Cost of goods sold and production cost. Product cost. Price. Profit and profitability Total cost of production

Dear readers! The article talks about typical ways to solve legal issues, but each case is individual. If you want to know how solve exactly your problem- contact a consultant:

APPLICATIONS AND CALLS ARE ACCEPTED 24/7 and 7 days a week.

It's fast and FOR FREE!

The cost of goods sold is considered a fundamental indicator that allows the management of organizations to determine the effectiveness of management activities, as well as to identify the difference between the costs incurred and the profits received.

Important Points

Also important is the issue of familiarization with the regulatory framework that regulates the cost. This allows you to make your business more successful.

What it is

The definition of “cost of goods sold” means the total value of the full direct costs of the enterprise at all stages of the production process and other costs during the implementation period.

In the process of determining it, the following expenses are taken into account:

Taking into account such types of costs, it is possible to calculate the cost of goods sold in 2020 without any problems.

Why is the indicator needed?

By itself, the cost expresses the aggregate indicator of the organization's use of various types of resources.

Thanks to this value, it is possible to provide entrepreneurial activity with resources by identifying a part of the cost share for their reimbursement.

Because of this, the production process is considered to be one that is constantly in operation.

The dynamics of the cost for a specific time period, including the analysis of the indicator after each sale of goods, provides an opportunity to sum up the expediency and rationality of purchases and the expenditure of not only material, but also labor resources.

Moreover, the calculated cost values in different periods make it possible to fully analyze the essence of the organization's expenses and form not only marketing, but also economic methods to reduce their share in.

Today, there are methods by which the cost of production can be significantly reduced.

This is possible thanks to the analysis of the full cost of all costs directly to production.

In such a situation, it will be possible to plan measures to reduce the price of products and calculate its optimal performance.

If the analysis was carried out qualitatively and at the same time all the factors that contribute to an objective assessment were taken into account, then we can talk about the regulation of the process for the production of goods.

According to many experts, one of the most optimal options for reducing the cost of production is considered to be an increase in labor productivity.

At the same time, “labor productivity” refers to the amount of work for a specific period of time costs for a specified period of time.

It should be noted that labor productivity is influenced by such factors as:

The latter factor implies the fact that in modern companies that use high-tech equipment in their work, the level of energy costs is significantly lower than in those organizations that use old models.

Moreover, modern equipment allows us to talk about a decrease in the amount of scrap, which leads to savings in the cost of raw materials and materials for the manufacture of a particular product.

Additionally, do not forget about another option to reduce the cost of goods. Its essence is to cooperate and expand the specialization of a manufacturing company.

Thanks to this, it is possible to achieve a significant reduction in the level of costs, both for administrative, managerial, and other types of activities of the organization.

The opportunity to save on the production of products is also provided by analyzing the adjustments and upgrades made by the option of using the company's fixed assets.

Additionally, it is possible to revise the existing management structure, the administrative building in favor of reducing the number of employees.

Due to the fact that the cost of managerial activities of the organization also affects the cost of goods and is necessarily taken into account when determining it, a reduction can automatically lead to a decrease in the level of costs.

Legal framework

The main legislative acts, which are recommended to refer to in the process of determining the cost of production, rightfully include:

In fact, the issue at hand is not mentioned anywhere else to the extent that companies can benefit from it.

How to calculate the cost of goods sold using the formula

The method of determining the cost directly depends on the stage at which the finished product is located.

For this reason, we can talk about ways such as:

Determination of manufacturing costs by the summation method	Without exception, all costs by economic components and the output of the grand total
Determination of the cost of gross output	The method of identifying the difference between the sum of all production costs without exception and directly non-production costs, and taking into account the costs of subsequent periods
Determination of cost by difference detection method	Directly between the cost of gross goods and adjustments to the balance of WIP, in cases of their increase. In the process of reducing balances, their adjustment, which is expressed in financial terms, is subject to summation
Determining the total cost	The method of summing the indicators of production costs and the total of non-production costs
Determining the cost of goods sold	The method of summing up the cost and direct commercial costs. At the same time, the actual indicators are determined when the financial indicator of the balance of unsold products is subtracted from the identified total in the summation process.

