Calculation of production cost of excel formula

The calculation of the cost of production is a complex calculation procedure. In an enterprise, this is the responsibility of accountants, who must calculate the expected income, taking into account all possible costs of the enterprise.

Production cost - main definitions

The cost price is the current expenses of the enterprise, expressed in cash, aimed at the production and sale of goods.

The cost price is an economic category that reflects the production and economic activities of the company and shows how much financial resources are spent on the manufacture and sale of products. The profit of the enterprise directly depends on the cost price, and the lower it is, the higher the profitability.

Types and types of cost

The cost happens:

1. Full (medium)- implies the totality of all costs, also commercial costs for the manufacture of products and the purchase of equipment are taken into account.
   The costs of creating a business are usually divided into periods during which they must pay off. Gradually, in equal shares, they are added to general production costs. Thus, the average cost per unit of production is formed.
2. Limiting- is directly dependent on the quantity of goods produced and reflects the cost of each additional unit of production. Shows how effective the further expansion of production will be.

The type of cost depends on what area of ​​business the owner wants to control:

What is the cost structure

The cost consists of the following items:

• Raw material required for production.
• Some businesses require calculation energy carriers(various types of fuel).
• Costs for equipment and machinery necessary for the operation of the enterprise.
• Staff salary and payment of all fees and taxes.
• overhead costs(office rent, advertising, and so on).
• Expenses for social events.
• Costs associated with depreciation fixed assets.
• Administrative expenses.
• Payment for the activities of third parties.

Also, when calculating the cost, it is customary to take into account production costs.

Volume of production and cost: is there a connection

The cost of production directly depends on the quantity of goods produced.

Let's say you need to buy a package of tea worth 50 rubles.

The road to the store takes half an hour.

Your costs will be:

• We will estimate an hour of your time at 60 rubles;
• Travel expenses will be 15 rubles.

The property formula is:

Cost price \u003d (price of goods + expenses) / (quantity of goods purchased) \u003d (60 + 50 + 15) / 1 \u003d 125 rubles

If you decide to purchase 4 packs of tea, in this case the cost of goods will be (4 * 50 + 60 + 15) / 4 = 68.75 rubles

The more products you purchase, the lower the cost will be, which in turn reduces the selling price of the product.

Thus, due to the large volume of output, larger firms can not be afraid of competition from such strong enterprises.

Methods of formation of production cost

The most common way to determine the cost is the costing method, with which it is possible to calculate the cost per unit of output sold.

It is best to calculate using the comparable controlled price method, which is set on the basis of the cost of services provided by competing firms.

Cost classification

The classification of costs is based on the assigned task related to business management (calculate the cost and profit of products sold, and so on).

• By adding to the cost of the finished product, all costs are usually divided into two types:

1. Direct- those that are added to the cost of goods manufactured by the company in an exact or single way. Often these are the costs of the necessary raw materials and materials, the wages of workers.
2. Indirect- represent overhead costs and relate to the object of calculation by the method of distribution according to the methodology established at the enterprise.

These include the following costs:

1. Commercial;
2. General business;
3. General production.

• Depending on the volume of products produced, the costs are:

1. Permanent- costs that do not depend on the volume of goods produced, but they are indicated per unit of output and change with the level of business activity.
2. Variables- costs that are affected by the volume of production or sales. A unit of output does not change the amount of costs.

• In terms of significance for a particular case, the costs are:

1. Relevant- costs that depend on the decisions made.
2. Irrelevant- costs that are not related to the decisions made.

Cost calculation methods

There are several different ways to calculate the cost of a product. They are applied depending on the nature of the work, services or products.

• Completeness of adding expenses to the cost price.

There are two types of production costs:

1. Complete- all expenses of the enterprise are taken into account.
2. Truncated- refers to the unit cost of production of variable costs.

The constant part of general production costs and other expenses is written off to reduce profits at the end of the specified period without distribution to the goods produced.

With this method of calculation, the cost price is affected by both variable and fixed costs. The price is calculated by adding the necessary profitability to the cost price.

• The actual and standard cost is calculated on the basis of expenses incurred by the enterprise. The standard cost makes it possible to control the costs of various resources and, in case of deviation from the norm, take all necessary actions in time.

The actual cost per unit of manufactured goods is determined after calculating all costs.

The method is distinguished by its low efficiency.

• Depending on the object of cost accounting, the following methods are distinguished:

1. Transverse- used by enterprises of mass and mass production, when the product goes through several stages of processing during the manufacturing process.
2. per-process- is typical for the mining industry.

Formation of cost at the enterprise

Determining the cost of manufactured products is the task of an accountant. This process is very important and complex. It is customary to divide costs into direct and indirect.

There are such expenses that are indicated in accounting as direct, and in tax as indirect.

All costs for the production of products and their sale are included in the cost price. The costs associated with taxation are usually normalized.

Grouping costs

To prepare an accounting report, it is necessary to group expenses by economic elements:

• material expenses;
• Payments of social needs;
• Salary of employees;
• Other expenses (payments, deductions to insurance funds).

When calculating costing, grouping of costs by costing items is used, due to which the cost of a unit of output is calculated.

• Costs for production materials and services;
• Salary of employees;
• The cost of preparing production for operation;

Enterprises that produce products of only one type can calculate the cost per unit of manufactured goods using a simple calculation method.

The price per unit of manufactured goods is determined by dividing the sum of all costs for a specified period by the number of products manufactured during this time.

Calculation of production cost of excel formula

There are special Excel programs with which it is possible to calculate the cost of production. You enter the required data and get Excel formulas.

Your task is to enter all the numbers correctly, the program will carry out all the calculations automatically and according to all the rules. All indicators are calculated by formulas. Data processing does not take much time.

Positive aspects of the program:

• The program works in different modes (automatic and manual);
• Correct work with "Returned waste";
• Suitable for medium and small businesses.
• Negative aspects of the program:
• Limited amount of processed information;
• Only one resource type specification is supported.

The cost price shows how much it cost the company to manufacture the product. It has a certain structure and is calculated by formulas.

In production, accountants are involved in calculating the cost, choosing a suitable method for this.

Noskova Elena

I have been in the accounting profession for 15 years. She worked as a chief accountant in a group of companies. I have experience in passing inspections, obtaining loans. Familiar with the areas of production, trade, services, construction.