How to find total variable costs. How to count them? Understanding Variable Costs

The sum of variable and fixed costs forms the cost of products (works, services).

The dependence of variable and fixed costs on the volume of production per output and per unit of output is shown in fig. 10.2.

Fig.10.2. Dependence of production costs on the quantity of output

The figure below clearly shows that fixed costs per unit output decreases as output increases. This indicates that one of the most effective ways to reduce the cost of products is to use production capacities as fully as possible.

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fixed costs do not depend on the dynamics of the volume of production and sales of products, that is, they do not change when the volume of production changes.

One part of them is related to the production capacity of the enterprise (depreciation, rent, wages of management personnel on time basis and general business expenses), the other part is related to the management and organization of production and marketing of products (expenses for research work, advertising, to improve the skills of employees, etc.). It is also possible to allocate individual fixed costs for each type of product and common for the enterprise as a whole.

However, fixed costs calculated per unit of output change with changes in the volume of production.

variable costs depend on the volume and change in direct proportion to the change in the volume of production (or business activity) of the company. As it increases, variable costs also grow, and vice versa, they decrease when it decreases (for example, the wages of production workers manufacturing a certain type of product, the cost of raw materials and materials). In turn, as part of variable costs allocate costs proportional and disproportionate . proportional costs vary in direct proportion to the volume of production. These include mainly the cost of raw materials, basic materials, components, as well as piecework wages of workers. disproportionate costs are not directly proportional to the volume of production. They are divided into progressive and degressive.

Progressive costs increase more than output. They arise when an increase in the volume of production requires high costs per unit of output (costs for piecework-progressive wages, additional advertising and sales costs). The growth of degressing costs lags behind the increase in output. Degressive costs are usually the costs of operating machinery and equipment, a variety of tools (accessories), etc.

On fig. 16.3. graphically shows the dynamics of the total fixed and variable costs.

Dynamics of unit costs looks different. It is easy to build on the basis of certain patterns. In particular, variable proportional costs per unit of output remain the same regardless of the volume of production. On the graph, the line of these costs will be parallel to the x-axis. Fixed costs per unit of production with the growth of its total volume decrease along a parabolic curve. For regressive and progressive costs, the same dynamics remains, only more pronounced.

Variable costs, calculated per unit of output, are a constant value under given production conditions.

More accurately named permanent and variable costs conditionally fixed and conditionally variable. The addition of the word conditionally conditionally means that variable costs per unit of output may decrease with changes in technology at large output volumes.

Fixed costs can change abruptly with a significant increase in output. At the same time, with a significant increase in output, the technology of its manufacture changes, which leads to a change in the proportional relationship between the change in the quantity of production and the value of variable costs (the slope on the graph decreases).

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Figure Total costs of the enterprise

The cost of all products calculated as follows:

C - total cost, rub.; a - variable costs per unit of output, rub; N - output volume, pcs; b - fixed costs for the entire volume of production.

Cost calculation units of production:

C ed \u003d a + b / N

With more full use production capacity, the unit cost of production decreases. The same happens with a significant increase in the scale of output, when variable and fixed costs per unit of output are simultaneously reduced.

Analyzing the composition of fixed and variable costs, we deduced the following relationship: an increase in revenue will lead to a significantly greater increase in profit if fixed costs remain unchanged.

Besides, there are mixed costs, which contain both constant and variable components. Some of these costs change when the volume of production changes, while the other part does not depend on the volume of production and remains fixed during the reporting period. For example, a monthly telephone fee includes a fixed amount of the subscription fee and a variable part that depends on the number and duration of long-distance telephone calls.

Sometimes mixed costs are also called semi-variable and semi-fixed costs. For example, if an enterprise's economic activity is expanding, then at some point there may be a need for additional storage facilities to store its products, which, in turn, will cause an increase in rental costs. Thus, fixed costs (rent) will change with activity levels.

Therefore, when accounting for costs, they must be clearly distinguished between fixed and variable.

The division of costs into fixed and variable is important in choosing an accounting and costing system. In addition, this grouping of costs is used in the analysis and forecasting of the break-even production and, ultimately, for choosing the economic policy of the enterprise.

In paragraph 10 of IFRS 2"Reserves" defined three groups of costs, included in the cost of production, namely: (1) production variable direct costs, (2) production variable indirect costs, (3) production fixed indirect costs, which will be called production overheads.

