Reducing the costs of production and sales of products is of great importance.

Firstly, this is one of the significant reserves for intensifying production. Reducing costs by saving raw materials, materials, fuel, energy and human labor costs allows us to produce a significant amount of additional products.

Secondly, reducing costs (while maintaining the same prices for finished products) leads to an increase in enterprise profits and increased profitability, creating real opportunities for transferring enterprises to self-financing.

Thirdly, reducing the cost of producing a unit of product is the material basis for reducing prices for industrial products, which leads to a reduction in production costs in other industries, to a reduction in the cost of capital investments and at the same time creates conditions for reducing retail prices for mass goods consumption.

Fourthly, reducing the costs of production and sales of products leads to an acceleration of the turnover of working capital in industry.

The main reserves for reducing the cost of industrial products are:

Systematic reduction of living labor costs per unit of production based on scientific and technological progress;

Improving the use of fixed assets and, in connection with this, increasing production output for each tenge of fixed assets;

Rational use of raw materials, materials, fuel, energy and reduction of costs per unit of product without compromising product quality;

Reducing losses from defects and eliminating unproductive expenses;

Reducing sales costs;

Elimination of excesses in the production management apparatus based on its rational organization.

The impact of labor productivity growth on cost reduction can be determined using the following formula:

Ez= (ZT - (Zt * Rz / Rv)) * T,

where Ez is the amount of savings from reducing production costs due to increased labor productivity;

ZT - costs under the item “Wages and social insurance contributions” per unit of product or per 1 tenge of marketable products in the base year;

Rz - the average annual salary of one employee in the planned year as a percentage of the average annual salary of the base year;

Рв - average annual output per employee in the planned year as a percentage of the average annual output of the base year;

expressed or in wholesale prices of the enterprise.

Large reserves for increasing production output and reducing production costs lie in the better use of production capacities and fixed assets of enterprises.

Calculation of savings in product costs due to better use of production fixed assets can be done using the formula:

Ea = (Za - (Za - Ra) / Rf) * T,

where Ea is the amount of savings from reducing costs in the planned year due to increased capital productivity;

For - depreciation charges in the cost of a unit of product or per 1 tenge of marketable products in the base year;

The ratio of the total amount of depreciation in the planned year to the total amount of accrued depreciation in the base year;

RF - the capital productivity indicator of the planned year as a percentage of the capital productivity indicator for the base year.

Savings in product costs, obtained by reducing the consumption rates of raw materials, materials, fuel and energy per unit of product, can be calculated using the following formula:

E m = (Zm - (Zm - N r) / 100) * T,

where E m is the amount of savings in production costs by reducing consumption rates of raw materials, materials, fuel and energy;

Zm - costs of raw materials, materials, fuel and energy in the base period per unit of product or per 1 tenge of marketable products based on the current consumption standards;

N r - rate of consumption of raw materials, materials, fuel and energy per unit of product or per 1 tenge of commercial products as a percentage of the rate of consumption of the base year.

In cases where in the base year there was an overconsumption of raw materials, materials, fuel and energy against the existing standards, it is necessary to separately determine how much the cost of production should be reduced by eliminating the specified overconsumption in the planned year:

En = (C1 - C2) * T,

where En - Savings in production costs in the planned year due to the elimination of excessive costs of raw materials, materials, fuel and energy;

C1 - actual cost per unit of product or actual costs per 1 tenge of marketable products in the base year;

C2 - actual cost per unit of product or actual costs per 1 tenge of commercial products in the base year, excluding allowed overexpenditures on raw materials, materials, fuel and energy.

If changes in wholesale prices for raw materials, supplies, fuel, and energy are expected in the planned year, then their impact on the cost of marketable products for the planned year is determined separately by the direct calculation method.

