The total cost of production is calculated. Cost of manufactured products

The basic concepts that economic science operates with a certain degree of simplification are income and expenses. Their ratio forms other economic categories. For example, for a single product, the costs of manufacturing and selling form the actual cost, which is included in the price of the product along with the desired profit. Relative to the total turnover of sold products, it reduces the income received by the enterprise, leaving at its disposal the gross profit. And now let's move on from simplification to specifics: we will deal with such a multifaceted concept as cost.

The concept of cost in accounting policy

In Russian practice, there are 4 types of cost accounting in an enterprise, which differ in their intended purpose and the specifics of the formation of an analytical cost base, namely:

• accounting;
• tax;
• managerial;
• statistical.

They are carried out at the enterprise at the same time, so it makes no sense to prioritize them. Although, according to the criterion of punishment for improper performance, the tax and accounting types of accounting are the most strictly regulated.

Accounting and tax types of accounting

Within the framework of accounting, on the basis of PBU, its actual purpose is formed - an accurate accounting of costs, summarized in the balance sheet. If the concept of "full cost of goods sold" is present in accounting, then tax accounting replaces it with a simple summation of the company's expenses. Tax accounting involves the correct formation of the 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 an enterprise's income can be reduced by the amount of expenses, with the exception of the list of expenses presented in Art. 270.

Management and statistical types of accounting

Management cost accounting is used for the purposes of the head of the enterprise. Depending on the tasks of management, cost samples, cost accounting criteria, and cost formation parameters change. For example, within the framework of management accounting, you can track the cost of a new product, to make a decision on the advisability of its further production and sale, you can monitor the work of a particular service in terms of the ratio of costs and income, or calculate the planned cost of the proposed project. In this case, the cost of goods sold, the formula for its calculation and the method of determination will vary greatly.

Statistical accounting is necessary for the study of economic development trends for certain types of activities, it is based on accounting analytics and on the reports of the TEP of the enterprise's activities.

and their relationship with cost

Costs are the resources used in the activities of the enterprise, the cost of which is expressed in monetary terms. They can relate to expenses if they are realized in the reporting period.

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

Costs is a concept of economic theory, very close to costs. Costs are the costs of production and / or circulation, presented in value terms. The summation of production and distribution costs forms the cost of goods sold, the formula for calculating which will be discussed below.

Tying expenses to the reporting period and their connection with income makes them the basis for cost formation. Therefore, we will continue to operate with the concept of "expenses", allowing the use of other concepts as synonyms.

Cost price by economic elements

The formation of the cost of economic elements is an enlarged grouping of homogeneous costs, more indivisible and independent of the place of their occurrence. These include the following categories of expenses:

• material (R M);
• wages (R OT);
• social contributions (R CO);
• depreciation (A);
• others (R PR).

When summing expenses by economic elements, the cost price is formed. The calculation formula will be: C RP \u003d R M + R OT + R CO + A + R PR.

According to the specific weight of one or another group of expenses in the overall 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 labor-intensive activities.

Cost by cost item

Structuring expenses by items involves taking into account heterogeneous costs, while a separate costing item may include several economic elements. The typical nomenclature consists of the following consumable items:

1. Workshop costs (R C), which form the workshop cost (C C):

• Materials and raw materials.
• Payroll of the main workers.
• Social contributions to payroll.
• Expenses for operation and maintenance (repair) of equipment.
• Energy and fuel for technological purposes.
• Expenses for the preparation of production, its development.
• Mandatory property insurance.
• Depreciation.
• Other shop expenses.

2. General production costs (R OP), which are added to the workshop. As a result, the production cost of goods sold (C PP) is formed:

• Marriage loss.
• Other

3. Non-manufacturing expenses (R VP):

• Shipping costs, packaging.
• Delivery.
• Scientific and technical developments.
• Personnel training.
• Other non-manufacturing expenses.

4. Selling expenses (R K).

According to the specified costing items, the cost price is formed. The calculation formula will look like: C RP \u003d R C + R OP + R VP + R K.

Cost types

Based on the costs, there are several types of cost.