Table Production costs in cost according to IFRS 2

Cost type	Composition of costs
variable direct	raw materials and basic materials, wages of production workers with accruals on it, etc. These are the costs that can be attributed directly to the cost of specific products based on primary accounting data.
indirect variables	such costs that are directly dependent or almost directly dependent on changes in the volume of activity, but due to the technological features of production, they cannot or are not economically feasible to be directly attributed to manufactured products. Representatives of such costs are the costs of raw materials in complex industries. For example, when processing raw materials - hard coal– coke, gas, benzene, coal tar, ammonia are produced. Divide the costs of raw materials by types of products in these examples can only indirectly.
permanent indirect	overhead costs that do not change or hardly change as a result of changes in the volume of production. For example, depreciation of industrial buildings, structures, equipment; the cost of their repair and operation; expenses for the maintenance of the shop management apparatus and other shop personnel. This group of costs in accounting is traditionally distributed by type of product indirectly in proportion to any distribution base.

Similar information.

variable costs These are costs, the value of which depends on the volume of output. Variable costs are opposed to fixed costs, which add up to total costs. The main sign by which it is possible to determine whether costs are variable is their disappearance during a stop in production.

Note that variable costs are the most important indicator of an enterprise in management accounting, and are used to create plans to find ways to reduce their weight in total costs.

What is variable cost

Variable costs have a major distinguishing feature- they vary depending on the actual production volumes.

Variable costs include costs that are constant per unit of output, but their total amount is proportional to the volume of output.

Variable costs include:

raw material costs;

Consumables;

energy resources involved in the main production;

salary of the main production personnel (together with accruals);

the cost of transport services.

These variable costs are directly charged to the product.

In value terms, variable costs change when the price of goods or services changes.

How to find variable costs per unit of output

In order to calculate the variable costs per piece (or other unit of measure) of the products manufactured by the company, you should divide the total amount of variable costs incurred by the total number of finished products, expressed in natural values.

Classification of variable costs

In practice, variable costs can be classified according to the following principles:

According to the nature of the dependence on the volume of output:

proportional. That is, variable costs increase in direct proportion to the increase in output. For example, the volume of production increased by 30% and the amount of costs also increased by 30%;

degressive. As production increases, the company's variable costs decrease. So, for example, the volume of production increased by 30%, while the size of variable costs increased by only 15%;

progressive. That is, variable costs increase relatively more with output. For example, the volume of production increased by 30%, and the amount of costs by 50%.

Statistically:

are common. That is, variable costs include the totality of all variable costs of the enterprise across the entire product range;

average - average variable costs per unit of production or group of goods.

According to the method of attribution to the cost of production:

variable direct costs - costs that can be attributed to the cost of production;

variable indirect costs - costs that depend on the volume of production and it is difficult to assess their contribution to the cost of production.

In relation to the production process:

production;

non-production.

Direct and indirect variable costs

Variable costs are either direct or indirect.

Production variable direct costs are costs that can be attributed directly to the cost of specific products based on primary accounting data.

Production variable indirect costs are costs that are directly dependent or almost directly dependent on the change in the volume of activity, however, due to the technological features of production, they cannot or are not economically feasible to be directly attributed to manufactured products.

The concept of direct and indirect costs is disclosed in paragraph 1 of Article 318 of the Tax Code of the Russian Federation. Thus, according to tax legislation, direct expenses, in particular, include:

expenses for the purchase of raw materials, materials, components, semi-finished products;

wages of production personnel;

depreciation on fixed assets.

Note that enterprises can include in direct costs and other types of costs directly related to the production of products.

At the same time, direct expenses are taken into account when determining the tax base for income tax as products, works, services are sold, and written off to the tax cost as they are implemented.

Note that the concept of direct and indirect costs is conditional.

For example, if the main business is transportation services, then drivers and car depreciation will be direct costs, while for other types of business, maintaining vehicles and remunerating drivers will be indirect costs.

If the cost object is a warehouse, then the storekeeper's wages will be included in direct costs, and if the cost object is the cost of manufactured and sold products, then these costs (storekeeper's wages) will be indirect costs due to the impossibility of unambiguously and in the only way to attribute it to the object costs - cost.

Examples of Direct Variable Costs and Indirect Variable Costs

Examples of direct variable costs are costs:

for the remuneration of workers involved in the production process, including accruals on their wages;

basic materials, raw materials and components;

electricity and fuel used in the operation of production mechanisms.

Examples of indirect variable costs:

raw materials used in complex production;

expenses for research and development, transportation, travel expenses, etc.

conclusions

Due to the fact that variable costs change in direct proportion to the production volume, and the same costs per unit of finished product usually remain unchanged, when analyzing this type of cost, the value per unit of production is initially taken into account. In connection with this property, variable costs are the basis for solving many production problems related to planning.

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Variable Costs: Accountant Details

Operational leverage in the main and paid activities of the BU
They are useful. Management of fixed and variable costs, as well as the operating costs associated with them ... in the cost structure of fixed and variable costs. The effect of operating leverage arises... variable and conditionally constant. Conditionally variable costs change in proportion to the change in the volume of provided ... constant. Conditionally fixed costs Conditionally variable costs Maintaining and maintaining buildings and ... the price of the service falls below the variable costs, it remains only to curtail production, ...

