In foreign practice, the cost accounting system can be standard (normative) and non-standard (non-normative).

At the same time, with the standard system, methods can also be used: product-by-product, order-by-order, process-by-process, etc., which do not differ from our methods.

In foreign practice, cost accounting is based on management goals. In this regard, costing can be carried out by responsibility centers to control technological processes and the activities of persons involved in these processes. The cost estimate is compiled by product - full accounting, which is used to determine prices. Partial s/s, which is used to identify free production capacity Þs/s is used for various purposes, and the same s/s cannot serve all purposes equally well. This approach led to the development of methods such as standard-costing And direct costing.

Standard costing.

This is a scientifically established preliminary cost, calculated using engineering calculations when analyzing cost data. System (1) is not independent and separate from other cost accounting methods. It is used in combination with other methods. In system (1), all costs are calculated before production begins, calculated using standards. The difference between actual and standard s/s is reflected in foreign practice in the system of accounting accounts. Thus, according to this system, a standard cost estimate is compiled and actual costs are recorded, highlighting deviations from the standards.

The system itself (1) is considered not as an accounting and costing system, but as a cost control system.

The standards are divided into:

current (reflecting the amount of expenses for a given period);

basic (do not change from year to year until the technological process itself changes. Changes in prices and tariffs do not lead to their change).

It is believed that the application of a reference standard will identify deviations that reflect certain trends. The development of standards is carried out by enterprise services responsible for the relevant cost items (technological service - standards for material consumption, production department - production standards, etc.). Manufacturing accounting summarizes or summarizes these standards and sets overhead standards. The adopted standards are summarized in the accounting department in cards of standards by cost items, subdivided by workshop.

Often, enterprises create standards committees, which include representatives of all interested services. Such committees review the system implementation plan (1), determine the main prerequisites for the implementation of this system and make recommendations for improving the system and revising existing standards. Current standards are revised when prices, processes, product specifications change, or when the standards are found to be incorrect. Once a year, a complete review of current standards is undertaken before the next year's cost estimates are prepared. Basic standards change only in cases of radical changes in production technology, enterprise capacity, or when they are significantly separated from actual use and lose their meaning.

System (1) is used as a means of management control over costs and the main control indicator is deviation from standards. Characteristic feature of the system(1) - not documenting deviations from the norms, but reflecting deviations in accounting on special accounts. This can be explained by greater attention to monitoring deviations from standards, which is tasked with preventing them. Deviations identified during the month serve as an indicator of the success of a particular department, and a breakdown of the reasons is given. Other characteristic feature- this is something that not all enterprises reflect in their accounting deviations from standards. Third feature- this is that deviations from the standards highlighted in the system of special accounts in terms of the use of current standards, if they are not subject to sharp fluctuations in the reporting period, when using basic standards in accounting, the reflection of deviations in the accounts becomes meaningless. ????????????

All deviations, as a rule, relate to the results of the month in which they were detected. However, in practice, the option of distributing deviations between GP and NP may be used. All deviations are studied, that is, analyzed, and the main questions in the analysis are:

How significant are these deviations?

What do they mean?

Based on the analysis data, appropriate management decisions are applied.

2. Direct costing.

The most difficult part of cost accounting is the distribution of indirect costs. In most cases, it is impossible to establish a direct connection between costs and certain types of products. Any method of distributing overhead costs between individual types of products does not give accuracy; the final cost always has a certain convention; a method of cost accounting without allocating costs has arisen.

According to system (2), only direct expenses are taken into account in the composition of s/s. The essence of this method is that all costs are divided by variables(costs change in proportion to production volume) - in American terminology, these are direct costs - and for permanent costs (costs that do not depend on changes in production volume).

This system is based only on direct (conditionally variable) costs. Indirect costs are excluded from the accounting system, since they are caused, according to the experts of this method, not so much by the production process as by the passage of time. In addition, direct costs are considered to be of decisive importance for pricing policy.

Thus, for cost accounting according to system (2), the most characteristic thing is the strict separation in accounting of direct costs from indirect ones. Direct costs are allocated to the product immediately, and indirect costs are defined as costs of a certain period and attributed to the “Profit and Loss” account. Production costs in foreign practice can be accounted for either in full with/with, or with a reduced range of items that include only direct costs. Product cost is determined only by variable costs, including material costs, labor costs and part of overhead costs. With this system, the concept of marginal income is introduced, that is, sales revenue minus variable costs. The indicator of marginal income is used to prove the comparability of product valuation with production results.

lecture 16

Some enterprises using a full cost distribution system, if necessary, prepare an internal cost report based on the direct cost principle.