When determining the total amount of savings from reducing the cost of a product, it also decreases due to a reduction in semi-fixed expenses (except for depreciation) as a result of increased production. The amount of savings from reducing semi-fixed costs can be determined as follows. First, their share in the cost of marketable products of the base year is calculated. Taking into account the fact that the increase in production volume causes a slight increase in semi-fixed costs, their share for planned calculations for the coming year is adjusted. To do this, conditionally fixed costs are converted to constants using the following formula:

Up = (U * (T - D)) / T,

where UP is the share of the given conditionally fixed costs in the cost of marketable products of the base period;

U is the share of semi-fixed expenses in the cost of marketable products in the base year;

T is the growth rate of the volume of marketable products in the planned year compared to the base period;

D is the growth rate of this type of cost due to an increase in production volume.

Then the relative savings from reducing semi-fixed costs as a result of increasing production volume are determined using the following formula:

Ep = T * Sat * Up / 100 * 100,

where Ep is the savings from reducing semi-fixed costs;

Sat - cost of marketable products in the base year;

UP - reduction in the share of the given conditionally fixed costs in the cost of marketable products of the base year compared to the share of conditionally fixed costs.

Cost reduction can be obtained by eliminating unproductive expenses and losses incurred in the base year, which include: payment for downtime; shortage and damage to material assets in work in progress; above-plan losses from defects, etc. Savings from the elimination of these losses are defined as the product of the amount of unproductive expenses in the base year by the growth rate of the volume of marketable products in the planned year.

The economic feasibility of operating an enterprise in a market economy is determined by the receipt of income. The profitability of an enterprise is characterized by absolute and relative indicators. Without making the appropriate expenses, it is impossible to obtain the desired income. Without receiving income, it is impossible to develop the enterprise and successfully solve social issues.

One of the main indicators of profitability is gross income. It represents the financial result from the sale of products (works, services) and is defined as the difference between the income from the sale of products (works, services) and the production cost of sold products (works, services) as a result of the main activity.

The most important indicator affecting gross income is production cost, so reducing it significantly affects the amount of gross income.

Many enterprises have departments of economic services that are engaged in item-by-item cost analysis and are looking for ways to reduce it. But to a large extent, this work is depreciated by inflation and rising prices for raw materials and fuel and energy resources. In conditions of sharp rise in prices and lack of own working capital for enterprises, the possibility of increasing income as a result of lowering costs is excluded.

The problem of reducing costs is one of the most pressing for enterprises in the printing industry in market conditions. The main requirements for competitive products are good quality and lower costs compared to other enterprises. There are opportunities to reduce costs at every enterprise. Analysis of the main performance indicators of the enterprise helps to identify these opportunities. The need to analyze the dynamics of product costs increases with the expansion of work to save all types of resources, mechanize and automate production, and improve the organization of production and management.

Cost savings can be achieved by efficient use of available resources. The value of savings for production is great, because Thanks to savings, enterprise funds are freed up, which can be used to expand production. By saving costs, you can ensure the efficient functioning of the enterprise.

All ways to reduce costs can be combined into the following main groups: increasing worker productivity, introducing advanced equipment and technology, better use of equipment, reducing the cost of its maintenance and operation, reducing the cost of procurement and better use of labor items, reducing administrative and management costs, eliminating unproductive expenses and losses. The significance of cost reduction in each specific case depends on the specific weight of a particular group of expenses.

An important source of cost reduction is a reduction in the labor intensity of production, and this leads to the fact that the growth in labor productivity outpaces the increase in average wages.

Savings for different expense items have different meanings. Thus, the rational reduction of the managerial personnel of the workshop has progressive significance. But cutting costs on labor protection due to the fact that some activities are not carried out is unacceptable. Such savings lead to deterioration of working conditions and an increase in industrial injuries.

When monitoring production costs, it is necessary to take into account that in addition to the factors discussed above, a change in the structure of the production program as a result of assortment shifts or changes in the distribution of production tasks between individual enterprises producing the same types of products, but with different levels of cost, can also have a significant impact on the cost. .

1. Absolute savings from reducing the cost of ES products.

a) savings from reducing the cost of comparable commercial products in the reporting period compared to the base period are calculated as the difference: Es=С1q1-Спq1

b) the amount of the planned target to reduce the cost of production compared to the baseline level is calculated using the formula: Es = Spqp-Coqp,

where Co and C1 are the cost of a unit of a certain type of product in the base and reporting periods, Cn is the planned cost of a unit of a certain type of product, q1 and qп are the number of units of a certain type of product produced actually in the reporting period and according to plan.