1. The workshop cost price calculates all the costs of the workshop associated with the production of products, namely, wages with deductions, expenses for the maintenance of equipment, materials and energy, and administrative workshop expenses.
2. The production cost is the sum of the costs for the production of this type of product, taking into account the cost of workshop and general production costs.
3. Commercial (full) cost is the cost of finished products , including all possible costs for the full life cycle of the product for production and marketing.

Methodology for calculating the cost

There are several methods of cost accounting and cost formation.

1. Cost accounting at actual cost - based on accurate accounting of existing actual costs of the enterprise.
2. Cost accounting at standard cost - the method is relevant for mass and serial production, which are distinguished by homogeneous repetitive operations, the cost is formed in accordance with the standards and norms adopted by the enterprise. An analogue of this method is the foreign "standard-cost".
3. Cost accounting at planned cost - used for planning, based on predicted figures, which are calculated according to actual data using predictive coefficients, suppliers' proposals, and expert evaluation results.

Cost in formulas

A) Determine the cost of goods sold, the formula for its calculation is as follows:

S RP \u003d S PP + R VP + R K - O NP, where all indicators in value terms:

• C RP - cost of goods sold;
• With PP - full production cost;
• Р VP - non-production expenses;
• R K - commercial expenses;
• О NP - unsold products.

B) Given the volume of products sold (O RP), you can find the cost per unit of goods. To do this, you need to divide the entire cost by volume (Task No. 1):

S ED = S RP: O RP.

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

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

N MP \u003d (P M / V) ´ 100%, where

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

The coefficient of cost of goods sold (refers to operating costs), shows the share of costs in revenue and allows you to evaluate the reasons for the decrease in profit from the sale of goods, it is determined by the formula:

K SRP = (S RP / V) ´ 100%.

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

TB \u003d R POST / (C - R TRANS.ED), where

• TB - breakeven point;
• P POST - fixed costs for the entire volume of production;
• P PER.ED - variable costs per unit of output;
• C - the price of the goods.

Task number 1 to determine the production cost of a unit of goods

Calculate the total production cost of a liter of juice. We will use the following data for the calculation.

1. Direct costs, thousand rubles:

• material (concentrate) - 2500,
• labor − 70.

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

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

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

Solution progress:

1. Summing up all the costs, we get the cost of goods sold, thousand rubles:

2500 + 70 + 2600 = 5170.

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

130,0 − 3% = 126,1

126,1*100% / 20% = 630,5.

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

5170 / 630,5 = 8,2.

Task number 2 to calculate the break-even point, profit margin and operating costs

The table presents data on the formation of profits of an individual enterprise, thousand rubles. During the reporting period, the volume of products sold amounted to 400 units.

For each additional unit sold, the contribution margin will gradually cover the fixed costs. If one unit of goods is sold, fixed costs will decrease by 200 rubles. and will amount to 69.8 thousand rubles. etc. In order to fully cover fixed costs and reach the break-even point, the company needs to sell 350 units of goods based on the following calculated data: 70,000 / (500 - 300).

To determine operating costs, the full cost of goods sold is used, the calculation formula is as follows: (120,000 + 70,000) * 100% / 200,000 \u003d 95%.

The rate of marginal profit will be 40% according to the calculation: 80000*100% / 200000 = 40%. It shows how the marginal profit will change with a change in revenue, 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.

The ability to calculate the cost of production, vary income and expense transactions, analyze the economic situation in each specific period in any context of data is the key to the success of the enterprise.

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, it is necessary to clearly understand what the cost of a product is.

The concept of cost

The cost price is the total and private sum of the costs for the production and sale of the product. Resources required to produce a product:

• the material from which the product is directly produced;
• fuel needed to transport materials for manufacturing or transport finished products to points of sale;
• repair work;
• workers' wages;
• rental of premises, if required.

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

Economic concepts of cost

Full cost

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

1. Employee salary.
2. Contributions to state funds.
3. The raw material used to make the product.
4. Accounting for depreciation of equipment and the cost of its repair (depreciation).
5. Advertising expenses.
6. Other expenses.