Example 2. In the reporting period, variable costs for the release of finished products, reflected .... The cost of production includes variable costs in the amount of 5 million rubles... Debit Credit Amount, rub. Reflected variable costs 20 10, 69, 70, ... Part of general factory costs added to the variable costs that form the cost 20 25 1 ... Debit Credit Amount, rub. Variable costs are reflected 20 10, 69, 70, ... Part of general factory costs is added to the variable costs that form the cost price 20 25 1 ...

Financing the state task: examples of calculations
Does it make sense to divide costs into variable and fixed costs?
It is the difference between revenue and variable costs, shows the level of compensation for fixed ... costs; PermZ - variable costs for the entire volume of production (sales); permS - variable costs per unit...increased. Accumulation and distribution of variable costs When choosing a simple direct costing ... semi-finished products of own production are taken into account at variable costs. Moreover, complex raw materials, with ... The total cost on the basis of the distribution of variable costs (for output) will be ...
Dynamic (temporary) profitability threshold model
For the first time he mentioned the concepts of "fixed costs", "variable costs", "progressive costs", "degressive costs". ... The intensity of variable costs or variable costs per working day (day) is equal to the product of the value of variable costs per unit ... total variable costs - the value of variable costs per unit of time, calculated as the product of variable costs by ... respectively, total costs, fixed costs, variable costs and sales. The above integration technology...
Director's questions to which the chief accountant should know the answers
Equality: revenue = fixed costs + variable costs + operating profit. We are looking for... products = fixed cost / (price - variable cost/unit) = fixed cost: marginal... fixed cost + target profit) : (price - variable cost/unit) = (fixed cost + target profit ... equation: price = ((fixed costs + variable costs + target profit) / target sales ... , in which only variable costs are taken into account. Marginal profit - revenue ...

The production costs of an enterprise can be divided into two categories: variable and fixed costs. Variable costs depend on changes in the volume of production, while fixed costs remain fixed. Understanding the principle of classifying costs into fixed and variable is the first step to managing costs and improving production efficiency. Knowing how to calculate variable costs can help you lower your unit cost, making your business more profitable.

Steps

Calculation of variable costs

Classify costs as fixed and variable. Fixed costs are those costs that remain unchanged when the volume of production changes. For example, this can include rent and salaries of management personnel. Whether you produce 1 unit per month or 10,000 units, these costs will remain about the same. Variable costs change with changes in the volume of production. For example, they include the cost of raw materials, packaging materials, the cost of shipping products and the wages of production workers. The more products you produce, the higher the variable costs will be.

Add together all variable costs for the time period under consideration. Having identified all variable costs, calculate their total value for the analyzed period of time. For example, your manufacturing operations are quite simple and include only three types of variable costs: raw materials, packaging and shipping costs, and workers' wages. The sum of all these costs will be the total variable costs.

Let's say that all your variable costs for the year in monetary terms will be as follows: 350,000 rubles for raw materials and materials, 200,000 rubles for packaging and delivery costs, 1,000,000 rubles for workers' wages.
The total variable costs for the year in rubles will be: 350000 + 200000 + 1000000 (\displaystyle 350000+200000+1000000), or 1550000 (\displaystyle 1550000) rubles. These costs directly depend on the volume of production for the year.

Divide the total variable costs by the volume of production. If you divide the total amount of variable costs by the volume of production for the analyzed period of time, you will find out the amount of variable costs per unit of output. The calculation can be presented as follows: v = V Q (\displaystyle v=(\frac (V)(Q))), where v is the variable cost per unit, V is the total variable cost, and Q is the output. For example, if in the above example the annual production is 500,000 units, then the variable cost per unit would be: 1550000 500000 (\displaystyle (\frac (1550000)(500000))), or 3 , 10 (\displaystyle 3,10) ruble.

Using variable cost information in practice
1. Evaluate trends in variable costs. In most cases, an increase in production will make each additional unit produced more profitable. This is because fixed costs are spread over more units of output. For example, if a business that produced 500,000 units spent 50,000 rubles on rent, these costs in the cost of each unit of production amounted to 0.10 rubles. If the volume of production doubles, then the rental cost per unit of production will already be 0.05 rubles, which will allow you to get more profit from the sale of each unit of goods. That is, as sales revenue increases, the cost of production also increases, but at a slower pace (ideally, in the cost of a unit of production, variable costs per unit should remain unchanged, and a component of fixed costs per unit should fall).
  