The main reserve for reducing production costs is increasing social productivity. An increase in the productivity of social labor causes a decrease in the number of workers and the wage fund. At enterprises that ensure labor productivity growth at a rate exceeding the growth of average wages, costs per unit of production are reduced.

C=(Iз/Iп)*Dзп, where C is the relative reduction in cost as a percentage, Dзп is the share of wages and social insurance contributions in total costs, Iз is the index of the average monthly salary per employee, Iп is the labor productivity index.

The most important sources of reducing production costs include the rational use of raw materials, materials, fuel and energy; improving equipment use; reduction in maintenance costs; production and sales management. These sources are constant and their importance increases under the influence, first of all, of the intensification of production based on the acceleration of scientific and technical progress, improvement of the organization of production and labor, growth in production volumes, etc.

2. Relative savings on depreciation due to improved use of fixed assets Ea. Improving the use of fixed production assets, achieved by increasing the operating time of equipment, increasing the shift ratio, reducing the amount of uninstalled and unused equipment, intensifying production processes, and more fully utilizing production capacity ensures an increase in production volume and a relative reduction in depreciation charges, the amount of which is determined by formula: Ea=(Ao/To – A1/T1)*T1, where Ao is the amount of depreciation charges in the base period without taking into account the commissioning of new production facilities, A1 is the amount of depreciation charges in the planning period taking into account the commissioning of new production facilities, To is the actual volume of gross products in the base period without taking into account the commissioning of new production facilities, premiums for improving quality, changes in prices for finished products, T1 - the volume of marketable products in the reporting period, taking into account the commissioning of new production facilities, premiums for improving quality, changes in prices for finished products.

3. Relative savings on conditionally constant (independent) expenses Epp, with an increase in production volume, is determined by the formula: Epp = (It*Co*Dpp)/100, where It is the growth rate of marketable products in the planned year compared to the base year, Co – the cost of commercial products or individual cost elements, Epp – the sum of the given conditionally fixed costs (without depreciation) in the base year, Dpp – the share of the given conditionally fixed costs in the cost of the commodity product or individual cost elements in the base year. Dpp=(Dup*(It-Iup))/It, where Dup is the share of the given conditionally fixed costs in the cost of marketable products in the base year compared to the year preceding the base year, It is the growth rate of marketable products in the planned year compared to base, Iуп – growth rate of semi-fixed expenses in the base year compared to the previous one.

4. Transitional savings from organizational and technical measures Eq. Due to the fact that certain organizational and technical measures are not implemented from the beginning of the year, it is not possible to fully realize the effect of implementation during the first year. However, this effect must be taken into account when calculating reserves for reducing production costs by factors in the next year. For this purpose, data on the average annual cost of production in the base year is used, and the calculation of the amount of expenses in the planned year due to the full use of the results of the measures is carried out according to the formula: Eq = (Cxo*No+Cx1N1)/(No+N1)-Cx1Nп, where Схо and Сх1 – variable costs per unit of product before and after this organizational and technical event, No and N1 – volume of output of this type of product in the base year, respectively, before and after the organizational and technical event, in physical terms, Nп – volume of output of this type products planned for the planned year.

5. Reduction in production costs (in percent) with an increase in production volume Cdn. Due to an increase in production volume, production costs decrease due to a relative change in variable costs. The percentage of cost reduction due to this factor is calculated using the formula: Cdn=100*Dnn/(100+Yb)-Dnn, where Dnn is the share of variable costs in the cost of production in the base period, Yb is the increase in production volume in the planned year as a percentage of basic level.

6. Decrease (increase) in production costs when prices for materials (fuel, raw materials, etc.) change. Savings due to the influence of this factor are calculated by the formula: Ets = (No*Ts1 – NoTso)*N or as a percentage Ets=No*Ts1/No*Tso*100%, where No is the rate of expenditure of this type of material per unit of production, Tso and T1 – unit prices of materials in the base and reporting periods, N – quantity of products produced in the reporting period.