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

marginal cost

This concept includes the cost of a manufactured unit of output. How to calculate the actual cost of finished products (it is also called full)? This can be done according to the formula, but for this you need:

1. Calculate how much raw materials and materials it takes to manufacture one copy of the product.
2. Calculate how much fuel and lubricants and electricity is spent on one unit of production.
3. Take into account the cost of semi-finished products purchased from other industries, if any.
4. Calculate how much the employee will receive by manufacturing this type of product (including all social benefits).
5. Know the cost of repairs and depreciation of equipment.
6. Consider tool wear.
7. Calculate the cost of maintaining a production facility.
8. Other costs.

After analyzing the data above, you can imagine how much raw material is spent on the manufacture of a unit of production. And if we add to all this: transportation; contributions to state funds; vacation pay for employees; 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 specific to a particular production.

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

Why do you need to calculate the cost of production?

When opening 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 to at least losses, and at most to complete bankruptcy.

What will cost analysis give you:

1. Shows the profitability of all your products . After all, it depends on it how efficiently raw materials and other, monetary and human, resources will be used.
2. Will form the retail and wholesale price . The right effective pricing policy will allow you to make production competitive.
3. It will make it clear how efficiently the production process operates in the enterprise. The lower the cost of production compared to the average data in this industry, the more effective the company will work. Accordingly, the higher the costs, the lower the profitability and efficiency of the enterprise.
4. Forms an indicator of reduction of fixed and variable costs.

Your profit depends on the calculation of the cost price. There is a cycle system here: the lower the cost, the greater the profit, and the higher the cost, the lower the profit. Therefore, each manufacturer seeks to reduce the cost of production in the pursuit of profit. In this case, the quality of the product may also suffer. In order to properly conduct your business, you must definitely calculate the cost of products, this is one of the main elements of management in the enterprise.

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

As an example, the furniture company Divan LLC will be taken. You want to calculate the cost of a manufactured product for December. In total, 12 corner sofas, 10 book sofas, 24 easy chairs were produced.

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.

How to calculate cost of goods sold

Let's take as an example a company already familiar to us for the manufacture of sofas. In December, ten corner sofas, seven sofa-books and twenty armchairs were sold.

Let's use the data above and calculate:

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

The total result was: 388,390 rubles.

Cost features

In the process of its 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 costs are included in the cost of production, up to heating the premises in the winter (not in the summer). All this allows us to judge that the main management mechanism is the analysis and accounting of all aspects of the economic activity of the organization, which will allow us to judge the correct operation of the company. At the same time, a specific cost estimate will depend on the inventory, technological features of the enterprise and on the managers themselves, who own this or that information about production.

Each company has its own method of calculation. So, for example, the production of confectionery according to the costing system will differ significantly from the method of calculating the cost at a furniture factory. In the first case, electricity and shelf life will be of paramount importance (special attention should be paid to it), 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.

The cost price is one of the most important indicators of the efficiency and profitability of the store. It can be calculated in several ways using different formulas. In our article, we will give examples and tell you how to determine this indicator correctly.

How to calculate the cost

The cost of products sold, goods, work performed, services rendered is the total of all costs incurred by the store in order to manufacture and sell.

How to calculate the cost? To do this, you need to sum up all the costs and expenses of the store. The full cost price is the totality of all expenses in monetary terms, all the costs incurred by the store to carry out its activities.

In general, in the economy, including the microeconomics of each store, costs are divided into types depending on the methods of their structuring, on how these costs change under the influence of various factors of commercial activity.

Costs are divided by economic elements and by cost items:

1. material costs. In the context of retail, this is the cost of products purchased for resale;
2. Depreciation of fixed assets;
3. Wage;
4. Social contributions to off-budget funds. It used to be the ESN;
5. Other taxes, for example, transport tax, property tax;
6. Rent;
7. Third-party company services;
8. Telephone and Internet;
9. Other expenses.

The total cost is found by simply adding up all the costs indicated in these paragraphs.

You can analyze the cost and markup and calculate the profitability of products in the Business.Ru program. It allows you to predict profits and make purchases based on sales dynamics!

Costs in the cost of production can be considered by calculation items. The cost of calculation items is calculated per unit of manufactured products.

