What is commercial output?

Issues of planning production volumes and accounting products were always at the center of attention of managers, accountants, financiers and other professionals who are involved in the real sector of the economy. Commodity products are goods produced by the enterprise that are in the warehouse and ready to be shipped to the consumer. Accounting for it is made both in kind and in monetary terms. At the same time, semifinished items are also included in the volume of marketable products, which are also supplied to the market.

If we take as an example a factory for the production of automobiles, it is obvious to all that its commodity output consists of cars. These machines can be of different brands. In turn, each brand has several options for bundling. For example, the entire line of models of the Volga Automobile Plant is equipped with a heating appliance. The buyer can choose a car equipped with a radio tape recorder and a navigator according to his needs. Similarly, the car interior can be clad in different materials.

From the examples given, it can be seen that different materials and components are used for the production of a car. Of course, the radio tape recorder is purchased from a third-party supplier. Any radio plant in Russia or abroad is engaged in the production of these complex products. Thus, it can be concluded that its marketable product serves as a component for the car. It is not difficult to guess that the share and cost of such components is significant.

To understand one subtlety in the system of economic indicators, it is necessary to know that in analyzing and calculating the results of an enterprise's activity for a certain period, indicators such as gross and marketable output are used. For some reason, many students and young economists, these indicators seem to be the same. Although in fact they have fundamental differences. For managers who deal with financial management, they carry completely different information, which, in turn, serves as the basis for making managerial decisions.

At the automobile plant, which is taken for example, it is quite possible that a situation will arise when these radio units are purchased with a large margin. Commodity production - finished cars - is consistently sold to consumers. In this case, the machines are purchased without these radio receivers. This can happen for various reasons. One of which is their obsolete design. All the leading companies offer their cars, equipped with players on optical discs. And in our example, yesterday's tape recorder, which only lose the magnetic tape on the cassettes.

And it turns out that purchased components for future use will be a useless load of dust in the warehouse. First of all, this fact characterizes the low professional level of logistics specialists. Of course, one should not blame them for purchasing a large number of these components. Most likely, counterparties offered very favorable terms. And the radio tape recorder was purchased at a price much lower than the market price. Now, long time being in a warehouse, they the fact of the presence increase the gross production.

I must say that such an indicator as gross output is formed by a simple formula. Gross output is commodity output plus stocks in warehouses. And to this is added the amount of work in progress. When the main experts analyze the results of the enterprise for the reporting period - it may be a quarter or a year - then they necessarily pay attention to the structure of gross output. Stocks of components that do not find application in the main production, should be minimized. How this is done is a separate topic.