When using the direct cost system, the procedure is often used that at the end of the reporting year, data is adjusted in relation to the system of full distribution of expenses. The direct-cost system interacts with the standard-cost system. Based on the principle of reflecting costs according to standard cost, as opposed to this system, costs are accounted for and calculated based on past costs.

Direct cost is based on the division of costs into variable and fixed, but in both the direct cost system and the full cost distribution system, a preliminary standard s/s can be drawn up and, in this regard, it is different that in the direct cost system the compilation of this preliminary s/s and is a combination of the standard-cost and direct-cost systems.

Since the direct cost system determines the division of costs into variable and fixed, it is closely related to the determination of the critical point of production volume, which makes it possible to use this system for profit planning, making decisions on prices and production volumes, monitoring current costs and drawing up internal financial reporting for management.

The main advantage of direct cost- this means a reduction in controlled s/s items. Its minus- this is the difficulty of identifying fixed costs; many questions arise about which costs should be included in the cash flow and which should be included in profit. When moving from a full cost determination system to a direct cost system, problems arise with determining income tax + problems in surveys for assessing finished products when compiling reports for shareholders (since finished products are valued at a reduced s/s).

Some authors oppose the use of direct costing to determine the final results of an enterprise, but recognize this system as an internal analytical tool, since when preparing external reporting it is necessary to show full costs.

In a number of complex industries, where the division of costs between products is conditional, the use of a direct cost system makes it possible to reduce the labor intensity of accounting work without reducing the reliability of the data obtained.

Cost accounting by responsibility centers.

Internal control over the activities of the structural divisions of the enterprise makes it possible to regulate the implementation of planned targets for all indicators established both for divisions and for the enterprise as a whole, to stimulate the struggle to improve product quality and increase labor productivity. The implementation of such control will make it possible to correctly evaluate the activities of departments and their participation in the activities of the enterprise.

Internal control focuses its attention on individual structural units and their managers, i.e. at responsibility centers.

Initially, the standard-cost system was conceived as a tool that identifies unused reserves without communication with specific performers; later, the idea arose of using deviations from certain norms to evaluate the activities of administrators; this led to the formation of the concept of responsibility centers, i.e. the degree of responsibility of certain persons for the results of their activities.

The basis for organizing cost accounting by responsibility centers is to assign expenses to managers at various levels and systematically monitor compliance with budgets for each responsible person. At the same time, it is necessary to distinguish responsibility centers from cost centers. As a rule, responsibility centers are created in accordance with the decentralized organization of a given enterprise and the list of job responsibilities at each workplace. Responsibility centers resemble the legal interpretation of accounting and the use of standard-cost principles and the use of standard-cost principles, while the structural units take into account those costs that they can influence and control these costs.

When determining the centers of responsibility, the technological system of the enterprise is taken into account first of all, and then its vertical and horizontal levels.

The horizontal level is limited by the scope of activities of each person responsible for the center.

The vertical level provides a hierarchical ladder of authority for persons making management decisions.

Moreover, each of the centers can be cost center, income center or investment effect center. In (1) a report is drawn up on expenses incurred in a given center, in (2) an income report is drawn up, and in (3) a report is drawn up on the payback period of investments. The head of the center must bear financial responsibility for the undertaken obligations to complete tasks. Moreover, each center can perform a variety of functions. All this is due to the fact that the object of the center of responsibility is a person, i.e. administrator, and not individual functions or tools.

In our practice, the center of responsibility is self-supporting units. Production departments are informed of the norms and standards for labor, material and energy costs, both in physical and in value terms, i.e. primarily those costs that the division can influence. The department is assigned a technological area, equipment, tools, storage facilities, in addition, the departments must be provided with the necessary weighing instruments and control devices. Accounting for the activities of structural units should ensure the receipt of operational information about the progress of production and deviations. All this data is used for economic analysis and reasonable assessment of the enterprise's performance and assessment of the contribution of this unit to the achieved results of the enterprise as a whole.

The activities of structural divisions are recorded in personal accounts, where all indicators for the reporting period are reflected. Personal accounts are compiled on the basis of both operational and accounting data, while the production output for this division is recorded using operational accounting and maintained by its production and dispatch department or production and dispatch service. Accounting for the release of products or semi-finished products is carried out on the basis of primary documents (delivery notes).