Using the most optimal and at the same time the appropriate method, you can easily make the necessary calculation.

Applied algorithm

To be able to determine the cost of goods, it is initially necessary to sum up the production costs, including depreciation.

In simple words, for the calculations you need information on the production cost.

As a result, it will be necessary to establish the various types of costs that have been incurred at all stages of production and at the same time meet such requirements as:

are related to commercial activities;
are directly related to the work of the company;
costs incurred on the finished product directly in the production and sales processes;
have documented validity;
fully comply with the legislation of the Russian Federation.

The amount of expenses is expressed in financial terms and is taken into account for all types of goods without exception.

Video: production cost

The costs that are included in the cost volume are subject to grouping by components of various economic indicators.

As a result, 5 groups are subject to consideration, namely:

material costs;
wages for employees;
social contributions;
depreciation;
other financial losses.

Based on this, a total of costs is derived that are not aimed at the production itself, but are necessary to maintain it. In simple terms, non-manufacturing costs.

How to calculate by balance

As a result of the foregoing, in order to be able to determine the cost of goods sold on the balance sheet, it will be necessary to use a formula such as:

At the same time, the total cost indicator is determined by the formula:

Zprod.	Production costs
Vzatr.	non-manufacturing costs

This line reflects information on expenses for ordinary activities that formed the cost of goods sold, products, work performed and services rendered (clauses 9, 21 PBU 10/99).

What expenses form the costsold goods, products, works, services?

The cost of sold goods, works, services includes the following expenses for ordinary activities (clauses 4, 5, 9 PBU 10/99, clauses 11, 22, paragraph 3 clause 23 PBU 2/2008):

- costs associated with the manufacture of products;

- expenses associated with the purchase of goods;

— costs associated with the performance of work;

— costs associated with the provision of services;

- expenses associated with the provision of property for rent (in organizations whose subject of activity is the provision of their assets for rent);

— expenses associated with the granting of rights to use the results of intellectual activity (in organizations whose subject of activity is the granting of such rights for a fee);

— expenses associated with participation in the authorized capitals of other organizations (in organizations whose subject of activity is participation in the authorized capitals of other organizations);

— amounts of deviations, claims, incentive payments recognized as revenue under construction contracts in previous reporting periods, the receipt of which was doubtful (expected losses);

- other expenses depending on their nature, conditions of implementation and activities of the organization.

The amount of expenses is determined based on the price established by the contract, taking into account all the stipulated discounts, regardless of the form of their provision (clauses 6.1, 6.5 PBU 10/99, Appendix to the Letter of the Ministry of Finance of Russia dated 06.02.2015 N 07-04-06 / 5027 ).

For organizations performing work under construction contracts, direct costs under the contract (expenses for ordinary activities) can be reduced by the income of the organization not directly related to the execution of the contract, received in the performance of other contracts (paragraph 3, clause 12, PBU 2/2008 ). For example:

- on income from the sale of materials and structures excessively written off for production;

- for rent for construction equipment that is temporarily not used by the organization itself for the execution of a construction contract.

The cost of sold goods, products, works, services is written off from accounts 20 “Main production”, 23 “Auxiliary production”, 29 “Serving production and facilities”, 41 “Goods”, 43 “Finished products”, 40 “Output of products, works, services” and others to the debit of account 90 “Sales”, sub-account 90-2 “Cost of sales” (Instructions for using the Chart of Accounts).

Note that management expenses recorded on account 26 "General business expenses", in accordance with the accounting policy of the organization (clauses 9, 20 PBU 10/99, Instructions for the application of the Chart of Accounts):

1) may be included in the cost of products, works, services (debited from account 26 to the debit of accounts 20, 23, 29);

2) as conditionally permanent, they can be directly related to the cost of sales of the reporting period in which they arose (debited from account 26 to the debit of account 90, subaccount 90-2).

Note!