Another way to share costs is by how they behave depending on changes in commercial, production, and management factors. In this context, all costs of the company, including the store, are divided into two groups:

• fixed costs;
• variable costs.

We calculate the cost using an example. Video

The cost of goods in the store

The cost of goods in retail trade may consist of the following elements:

1. The purchase price of goods in the cost of production. This is the cost at which stores buy goods from suppliers, wholesalers, manufacturers for further retail sale;
2. Shipping costs;
3. Renting a retail outlet - if the store is not owned by the entrepreneur;
4. Depreciation of fixed assets in the cost of production. This is commercial equipment, computer equipment. Everything that costs more than 10 thousand rubles;
5. The salary is constant. This is the salary of management, accounting, permanent salaries of sellers and sales managers, service personnel;
6. Salary is variable. These are percentages of sales, concluded contracts, which are received by sales managers depending on the effectiveness of their work;
7. Payroll deductions. These are contributions to off-budget funds, the former UST - to the Pension Fund of the Russian Federation, to the Social Insurance Fund, to the Compulsory Medical Insurance Fund;
8. taxes;
9. Services of third parties - transport services, Internet, communications, including mobile;
10. Other expenses. This usually includes what is not included in the above large groups of expenses: stationery, other expenses.

Costs in retail trade in the cost of production specified in paragraphs 1, 2 and 6 are variable. This means that they change, the amount of costs varies depending on the volume of trade: the more you sell, the more you spend on buying goods.

The rest of the costs are fixed. They do not change depending on the volume of trade: no matter how much you sell - little or a lot - the cost of rent is the same for you, the salary for the store director, along with accountants and cleaners, you pay the same, for communications, the Internet and stationery you spend as much same.

The Business.Ru service will generate reports on the total balances and cash of your store, as well as help you compile detailed sales analytics, which will allow you to correctly calculate the cost and profitability of goods in your store.

Cost calculation methods in trade

In retail, it is very important to use one of the three costing methods. Here we mean not the full cost, but the cost of goods.

Namely: at what price to write off the cost, write off the costs of goods purchased for further resale. All other costs mentioned above are simply added to the cost of goods.

There are three methods for determining at what price to write off goods purchased for sale:

• At the cost of each unit of goods;
• at an average cost;
• According to the FIFO method (FIFO: First In First Out - First In, First Out).

Cost of each unit method

It is used in those areas of trade when they sell some piece and expensive goods. It can be cars, jewelry.

This method is used where accuracy is needed in determining the cost, as well as in determining the financial results from each individual sale.

When applying this method, the cost price, the cost is deducted from the amount for which each individual product was purchased, each individual product, which was then sold.

Average cost method

It lies in the fact that the cost (actual cost) of the goods sold is written off to the costs every month not at the price of each individual purchase, but at the arithmetic average, that is, at the average cost. This method is used more often than the first.

The formula for calculating the average cost is as follows:

Average cost = (cost of balances at the beginning of the month + cost of the next delivery) / (quantity of goods at the beginning of the month + quantity of goods in the next delivery)

Example of calculating costs using the average cost method

Let's say you own a butcher shop. At the beginning of the month, you still had sausages in the amount of 5 kilograms at 270 rubles per kilogram (supplier price).

Within a month, you received new sausages in two batches: 7 kilograms for 270 rubles and 7 kilograms for 240 rubles. During the reporting month, you sold 17 kilograms at a selling price of 300 rubles per kilogram.

Let's find the cost of sausages sold per month using the average cost method:

• The cost of balances at the beginning of the month:
  5 kg. * 270 rub. = 1350 rubles.
• Cost of the first delivery:
  7 kg. * 270 rub. = 1890 rubles.
• Cost of the second delivery:
  7 kg. * 240 rub. = 1680 rubles.
• The average cost of sausages:
  (1350 + 1890 + 1680) / (5 +7 +7) = 4920 / 19 = 259 rubles.

Since you sold 17 kilograms at 300 rubles per kilogram in a month, that is, for 5100 rubles (17 * 300), then you write off 17 kilograms at the average price to the cost of sales:

17 * 259 = 4403

5100 - 2590 = 697 rubles.