Product quality indicators in the personal invoice are filled in according to quality control department data (an important quality indicator is the absence of defects). Personal accounts show the number of employees in a given department, which is determined on the basis of time sheet data. Based on the above data, output per worker is calculated.

Data on the actual consumption of material resources is reflected in the personal account on the basis of primary documents, while in some cases, material reports on the consumption of materials drawn up by the head of the department, indicating expenses according to standards and actual expenses, can be used. Accounting for labor costs is based on unified standardized tasks, which indicate the final result of the department’s work, i.e. hours worked, output, etc. Accounting for the costs of material and labor structural units should be based on the use of elements of standard cost accounting.

When determining s/s structural divisions, its composition does not include general business expenses, commercial expenses, i.e. this s/s is calculated in the amount of costs that determine the workshop s/s. Claims between workshops are documented in acts, and claims or deviations that arose not through the fault of a given workshop are not taken into account in the workshop s/s, but are taken into account at the place of occurrence. Through this, production costs are controlled and accounting for income and investment effects is organized to a lesser extent by responsibility centers.

lecture 17

A key place in foreign practice is occupied by the classification of costs into semi-variable and semi-fixed. This classification allows you to quickly manage corporate profits.

Variable costs (VC) change in proportion to the growth of production volume.

These include: material costs, wages of production workers, transport services, etc.

Fixed costs (FC) remain unchanged (stable) when production volume fluctuates in a given time (relevant) period (quarter, half-year, year). Fixed costs usually include: depreciation, interest on short-term loans, rent, salaries of administrative and management personnel, etc. Over a longer period of time, all types of costs are subject to change under the influence of internal and external factors (for example, innovations in organization and production technology, product market conditions, etc.). The dependence of variable and fixed costs on production volume can be presented graphically (Fig. 2.1).

Sales revenue (net) minus variable costs constitutes the marginal income (profit) of the corporation and is an important parameter in assessing management decisions.

The distinction between variable and fixed costs is of fundamental importance to corporate management. It can manage variable costs by changing their value in a given relevant period. Obviously, fixed costs are beyond the direct control of the corporation's management, since they are mandatory and must be repaid regardless of the volume of production (for example, rent, insurance payments, interest on loans and borrowings, etc.).

At many Russian enterprises, a system for calculating product costs (within the framework of management accounting) - “direct costing” - has become widespread. Its essence lies in the fact that they do not calculate the full cost of production and sales of products (products), but only variable costs (their direct types). The main goal of introducing this system for calculating the cost of products is to ensure control over the formation of marginal income (analogues: marginal profit, gross margin, added value). In the “direct-costing” system, marginal income (MI) for specific types of products is determined by the formula:

MD = C r - PI,

where Ts r is the selling price of the product; PI SD - variable costs allocated to this product.

The advantages of this system for calculating product costs are:

♦ its simplicity and accessibility for practical use;

♦ a minimum of settlement transactions related to the distribution of indirect (indirect) costs, which are taken into account for the enterprise as a whole;

♦ high reliability of the results obtained, since they eliminate errors in attributing indirect costs to individual products in the process of their distribution;

♦ the ability to manage both variable costs and marginal income.

The main disadvantage of the direct costing system is the incomplete reflection of the entire set of costs associated with the production and sale of certain types of products. To more clearly characterize this system for calculating costs by type of product, let’s consider two examples.

Let's consider the option when an enterprise produces five products. All costs associated with their production are divided into variable and constant (Table 2.4).

Based on the data in table. 2.4 the management of the enterprise can draw the following conclusions:

1) it is necessary to maximize the production and sale of product No. 1, since the maximum marginal income has been achieved on it;

2) product No. 2 generates the largest amount of marginal income, but its rate is only 30%, or two times lower than for product No. 1;

3) products No. 3 and No. 5 show quite satisfactory results;

4) product No. 4 has a negative rate of marginal income, so it is advisable to significantly reduce the costs of its production or completely stop production.

Let us present a situation where product No. 4 is excluded from the list of manufactured products (Table 2.5).

The resolution of such a situation is one of the defining moments in the activities of the enterprise management. In this case, the priority is not the absolute revenue from the sale of a particular product, but the rate of marginal income (product profitability). Thus, as a result of the discontinuation of product No. 4, the total marginal income increased, as did profit, by 0.45 thousand rubles. (14.55 - 14.1), despite the fact that revenue from the sale of the remaining products decreased by 3.0 thousand rubles. (34.5 - 37.5). Consequently, a more rational assortment structure of production has been achieved, ensuring optimal profit.