General business expenses of construction organizations may be included in the cost of work under construction contracts only if they are reimbursed by the customer (clause 14 PBU 2/2008).

In the first case, these expenses form an indicator in line 2120 "Cost of sales", and in the second case they are shown in line 2220 "Administrative expenses" of the Statement of Financial Performance.

The rules for recognition of expenses in the Statement of Financial Performance are defined in paragraphs 18, 19 of PBU 10/99 and paragraphs 16, 23 of PBU 2/2008. In particular:

— expenses are recognized taking into account their connection with receipts (for example, the cost of performing work is recognized simultaneously with the recognition of proceeds from their sale as part of income);

— if the expenses cause the receipt of income during several reporting periods and the relationship between income and expenses cannot be clearly determined or is determined indirectly, then they are recognized in the Statement of Financial Performance by their reasonable distribution between the reporting periods;

- if a small business organization recognizes proceeds from the sale of products and goods not as the transfer of ownership, use and disposal of the delivered products, goods sold, but after receipt of payment, then the expenses are recognized after the debt is paid off.

Features of calculating the cost of goods, products, works, services are established by industry methodological instructions, recommendations, guidelines (clause 10 PBU 10/99, Letter of the Ministry of Finance of Russia dated 04.29.2002 N 16-00-13 / 03 “On the application of regulatory documents governing issues accounting for production costs and calculating the cost of products (works, services).

What accounting data is usedwhen filling in line 2120 "Cost of sales"?

The value of the indicator of line 2120 "Cost of sales" (for the reporting period) is determined on the basis of data on the total debit turnover for the reporting period on account 90, subaccount 90-2, in correspondence with accounts 20, 23, 29, 41, 43, 40, etc. At the same time, the turnover on the debit of account 90, subaccount 90-2, in correspondence with the credit of account 44, as well as in correspondence with the credit of account 26 (if any) are not taken into account (paragraph 23 of PBU 4/99). The resulting value of the cost of goods sold, products, works, services is indicated in line 2120 "Cost of sales" in parentheses.

Note!

In the event that types of income are allocated in the Statement of Financial Results, each of which individually amounts to five or more percent of the total amount of the organization's income for the reporting year, additional lines are introduced to line 2120 "Cost of sales", which indicate the expenses corresponding to the types allocated by the organization income (clause 21.1 PBU 10/99).

Line 2120 “Cost of sales” = Turnover on the debit of account 90/2 - Turnover on the debit of subaccount 90/2 and credit of account 44 - Turnover on the debit of subaccount 90/2 and credit of account 26 (If, in accordance with the accounting policy of the organization, management expenses as conditionally permanent are debited to the debit of account 90, subaccount 90-2)

Line 2120 "Cost of sales" (for the same reporting period of the previous year) is transferred from the Statement of Financial Performance for the same reporting period of the previous year.

Example of filling line 2120"Cost of sales"

Indicators for subaccount 90-2 of account 90 in accounting (excluding turnover on the debit of subaccount 90-2 in correspondence with the credit of accounts 44 and 26): rub.

Turnover for the reporting period (2014)	Sum
1	2
1. For the debit of sub-account 90-2	72 013 678
1.1. According to the debit of sub-account 90-2, an analytical account for accounting for the cost of sales of finished products	53 214 540
1.2. According to the debit of sub-account 90-2, an analytical account for accounting for the cost of sales of goods	15 220 638
1.3. According to the debit of sub-account 90-2, an analytical account for accounting for the cost of providing intermediary services	1 678 500
1.4. According to the debit of sub-account 90-2, an analytical account for accounting for the cost of performing car repair work	1 900 000

Fragment of the Statement of Financial Results for 2013

Solution

The cost of sold goods, products, works, services for 2014 is (total) 72,014 thousand rubles.

For types of revenue that are at least 5%, the cost is equal to:

sold products - 53,215 thousand rubles;

goods sold - 15,221 thousand rubles.

A fragment of the Statement of Financial Results will look as follows.

