Cost of sales: formula, methodology and calculation example

The main concepts used by economic science, with a certain degree of simplification, are incomes and expenditures. Their ratio forms other economic categories. For example, with respect to a single product, the costs of production and sales form the actual cost, which is included in the price of the goods together with the desired profit. Concerning the general commodity turnover the actual cost price of the sold production reduces the received incomes of the enterprise, leaving in its order the gross profit. And now let's move from simplification to reality: we will understand with such a multifaceted notion as the cost price.

The concept of cost in accounting policy

In the Russian practice, there are 4 types of accounting for costs in the enterprise, which differ in the purpose and specificity of the formation of the analytical cost base, namely:

• Accounting;
• Tax;
• Managerial;
• statistical.

They are conducted at the enterprise simultaneously, so it makes no sense to prioritize. Although by the criterion of punishment for improper execution, the most strictly regulated are the tax and accounting types of accounting.

Accounting and tax types of accounting

In the framework of accounting, the actual expenses of the enterprise are formed on the basis of the PBU , its purpose is to accurately account for the costs that have been brought together in the balance sheet. If in accounting there is a concept "the full cost price of the sold production", the tax account replaces it with simple summation of expenses of the enterprise. Tax accounting implies the correct formation of a tax base for the calculation of corporate income tax. According to the tax code (Chapter 25), in order to find the tax base, the amount of the company's revenues can be reduced by the amount of expenses, with the exception of the list of costs presented in Art. 270.

Management and statistical types of accounting

Management accounting of costs is used for the purposes of the head of the enterprise. Depending on the tasks of the management, cost sampling, cost accounting criteria, parameters of cost formation change. For example, within the framework of management accounting, it is possible to track the cost of a new product, to decide on the feasibility of its further production and sale, you can monitor the work of a specific service in terms of the ratio of costs and revenues, or calculate the planned cost of the proposed project. In this case, the cost price of the products sold, the formula for calculating it and the method of determination will vary greatly.

Statistical accounting is necessary for the study of trends in economic development for individual activities, it is based on the analysis of accounting and on the reports of TEP activities of the enterprise.

"Costs", "expenses", "costs" and their interrelation with the cost price

Costs are resources used in the operation of an enterprise, the value of which is expressed in monetary terms. They can relate to costs, if implemented in the reporting period.

In accordance with the tax code, expenses are documented costs of the enterprise incurred in the reporting period; They lead to a reduction in the organization's income from basic and other activities.

Costs are a concept of economic theory, very close to costs. Costs are the costs of production and / or treatment represented in value terms. The summation of the costs of production and circulation forms the cost of sales, the formula for calculating which will be discussed later.

Linking costs to the reporting period and their relationship to revenues makes them the basis for cost formation. Therefore, we will continue to operate with the notion of "expenses", allowing the use of other concepts as synonyms.

In order to calculate the cost price, it is necessary to conduct an economically justified grouping of expenditures according to the chosen classification criterion.

Cost of economic elements

The formation of the cost price for economic elements is an enlarged grouping of homogeneous expenditures, more indivisible and independent from the place of their origin. These include the following expenditure groups:

• Material (Р _М );
• Remuneration of labor (P _OT );
• Social deductions ( _RI );
• Depreciation (A);
• Other (R _PR ).

When summing up expenses by economic elements, the cost is formed. The calculation formula will be as follows: С _РП = Р _М + Р _ОТ + Р _СО + А + Р _ПР .

By the relative weight of a particular group of expenses in the general structure, one can draw a conclusion about the nature of production. For example, with a high share of labor costs and related social contributions, the enterprise is engaged in a labor-intensive type of activity.

Cost by item of cost

Structuring costs by items involves accounting for dissimilar costs, while a separate calculation article may include several economic elements. Typical nomenclature consists of the following expenditure items:

1. Guild costs (P _C ), which form the shop cost (C _C ):

• Materials and raw materials.
• PHOT of the main workers.
• Social deductions for FOT.
• Expenses for operation and maintenance (repair) of equipment.
• Energy and fuel for technological purposes.
• Expenses for the preparation of production, its development.
• Compulsory property insurance.
• Depreciation.
• Other shop expenses.

2. General production costs ( _PPS ), which are added to the shop floor. As a result, the production cost of sales is formed (with _PP ):

• Losses from marriage.
• Other general economic expenses.

3. Non-production expenses (RVP):

• Costs for packaging, packaging.
• Delivery.
• Scientific and technical developments.
• Personnel training.
• Other non-production expenses.

4. Commercial expenses (RK).

The above costing items form the cost price. The calculation formula will have the form: С _РП = Р _Ц + Р _ОП + Р _ВП + Р _К.