7. Percentage of reduction in production costs C. The influence of this factor on the reduction in production costs can be determined by the formula: C = (Ji*Di)/100%, or the average reduction in cost by the sum of all factors C = Ji*Di/100% or C =E/Co*100%, where Ji is the change in costs for the i-th item of production cost in a given period, Di is the share of the i-th item of cost in the cost of the base period, E is the total amount of conditional annual savings obtained due to implementation of all organizational and technical measures for the planned period, Co – cost of the annual production volume in the base period before the implementation of the measures.

8. Savings on wages and social insurance contributions Ez. It can be achieved in terms of workers' wages through the implementation of various organizational and technical measures that ensure a reduction in the labor intensity of production. Ez=(to*Zo-t1*Z1)*(1+Zn/100) 2 *N, where to and t1 are the labor intensity of a unit of production before and after the events, Zo and Z1 are the average hourly wages of workers before and after the events , Zn is the established coefficient for social insurance, N is the number of products for which labor intensity is reduced due to activities in the reporting year. Similarly, labor savings are calculated for all products, and then the total savings for the year are determined. If this organizational and technical measure is not implemented from the beginning of the year, when calculating the reduction in production costs, part of the amount of savings that should be obtained in this period is taken into account. When carrying out organizational and technical measures that ensure the release of workers with time-based wages, savings are determined by the formula: Ez=(Ep*Zs(1+Zn/100))*n, where Ep is the number of workers planned for release, Zs is the average monthly salary for this category of workers, Zn is the established coefficient of contributions to social insurance, n is the number of months from the date of the event until the end of the year.

Conclusion

After reading the above text, you can come to a number of conclusions. Firstly, accounting for production costs is not possible without knowledge of the classification of costs both by economic elements and by costing items. However, knowledge of only these two classifications will not be able to ensure perfect accounting of production costs; for this purpose, other types of classifications of production costs are given here, as well as a specific list of costs included in one or another classification. Secondly, accounting for production costs is possible in accordance with the Accounting Regulations, and is carried out according to the chart of accounts, without the ability to handle which this accounting is also not feasible. Thirdly, accounting for production costs can be carried out by several methods, the choice of which depends on the industry in which a given enterprise operates, the organization of production at a given enterprise, the opinion of the administration, market conditions and a number of other factors. Moreover, as it turned out, their joint use is also possible if circumstances require it or the use of a mixed accounting method is an option for more profitable conduct of business activities of the enterprise. Fourthly, keeping records of production costs is part of accounting, the maintenance of which is mandatory for all legal entities engaged in any type of activity in accordance with the laws of the Russian Federation, which means that the development of industrial relations will push enterprises to keep records more carefully, because it will all more and more controlled by the state. Fifthly, the production capacity of an enterprise is not always limited by the demand for finished products or any other external factors, but, as a rule, is established by the administration of the enterprise, in accordance with its opinions about the operation of a given production unit. Sixth, enterprises are constantly forced to look for factors and reserves for reducing the cost of production in order to receive maximum profit from their activities. All these factors and reserves, as a rule, form the basis for planning the future activities of the enterprise and their calculations are necessary for constructing diagrams that clearly demonstrate the prospects for the development of the enterprise.

It is obvious that accounting for production costs has the most unlimited prospects for development, since the modern market economy, with its ever-increasing degree of competition, obliges enterprises to think about their production costs, as well as about the methods of accounting for these costs in order to more freely maneuver of their products on the market.

The powerful influx of new firms and, as a consequence, increased competition is forcing existing enterprises to seriously think about how not to lose part of their market share and reduce their profits. This leads them to consider the costs of production and sales of products, without analysis of which the existence of a company in modern market conditions becomes not only problematic, but, in my opinion, even impossible (especially since the laws of the Russian Federation oblige the enterprise to maintain accounting records). This is obvious, because any analysis of the results of an enterprise’s economic activity is based on data on the costs of production and sales of products.

Today, the topic proposed for consideration is not completely new, although most textbooks do not provide complete and detailed information about it, but contain only parts of it. In my work I relied mainly on such scientists as: Nikolaeva S.A., Shim J.K. and Abashina A.M. Nevertheless, in my opinion, it is one of the most relevant topics for consideration related to the activities enterprises, for today, and for tomorrow too.