FIFO method

This is the most popular costing method used in the trade. It consists in the fact that the cost price is first written off the goods at the price of the first delivery (previous), then at the price of the next one, and so on.

This method may also be more profitable for the store. Let's consider an example, based on the previous sausage data for your butcher shop: you have a balance of 5 kg. 270 rubles each, and two deliveries - 7 kg. for 270 rubles. and 7 kg. for 240 rubles. and sale of 17 kg. 300 rubles each

Example of FIFO cost calculation and financial results :

When you sold 17 kilos, you sold the rest first:

5 kg. for 270 rubles. = 1350 rubles.

Then you sold the first batch:

7 kg. for 270 rubles. = 1890 rubles.

Then you sold 5 kilograms from the second batch:

5 kg. for 240 rubles. = 1200 rubles.

Thus, the total cost (actual cost of sales) of 17 kilograms of sausages sold during the month will be:

1350 + 1890 + 1200 \u003d 4440 rubles . (actual cost of sales)

Profit from the sale of sausages per month will be:

5100 - 4440 \u003d 660 rubles.

The definition of "calculation" means a kind of process of calculating the amount of financial costs , which, first of all, are directly related directly to the production and the fact of the sale of a single specific unit of production, and for a separate cost item.

In fact, the cost estimate is a document that displays the costs that are directly related to the production and sale of a unit of goods. In the calculation under consideration, all costs without exception are necessarily grouped by cost items , depending on where they are formed, as well as their purpose.

In parallel with this, the direct object of the calculation under consideration is rightfully considered to be a specific product or a service provided, or work performed.

To be able to achieve a certain goal, normative, planned and reporting types of costing are formed.

Normative costing can be calculated on the basis of existing technical standards and financial costs.

In turn, the planned cost estimate is formed solely for the purpose of determining the planned cost per unit of goods.

The reporting type of costing is formed at the end of the reporting period and displays all the available costs for the manufacture and sale of a unit of goods solely upon the fact. This is necessary, first of all, for the purpose of conducting an analysis, as well as comparing forecasted and actual costs, including identifying reserves for the possibility of reducing costs (including planning various measures to reduce costs).

The name and directly the composition of cost items in the calculation is calculated by recommendations for each specific industry.

Calculation scheme with formula

For a detailed explanation, let's take, for example, costing and determining selling costs.

The calculation scheme for the considered costing is as follows:

1. Returnable waste must necessarily be calculated from the cost of raw materials and related materials (a certain percentage must be taken).
2. To calculate the additional salary, it is necessary to take into account such information as: if the basic salary is more than 200 thousand rubles, then the additional salary is 10% of the base salary, if less - 15%.
3. The fact of payroll is 30% of the base amount and additionally.
4. The cost of maintaining the performance of various equipment is only 5% of the value of the base wage.
5. General business costs amount to 9% of the average value of wages.
6. As for general production, the indicator is 18% of (25% BZP + 75% D). Moreover, OZP is the basic wage for employees, and D is the additional provided.
7. The production price is equal to the sum of the costs of maintaining the process, providing the necessary raw materials and other materials, fuel, auxiliary components, and so on, minus age-related waste.
8. Non-manufacturing costs (meaning costs) are 3% of the production price.
9. Total cost = production + production costs.
10. The producer's income is necessarily considered as a percentage of the total cost.
11. Wholesale cost = total + manufacturer's income.
12. VAT must be calculated solely on the wholesale cost.

Moreover, selling wholesale cost = wholesale cost + indirectly assessed taxes.

Explanations

Explanations for the definition of some costing items are as follows :

The cost of goods B and C is calculated according to a similar principle.

It is worth noting what can be done in such a way that Excel takes the initial information for determination at the same time in the corresponding tables.

For example, raw materials and materials - from the generated production report, and wages - from the corresponding statement.

The list of costing items displays a production feature .

Directly for domestic modern practice, the most characteristic, in fact, can be considered such a main list of costing articles , such as:

• raw materials and materials;
• fuel and energy for the necessary technological purposes;
• salaries of hired staff;
• overhead financial costs;
• general business expenses;
• other production costs;
• various others .