The economic essence of another system for calculating product costs - “standard costing” - lies in its implementation on the basis of the standards and standards for material and labor costs developed by the enterprise. In this case, the actual operating costs for each product are compared with the standard ones to reflect the magnitude of deviations in accounting. This system is often called “variance cost management,” which allows you to get a more objective picture of the product costing results. The introduction of the “standard-costing” system can only be carried out in conditions of a stable economic environment, overcoming high inflation and the introduction of modern management at enterprises and corporate groups (financial and industrial groups, holdings, etc.).

The concept of “average costs” characterizes the average costs per unit of production and is used to compare them with the price of the product.

Finally, marginal cost is the additional cost associated with producing one more unit of output. The difference between total costs and variable costs expresses the fixed amount of fixed costs. Therefore, the change in the amount of total costs is equal to the change in the value of variable costs for each additional unit of production in a given relevant period. Thus, the concept of variable costs has important practical significance, since it allows us to determine those costs, the magnitude of which the management of an enterprise (corporation) can control most successfully.

The influence of such factors as increased competition, changes in consumer behavior, constant rise in prices for basic resources - on the development of individual companies and entire sectors of the market economy - has undergone significant growth in recent decades, forcing private companies in developed countries to pay increasing attention to the development of new management concepts the internal business environment of the organization and the factors that shape it. Kazakh enterprises are also riding the wave of global interest in reducing costs, increasingly turning their attention to foreign experience.

In the last two decades of the 20th century, leading foreign companies, with the assistance of the best economists in the world, developed a number of special cost management methods, most of which are of real interest to enterprises in countries with newly established market economies.

Now the focus of leading companies is cost management within the framework of the lean production concept (lean, rational production), when the objects of reduction are system costs associated with the elimination of inventories, queues, redundant processing, etc. This is closely related to the process approach, allocation key customer groups that support end-to-end business processes. They “pull” only what is necessary from the enterprise’s resources, force them not to make unnecessary movements, and provide a unique opportunity to reduce costs and improve consumer quality at the same time.”

The most durable and flexible cost management method in the West, and throughout the world, is the direct-costing cost management system.

Direct-costing is an accounting method in the controlling system based on determining the real cost of products and services, regardless of the calculated semi-fixed and overhead costs.

The direct-costing system assumes that the cost of production is taken into account only in terms of variable costs. Fixed expenses are collected in separate accounts and written off directly to the financial result at a specified frequency.

The problem of applying this system in the practice of Kazakh enterprises is that quite often domestic enterprises evaluate activities in terms of profit at the end of the period. It may be a year, a quarter or a month, but for a growing business, even if operating efficiency decreases, profits can continue to grow, compensated by increased sales. As a result, if the profits of such enterprises begin to fall, then this indicates such large and neglected problems that it may already be too late to solve them.

Another problem is the fact that the market is in constant dynamics and it is important to understand exactly how this or that structural unit works at a given time. Direct-costing allows you to solve these really important problems and manage the company based not on profit or turnover, but on marginal profit.

The second well-known Western method of cost management is the concept of target costing - an attempt to get away from traditional cost accounting. The basis of the concept is a change in the view of the interdependence of price, profit and cost. That is, it is expected that new products will be sold at a price that will fully cover costs and provide the profit necessary for further business development. For traditional products, the use of such a formula is only theoretically possible. Therefore, the creators of the target costing system changed the order of actions in this expression, and the priorities of the components changed accordingly:

Target cost = Target price - Target profit

One of the first, but still relevant today, definitions of target costing, given by M. Sakurai in 1989, emphasizes the complexity and unifying essence of this concept: “Target costing can be defined as a cost management tool used to reduce any costs associated with product throughout the entire period of its life cycle, by combining the efforts of the company’s production, design, research, marketing, and economic departments.” (Figure 2)

Figure 2. Sequence of actions in the target costing concept

Target costing is a model built on the principles of GAP analysis and convenient at the planning stage, but it requires an excellent understanding of the market situation and the availability of the results of competent marketing analysis, therefore it is of little use in domestic practice.

Activity based costing - calculation of cost based on the volume of economic activity

If we talk about specific methods, then the most widespread method in Kazakhstan practice is the already mentioned ABC-costing.