The main goal of this course work is to gain knowledge about: production costs, principles of accounting and control of production costs, methodology for accounting for production costs and calculating the cost of manufactured products, as well as drawing up a support base for further research of the proposed problem in subsequent training courses. The basis of the research was mainly textbooks and workshops on cost accounting at the present stage of market development, a set of regulatory documents and recommendations, as well as a number of journal articles from the main economic periodicals on accounting.

In this work, an attempt is made to systematize production costs and provides a detailed list of costs included in the cost of manufactured products. This work also presents all the main methods of accounting for production costs and calculating production costs. A set of formulas for analyzing economic results and calculating production costs is given.

After reading the text of the coursework itself, you can come to a number of conclusions. Firstly, accounting for production costs is not possible without knowledge of the classification of costs both by economic elements and by costing items. However, knowledge of only these two classifications will not be able to ensure perfect accounting of production costs; for this purpose, other types of classifications of production costs are given here, as well as a specific list of costs included in one or another classification. Secondly, accounting for production costs is possible in accordance with the Accounting Regulations, and is carried out according to the chart of accounts, without the ability to handle which this accounting is also not feasible. Thirdly, accounting for production costs can be carried out by several methods, the choice of which depends on the industry in which a given enterprise operates, the organization of production at a given enterprise, the opinion of the administration, market conditions and a number of other factors. Moreover, as it turned out, their joint use is also possible, if circumstances so require, i.e., the use of a mixed method of accounting is an option for more profitable conduct of business activities of an enterprise. Fourthly, keeping records of production costs is part of accounting, the maintenance of which is mandatory for all legal entities engaged in any type of activity in accordance with the laws of the Russian Federation, which means that the development of industrial relations will push enterprises to keep records more carefully, because it will all more and more controlled by the state. Fifthly, the production capacity of an enterprise is not always limited by the demand for finished products or any other external factors, but, as a rule, is established by the administration of the enterprise, in accordance with its opinions about the operation of a given production unit. Sixth, enterprises are constantly forced to look for factors and reserves for reducing the cost of production in order to receive maximum profit from their activities. All these factors and reserves, as a rule, form the basis for planning the future activities of the enterprise and their calculations are necessary for constructing diagrams that clearly demonstrate the prospects for the development of the enterprise. And finally, it was found that accounting for production costs can only be done based on the basic principles of its organization.

It is obvious that accounting for production costs has the most unlimited prospects for development, since the modern market economy, with its ever-increasing degree of competition, obliges enterprises to think about their production costs, as well as about the methods of accounting for these costs in order to more freely maneuver of their products on the market.

List of used literature

1. Androsov A.M. Accounting and reporting in Russia: Practical. management. - M.: JSC "MENATEP-INFORM", 1994.-576 p.

2. Aksenenko A.F. Cost in the industry management system: Accounting and analysis. – M.: Economics, 1984.-167 p.

3. Balabanov I. T. Analysis and planning of finances of an economic entity. – M.: Finance and Statistics, 1998.-112 p.

4. Barunina E. V. Cost accounting in market conditions // Bukh. Accounting. – 1992. - No. 4. - With. 24-26

5. Accounting: Textbook. / Ed. A. D. Larionova. –M.: “Prospekt”, 1999.-392 p.

6. Accounting in production, A. M. Abashina, A. A. Makovsky, M. N. Simonova, I. K. Talier. – 2nd ed., revised. – M.: Filin, 1998.-374 p.

7. Glushkov I. E. Accounting at a modern enterprise. – Novosibirsk: EKOR, 1993.-202 p.

8. Zhideleva V.V., Kaptein Yu.N. Enterprise Economics: Textbook / ed. S. B. Svigzova; Syktyvkar State univ. – Syktyvkar: Syktyvkar University, 1996.-132 p.

9. Kozlova E. P. Accounting in small businesses: Workshop of an accountant / E. P. Kozlova, T. N. Babchenko, E. N. Galanina. – M.: Finance and Statistics, 1997.-208 p.