Explanations	Name of indicator	Code	For 2014	For 2013
1	2	3	4	5
	Cost of sales	2120	(72 014)	(71 165)
	including:
	products sold	2121	(53 215)	(52 600)
	goods sold	2122	(15 221)

If you are engaged in the production or resale of certain goods, then for you the cost of sales is one of the most important indicators of the profitability of a particular product. To calculate this cost, you need to determine the price of the inventory you have at the beginning and end of the tax year.

Who needs it?

Cost of sales is an important indicator for those people who are engaged in wholesale or retail trade, direct production or business activities related to the purchase or sale of goods for profit. Thus, this term in no way refers to people engaged in business activities in the field of personal services, including lawyers, doctors, painters or carpenters, unless they are involved in the sale of various supplies or materials.

How to make calculations?

The cost of sales is the result of detailed calculations for a certain period of time. In order to determine it, you need to know the following indicators:

The price of the inventory you have at the beginning of the year. In the event that it differs from the price of inventory held at the end of the previous year, you should attach a detailed explanation.
The cost of all kinds of purchases are excluded from here those goods that were taken by you for personal use.
Costs that have been allocated to pay employees. You should also exclude any amounts allocated only for yourself.
The price of materials, as well as all necessary supplies.
All other costs.

Having determined all these parameters, you can calculate the cost of sales. These are the most important indicators that should be present in your reporting.

To make the calculation, you need to add up all these characteristics, and also determine the value of the inventory that is present at the end of the year. Simply subtract the sum of all the above indicators from the value of the inventory that you have at the end of the year - and you can determine the cost of selling products.

Inventory price at the beginning of the year

If you are in retail, then the price of your initial inventory will be the value of all the goods you have at the beginning of the year that you intend to sell to customers. In the event that you are engaged in production, then for you this indicator will be the total cost of all kinds of semi-finished products, raw materials, finished products and any supplies you need in the production process.

The opening inventory in most cases is exactly the same as it was at the end of the previous year, but if you have a discrepancy in these figures, you should determine the reason for them on the form attached to your tax return.

Donation to charity

In the event that your company donates its own goods to charity, you can deduct from the taxable base either the fair market value of all donated products, or their base - it all depends on which indicator is lower. The donated item base is any inventory expense you incurred in prior years that you would otherwise have to include in the price of your opening inventory for this year. You will need to subtract the price of all donated products from the cost of the initial inventory, as it is not part of the cost of goods sold.

In the event that you did not include the value of all donated items in the price of your initial inventory, the donated product base is zero and you do not have the right to deduct this donation from your taxable base. In this case, the posting of the value of such products is carried out by the standard accounting method.

illustrative example

You are a taxpayer using the standard calendar tax year and accrual technology. In 2015, you decided to donate property to a particular church with a fair market value of €600. According to the rules, in the price of the final inventory for 2014 you included the cost of acquiring this property in the amount of 400 euros, and in the same year you deducted administrative and other costs in the amount of 50 euros related to this property . You posted these costs as business expenses.

For 2015, you can deduct this donation only in the amount of 400 euros, since 200 euros is an amount that would be your ordinary income if you sold this property at a fair market price. The cost of goods sold, which is the basis of your gross income calculations, will not have to include this €400, so you can deduct it from the total price of opening inventory for that year.

Deduction of goods that were taken for personal use

If your primary activity is trading, you will need to deduct the cost of all items you purchase to sell. In the case of manufacturing activities, you will need to consider the full cost of raw materials, parts or assemblies required to produce your final product.

Discounts

The difference between the price originally published and the actual price paid by the buyer when purchasing the product is called the sales price discount. When calculating the cost of purchased products, you need to use not the initially published prices, but the prices that were actually paid. Accounting for the cost of sales provides for the absence of specifying the amount of discounts as a separate item of gross income.

Thus, a car dealer, when calculating the cost of cars sold, must first deduct any factory discounts from it.

What are the discounts when buying with cash?

The Instant Checkout Cash Discount is an amount that a supplier allows you to deduct from your invoice for purchased products to use as an instant checkout incentive.