  Use the percentage of variable costs in cost to assess risk. If we calculate the percentage of variable costs in the cost of a unit of production, then we can determine the proportional ratio of variable and fixed costs. The calculation is made by dividing the value of variable costs per unit of production by the unit cost of production according to the formula: v v + f (\displaystyle (\frac (v)(v+f))), where v and f are variable and fixed costs per unit of output, respectively. For example, if the fixed costs per unit of production are 0.10 rubles, and the variable costs are 0.40 rubles (for a total cost of 0.50 rubles), then 80% of the cost is variable costs ( 0 , 40 / 0 , 50 = 0 , 8 (\displaystyle 0.40/0.50=0.8)). As an outside investor in a company, you can use this information to assess the potential risk to the company's profitability.
  
  Conduct benchmarking with companies in the same industry. First, calculate the variable costs per unit of output for your company. Then collect data on the value of this indicator from companies in the same industry. This will give you a starting point for evaluating the performance of your company. Higher variable costs per unit of output may indicate that a company is less efficient than others; while a lower value of this indicator can be considered a competitive advantage.
  - The value of variable costs per unit of output above the industry average indicates that the company spends more money and resources (labor, materials, utilities) on the production of products than its competitors. This may indicate its low efficiency or the use of too expensive resources in production. In any case, it will not be as profitable as its competitors unless it cuts its costs or increases its prices.
  - On the other hand, a company that is able to produce the same goods at a lower cost sells competitive advantage in getting more profit from the established market price.
  - This competitive advantage may be based on the use of cheaper materials, cheap labor, or more efficient manufacturing facilities.
  - For example, a company that purchases cotton at a lower price than other competitors can produce shirts at lower variable costs and charge lower prices for products.
  - Public companies publish their statements on their websites, as well as on the websites of exchanges where their securities are traded. Information about their variable costs can be obtained by analyzing the "Statements of Financial Performance" of these companies.
2. Conduct a break-even analysis. Variable costs (if known) combined with fixed costs can be used to calculate the break-even point for a new manufacturing project. The analyst is able to draw a graph of the dependence of fixed and variable costs on production volumes. With it, he will be able to determine the most profitable level of production.

Each enterprise incurs certain costs in the course of its activities. There are different ones. One of them provides for the division of costs into fixed and variable.

The concept of variable costs

Variable costs are those costs that are directly proportional to the volume of products and services produced. If an enterprise produces bakery products, then as an example of variable costs for such an enterprise, one can cite the consumption of flour, salt, yeast. These costs will grow in proportion to the growth in the volume of bakery products.

One cost item can relate to both variable and fixed costs. For example, the cost of electricity for industrial ovens that bake bread would serve as an example of variable costs. And the cost of electricity for lighting a production building is a fixed cost.

There is also such a thing as conditionally variable costs. They are related to production volumes, but to a certain extent. With a small level of production, some costs still do not decrease. If the production furnace is loaded halfway, then the same amount of electricity is consumed as for a full furnace. That is, in this case, with a decrease in production, costs do not decrease. But with an increase in output above a certain value, costs will increase.

Main types of variable costs

Let's give examples of variable costs of the enterprise:

Wages of employees, which depends on the volume of products they produce. For example, in the bakery industry, a baker, a packer, if they have piecework wages. And also here you can include bonuses and remuneration to sales specialists for specific volumes of products sold.
The cost of raw materials, materials. In our example, this is flour, yeast, sugar, salt, raisins, eggs, etc., packaging materials, packages, boxes, labels.
are the cost of fuel and electricity, which is spent on the production process. It could be natural gas, gasoline. It all depends on the specifics of a particular production.
Another typical example of variable costs are taxes paid on the basis of production volumes. These are excises, taxes on tax), USN (Simplified Taxation System).
Another example of variable costs is the payment for the services of other companies, if the volume of use of these services is related to the level of production of the organization. It can be transport companies, intermediary firms.

Variable costs are divided into direct and indirect

This separation exists due to the fact that different variable costs are included in the cost of goods in different ways.

Direct costs are immediately included in the cost of goods.

Indirect costs are allocated to the entire volume of goods produced in accordance with a certain base.

Average variable costs

This indicator is calculated by dividing all variable costs by the volume of production. Average variable costs can both decrease and increase as production volumes increase.

Consider the example of average variable costs in a bakery. Variable costs for the month amounted to 4600 rubles, 212 tons of products were produced. Thus, the average variable costs will amount to 21.70 rubles / ton.

The concept and structure of fixed costs

They cannot be reduced in a short amount of time. With a decrease or increase in output, these costs will not change.

Fixed costs of production usually include the following:

rent for premises, shops, warehouses;
utility bills;
administration salary;
the cost of fuel and energy resources that are not consumed production equipment, but for lighting, heating, transport, etc.;
advertising expenses;
payment of interest on bank loans;
purchase of stationery, paper;
costs for drinking water, tea, coffee for employees of the organization.