Items 1 to 7 are usually called production costs, since they are mostly directly related to servicing the direct production process. The amount of production costs forms the production cost.

Article 8 (meaning commercial costs) costs directly related to the sale of goods, namely: financial costs for packaging, advertising purposes, preservation and, in part, even transport financial costs.

Additionally, it is worth paying attention to the fact that indirect costs in coefficients or as a percentage are directly related to the manufacture of all products without exception, or their individual varieties.

Directly the specifics of the company kind of "dictates" a list of direct and indirect costs. For example, in the field of shipbuilding, almost without exception, financial costs are direct costs. As far as the chemical industry is concerned, practically everything is related to indirect costs.

Application

The main tasks of calculating the cost of goods are determined solely by the intended purpose of the calculation, and can be formulated as follows:

In fact, the calculation of the cost of goods, works or the services themselves can be conditionally divided into several stages.

At the first stage, all necessary cost calculations are carried out for all goods without exception. At the next stage, the actual cost is calculated for each individual product. At the final stage, the cost of a unit of goods performed according to the work contract or the service rendered is determined.

However, in reality, the process itself is a little more complicated, which is largely due to the process of so-called zeta spending.

In addition, I would like to note that until recently, costing systems pursued only one goal - the assessment of available stocks of finished goods and various semi-finished products of their own manufacture, which is extremely important for internal production purposes, as well as the formation of external required reporting and income level calculation.

Examples

To be able to understand in more detail the essence of determining the costing of goods, it is recommended to refer to the available examples.

These examples of calculation will significantly minimize the risks of obtaining false information as a result of the calculations.

A detailed calculation of the cost of production is presented in this manual.

We analyzed what constitutes the cost of production and found out that the total cost includes the costs of producing finished products and their subsequent sale. In addition, we briefly got acquainted with the concept of product costing. In this article, we will consider in detail how the calculation of the cost of production and accounting for production costs takes place.

At the initial stage of the formation of the cost of finished products, it is necessary to take into account all the associated costs that have arisen in the relevant accounting accounts.

Direct costs of the main production are reflected in the debit of account 20, auxiliary production - in the debit of account 23.

The actual costs to consider at this stage include:

• (posting for accounting for this type of cost has the form D20 (23) K02);
• (wiring - D20 (23) K05);
• employees (corresponding posting D20 (23) K70);
• insurance contributions for employees (D20 (23) K69);
• raw materials and (wiring D20 (23) K10);
• semi-finished products of own production (D20 (23) K21);
• services of third parties (D20 (23) K60).

Expenses of a similar type related to the maintenance and management of production are reflected in similar entries, but instead of account 20 (23), account is used. 25 "General production costs".

Expenses of a similar type related to the management of the organization are also reflected in similar entries, but instead of account 20, account is used. 26 "General expenses".

Also in the production process, it is necessary to take into account the costs arising in connection with the marriage of products. Defective products incur certain costs associated with their elimination. These can be additional materials or raw materials, remuneration of workers involved in correcting the marriage, services of third-party organizations, etc. That is, the costs of eliminating the marriage are reflected in the entries indicated above, but all these expenses are collected not on the 20th account, but on a debit account 28 "Marriage in production".

Thus, all production costs are taken into account. The debit of accounts 20 and 23 collected all direct costs, the debit of accounts 25 and 26 - indirect.

Before proceeding to the calculation of the cost of production, it is necessary to distribute the actual costs of auxiliary production between the main production, general production and general economic needs. For this, postings D20 (25, 26) K23 are performed.

Auxiliary Production Cost Allocation Postings

Write-off of indirect overhead and general business costs

At the end of the month, it is necessary to write off indirect expenses collected on the debit of accounts 25 and 26. Write-off of general production costs is carried out by posting D20 K25, and general business expenses - D20 K26.

It should be noted that the distribution of indirect overhead costs by types of products of the main production can be carried out in one of the following ways:

• in proportion to the salary of workers in the main production;
• in proportion to material costs;
• in proportion to the amount of direct costs;
• in proportion to the proceeds from the sale of finished products.

The organization chooses one of these methods and reflects its choice in the Order on accounting policies.