When calculating the cost of sales of a service or goods, you can record these discounts using one of the following accounting technologies:

record them on credit of a certain discount account;
subtract them from the total purchases for that year.

Regardless of which method you will use, you need to do everything consistently and systematically.

If such discounts are credited to a separate account, you will need to report a credit balance at the end of the tax year in the amount of total business income. It should be noted that the use of this method does not provide for the subtraction of the discount from the cost of goods sold.

Withdrawal from sales

If certain items are removed from sale for personal or family use, their cost must be deducted from the total price of the items you purchased for sale. To do this, when the cost of sales is calculated, the invoice must contain the cost of these goods on credit for sales or purchases, and this amount must be debited from your expense account.

The latter is a separate account designed to keep records of entrepreneurial income, which is withdrawn to pay for any personal expenses of the entrepreneur or his family.

Salary

In the vast majority of cases, when cost of sales is calculated, the calculation of labor costs is considered as a separate element of cost of goods sold only in mining or manufacturing enterprises. Small trading companies often do not have their own labor costs, providing for the possibility of attributing them to the cost of goods sold. In companies engaged in the manufacturing industry, any labor costs necessarily include not only direct, but also indirect costs necessary for processing raw materials into finished products.

Salary of production employees

When the cost of sales is calculated (the calculation formula was indicated above), this item includes the salary of all employees who were employed in a particular production of this product for a full time. It is worth noting that this category also includes the salaries of part-time employees in the event that you have the opportunity to calculate this component of their salary.

Other labor costs

These costs must be deducted from the taxable base as administrative or selling expenses, since it is impossible to calculate the cost of sales according to the rules with the inclusion of these costs. The only type of labor costs that, in accordance with the rules, can be taken into account when calculating the cost of goods sold, are the wages of auxiliary and production employees, as well as various labor costs considered as overhead costs.

Materials and supplies

All kinds of materials and supplies, including various chemicals and components necessary for the production of a particular product, must be recorded when calculating the cost of sales. Postings of chemicals and parts that do not go into the production of products are carried out as deferred expenses, deductible from the tax base as standard business expenses (depending on the use of these materials).

The calculation of the cost of production in production is determined for different purposes, one of which is pricing. This value is very important for the enterprise, because accurately shows the total amount of cash costs for the production of the product. In the future, it is used to assign the most effective price for the sale of products. Thus, the analysis of the cost indicator will not allow the organization to become unprofitable and uncompetitive due to the high pricing policy. How to correctly determine the cost of a product (service) and what items of expenditure should be included in the calculations so that the result is true?

Essence and types of cost

For the manufacture of one unit of a product, an enterprise spends a certain amount of money on the purchase of material (raw materials), energy, machine tools, fuel, employees, taxes, sales, etc. All these costs ultimately give a general indicator of the funds spent, which is called the cost of 1 piece of production.

Each enterprise in practice calculates this value for planning production and accounting for the finished commodity mass two ways:

by economic elements of costs (the cost of all products);
calculate cost items per unit of product.

All funds that were spent on the manufacture of products before the delivery of finished products to the warehouse, as a result, show the net factory cost. But they still need to be implemented, which also requires costs. Therefore, in order to get full cost to them still need to add the cost of marketing. These can be, for example, transportation costs, the salary of movers or a crane who participated in the shipment and delivery of products to the customer.

Calculation methods production costs allow you to see how much money is spent directly in the shop and then at the exit of the product from the plant as a whole for delivery to the customer. Cost indicators are important for accounting and analysis at each stage.

Based on these requirements and ideas, there are such cost types:

workshop;
production;
complete;
individual;
industry average.

Each cost estimate allows you to analyze all stages of production. Thus, it is possible to determine where it is possible to reduce costs, avoiding overspending unjustified funds for the production of marketable products.

When determining the cost units of goods costs are grouped into a common cost estimate from articles. The indicators for each position are summarized in a table for certain types of expenses and summarized.

Structure of this indicator

Industry production differ in their specific products (services), affecting the cost structure. Different directions are characterized by their special costs for the main production, which prevail over others. Therefore, first of all, they pay attention to them when they try to reduce the cost in order to increase.