Gross costs

All of the above examples of fixed and variable costs add up to gross, that is, the total costs of the organization. As production volumes increase, gross costs increase in terms of variable costs.

All costs, in fact, are payments for the acquired resources - labor, materials, fuel, etc. The profitability indicator is calculated using the sum of fixed and variable costs. An example of calculating the profitability of the main activity: divide the profit by the amount of costs. Profitability shows the effectiveness of the organization. The higher the profitability, the better the organization performs. If the profitability is below zero, then the costs exceed the income, that is, the organization's activities are inefficient.

Enterprise Cost Management

It is important to understand the essence of variable and fixed costs. With proper management of costs in the enterprise, their level can be reduced and more profit can be obtained. Fixed costs are almost impossible to reduce, so efficient work to reduce costs can be carried out in terms of variable costs.

How can you reduce costs in your business?

Each organization works differently, but basically there are the following ways to reduce costs:

1. Reducing labor costs. It is necessary to consider the issue of optimizing the number of employees, tightening production standards. Some employee can be reduced, and his duties can be distributed among the rest with the implementation of his additional payment for additional work. If the enterprise is growing production volumes and it becomes necessary to hire additional people, then you can go by revising production standards and or increasing the amount of work in relation to old workers.

2. Raw materials are an important part of variable costs. Examples of their abbreviations might be as follows:

search for other suppliers or changing the terms of supply by old suppliers;
introduction of modern economical resource-saving processes, technologies, equipment;

cessation of the use of expensive raw materials or materials or their replacement with cheap analogues;
implementation of joint purchases of raw materials with other buyers from one supplier;
independent production of some components used in production.

3. Reducing production costs.

This may be the selection of other options for rental payments, the sublease of space.

This also includes savings on utility bills, for which it is necessary to carefully use electricity, water, and heat.

Savings on the repair and maintenance of equipment, vehicles, premises, buildings. It is necessary to consider whether it is possible to postpone repairs or maintenance, whether it is possible to find new contractors for this purpose, or whether it is cheaper to do it yourself.

It is also necessary to pay attention to the fact that it can be more profitable and economical to narrow down production, transfer some side functions to another manufacturer. Or vice versa, enlarge production and carry out some functions independently, refusing to cooperate with subcontractors.

Other areas of cost reduction may be the organization's transport, advertising, tax relief, debt repayment.

Any business must consider its costs. Working to reduce them will bring more profit and increase the efficiency of the organization.

Such a question may arise for a reader familiar with management accounting, which is based on accounting data, but pursues its own goals. It turns out that some methods and principles of management accounting can be used in ordinary accounting, thereby improving the quality of information provided to users. The author suggests that you familiarize yourself with one of the ways to manage costs in accounting, which will help the document on costing products.

About the direct costing system

Management (production) accounting - management economic activity enterprises based on an information system that reflects all the costs of the resources used. Direct costing is a subsystem of management (production) accounting based on the classification of costs into variable-fixed depending on changes in production volumes and cost accounting for management purposes only at variable costs. The purpose of using this subsystem is to increase the efficiency of resource use in production and economic activity and maximizing on this basis the income of the enterprise.

In relation to production, a simple and developed direct costing is distinguished. When choosing the first option, the variables include direct material costs. All the rest are considered constant and are charged in total to complex accounts, and then, according to the results of the period, are excluded from the total income. This is the income from the sale of manufactured products, calculated as the difference between the cost of products sold (sales proceeds) and the variable cost. The second option is based on the fact that, in addition to direct material costs, conditionally variable costs include, in some cases, variable indirect costs and a part of fixed costs that depend on the utilization rate of production capacities.

At the stage of implementation of this system at enterprises, as a rule, simple direct costing is used. And only after its successful implementation, the accountant can switch to a more complex developed direct costing. The goal is to increase the efficiency of the use of resources in production and economic activities and to maximize the income of the enterprise on this basis.

Direct costing (both simple and advanced) is distinguished by one feature: priority in planning, accounting, costing, analysis and cost control is given to the parameters of the short and medium term compared to taking into account and analyzing the results of past periods.

About the amount of coverage (margin income)

The basis of the method of cost analysis according to the "direct costing" system is the calculation of the so-called marginal income, or "coverage amount". At the first stage, the amount of the “contribution for coverage” is determined for the whole enterprise. In the table below, we will reflect the named indicator along with other financial data.

As you can see, the amount of coverage (marginal income), which is the difference between revenue and variable costs, shows the level of reimbursement of fixed costs and profit generation. If the fixed costs and the amount of coverage are equal, the profit of the enterprise is zero, that is, the enterprise operates without loss.

