organization of production, labor and management; factors associated with changes in the volume and range of products; national economic factors.
The first group of factors takes into account the impact of scientific and technological progress on reducing the cost of production through the introduction of new equipment, technology and modern resource-saving equipment, mechanization and automation of production processes, improving the design and technical characteristics of manufactured products. The reduction in material consumption rates and the increase in labor productivity achieved as a result of technological progress makes it possible to reduce costs by reducing the cost of materials and wages with deductions from it.
The second group of factors affects the reduction of production costs by improving the methods of organizing production and labor, better use of working time, reducing the technological cycle.
production and sale of products, improvement of production management, reduction on this basis of management costs, etc. When assessing the influence of factors in this group, one should take into account the results of reducing downtime and loss of working time. This group of factors also includes improved use of fixed assets, leading to lower depreciation costs.
The third group of factors takes into account the impact of changes in the volume and range of products on the cost. Thus, an increase in output on the same production areas and equipment
leads to a decrease in the cost of production by reducing the share of fixed costs.
The fourth group of factors determines the impact on the cost of changes in prices, tariff rates, transport tariffs, tax rates, inflation, interest rates on bank loans, etc. The factors of the fourth group are external in relation to the industrial enterprise.
The degree of influence on the level and structure of production costs is different for each group of factors. For example, when increasing production up to a certain limit, cost reduction is achieved by reducing the share of fixed costs per unit of output, as well as by increasing labor productivity as a result of improving work skills. Tech level up
production has a significant impact on reducing production costs as a result of the introduction of advanced equipment and production technology, modernization and replacement of outdated equipment, mechanization and automation of production processes.
Factors affecting the cost of production can be classified according to several criteria.
To technological - a change in the range of products; duration of the production cycle; improving the use and application of new types of raw materials and materials, the use of cost-effective substitutes and the full use of waste in production; improvement of production technology, reduction of its material consumption and labor intensity.
2. According to the time of occurrence, planned and sudden factors are distinguished. The enterprise can plan the following activities - commissioning and development of new workshops; preparation and development of new types of products and new technological processes; optimal placement of certain types of products in the enterprise. Sudden (not planned) factors include production losses; change in the composition and quality of raw materials; change in natural conditions; deviations from the established production standards and others.
3. According to the place of occurrence, factors are divided into external (independent of the enterprise) and internal (depending on the enterprise). The cost of production, regardless of the enterprise, can be affected by the economic situation in the country, inflation; natural and climatic conditions; technical and technological progress; changes in tax legislation and other factors. The internal ones include the production structure of the enterprise; management structure; the level of concentration and specialization of production; duration of the production cycle.
4. According to the purpose, the main and secondary factors are distinguished. This group factors depends on the specialization of the enterprise. If we consider material-intensive production, for example, a meat processing enterprise, then the following factors can be attributed to the main ones: prices for material resources and the consumption of raw materials and other materials; technical equipment of labor; technological level of production; production rate; nomenclature and range of products; organization of production and labor. To a lesser extent, the cost of production will be affected by the management structure; natural and climatic conditions; wages of production workers.
Conclusion
The cost of production is a quality indicator,
characterizing the production and economic activity of the enterprise.
The cost price reflects the costs of the enterprise for the production and marketing of products, expressed in monetary terms. In addition, the cost price as a generalizing economic indicator reflects all aspects of the enterprise's activities: the degree of technological equipment of production and the development of technological processes; the level of organization of production and labor, the degree of use of production capacities; profitability of the use of material and labor resources and other conditions and factors that characterize production and economic activity.
The most important point in the study of such an indicator as
cost is a consideration of the factors affecting the rate and
determination of the main directions for cost reduction. How the enterprise solves this issue depends on obtaining the greatest effect at the lowest cost, the growth of savings, saving labor, material and financial resources. The cost price reflects a large part of the cost of products and depends on changes in the conditions of production and sale of products. Therefore, technical and economic factors of production have a significant impact on the level of costs. This influence manifests itself in
from changes in technology, technology, organization of production, in the structure and quality of products and from the amount of costs for its production. It follows that the identification of reserves to reduce costs should be based on a comprehensive technical and economic analysis of the enterprise: the study of the technical and organizational level of production, the use of production capacities and fixed assets, raw materials and materials, labor, economic relations; as well as all components of the cost.
Systematic cost reduction ensures not only growth
profits of the enterprise, but also gives the state additional funds both for further development social production, and to improve the material well-being of workers.
Literature
1. Gribkov V. D., Gruzinov V. P. Enterprise Economics: Textbook. Workshop. 4th ed., revised. and add. - M .: Finance and statistics; INFRA-M, 2009-400s.: ill.
