Costs per ruble of marketable products: formula, determination method

Any head of an existing enterprise engaged in the production of any goods has a concept of costs, expenses, costs. For the successful operation of the company, it is necessary to clearly and strictly control costs, be able to manage them and strive for their constant reduction.

Essence of costs

Simply put, costs are a monetary expression of the resources spent on the production, storage and marketing of products. It is very important to keep track of where and in what amounts the material, labor and economic resources of the company are spent. If this is neglected, then the organization will fail.

If the manager does not take into account the fact that the cost of production that he produces is growing, while profit does not increase or decrease, this indicates a near crisis in the life cycle of the enterprise. Therefore, it is required to regularly conduct a cost study, cost analysis for 1 ruble of marketable products and strive to reduce them by various methods.

Classification

At the moment, there are many types and classifications of costs. They are distinguished depending on:

• elements - material, wages, deductions, depreciation, other;
• costing articles - each industry has its own specific costs, an approximate list is presented in the figure below;
• relationship to cost - direct and indirect;
• attitude to the level of business activity - variable and constant;
• cost recognition method - production costs (including costs per ruble of marketable products) and costs for the time interval;
• sales - sold and marketable;
• the number of elements - singleton and multi-element;
• adjustable possibilities - adjustable and unregulated;
• relations to production - production and non-production.

Realized and commercial products

It represents the entire volume of manufactured goods that were sold to the buyer and for which the company received revenue. This indicator is expressed in monetary terms. To find the value of this indicator, you need to add to the balance of unsold products at the beginning of the period the amount of marketable products and subtract the balances of unsold products at the end of the period. Selling products do not differ in composition from marketable. But there are differences in the amount.

A marketable product is all products, including those not yet sold in warehouses.

The formula for the cost of the ruble of commodity products

If you want to determine the cost per ruble of marketable products, you need to divide its total cost by the amount of sales. The latter in this case is used at wholesale prices, that is, without indicating value added tax.

This indicator characterizing the level of costs per ruble of marketable products can be interpreted in two variations: these are the costs that are required to produce 1 ruble of marketable products, as well as an indicator of the ratio characterizing the cost price and its structure.

If, as a result of calculating the cost of a ruble of marketable products, the indicator is below unity, then such production is defined as profitable, if it is higher, it is unprofitable.

Cost-effectiveness

In general, it is important not only to know the value of the costs per ruble of marketable products, but also to understand how cost-effective the costs are in principle. Cost-effectiveness characterizes the amount of profit received from 1 ruble of sold products. The source of data for the calculations will be the balance sheet.

The balance sheet formula is profit before tax divided by the total cost of goods. If we consider from the point of view of codes of balance sheet items, then the calculation formula looks like this:

(2200/2120) * 100%

A change in the indicator suggests that measures need to be taken with respect to pricing or cost.

Profitability of expenses can decrease in two cases: when cost increases and profit decreases. And also when the management of the company deliberately reduces prices in order to stimulate sales. At the same time, administrative costs for sales are growing.

If profitability is growing, this means that OPF and current assets began to return faster.

Cost Variation Factors

An analysis of the cost per ruble of marketable products can show dynamics over the period. This makes it clear to us that some factors influence the changes. In particular, they include:

• staffing of the enterprise with modern and high-quality equipment, its equipment, serviceability;
• the dynamics of procurement prices for materials and services in cost items;
• seasonal factor (depending on the type of product or service);
• indicators of qualitative and quantitative labor (productivity, reject rate);
• the dynamics of selling prices for goods or services that the company offers;
• the dynamics of the volume and range of the product catalog;
• change in the size of costs per unit of output.

In order to understand exactly what factor influenced the growth or decrease in costs, conduct a factor analysis aimed at identifying the very specific structural unit in the cost structure.

Determination method

As a result of the analysis of the costs per ruble of marketable products, they can be divided into 3 groups:

1. The first group reflects the costs of materials and raw materials.
2. The second contains information about the means of labor.
3. Third - information about the cost of labor.

And depending on whose share of the three groups is greater, the type of production is determined by the nature of the costs. Namely:

• material intensive;
• capital intensive;
• laborious.

And based on the picture obtained, it is worth making a conclusion and finding a solution to reduce the costs of a particular group.

So where does cost analysis start? First, we need a table of production costs, broken down by cost elements. From it we will see the dynamics and deviations of indicators. And also find out the cost structure and determine the type of production.

Next, compile a table and calculate the cost per ruble of commodity and sales. The table contains data on the volume of commodity and sold products and their cost, costs per ruble each.

Then you can determine the change in costs for the costing items and conduct factor analysis.

Cost Reduction Ways

We briefly consider the main ways to reduce costs in a manufacturing enterprise. There are 2 ways to reduce costs:

1. The first is the reduction of conditionally variable costs: rationalizing the use of raw materials, semi-finished products, fuel and energy, increasing the level of labor productivity and improving the use of working time.
2. The second direction is the reduction of fixed costs (maintenance of machinery and equipment, distribution costs and general business expenses). Mechanization and automation of production will play a positive role in this matter.

In the struggle to reduce costs, it is important to introduce a saving regime at the enterprise. Also, to reduce costs, it is necessary to regularly review and evaluate the management apparatus and its maintenance costs. The effective operation of the Quality Control Department helps to reduce losses from marriage.

Practical example

As an example, take LLC "Ardon", engaged in the production of small-sized cabinet furniture. Consider table 1, characterizing the composition and cost structure for 2010-2012.

Table 1. The composition and cost structure of LLC Ardon for 2010-2012.

After analyzing the data obtained, we can calculate the cost per ruble of marketable products. The data are systematized in table 2.

Table 2. Cost analysis per ruble of marketable and sold products.

Based on the data in the table, we see that costs are reduced, despite the jump in cost in 2011. This indicates the rational use of resources, increasing production volumes and efficient operation of fixed assets.

Next, we turn to table 3 to consider the dynamics of costs.

Table 3. Dynamics of costs per 1 ruble of marketable products.

After analyzing the example, we can consider how the competent management of the enterprise increases its profitability. Thus, we examined an example of calculating the cost of a ruble of commodity products, and also calculated the dynamics of costs in the study period.