Each indicator that is included in the calculations has its own percentage. All costs are grouped by item in the overall cost structure. The cost items show a percentage of the total. This clarifies which of them are priority or incremental production costs.

Per share cost influenced by a variety of factors:

location of production;
application of the achievements of the scientific and technical process;
inflation;
concentration of production;
change in the interest rate of a bank loan, etc.

Therefore, there is no constant cost value even for manufacturers of the same product. And you need to follow it very carefully, otherwise you can bankrupt the enterprise. Estimating the production costs indicated in the costing items will allow you to timely reduce the cost of manufacturing marketable products and get more profit.

In the calculations of enterprises, the calculation method for estimating the cost of products, semi-finished products, and services prevails. Calculations are carried out per unit of commercial mass, which is manufactured at an industrial facility. For example, 1 kWh of electricity supply, 1 ton of rolled metal, 1 ton-km of cargo transportation, etc. The calculation unit must necessarily comply with standard measurement standards in physical terms.

If you have not yet registered an organization, then the easiest this can be done using online services that will help you generate all the necessary documents for free: If you already have an organization and you are thinking about how to facilitate and automate accounting and reporting, then the following online services come to the rescue, which will completely replace an accountant at your plant and save a lot of money and time. All reporting is generated automatically, signed with an electronic signature and sent automatically online. It is ideal for an individual entrepreneur or LLC on the simplified tax system, UTII, PSN, TS, OSNO.
Everything happens in a few clicks, without queues and stress. Try it and you will be surprised how easy it got!

Cost classification

The production of products consists in the use of raw materials, technical devices, the involvement of service personnel directly involved in production activities and additional materials, mechanisms and persons serving and managing the enterprise. Based on this, cost items are used in costings in different ways. Only direct costs can be included, for example, when calculating shop costs.

First, for convenience, expenses are classified according to similar criteria and combined into groups. This grouping allows you to accurately calculate the indicator of production costs related to one economic component of the cost.

That's why costs combine into separate classes according to such similar properties:

according to the principles of economic homogeneity;
type of products;
methods of adding individual goods to the cost price;
depending on the place of occurrence;
purpose;
quantitative component in production volumes;
etc.

Cost items are classified according to common features to identify a specific object or place of cost.

The classification is made according to economic signs of homogeneity for costing per unit of manufactured products:

This list of economic elements is the same for calculating the cost in all industries, which makes it possible to compare the structure of costs for the manufacture of goods.

Calculation example

To determine the funds spent on the manufacture of products, you need to use one of two methods:

based on costing;
using production cost estimates.

Usually the calculation is carried out for a quarter, half a year, a year.

The calculation of the costing of manufactured products for any period can be performed according to this instruction:

Calculation example the cost of plastic pipes at the manufacturer for 1000 m of products and determine the selling price for 1 m of goods:

We determine how much money was spent according to paragraphs 4, 5 and 6 of the initial data:
- 2000x40 / 100 \u003d 800 rubles - deducted to the funds, based on wages;
- 2000x10/100 \u003d 200 r - overhead costs;
- 2000x20/100 \u003d 400 r - general business expenses;
The production cost for the manufacture of 1000 m of pipe consists of the sum of the cost indicators in paragraphs 1-6:
3000+1500+2000+800+200+400= 7900 rubles
Cost indicators for the sale of products
7900x5/100 = 395 rubles
So, the total cost of 1000 m of plastic pipes will be equal to the sum of the production cost and distribution costs
7900 + 395 = 8295 r
According to the amount received, the total cost of 1 m of plastic pipe will be equal to 8r. 30 kop.
the sale price of a pipe for 1 m, taking into account the profitability of the enterprise, will be:
8.3+ (8.3x15/100) = 9.5 p.
The markup of the enterprise (profit from the sale of 1 m of pipe) is:
8.3x15/100 = 1.2 p.