2. Zaytsev NL, Economics, organization and business management: Textbook. 2nd ed., add. - M.: INFRA-M, 2009 - 455s.
3. Gruzinov, V.P. Enterprise Economics: Textbook for High Schools / Ed. V.P. Gruzinova. - M.: Banks and stock exchanges, Unity, 2001. - 535p.
4. Abryutina, M.S. Enterprise Economics: Textbook. - M .: Higher School Publishing House, 2006. - 480s.
5. Bakanov M. I., Sheremet A. D. Theory of economic analysis. - M.: Finance and statistics, 2005. - 416s.
Technical and economic factors affecting the cost of production can be grouped into four groups:
- - raising the technical level of production;
- - improvement of management, organization of production and labor;
- - changes in the volume and structure of products and the structure of production;
- - factors reflecting changes in business conditions.
In the first group of factors - an increase in the technical level of production - the main ones should be distinguished:
- - introduction of new and improvement of applied equipment and technology;
- - expansion of the scale of application of new equipment, technology, modernization and improvement of the operation of existing equipment;
- - application of new types and replacement of consumed raw materials, materials, fuel and energy, improvement of their use;
- - improving the quality of products, improving their characteristics.
The main, in the group of factors - improving management, organization of production and labor - include:
- - rationalization of production management;
- - improvement of the organization and maintenance of production;
- - improving the organization of labor and the use of working time;
- - elimination of unnecessary costs and losses (including losses from marriage).
In the third group - a change in the volume and structure of products and the structure of production, the following factors are distinguished:
- - relative change in conditionally fixed costs as a result of changes in the volume of production;
- - relative change in depreciation charges;
- - change in the structure of products;
- - commissioning of new industries (and in associations also the commissioning of new enterprises);
- - development of new enterprises and preparation of production at existing enterprises.
The fourth group - factors reflecting changes in business conditions - includes:
- - change in prices for manufactured products;
- - change in prices for consumed raw materials, materials, components and semi-finished products, fuel, energy;
- - change in wages in accordance with the decision of the government;
- - change in the taxation system;
- - revaluation of fixed assets and change in depreciation rates.
The change in costs is determined in relation to each individual factor, regardless of its impact (positive or negative) on reducing the cost of production.
- 1. Planned (expected) costs per thousand rubles are determined. of manufactured products in the base year in the planning year methodology. The volume of production of the preplanned year is determined in the prices of the planned year.
- 2. The cost of production of the planned year is calculated based on the planned (expected) level of costs of the base year.
- 3. The influence of the first three groups of factors on the level of costs is determined.
- 4. The cost of production of the planned year is determined, in the prices and conditions of the planned year, for which the total amount of savings (increase) due to the influence of the first three groups of factors is subtracted (added) from the cost of production calculated according to the level of planned (expected) costs of the base year.
- 5. The level of costs per thousand rubles is determined. production of the planned year and a decrease (increase) in these costs compared to the expected level of costs in the base year under comparable conditions.
- 6. The influence of the factors of the fourth group on the cost of production of the planned year is calculated.
- 7. The final level of costs per thousand rubles is determined. planned products.
The calculation of changes in the cost of production in the planned period due to technical and economic factors is carried out in the context of cost elements.
The special literature contains a sufficient number of formulas and descriptions of methods for calculating the influence of certain technical and economic factors on the cost of production.
In calculating the impact on the cost of production of changes in costs in connection with the development of technology, improving the design of products, the technology of their manufacture, savings from reducing technological labor intensity, material and other variable production costs are taken into account. Savings is understood as a direct absolute reduction in costs per unit of output or for the planned amount of work in the planned year. Savings are determined taking into account the duration of the corresponding measure in the planned year. But at the same time, in the calculation of the cost for the listed factors, the savings from carrying out activities in the preplanned year, which are transferred to the planned year, should be taken into account.
Cost savings due to the use of new types and replacement of consumed raw materials, materials, fuel and energy, as well as improving their use is determined by multiplying the savings of the relevant resources in kind by the average prices prevailing in the base year.
When calculating the change in the cost of production due to improving the quality of products, improving their characteristics, direct and additional current costs associated with improving the designs and improving the consumer properties of products manufactured in accordance with approved standards and specifications are taken into account. The change in the cost of warranty service of products is also taken into account. The amount of additional costs is determined based on the change in direct costs per unit of output and the total volume of improved quality products in the planned year.
The procedure for determining savings, due to the factor of improving management, organization of production and labor, is similar to calculating the influence of factors associated with an increase in the technical level of production.
The cost reduction due to the reduction of losses from rejects (for enterprises and departments where it is planned) is calculated by multiplying the norms of losses from rejects in the base year by the reduction factor for these norms and the volume of production in the planned year.
2. Analytical part
