Conditionally fixed costs per unit of production. Composition of fixed (conditionally fixed) expenses. Why is it necessary to separate costs by class?

Conditionally fixed costs- these are costs for which it is conventionally assumed that they do not change with changes in production volumes. These include:

depreciation of buildings and structures,
production and enterprise management costs,
rent, etc.

Synonyms

semi-fixed expenses

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Variable costs increase or decrease in proportion to the volume of production (provision of services, trade turnover), i.e. depend on the business activity of the organization. Both production and non-production costs can be variable. Examples of manufacturing variable costs include direct material costs, direct labor costs, auxiliary materials costs, and purchased intermediate goods costs.

Variable costs characterize the cost of the product itself, all others (fixed costs) characterize the cost of the enterprise itself. The market is not interested in the value of the enterprise, it is interested in the cost of the product.

Total variable costs have a linear dependence on the indicator of business activity of the enterprise, and variable costs per unit of production are a constant value.

Production costs that remain virtually unchanged during the reporting period do not depend on the business activity of the enterprise and are called fixed production costs. Even if production (sales) volumes change, they do not change. Examples of fixed production costs are the cost of renting production space and depreciation of fixed assets for production purposes.

Fixed costs are the costs of renting premises, security, depreciation, etc. Fixed costs per unit of production are reduced in steps. Total fixed costs are constant and do not depend on the volume of business activity, but may change under the influence of other factors. For example, if prices rise, total fixed costs also rise.

IN real life It is extremely rare to find costs that are purely fixed or variable in nature. Economic phenomena and associated costs are much more complex from a maintenance point of view, and therefore in most cases the costs are conditionally variable (or conditionally constant). In this case, a change in the organization's business activity is also accompanied by a change in costs, but unlike variable costs, the relationship is not direct. Conditionally variable (conditionally fixed) costs contain both variable and fixed components. An example is the payment for using a telephone, consisting of a fixed subscription fee (fixed part) and payment for long-distance calls (variable component).

Therefore, any costs in general view can be represented by the formula

where Y is total costs, rub.;

a is their constant part, independent of production volumes, rub.;

b - variable costs per unit of production (cost response coefficient), rub.;

X - indicator characterizing business activity organization (volume of production, services provided, turnover, etc.) in natural units of measurement.

Costs taken into account and not taken into account in estimates. The process of making a management decision involves comparing several alternative options with the aim of choosing the best one. The indicators compared can be divided into two groups: the first remain unchanged for all alternative options, the second vary depending on the decision made. When considered a large number of alternatives that differ from each other in many respects, the decision-making process becomes more complicated. Therefore, it is advisable to compare not all indicators with each other, but only the indicators of the second group, i.e. those that change from variant to variant. These costs, which distinguish one alternative from another, are often called relevant in management accounting. They are taken into account when making decisions. Indicators of the first group, on the contrary, are not taken into account in the assessments.

Sunk costs. These are expired costs that no alternative option can correct. In other words, these previously incurred costs cannot be changed by any management decisions. Sunk costs are not taken into account when making decisions. However, the costs not taken into account in assessments are not always irrecoverable.

Indirect costs, as mentioned above, are divided into two groups: semi-variable and semi-fixed. The former increase in direct proportion to the growth of production volume, the latter do not change in direct proportion to the volume of output.

Conditionally - variables costs are those whose total value is directly dependent on production volumes. These include:

1. costs of raw materials, supplies, purchased semi-finished products and components (there are none in the energy sector);
2. fuel and energy for technological purposes;
3. costs wages production workers;
4. costs of maintaining and operating machinery and equipment, excluding depreciation.

Conditionally fixed costs are those whose value does not change with changes in production volume. These include:

1. general production expenses, except for the cost of maintaining machinery and equipment, but including depreciation;
2. general business costs;
3. other costs (partially).

Conditionally permanent costs (UPI) have an abrupt tendency to change. The reasons for this change may be different:

- sharp increase in rent;
- expansion of production, requiring the introduction of new equipment (increase in depreciation), expansion of space (increase in rent), increase in operating costs;
- revaluation of fixed assets;
- sale of part of fixed assets;
- reconstruction of buildings and structures, etc.

Conventionally, fixed costs can be divided into two groups: residual (those that the enterprise continues to operate, despite the fact that production and sales of products have completely stopped), and starting (which arise with the resumption of production.

There are the following types of conditionally variable costs:

1. proportional, which change in the same proportion as the volume of production and sales of products.
2. depression, which change in a relatively smaller proportion than production and sales.
3. progressive (in greater proportion).

General and gross costs mean the sum of fixed and variable costs. Average costs are the costs per unit of production.

Marginal cost means average value costs (increase or reduction) arising when the volume of production and sales of products changes. Those. Marginal cost is the additional cost associated with producing one more unit of output.

It is more profitable for an organization to have as little amount as possible per unit of output (work, services) fixed costs, which is achieved with the maximum possible volume of production (sales) with the available number of machines and equipment, production space, human (labor) resources. In the event of a decrease in production (sales) volume, the amount of semi-variable costs (for the organization as a whole) is reduced in proportion to such a decrease, but the amount of semi-fixed costs is not. As a result, there is an increase in the share of cost in the selling price of products, which means a decrease in the share of profit (and, accordingly, the organization’s income) in this price.