ABC is an English abbreviation that stands for Activity Based Costing, that is, “accounting by activity” or “costing based on business processes.”

Since 1991-1992 it is widely recognized as a basis for strategic decision making, cost management and profitability improvement through reengineering and performance monitoring of business processes. (Figure 3)

Figure 3. The simplest ABC-Costing scheme

Planning and accounting by type of activity, more often called ABC-costing, involves a comparison in planning, analytical and accounting activities of costs and types of activity of the enterprise that led to the formation of these costs (in traditional planning and accounting systems, costs are calculated at the places of their occurrence). This makes it possible to assess cost effectiveness and identify:

- “justified” costs, where the beneficial effect (increase in financial results) exceeds the cost;

- “unjustified” costs (losses), where the amount of costs is greater than the beneficial effect of their implementation.

ABC-costing gives us the opportunity to divide accounting (and structural divisions of the company) into more important and less significant ones and identify the most problematic areas that can become (or are) sources of losses.

The ABC costing method, although not ideal, is undoubtedly one of the best at the moment and is used both independently and in combination with other cost accounting methods.

If we talk about world practice, where information technologies have long been actively and maximally used, then we can cite as an example such a model as the optimal budgeting model, which, of course, takes into account not only costs, but gives a comprehensive assessment of the company’s activities.

The optimal budgeting model is a strategic software product, already quite well-known and based on accounting and analytical developments of the latest generation:

Accounting, planning and analysis by type of activity (Activity-Based Costing);

Welfare of the Firm Theory.

The theory of firm value provides the construction of integral models of economic activity, where any management decision (including costs) is considered in the context of the impact on the value of the firm's market value (in a joint-stock company - the amount of the current market value of shares). The main achievement of these models is that they provide quantitative commensurability of the effect from the implementation of planned measures between the three main blocks of economic activity:

Current operations;

Investment activities;

Attracting sources of financing and maintaining financial stability.

A formalized system of analytical processing of budget data, in particular costs, is essential due to the fact that the dynamics of these indicators has an effect on all areas of management policy - pricing, production structure, profit distribution, economic forecasting, etc., therefore, for the purpose of drawing up a correct management budget (master budget) it is necessary to develop automated modules to solve the problems of the so-called “sensitivity analysis”, showing the quantitative effect of possible deviations of actual budget parameters from planned ones on various aspects of the company’s activities (asset turnover, sales volume, profitability, etc.), and also offering a set of situational management decisions (that is, what management measures can be taken in the case of given dynamics of budget data).

Thus, among all the variety of currently existing foreign systems and methods of cost management, the most interesting are direct-costing, target costing, ABC-costing, due to their flexibility and ability to adapt to the real conditions of the Kazakh economy.

1.3 Foreign experience in cost management

economic indicator cost material

The influence of such factors as increased competition, changes in consumer behavior, constant rise in prices for basic resources - on the development of individual companies and entire sectors of the market economy - has undergone significant growth in recent decades, forcing private companies in developed countries to pay increasing attention to the development of new management concepts the internal business environment of the organization and the factors that shape it.

In the last two decades of the 20th century, leading foreign companies, with the assistance of the best economists in the world, developed a number of special cost management methods, most of which are of real interest to enterprises in countries with newly established market economies.

Now the focus of leading companies is cost management within the framework of the lean production concept (lean, rational production), when the objects of reduction are system costs associated with the elimination of inventories, queues, redundant processing, etc. This is closely related to the process approach, allocation key customer groups that support end-to-end business processes. They “pull” only what is necessary from the enterprise’s resources, force them not to make unnecessary movements, and provide a unique opportunity to reduce costs and improve consumer quality at the same time.”

The most commonly used cost management methods are:

· Absorption costing

Direct costing

ABC system

Absorption costing

Absorption costing - costing with full distribution of costs - involves determining the cost of production with the distribution of all costs between sold products and remaining goods. Moreover, within the framework of this method, production or total cost can be calculated. Costing with full cost allocation involves the calculation of production costs based on direct (labor and material) and indirect overhead costs distributed into the cost of production. General business indirect expenses are either used to calculate the full cost, or are calculated as period costs, that is, they are not associated with physical units of finished products and are written off for the period (month, quarter, year). The total cost, therefore, consists of production cost plus general business (administrative, sales) expenses.

In this method, the main task is to correctly distribute overhead costs, since direct costs, according to the principles of classification of expenses in this method, we can easily identify and attribute to cost objects.