Formula and calculation procedure

Total cost calculation(PST) must be determined by the following formula:

PST \u003d MO + MV + PF + TR + A + E + ZO + ZD + OSS + CR + ZR + HP + RS,

Expenditure items are determined separately for each type of product, and then summarized. The resulting amount will show the costs that production incurs in the manufacture and sale of a certain product from the finished product warehouse. This indicator will be the total cost per unit of production, to which profit is then added and the selling price of the goods is obtained.

Balance calculation procedure

It is important for a company to get an indicator cost of goods sold to determine the profitability of manufactured products. To understand how much profit was received from each ruble invested in production, you can use the formula for calculating the balance of cost of sales.

Eat two types of calculations, which uses:

Profit from the sale of sold products;

To calculate the profitability index, two cost parameters are also used: direct and general production (indirect). Direct costs include the costs of materials, equipment and wages of workers that are directly related to the manufacture of products. Indirect costs are money spent on the repair of equipment, fuel, salaries of management personnel, etc., but not directly involved in the creation of goods. For the analysis of net income from the sale of manufactured products, it is not necessary to take into account indirect costs.

In commercial enterprises, two main calculation options direct cost budget for raw materials:

normative;
analytical.

Where a calculation is made for the manufacture of products using the standard method, the cost indicator is calculated more accurately, but more time-consuming. For large volumes of output, it is more acceptable than for firms with small production. The analytical method allows you to determine the cost of production much faster, but the error will be greater. It is more commonly used in small businesses. Regardless of how direct production costs are calculated, they will be needed further to determine the amount of net profit.

So, when calculating the base cost, direct costs are taken and do not include additional ones, which makes it possible to more accurately assess the profitability of the manufactured goods separately. You will get the total amount of direct costs for the manufacture of products for a certain period. From this amount, you need to subtract the amount of unfinished semi-finished products. Thus, an indicator will be obtained that reflects how much money was invested in the manufacture of products for the billing period. This will be the cost of manufactured and delivered to the warehouse products.

To determine the cost of goods sold, you need to know the balance of finished products at the beginning and end of the month in the warehouse. Often, the cost of an individual product is calculated to determine how profitable it is to produce.

Cost formula products sold from stock per month as follows:

SRP \u003d OGPf at the beginning of the month + GGPf - OGPf at the end of the month,

OGPf at the beginning of the month - the balance of finished products in the warehouse at the beginning of the reporting month;
GWPf - manufactured products per month at actual cost;
OGPF at the end of the month - the balance at the end of the month.

The resulting cost of goods sold is used in profitability calculations. To do this, it is revealed as a percentage: the profit is divided by the cost of goods sold and multiplied by 100. Profitability indicators are compared for each item of the manufactured goods and they analyze what is profitable to produce further in production and what needs to be excluded from production.

The definition of the concept of production cost and methods for its calculation are discussed in the following video:

The price of any product depends on its initial cost, which is calculated using a special formula, taking into account a number of costs.

The cost of a product is the amount that was spent on its production. It includes the expended natural resources, raw materials, materials, fuel, energy, transportation, wages for production workers and other costs.

Dear reader! Our articles talk about typical ways to resolve legal issues, but each case is unique.

If you want to know how to solve exactly your problem - contact the online consultant form on the right or call by phone.

It's fast and free!

The cost can be divided into the following types:

The definition of full cost includes all costs, including commercial costs.
The concept of marginal cost corresponds to the cost of one unit of production.

The cost of finished products is calculated taking into account the total cost of production and it happens:

Workshop. Includes the costs of all stages of production.
Production. Calculated by adding the shop floor and total costs of the plant.
Complete. It takes into account the costs not only for production, but also for transportation and sale.

The classification of cost is extensive, it can be divided into many types depending on the characteristics of production and methods of selling goods.

Calculation methods

There is no single methodology for calculating the cost. Depending on the type of product, its production and many different factors, the cost of production can be calculated in different ways.

Most often, the following costs are taken into account in the calculations:

the cost of entrepreneurial activities of the manufacturer;
the total cost of production and sales;
the cost of preparing documentation for the goods;
other expenses stipulated by the legislation;

Costs should be taken into account in the reporting period corresponding to the time of production of the goods, and not to the time of payment of all costs.