Taking into account the above, the total amount of costs (C) of an organization for the manufacture of all types of products it produces can be expressed by the formula:

Z = A + (B1 x X1 + B2 x X2 + B3 x X3 + ... + Bn x Xn),

where A - total amount fixed costs for the organization as a whole;

1, 2, 3, …, n - types of products;

B1, B2, B3, …, Bn - the sum of variable costs in the cost of each type of product;

X1, X2, X3, …, Xn - the quantity of each type of product.

Clarifying the question of whether each type of expense belongs to conditionally variable or conditionally constant is also necessary for correct drafting calculation (formation of selling price) per unit of product (work, service).

In concept management accounting costs occupy an important place, since in the course of current activities their analysis is mandatory. Conditionally fixed costs are general business expenses for advertising, as well as those that do not depend on production volume. Every organization has this part of the costs, so studying and optimizing it makes it possible to increase profits.

Why is it necessary to separate costs by class?

To make it easier and more efficient to analyze expenses in an enterprise, they are usually classified according to certain criteria. This division allows us to identify their relationship and calculate how much each individual influences the cost of production and the profitability of the business as a whole.

In order for an enterprise's cost structure to be orderly, it is necessary to effectively maintain accounts and link costs to objects. For this purpose, expenses are classified according to similar characteristics. The choice of differentiation determines the object: if it changes, this may entail a change in the cost category.

Types of classifications:

Subjective. Costs are grouped according to specific characteristics: direct or indirect, fixed or variable.
Objective. In this case, the subjective classification is tied to a specific object.

Costs may vary for each company different ways so that the cost structure is clear and understandable. Management accounting allows you to choose the most optimal method. It should be noted that all costs are grouped by type of expense, cost carriers and the place where they arise.

By type, costs can be divided in accordance with economically homogeneous factors and according to costing items.

Cost carriers are products, types of work or services. This category of expenses is necessary in order to determine the cost per unit of production.

Costs and their classification also depend on the place of origin: it can be production shops or other departments. It is advisable to group expenses in accounting so that the information is as accessible as possible for analyzing expenses and determining savings strategies.

Costs and their classification

Enterprises distinguish between the main types of costs:

conditionally fixed costs;
conditionally variable costs.

Conditionally fixed costs are those that do not depend on the time period and production volumes. These costs increase as the scale increases. economic activity, but at a slower pace. In some cases, their growth tends to jump.

Simply put, semi-fixed costs are those that arise when production volume increases sharply, for example, the cost of additional equipment.

Conditionally variable costs include expenses that are associated with the purchase and sale of products. Their value depends on many factors: supplier prices, and others.

They are calculated as the sum of semi-variable and semi-fixed expenses.

Internal and external expenses

Towards environment costs are classified into internal and external. Domestic finances on our own, and entrusts the care of external ones to other organizations or society as a whole.

Grouping costs by areas and items is used to calculate the costs of producing and selling goods or services. To make it more convenient to calculate losses and profits, analyze costs and set prices, a calculation sheet is drawn up. Costs are divided by item depending on what role they play in the enterprise and for what needs they are used.

Indirect and direct costs

Indirect or divided depending on the method of attributing costs to cost.

Indirect costs are those that are not accrued per unit of production, but accumulate in accounts. After this, they are included in the cost using a calculation method. Typically, indirect costs are taken into account where they occur and then allocated between product types. These include salary temporary workers or the cost of purchasing additional materials.

Direct costs are calculated on the basis of primary documents for each unit of production. All expenses that relate to a specific product are called direct: the purchase of raw materials and supplies, the salaries of the main workers, as well as any other. When calculating an object, you need to understand that the greater the share of direct costs, the more accurately you can calculate the cost per unit of the product.

Technical and economic costs

According to the technical and economic purpose, costs can be divided as follows:

Basic.
Invoices.

The main costs are usually those that are directly related to the production process or the provision of services. These are the costs necessary to carry out production and release a specific product: the cost of purchasing materials, costs of electricity, fuel, labor, etc.

General production and business expenses are considered indirect. They are related to service structural divisions enterprises.

Costs characterizing the activities of the enterprise

In order to analyze the activities of the enterprise as a whole and evaluate the finished product, the cost structure of the enterprise has the following form: expenses are divided into incoming and outgoing. Incoming funds include purchased funds that are used to make a profit. If over time they are no longer relevant or are used up, they are transferred to expired costs.

In the balance sheet asset, incoming costs can be reflected as goods, finished goods, inventories or work in progress.

Costs that relate to social or management development programs are usually called discretionary. To obtain average unit costs, it is necessary to add up unit fixed and variable costs.

Types of variable costs

Depending on changes in production volumes, variable costs can be divided into types:

Proportional. These costs change at the same rate as the scale of production.
Progressive. Such costs increase much faster than the rate of growth of enterprise activity. This may be due to interruptions or downtime.
Degressive. To increase profits and reduce costs, the rate of these expenses must exceed the rate of progressive and proportional expenses.

Semi-variable and semi-fixed costs are important indicators in any business, so it is necessary to clearly understand the mechanism of their formation.

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