However, when determining direct costs, you may encounter a number of problems. For example, if many types of products are produced in one place using the same equipment and using the same materials, then in this case direct costs are distributed in proportion to the standards developed by the technological and planning department, and the standards developed once must be periodically compared with actual consumption and amendments made.

Absorption-costing allows you to create a more correct cost price and eliminates excessive losses and profits by including constant commissioning and commissioning in the cost of production, and not in period expenses.

The profit generation scheme for the absorption-costing system in general looks like this:

1. Revenue from sales.

2. Direct production costs:

· basic materials;

· basic salary.

3. General production expenses.

4. Gross profit.

VP=V-PZ-OPR, (1.1)

where VP is gross profit;

B - sales revenue;

PP - direct production costs;

OPR - general production expenses.

5. General business expenses (commercial and administrative).

6. Operating profit.

OP=VP-OHR, (1.2)

where OP is operating profit;

VP - gross profit;

OCR - general business expenses (commercial and administrative).

Absorption costing is relevant when an enterprise participates in price competition or the price of products is tied to full costs.

ABC (Activity-Based Costing) system.

Activity-based costing, or activity-based costing, plays an important role in the overall cost management system.

An effective way to reduce costs is to manage resource-consuming activities with the help of its drivers (reasons).

Cost management must ensure real cost reduction by reducing activities that do not create added value and improving activities that do create it, that is, increasing the value of the product.

The process of accounting for costs and calculating the cost of goods (works, services) using the Activity Based Costing system is presented in Figure 1.2 (Taken by the author from).

Figure 1.2 - The process of cost accounting and cost calculation using the ABC system

The main areas of application of ABC are:

· for a more precise calculation of the cost of cost objects and setting prices on this basis;

· for budgeting costs and monitoring compliance with budgets by type of activity, departments, sections, divisions, etc.;

· information base for benchmarking activities and reengineering of business processes based on its results;

· information base for making decisions about outsourcing (one of the types of reengineering), as well as other decisions.

Cost factors that influence a specific type of activity act here as a process meter.

The costing method for operations is usually analyzed according to such parameters as: inventory valuation, decision making, control.

The main feature of the ABC system is the allocation of costs attributable to the production of a unit of production, a batch of products, production overhead and general business expenses.

This method has a number of advantages:

1) it allows you to analyze overhead costs in detail, which is of great importance for management;

2) makes it possible to more accurately determine the costs of unused capacity for their periodic write-off to the profit and loss account; The unit cost of production estimated using this method is the best financial estimate of the resources consumed, since it takes into account complex alternative ways of determining the relationships between products and resource use.

3) allows you to indirectly assess the level of labor productivity - the deviation from the amount of resources consumed, and therefore from output or comparison of the actual level of cost distribution with the volume that could be possible with the actual provision of resources.

4) not only delivers new information on costs, but also generates a number of non-financial indicators, mainly measuring production volume and determining the production capacity of the enterprise.

5) costs for individual operations and the number of cost distribution objects represent individual performance measures; taken together, they can produce cost allocation ratios that can serve as measures of the productivity of each activity under management control.

The introduction of the ABC system into the domestic practice of economic analysis of work would ensure reliable calculation of the cost of specific products, which would significantly increase the objectivity of assessing the profitability of products.

The following circumstances act as peculiar pitfalls:

· ABC costing requires a fairly heavy absorption of costs - spreading out a large number of fixed costs;

· additional resources of the financial department are needed; this system can be implemented in different ways: you can make every effort and very accurately describe all expense pools, or you can do it not very diligently;

· the result obtained will most likely not show to what level the price of the product can be reduced;

· the company can get an accurate result, but it happens that too much effort is spent on it;

· the use of ABC costing does not require concentration on individualized products that are produced for the client, but forces one to follow the principle: “Produce a mass product.” But will this be compatible with the company's marketing strategy?

Direct costing

In the conditions of developing market relations, the effective management of an organization's commercial activities increasingly depends on the level of its information support. All world experience testifies to the effectiveness of using the marginal method of accounting - the Direct Costing accounting system, which is based on the calculation of the reduced cost of production and the determination of marginal income.

Direct costing is relevant when making a decision to increase or decrease production volumes of a particular type of product. Marginal income must cover fixed costs, and this is the reason for a positive decision regarding production.

Modern direct costing has two options:

· simple direct costing, based on the use of data only on variable (operational) costs in accounting;

· developed direct costing (verible costing), in which the cost, along with variable costs, also includes direct fixed costs for the production and sale of products.