The definition of production volumes that ensure the break-even operation of the enterprise is carried out using the “break-even model” or the establishment of a “break-even point” (also called the coverage point, the point of critical production volume). This model is built on the basis of the interdependence between the volume of production, variable and fixed costs.

The break-even point can be determined by calculation. To do this, you need to make several equations in which there is no profit indicator. In particular:

B = Post3 + Rem3 ;

c x O \u003d Post3 + peremS x O ;

Post3 = (c - AC) x O ;

O=	*PostZ*	=	*PostZ*	, Where:
	*c - changeS*		md

B - revenues from sales;

PostZ - fixed costs;

PeremZ - variable costs for the entire volume of production (sales);

AC - variable costs per unit of output;

c - wholesale price of a unit of production (excluding VAT);

ABOUT - volume of production (sales);

md - the amount of coverage (marginal income) per unit of output.

Assume that for the period the variable costs ( PeremZ ) amounted to 500 thousand rubles, fixed costs ( PostZ ) are equal to 100 thousand rubles, and the volume of production is 400 tons. Determining the break-even price includes the following financial indicators and calculations:

- c = (500 + 100) thousand rubles / 400 t = 1,500 RUB/t;

- AC = 500 thousand rubles. / 400 t = 1,250 RUB/t;

- md = 1,500 rubles. - 1 250 rubles. = 250 rubles;

- ABOUT = 100 thousand rubles. / (1,500 RUB/t - 1,250 RUB/t) = 100 thousand RUB / 250 rubles/t = 400 tons

The level of the critical selling price, below which a loss occurs (that is, it is impossible to sell), is calculated by the formula:

c \u003d PostZ / O + peremS

If we substitute the figures, the critical price will be 1.5 thousand rubles/t (100 thousand rubles / 400 tons + 1,250 rubles/t), which corresponds to the result obtained. It is important for an accountant to monitor the break-even level not only at the price of a unit of production, but also at the level of fixed costs. Their critical level, at which total costs (variables plus fixed) are equal to revenue, is calculated by the formula:

Post3 = O x md

If we substitute the numbers, then the upper limit of these costs is 100 thousand rubles. (250 rubles x 400 tons). The calculated data allow the accountant not only to track the break-even point, but also to a certain extent manage the indicators that affect it.

About variable and fixed costs

The division of all costs into these types is the methodological basis for cost management in the direct costing system. Moreover, these terms are understood as conditionally variable and conditionally fixed costs, recognized as such with some approximation. In accounting, especially if we talk about actual costs, there can be nothing constant, but small fluctuations in costs can be ignored when organizing a management accounting system. The table below shows distinctive characteristics named in the heading of the cost section.

Fixed (conditionally fixed) expenses	Variable (conditionally variable) expenses
The costs of production and sale of products that do not have a proportional relationship with the amount of output and remain relatively constant (time wages and insurance premiums, part of the costs of servicing and managing production, taxes and deductions to various funds)	Costs of production and sales of products that vary in proportion to the number of products produced (technological costs for raw materials, materials, fuel, energy, piecework wages and the corresponding share of the unified social tax, part of transport and indirect costs)

The amount of fixed costs for a certain time does not change in proportion to the change in the volume of production. If the volume of production increases, then the amount of fixed costs per unit of output decreases, and vice versa. But fixed costs are not completely fixed. For example, security costs are classified as fixed, but their amount will increase if the administration of the institution deems it necessary to increase the salary of security workers. This amount may also be reduced if the administration purchases such technical means that will make it possible to reduce the security personnel, and saving on wages will cover the costs of acquiring these new technical means.

Some types of costs may include fixed and variable elements. An example is telephone expenses, which include a constant component in the form of long-distance and international telephone calls, but vary depending on the duration of calls, their urgency, etc.

The same types of costs can be classified as fixed and variable depending on specific conditions. For example, the total cost of repairs may remain constant as production volumes increase - or increase if production growth requires the installation of additional equipment; remain unchanged with a reduction in production volumes, if no reduction in the equipment fleet is expected. Thus, it is necessary to develop a methodology for dividing the disputed costs into conditionally variable and conditionally fixed costs.

To do this, it is advisable for each type of independent (separate) costs to assess the growth rate of production volumes (in physical or value terms) and the growth rate of selected costs (in value terms). The assessment of comparative growth rates is made according to the criterion adopted by the accountant. For example, the ratio between the growth rate of costs and production volume in the amount of 0.5 can be considered as such: if the growth rate of costs is less than this criterion compared to the growth in production volume, then the costs are fixed, and in the opposite case, they are variable costs.