10. Kondrakov N.P. Accounting: Textbook. – M.: INFRA-M, 1997.-558 p.

11. Kotaev A. N. On the grouping of costs in production accounting // Bukh. Accounting. – 1994.-№9.-p.15-20

12. Makarieva V.I. Accounting in market conditions: Consultation. – Ed. 2nd, revised – M.: Finance and Statistics, 1993.-80 p.

13. Nikolaeva S. A. Features of cost accounting in market conditions: Theory and practice. – M.: Finance and Statistics, 1993.-123 p.

14. Nikolaeva S. A. Principles of formation and cost calculation. – M.: Analytics-Press, 1997.-144 p.

15. Savitskaya G.V. Analysis of the economic activity of the enterprise. – 3rd ed. – Minsk: Ecoperspective, 1999.-498 p.

16. Shim D.K. Siegel D.G. Methods of cost management and cost analysis: translation from English. – M.: Filin, 1996.-344 p.

When companies took certain temporary losses in order to somehow break into the market. Then they significantly changed their production, reducing the costs of manufacturing and marketing products.) 2. Accounting for the costs of production and output. The main task of accountants at manufacturing enterprises working in this accounting area is to calculate the actual spent...

In agricultural organizations, a specific range of cost items is formed for each industry. Chapter 2 Formation of costs of auxiliary productions by their types of income in the agro-industrial complex system 2.1. Features of technology and cost accounting for crop production Crop growing - one of the main and specific branches of agriculture - is different...

Effective ways to reduce production costs

Algorithms for calculating the overall influence of various cost reduction factors on its dynamics

Determination of economic results from reducing production costs

The size of the sales margin and the possible sales volume directly depend on the size of the cost price. In market conditions, a company cannot form the selling price of its products by simply adding the required sales margin to the production cost, but is forced to limit the maximum selling price to the average market price level.

A competitive advantage will always be with those manufacturers whose production costs are lower than those of their competitors. Conversely, companies with the highest production costs will always experience difficulties with product sales and financial stability, because their small sales margins will not allow them to generate income sufficient to cover all costs and make a profit. Based on this, we can say that the main goal of reducing the cost of production is to maintain the company’s competitiveness in the sales market and ensure the profit margin it needs for development.

How to reduce production costs?

1. Increase in production volumes

Increasing production volumes is the most obvious and effective way to reduce production costs. This is due to the fact that all production costs of a company can be classified as variable or fixed.

Variable costs change in a certain proportion along with the dynamics of production volume: production increases - costs also increase, production decreases - costs fall.

Typical variable costs are the consumption of raw materials and materials for production, wages of production workers, energy consumption during the operation of production equipment.

Fixed expenses have little dependence on the dynamics of production; they are necessary regardless of the volume of products produced in the reporting period (depreciation of production equipment, costs of repairs and maintenance of production premises, energy costs for general workshop needs, etc.).

2. Increased productivity

3. Saving operating costs for production

The greatest effect is achieved by minimizing direct production costs - the cost of energy resources during the operation of production equipment, the cost of remuneration of production workers and the cost of maintaining and repairing production fixed assets.

4. Reducing purchase prices for raw materials and materials for production

The share of raw materials costs in the workshop cost of most manufacturing companies is quite large (usually from 50 to 80%). In addition, the purchase price of raw materials and materials, in addition to the prices for purchasing them from suppliers, also includes the costs of delivery from the supplier’s warehouse to the buyer’s warehouse. Typically, the cost of purchasing raw materials and supplies is reduced in two ways:

reduce the average price of purchasing raw materials from suppliers;

minimize transportation costs for the delivery of raw materials purchased from suppliers.

To reduce the cost of purchasing raw materials from suppliers, a company can simultaneously use several methods - searching for more favorable price offers on the market, using discount and bonus programs from existing suppliers, as well as purchasing cooperation with friendly companies (under an agency agreement or a joint venture agreement ).

5. Reduction of technological losses and production defects

Technological losses are irretrievable waste of raw materials and materials that are generated during the production process, reconfiguration and adjustment of production equipment, as well as during the repair and testing of the functionality of this equipment. The reasons for production defects are insufficient qualifications of personnel, inappropriate quality of raw materials and materials, technical problems in the operation of equipment.