In general, the essence of the direct costing system is to divide costs into fixed and variable components depending on changes in production volume. Under these conditions, the cost of production is planned and taken into account only in terms of variable costs. The difference between product sales revenue and variable costs is the contribution margin. Under this system, fixed costs are not included in the calculation of product costs and are written off directly to reduce the enterprise's profit.

With the direct costing system, a limited cost is determined, which includes only the sum of variable costs.

To assess and analyze the efficiency of the enterprise, this indicator is compared with revenue for the period and the marginal profit for the reporting period is determined (gross profit, coverage amount).

The net profit of an enterprise is the difference between the received value and the amount of fixed costs, which are not distributed between products, but are written off as a total amount to the financial results of the reporting period (one-stage accounting of coverage amounts).

According to this method, marginal profit is determined as follows:

where is sales revenue;

Variable production costs;

Variable management and sales costs.

Profit is determined as follows:

where are fixed costs.

An important advantage of the direct costing system is the possibility of a detailed and qualitative analysis of the relationship between production volume, cost, marginal income and profit.

In a market economy, direct costing provides information about the possibility of using dumping in competition - selling goods at deliberately reduced prices, which is associated with establishing a lower price limit.

This technique is used during periods of temporary reduction in demand for products to conquer sales markets.

In addition, direct costing makes it possible to more quickly control fixed costs, since standard costs or flexible estimates are often used in the cost control process.

With the direct costing system, the full costs of manufacturing products are not determined. Therefore, this system does not meet one of the main goals of domestic accounting - the preparation of accurate calculations. However, it should be borne in mind that there is no costing system that would allow one to determine the cost per unit of production with one hundred percent accuracy.

An important feature of direct costing is that thanks to it it is possible to study the relationships and interdependencies between production volume, costs and profits.

Figure 1.3 - Graph of revenue and costs of the company: FC - fixed costs; VC -- variable costs; TC - gross costs; TR -- gross revenue (gross income); R -- threshold revenue; Q -- threshold sales volume

The graph shows the dependence of variable costs, fixed costs and revenue on production volume. This chart and its numerous modifications are used in analysis and management decision-making.

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Originated in the USA in the early 70s...

Product Quality Management Systems

Improving inventory management using the example of the Republican Unitary Enterprise "Gomel Plant of Special Tools and Technological Equipment"

The organization of replenishment of material resources can be carried out on the basis of several different systems...

Improving personnel management (using the example of the trade communal unitary enterprise "Department Store Belarus")

To address this issue, the Japanese experience should be separately considered as an example of special human resource management. Japan is a special country, unlike any other, and those countless techniques...

Improving product cost management using the example of GOLKHU "Rechitsa Experimental Forestry Enterprise"

cost of production reduction calculation Development of domestic production accounting and analysis...

Quality management within the framework of crisis management

Total quality control carried out by companies in the USA, Japan and Western Europe requires three mandatory conditions. 1. Quality as the main strategic goal of activity is recognized by the top management of companies...

Project management (using the example of a branch of OJSC Rostelecom)

To identify the dynamics, as well as the main trends in the development of project management, let us turn to a retrospective of the formation of a modern project management system. First of all, it should be noted...

Management of industrial inventories of an enterprise (using the example of the Shchelkovo Plant of Secondary Precious Metals)

Logistics technologies in the field of inventory management used by Western manufacturers are mainly aimed at minimizing inventories...

Enterprise risk management using the example of Polyolefin-TLK LLP

The Microsoft Solutions Framework (MSF) proposes to distribute project management risks among project team members. This increases the responsibility of employees and allows the proposed methodology to be applied to a wide range of different projects...

Management decisions and responsibility

The economic miracle of Japan, which means the transformation in a few decades of a third-rate country into a world power that really claims to be the first place in the world in the 21st century...

Master's student Urbisinova Zh.A., scientific supervisor: Ph.D., associate professor Esturlieva A.I.

Caspian State University of Technology and Engineering named after. Sh. Yesenova, Kazakhstan.

The influence of such factors as increased competition, changes in consumer behavior, constant rise in prices for basic resources - on the development of individual companies and entire sectors of the market economy - has undergone significant growth in recent decades, forcing private companies in developed countries to pay increasing attention to the development of new management concepts the internal business environment of the organization and the factors that shape it within the market. Kazakh enterprises are also riding the wave of global interest in reducing costs, increasingly turning their attention to foreign experience. In the last two decades, leading foreign companies, with the assistance of the best economists in the world, have developed a number of special cost management methods, most of which are of real interest to enterprises in countries with newly established market economies.