For clarity, we present a formula that can be used to compare the growth rates of costs and production volumes and classify costs as fixed:

(	*Aoi*	*x 100% - 100) x 0.5 >*	*Zoi*	*x 100% - 100* , Where:
	*Abi*		*Zbi*

Aoi - the volume of output of i-products for the reporting period;

Abi - the volume of output of i-products for the base period;

Zoi - i-type costs for the reporting period;

Zbi - i-type costs for the base period.

Suppose, in the previous period, the volume of production amounted to 10 thousand units, and in the current period - 14 thousand units. Classified costs for the repair and maintenance of equipment - 200 thousand rubles. and 220 thousand rubles. respectively. The specified ratio is fulfilled: 20 ((14 / 10 x 100% - 100) x 0.5)< 10 (220 / 200 x 100% - 100). Следовательно, по этим данным затраты могут считаться условно-постоянными.

The reader may ask what to do if, during a crisis, production does not grow, but declines. In this case, the above formula will take a different form:

(	*Abi*	*x 100% - 100) x 0.5 >*	*Zib*	*x 100% - 100*
	*Aoi*		*Zoi*

Suppose that in the previous period the volume of production amounted to 14 thousand units, and in the current period - 10 thousand units. Classified costs for the repair and maintenance of equipment 230 thousand rubles. and 200 thousand rubles. respectively. The specified ratio is fulfilled: 20 ((14 / 10 x 100% - 100) x 0.5) > 15 (220 / 200 x 100% - 100). Therefore, according to these data, the costs can also be considered conditionally fixed. If costs have increased despite the decline in production, this also does not mean that they are variable. Just fixed costs have increased.

Accumulation and distribution of variable costs

When choosing a simple direct costing, only direct material costs are calculated and taken into account in the calculation of variable cost. They are collected from accounts 10, 15, 16 (depending on the adopted accounting policy and methodology for accounting for inventories) and debited to account 20 "Main production" (see. Instructions for using the Chart of Accounts).

The cost of work in progress and semi-finished products of own production is accounted for at variable costs. Moreover, complex raw materials, during the processing of which a number of products are obtained, also relate to direct costs, although it cannot be directly correlated with any one product. The following methods are used to allocate the cost of such raw materials to products:

The indicated distribution indicators are suitable not only for writing off the costs of complex raw materials used for manufacturing different types products, but also for production and processing, in which it is impossible to directly allocate variable costs to the cost of individual products. But it is still easier to divide the costs in proportion to the selling prices or natural indicators of the output of products.

The company introduces a simple direct costing in production, which results in the release of three types of products (No. 1, 2, 3). Variable costs - for basic and auxiliary materials, semi-finished products, as well as fuel and energy for technological purposes. In total, variable costs amounted to 500 thousand rubles. Products No. 1 produced 1 thousand units, the sale price of which is 200 thousand rubles, products No. 2 - 3 thousand units with a total selling price of 500 thousand rubles, products No. 3 - 2 thousand units with a total selling price of 300 thousand . rub.

Let us calculate the coefficients of distribution of costs in proportion to the selling prices (thousand rubles) and the natural indicator of output (thousand units). In particular, the first will amount to 20% (200 thousand rubles / ((200 + 500 + 300) thousand rubles)) for products No. 1, 50% (500 thousand rubles / ((200 + 500 + 300) thousand rubles)) for products No. 2, 30% (500 thousand rubles / ((200 + 500 + 300) thousand rubles)) for products No. 3. The second coefficient will take the following values: 17% (1 thousand units / ((1 + 3 + 2) thousand units)) for product No. 1, 50% (3 thousand units / ((1+3+2) thousand units)) for product No. 2 , 33% (2 thousand units / ((1 + 3 + 2) thousand units)) for product No. 2.

In the table, we will distribute variable costs according to two options:

Name	Types of cost distribution, thousand rubles
Name	By production	At selling prices
Products № 1	85 (500 x 17%)	100 (500 x 20%)
Products № 2	250 (500 x 50%)	250 (500 x 50%)
Products № 3	165 (500 x 33%)	150 (500 x 30%)
Total amount	500	500

The options for the distribution of variable costs are different, and more objective, in the opinion of the author, is the assignment to one or another group in terms of quantitative output.

Accumulation and distribution of fixed costs

When choosing a simple direct costing, fixed (conditionally fixed) costs are collected on complex accounts (cost items): 25 “General production expenses”, 26 “General expenses”, 29 “Production and household maintenance”, 44 “Sales expenses”, 23 "Auxiliary production". Of these, only selling and administrative expenses can be reflected in the financial statements separately after the gross profit (loss) indicator (see the income statement, the form of which is approved Order of the Ministry of Finance of the Russian Federation dated 02.07.2010 No.66n). All other costs must be included in the cost of production. This model works with advanced direct costing, when there are not so many fixed costs that they can not be distributed to the cost of production, but written off as a decrease in profit.

