How to calculate the cost of production. How to calculate the cost of sales

For those who decide to start their own business, it will be necessary to study the question of how to calculate the total cost of production. This is important for its implementation. In order to understand this issue, you must clearly understand what is the cost products.

Cost concept

Cost is the total and partial cost of the production and sale of the product. In the manufacture of the product requires resources:

• material from which the product is directly made;
• fuel necessary for transportation of materials for manufacturing or transportation of finished products to points of sale;
• repair work;
• salary to workers;
• rental of premises, if required.

Each product is individual, and it needs its own resources for manufacturing. And to figure out how to calculate the cost of production, you need to consider each stage separately.

Economic concepts of cost

How to calculate the cost of sales from an economic point of view? There are two concepts.

Total cost

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

1. Salary of employees.
2. Contributions to state funds.
3. Used raw materials for the manufacture of products.
4. Accounting for deterioration of equipment and expenses for its repair (depreciation).
5. Advertising costs.
6. Other expenses.

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

Marginal cost

This concept includes the cost of a unit of output. How to calculate the actual cost of finished products (it is also called complete)? You can do this by the formula, but for this you need:

1. Calculate how much raw materials and materials are spent on the manufacture of one copy of the product.
2. Calculate how much fuels and lubricants and electricity goes to one unit of production.
3. Take into account the costs of semi-finished products purchased at other plants, if any.
4. Calculate how much the employee will receive by making this type of product (taking into account all social payments).
5. Know the cost of repairs and depreciation of equipment.
6. Consider tool wear.
7. Calculate the cost of maintaining the production room.
8. Other costs.

After analyzing the data above, you can imagine how much raw material is spent on the production of a unit of production. And if you add to all this also: transportation; deductions to state funds; payment of employees leave; taxes expenses incurred by the organization due to unforeseen circumstances - all this will give you a complete picture of how to calculate the actual cost of production.

Cost types

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

1. Aggregate cost. The cost of manufacturing a product on a particular machine, whether it is a technical machine or a fabric one, is estimated.
2. Prime cost. In addition to assessing the costs of manufacturing products in the workshop, the costs of maintaining and servicing the territory itself are also taken into account: heating, security, alarm, fire protection, management structure.
3. General manufacturing costs. They consist of expenses for depreciation and repair of equipment, advanced training of workers, taxes.
4. The full cost price. Among other expenses, it includes packaging costs, loading and unloading of products, transportation services.

Why do you need to calculate the cost of production?

Starting a business, not everyone is in a hurry to immediately calculate the cost of production, thereby making a huge mistake. This mistake can lead you at least to losses, and at the very least to complete bankruptcy.

What will the cost analysis give you:

1. Will show the profitability of all your products. After all, it depends on her how efficiently raw materials and other, monetary and human resources.
2. Will form the retail and wholesale price. Correct effective price policy allow you to make production competitive.
3. Will make it clear how efficiently the production process at the enterprise. The lower the cost of production compared to the average statistics in this industry, the greater will the company be working. Accordingly, the higher the costs, the lower the profitability and efficiency indicator of the enterprise.
4. It will form an indicator of reduction of fixed and variable costs.

It is from the calculation of cost that your profit depends. The circulation system operates here: the lower the cost, the higher the profit, and the higher the cost, the lower the profit. Therefore, each manufacturer seeks to reduce production costs in the pursuit of profit. In this case, the quality of the product may suffer. In order to conduct your business correctly, it is necessary to calculate the cost of products, this is one of the main elements of management at the enterprise.

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

As an example, the furniture company LLC Divan will be taken. It is required to calculate the cost of the manufactured product for December. In total, 12 corner sofas, 10 book sofas, 24 soft chairs were issued.

Total:

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

This example showed how to calculate the cost of production per unit of goods. In this case, the full cost of the product will be considered all costs in general.

How to calculate the cost of sales

Take, for example, the already familiar sofa manufacturing company. In December, ten corner sofas, seven book sofas and twenty armchairs were sold.

We use the data above and calculate:

1. Ten corner sofas cost us 221,100 rubles (22,110 x 10).
2. Seven sofas-books - 71 050 rubles (10 150 x 7).
3. Twenty seats - 96,240 rubles (4812 x 20).

The total result was: 388,390 rubles.

Features of cost

In the process of their work, each organization seeks to minimize its production costs. Therefore, the question of how to calculate the cost of production will depend on a number of factors. Directly all expenses are included in the cost of production, up to heating the premises in the winter (absent in the summer). All this allows us to judge that the main management mechanism is the analysis and accounting of all aspects of the organization’s economic activity, which will make it possible to judge the correct operation of the company. In this case, a specific cost estimate will depend on the inventory, technological features of the enterprise and on the managers themselves who own one or another production information.

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