Now the focus of attention of leading companies is cost management within the framework of the lean production concept (lean, rational production), when the objects of reduction are system costs associated with the elimination of inventories, queues, redundant processing, etc. This is closely related to the process approach, allocation key customer groups that support end-to-end business processes. They “pull” only what is necessary from the enterprise’s resources, force them not to make unnecessary movements, and provide a unique opportunity to reduce costs and improve consumer quality at the same time. The most durable and flexible cost management method in the West, and throughout the world, is the direct-costing cost management system. Direct-costing is an accounting method in the controlling system, based on determining the real cost of products and services, regardless of the calculated semi-fixed and overhead costs. The direct-costing system assumes that the cost of production is taken into account only in terms of variable costs. Fixed expenses are collected in separate accounts and written off directly to the financial result at a specified frequency.

The problem with applying this system in the practice of Kazakh enterprises is that quite often domestic enterprises evaluate their activities in terms of profit at the end of the period, which is where the big mistake of accrual costs lies. It may be a year, a quarter or a month, but for a growing business, even if operating efficiency decreases, profits can continue to grow, compensated by increased sales. As a result, if the profits of such enterprises begin to fall, then this indicates such large and neglected problems that it may already be too late to solve them.

Another problem is the fact that the market is in constant dynamics and it is important to understand exactly how this or that structural unit works at a given time. Direct-costing allows you to solve these really important problems and manage the company based not on profit or turnover, but on marginal profit. .The second well-known Western method of cost management is the concept of target costing - an attempt to get away from traditional cost accounting. The basis of the concept is a change in view of the interdependence of price, profit and cost. That is, it is expected that new products will be sold at a price that will fully cover costs and provide the profit necessary for further business development. For traditional products, the use of such a formula is only theoretically possible. Therefore, the creators of the target costing system changed the order of actions in this expression, and the priorities of the components changed accordingly:

Target cost = Target price – Target profit

One of the first, but still relevant today, definitions of target costing, given by M. Sakurai in 1989, emphasizes the complexity and unifying essence of this concept: “Target costing can be defined as a cost management tool used to reduce any costs associated with product throughout the entire period of its life cycle, by combining the efforts of the company’s production, design, research, marketing, and economic departments.”

Figure 1. Sequence of actions in the target costing concept

Target costing is a model built on the principles of GAP analysis and convenient at the planning stage, but it requires an excellent understanding of the market situation and the availability of the results of competent marketing analysis, therefore it is of little use in domestic practice.

Thus, among all the variety of currently existing foreign systems and methods of cost management, the most interesting are direct-costing, target costing, ABC-costing, due to their flexibility and ability to adapt to the real conditions of the Kazakh economy. Costs play a very important role in the activities of an enterprise. Production and economic activities at an enterprise are associated with the consumption of raw materials, auxiliary materials, technological energy, water, payroll, contributions to social funds and a number of other necessary costs and deductions.

Providing objective data for drawing up the enterprise budget;

The ability to evaluate the activities of each division of the enterprise from a financial point of view;

Making informed and effective management decisions.

Thus, in order to solve the problems of reducing the costs of production and sales of products at the enterprise, a program must be developed that would take into account all the factors that influence the reduction of costs of production and sales of products, and would be adjusted taking into account the changed circumstances at the enterprise.

Literature:

1. Abryutina M.S. Analysis of the financial and economic activities of an enterprise: Educational and practical guide. - 3rd ed., revised. and additional: textbook / M.S. Abryutina, A.V. Gracheva.-3rd ed., revised. and additional - M.: Business and Service, 2001.-272p.

2. Asylbekov I. Cost calculation using the “Direct costing” method. Its advantages and disadvantages // KarSU Youth and current problems of the modern world. – 2004 - No. 4, p. 66

3. Berdnikova T.B. Analysis and diagnostics of the financial and economic activities of the enterprise. – M.: INFRA-M, 2004. – 320 p.

4. Guseva, I.B., Plekhanova, A.F. Accounting and distribution of indirect costs // Handbook of economists. - 2005. - No. 7. - P. 132-134.

5. Gorelik O.M. Marginal analysis in the management of costs and production costs // Financial management. – 2009.- No. 2.- P. 87-90.