When calculating the price of a product, the cost calculation is performed. The calculation is based on the quantity of products produced (in meters, pieces, or, in case of one-time production, a hundred meters or pieces are taken as a unit of measurement).

Costing items should reflect all stages of production, for example:

the cost of raw materials and materials;
fuel and energy costs;
wages for production workers;
total costs for the production process:
expenses for the economic needs of the enterprise;
business expenses;
other costs;

All these factors are expressed in certain amounts, and taking into account them, a formula for calculating the cost is compiled.

General view and decoding

As mentioned above, there is no single calculation formula; when calculating the cost of a particular product, various factors can be taken into account.

Here is a general formula for calculating the total cost:

PS \u003d Total Cost of Production + Cost of Selling Goods / Calculation Unit;

The cost is calculated in order to:

Assess profitability.
Set the wholesale and retail price for the product.
Assess the efficiency of resources used in production.
Calculate the potential profit of the enterprise.

The production process also includes such types of costs as fixed and variable, which must be reflected in the cost of goods. Moreover, fixed costs exist for the enterprise even when it does not produce anything.

In general, the formula for calculating the cost price looks like this:

PS \u003d (Total production costs + Costs of selling goods) / cost unit;
PS - total cost of production;

Total cost of production- this is the total cost of raw materials, energy, wages of workers and other costs that the production process required.

Costs for the sale of goods- the amount spent on storage, transportation, documentation for the goods.

Calculation unit- the quantity of goods, expressed in pieces or meters.

Formula calculation example

Using Excel

There are methods for calculating the cost using tables in Excel. Let us give examples of calculations.

Option 1

In cases where an organization is not able to calculate the exact cost of production, a rough estimate can be made. The planned quantity of goods and the planned costs are entered into the table and division is performed. The amount that will turn out as a result will be the unit of costs.

Example 1:

Option 2

After the company has allocated the amount necessary to produce 1 unit of goods, it is necessary to calculate the cost price by adding up the variable and fixed costs. The amount of variable costs depends on the quantity of output, and fixed costs do not change.

Example 2:

Reduction methods

Production Cost Reduction Scheme

There are methods by which the cost of goods can be reduced. This can be done by conducting a detailed analysis of the total cost of all production costs. In this case, you can plan measures to reduce the price of goods and calculate its optimal value.

If the analysis is carried out qualitatively and taking into account all the factors necessary for an objective assessment, then there are all opportunities to adjust the production process.

According to experts, one of the most effective ways to reduce the cost of goods is to increase.

Labor productivity- is the amount of work for a certain amount of labor costs in a given period of time.

The following factors influence labor productivity:

The level of qualification of employees involved in the production of products. It is better to replace untrained employees with low qualifications with qualified specialists. This will reduce the number of production workers, and hence the cost of paying wages, which also affect the cost of production.
Conditions of production and organization of the work process. At a manufacturing enterprise, which is equipped with modern high-tech equipment, energy costs will be significantly lower than where obsolete models of equipment are used. In addition, modern equipment will reduce the number of defects, and therefore the cost of raw materials and materials in the manufacture of goods. .

There is another way to reduce the cost of production - its essence is to cooperate and expand the specialization of the manufacturing enterprise. This will reduce the cost of administrative, management and other activities of the enterprise.

Savings on the production of goods will also allow such a measure as analysis, making the necessary changes and improving the ways in which the fixed assets of the enterprise are used.

It is also possible to revise the management structure, the staff of administrative and executive employees in the direction of reducing their number. Since the costs of the management activities of the enterprise also affect the cost of the product and are taken into account in its calculations, reducing staff and replacing quantity with quality will also lead to cost reduction and cost reduction.

In conclusion, we can say that by applying the formula for calculating the cost and taking into account the result obtained, it is possible to objectively assess the profitability of production and the main indicators of the company's activities.

The result of the calculations is an indicator of how efficiently the resources of the enterprise are used and what results are obtained by measures to improve production conditions and introduce new technologies.