6. Optimization of production processes

This method, of course, requires much more preliminary analysis of the situation and is more labor-intensive than others, since losses and unnecessary costs as a result of ineffective processes cannot be identified simply on the basis of data from production reports.

At the same time, the positive effect of reducing production costs as a result of optimizing production processes may well be significant and even superior to other methods. In addition, if as a result of this work the company’s process efficiency actually increases, then it almost always leads to additional cost reductions in other ways.

Algorithms for calculating the economic effect of reducing production costs

Example 1

Calculation of reduction in production costs when increasing production scales

Each company has a different ratio of semi-variable and semi-fixed costs in the total amount of costs due to the characteristics of the technological production cycle, organizational structure and chain of business processes.

But in any case, in order to predict the effect of reducing product costs from increasing its output, it is necessary to first analyze the company’s costs and calculate their dynamics in relation to production dynamics.

Table 1.1 shows the calculation of the production cost of the Alpha company for the production of 1000 units of product.

Table 1.1

Calculation of production costs per 1000 units. products

As you can see, the company’s workshop costs for production are 78% variable, and 22% constant in relation to the dynamics of product output.

The production cost of production, taking into account the influence of the cost structure of auxiliary production and general production costs, reduces the share of variable costs to 67% and increases the share of fixed costs to 33%.

We project the current ratio of variable and fixed costs to increase production volumes by 25%, i.e. up to 1250 units of production. In this case, variable costs should also increase by 25%, and fixed costs should remain the same amount as when producing 1000 units of product.

We calculate the amount of increase in production costs, divide it by the increased number of units of production and compare the resulting cost of one unit with a similar indicator of the actual production volume (Table 1.2).

Table 1.2

Dynamics of production costs during production expansion

So, with the current structure of variable and fixed production costs, an increase in output by 25% will lead to a reduction in the cost of production of one unit of production by 6.5% (from 2500 rubles to 2336 rubles).

A. A. Grebennikov,
Chief Economist of Rezon Group of Companies

The material is published partially. You can read it in full in the magazine

Cost is amount of costs, spent on the production of any product, product, service. Depending on the volume, there are shop, full, unit and production costs, which include different types of costs.

By reducing costs, you can reduce the price of products, becoming a more competitive and attractive enterprise in the market, without reducing your profits, raise salaries for key personnel, and also significantly improve the financial stability of the company.

Cost includes the following elements:

1. Labor costs (worker wages).
2. (expenses for the purchase of materials, raw materials, tools, third-party services and everything that is used in the creation of the product).
3. Contributions to extra-budgetary funds.
4. Depreciation costs (depreciation of fixed assets).
5. Other.

The “other” element includes: fees for the use of housing and communal services, loan payments, rent, repairs, and so on.

Naturally, the management of each enterprise thinks about how to reduce production costs and get the greatest profit in order to increase its profitability.

To reduce product costs, it is required look for ways to reduce them.

In the cost structure, the largest share is traditionally occupied by material and labor resources, therefore, the primary direction of cost minimization will be to reduce these costs.

Ways to minimize costs:

1. Increased production output. Fixed costs, such as rent, are spread over more products.
2. Search for analogues of materials.
3. Increased efficiency of equipment use, development of low-budget production.
4. Reduced use of third party services. If a company uses external services to a minimum, and, on the contrary, performs all functions in-house, then costs can be reduced. For example, reducing delivery or assembly costs.
5. Reduction of personnel, combination of positions. Not the most pleasant, but one of the most effective methods of reducing costs.
6. Decrease in inventories.
7. Relations with suppliers. By providing, for example, a discount on the purchase of your goods to suppliers, it is possible to establish commercial relations with them and buy materials and components at a lower price. Also, you should choose those suppliers who provide free delivery and free repairs under warranty.
8. Cost intensification. The introduction of new technologies into production and an increase in its volume has a positive effect on revenue; production activities are carried out faster, therefore, more products are produced per unit of time. It is possible to introduce a system of fines for downtime and defects in production, but this in turn can cause negativity on the part of the staff.
9. Saving energy and fuel.
10. Reducing telecommunications costs.
11. Sale or rental of unused premises, equipment, as well as sale of goods with an expiring shelf life.
12. Reducing tax costs (concluding agreements with individual entrepreneurs and legal entities, etc.).
13. Exercising control over receivables and payables.
14. Optimization of procurement, holding tenders.