If only material costs are classified as variables, the accountant will have to determine the full cost of specific types of products, including variable and fixed costs. There are the following options for allocating fixed costs to specific products:

in proportion to the variable cost, including direct material costs;
in proportion to the shop cost, including variable cost and shop expenses;
in proportion to special cost allocation ratios calculated on the basis of estimates of fixed costs;
natural (weight) method, that is, in proportion to the weight of the products produced or other physical measurement;
in proportion to the “sales prices” adopted by the enterprise (production) according to market monitoring data.

In the context of the article and from the point of view of using a simple direct costing system, it is necessary to assign fixed costs to calculation objects based on previously distributed variable costs (based on variable cost). We will not repeat ourselves, but rather point out that the distribution of fixed costs by each of the above methods requires special additional calculations, which are performed in the following order.

Determined according to the estimate for the planned period (year or month), the total amount of fixed costs and the total amount of expenses according to the distribution base (variable cost, shop cost or other base). Next, the coefficient of distribution of fixed costs is calculated, which reflects the ratio of the amount of fixed costs to the distribution base, according to the following formula:

*Cr =*	n		m	Zb , Where:
	*SUM*	*Zp /*	*SUM*
	*i=1*		*j=1*

Cr - coefficient of distribution of fixed costs;

Zp - fixed costs;

Zb - distribution base costs;

n , m - the number of items (types) of costs.

Let's use the conditions of example 1 and assume that the amount of fixed costs in the reporting period amounted to 1 million rubles. Variable costs are equal to 500 thousand rubles.

In this case, the distribution coefficient of fixed costs will be equal to 2 (1 million rubles / 500 thousand rubles). The total cost on the basis of the distribution of variable costs (for output) will be doubled for each type of product. Let's show the final results, taking into account the data of the previous example, in the table.

Name
Products № 1	85	170 (85x2)	255
Products № 2	250	500 (250x2)	750
Products № 3	165	330 (165x2)	495
Total amount	500	1 000	1 500

Similarly, the distribution coefficient is calculated to apply the method "in proportion to selling prices", but instead of the sum of the costs of the distribution base, it is necessary to determine the cost of each type of marketable product and all marketable products in the prices of possible sales for the period. Further, the overall distribution coefficient ( Cr ) is calculated as the ratio of total fixed costs to the cost of marketable products in prices of possible sale according to the formula:

*Cr =*	n		p	*stp* , Where:
	*SUM*	*Zp /*	*SUM*
	*i=1*		*j=1*

stp - the cost of marketable products in prices of possible sale;

p - the number of types of commercial products.

Let's use the conditions of example 1 and assume that the amount of fixed costs in the reporting period amounted to 1 million rubles. The cost of manufactured products No. 1, 2, 3 in selling prices is 200 thousand rubles, 500 thousand rubles. and 300 thousand rubles. respectively.

In this case, the distribution coefficient of fixed costs is 1 (1 million rubles / ((200 + 500 + 300) thousand rubles)). In fact, fixed costs will be distributed according to sales prices: 200 thousand rubles. for products No. 1, 500 thousand rubles. for products No. 2, 300 thousand rubles. - for products No. 3. In the table we show the result of the distribution of costs. Variable costs are allocated based on product sales prices.

Name	Variable costs, thousand rubles	Fixed costs, thousand rubles	Full cost, thousand rubles
Products № 1	100	200 (200x1)	300
Products № 2	250	500 (500x1)	750
Products № 3	150	300 (300x1)	450
Total amount	500	1 000	1 500

Although the total total cost of all products in examples 2 and 3 is the same, for specific types this indicator differs and the task of the accountant is to choose a more objective and acceptable one.

In conclusion, we note that variable and fixed costs are somewhat similar to direct and indirect costs, with the difference that they can be more effectively controlled and managed. For these purposes, cost management centers (MC) and responsibility centers for cost formation (CO) are being created at manufacturing enterprises and their structural divisions. The first calculates the costs that are collected in the second. At the same time, the responsibilities of both the CO and the CO include planning, coordination, analysis and cost control. If both there and there to allocate variable and fixed costs, this will allow them to be better managed. The question of the advisability of dividing expenses in this way, posed at the beginning of the article, is decided depending on how effectively they are controlled, which also implies monitoring the profit (breakeven) of the enterprise.

Order of the Ministry of Industry and Science of the Russian Federation dated July 10, 2003 No. 164, which amended the Methodological Provisions for Planning, Cost Accounting for the Production and Sale of Products (Works, Services) and Calculation of the Cost of Products (Works, Services) at Chemical Complex Enterprises.

This method is applied when the main product dominates and a small share of by-products is valued either by analogy with its costs in a separate production, or at the selling price minus the average profit.

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