Types of cost

Based on methods of grouping costs, several types of cost are distinguished.

1. The shop cost price calculates all the costs of the workshop related to the production of products, namely labor payment with deductions, maintenance costs of equipment, materials and energy, managerial shop expenses.
2. The production cost is a summation of the costs of production of this type, taking into account the cost of workshop and general production costs.
3. Commercial (full) cost is the cost of finished products sold, including all possible costs for the full life cycle of the product for production and marketing.

Method of calculating the cost price

There are several methods of accounting for costs and the formation of cost.

1. Accounting for costs at actual cost - based on accurate accounting of actual actual costs of the enterprise.
2. Accounting for costs of the standard cost - the method is relevant for mass and batch production, which are characterized by homogeneous repetitive operations, the cost price is formed in accordance with the standards and norms adopted by the enterprise. The analogue of this method is the foreign "standard-bone".
3. Cost accounting for the planned cost price - used for planning, is based on projected figures that are calculated from actual data using forecast coefficients, vendor proposals, and expert evaluation results.

Cost in formulas

A) Define the cost of sales, the formula for calculating it is as follows:

With _РП = С _ПП + Р _ВП + Р _К - О _НП where all indicators in cost expression:

• With the _RP - the cost of sales;
• With _PP - full production cost;
• RVP - non-production costs;
• Р _К - commercial expenses;
• About _NP - unrealized products.

B) Given the volume of products sold ( _OW ), you can find the cost price of a unit of goods. For this, it is necessary to divide the total cost price by volume (Task No. 1):

With _ЕД = С _РП : О _РП .

B) For analytical purposes, relative indicators are used (Task No. 2):

The norm of marginal profit ( _NMP ), which shows the ratio of variable and fixed costs in the enterprise, it is calculated by the formula:

Н _МП = (П _М / В) '100%, where

• P _M is the marginal profit;
• B - proceeds from the sale of goods.

The cost factor of the products sold (refers to transaction costs), shows the share of costs in revenue and allows you to assess the reasons for the decline in profits from the sale of goods, it is determined by the formula:

To _SRP = (With _RP / B) '100%.

The threshold of profitability (or break-even production) shows, at what volume of production costs pay off, it is calculated as follows:

TB = P _POST / (C - P _PER.ED ), where

• TB - break-even point;
• R _POST - the expenses are constant for the whole volume of production;
• P _PER.ED - expenditure variables per unit of output;
• C is the price of the goods.

Task number 1 for determining the production cost of a unit of goods

Calculate the total production cost of a liter of juice. For the calculation, we use the following data.

1. Direct costs, thousand rubles:

• Material (concentrate) - 2500,
• Labor - 70.

2. Overhead costs of production, thousand rubles. - 2600.

3. For the reporting period, juice concentrate was used, thousand liters - 130.

4. The technology of juice production implies loss of concentrate up to 3%, while the share of concentrate in the finished product is not more than 20%.

Progress:

1. Summing up all expenses, we will get the cost price of the sold products, thousand rubles:

2500 + 70 + 2600 = 5170.

2. Let's find the volume of finished juice in kind, taking into account the technological losses, thousand liters:

130.0 - 3% = 126.1

126.1 * 100% / 20% = 630.5.

3. We calculate the cost of production of a liter of juice, rubles:

5170 / 630.5 = 8.2.

Task number 2 for the calculation of the break-even point, the rate of profit and transaction costs

The table presents data on the formation of the profit of an individual enterprise, thousand rubles. During the reporting period, the volume of sales was 400 units.

Indicators	Total	Per unit
Revenues	200 000	500
Variable costs	120,000	300
Marginal profit	80,000	200
Fixed costs	70 000
Profit	10,000

For each additional unit of goods sold marginal profit will gradually cover the fixed costs. If one unit of goods is sold, the fixed costs will be reduced by 200 rubles. And will amount to 69.8 thousand rubles. Etc. To completely cover the fixed costs and enter the break-even point, the company needs to sell 350 units of goods based on the following calculated data: 70000 / (500 - 300).

To determine transaction costs, the total cost of goods sold is used, the calculation formula is as follows: (120000 + 70000) * 100% / 200000 = 95%.

The margin margin will be 40% according to the calculation: 80000 * 100% / 200000 = 40%. It shows how the margin profit will change when revenue changes, for example, an increase in revenue by 1 ruble will lead to an increase in profit by 40 kopecks, subject to the same fixed costs.

Ability to calculate the cost of production, to vary income and expenditure transactions, to analyze the economic situation in each specific period in any data section is the key to the successful operation of the enterprise.