Using several or one of these methods will help enterprise management reduce costs and reduce production costs. But, in addition to the ways to reduce costs, it is also necessary to know the factors influencing this reduction. Let's look at them in more detail.

The likelihood of a drop in the cost of products can be detected in 2 areas - sources and factors.

Sources are assumed to be those whose savings reduce the initial cost of the product. These are the costs of living and materialized labor, administrative and management costs. Let's look at the factors below.

Technological

This type of factors is associated with production technology, operation and quality of equipment and includes:

• use of new, energy-saving and high-performance equipment;
• improving the quality of manufactured products and labor;
• modification of the nature and manufacturing technology;
• the use of high-quality materials, due to which you can increase the price of products.

Economic

• raising the level of work of production and management structures;
• improving the work of human resources and economic services;
• improvement of organizational structure;
• reduction of costs for unreasonable investments.

Organizational

This type of factor involves the organization of labor and production, namely:

• reduction in the number of downtime and product defects;
• improving the use of funds, material and technical base;
• reduction of transportation costs;
• stimulating employees for greater labor productivity;
• liquidation of obsolete and unnecessary inventories;
• increasing the turnover of funds, as well as reducing the production cycle;
• ensuring the rhythm of production;
• improving the skills of workers.

In addition, factors influencing cost reduction can also be divided into production (inside production) and non-production (external environment, for example, tariffs for housing and communal services, rent).

Now let’s look in detail at what measures exist to reduce the cost of a product, product or service.

The main, most realistic reserve for reducing product costs is considered to be a change in two main parameters characterizing products - depreciation intensity and material intensity.

S/N = M/N + A/N, where

M/N- material consumption, A/N— depreciation.

Savings from reducing depreciation of products can be determined in accordance with the data in the article “Depreciation of fixed assets” for formula:

Savings = ((If * Ia) / In - 1) * da * 100, where

If— index of growth in the value of fixed assets, Ia— growth index of the average depreciation rate, In— index of growth of marketable products for comparable purposes, da— the share of depreciation in the cost of production.

It must be remembered that cost reduction must be based on a systematic and pre-planned approach.

The systematic approach includes a number of activities that can be divided by time frame:

1. Maintaining financial discipline. The head of the organization must draw up a financial plan and implement measures to reduce costs only by strictly following this plan. Also, it is necessary to create a financial accounting system that includes accounting not only for income, but also for expenses.
2. Drawing up a cost reduction plan. By analyzing the activities of an enterprise, you can identify weaknesses in it and reduce costs where required. Systematic cost reduction in general should be associated with improved management in three areas: investments, procurement, production processes (improvements due to organizational and technological changes).
3. Controlling. To reduce costs, monitoring defects, downtime, property damage, and low employee productivity is also effective. Many modern enterprises have a controlling department that deals with these studies.

So, main measures to reduce costs are:

• increasing the technical level of production (use of electronic computers, improvement of existing equipment, use of waste, etc.);
• increased production management efficiency;
• expansion of specialization and cooperation;
• reduction of current costs (improved maintenance of main production)
• reduction of living labor costs (reduction of lost working time, reduction of the number of workers who do not meet production standards);
• reduction in management costs and savings in wages and salaries due to the release of management personnel
• elimination of losses, incl. from defects and downtime.
• the growth of labor productivity should outpace the growth of wages, thereby ensuring a reduction in production costs.
• reduction of workshop and general plant expenses.
• increasing product output or changing its structure, assortment and nomenclature
• improving the use of natural resources
• development of new types of products.

Thus, cost is the most important factor in making a profit for an enterprise. Using a systematic approach, clearly planning areas for cost reduction and controlling this process, you can raise the enterprise to a new level of profitability and competitiveness in the market.

Cost reduction in 1C is lower.