Types of costs. Average costs in the long run

Any company, before starting production, must have a clear idea of ​​what profit it can expect. To do this, it studies demand and at what price it will sell products or services. And compares the expected profit with costs (expenses).
Production costs is the cost of resources that a company uses to produce and sell products.
Types of production costs:
1. External (accounting or explicit) - payment for resources that do not belong to the company, are attracted from outside (salaries, rent, expenses for basic and revolving funds, payment for the entrepreneurial abilities of production and sales organizers). The sum of all external costs determines the cost of production. The size of external costs determines the price. For example, in industry, the share of cost in the selling price of an enterprise without VAT and excise taxes is approximately 80%.
2. Domestic (implicit) - the opportunity costs of using resources that are the property of the company. For example, the owner of the land does not pay rent, however, cultivating it himself, refuses to rent it out and from additional income in connection with this. For example, a worker is not hired by a factory and does not receive wages. For example, an entrepreneur who has invested his money in production cannot put it in the bank, the lost profit is % of the bank.
Taking into account not only external, but also internal costs allows us to more clearly determine profit:
1. Accounting – the difference between the company’s income and external costs.
2. Economic (net) - the difference between the firm's income and total costs. Or what's the difference between accounting profit and internal costs. Economic profit is calculated to determine how profitable a given activity is compared to other options.
If economic profit Above zero- this means that this field of activity is profitable compared to other options.
If economic profit is less than zero- that means it’s unprofitable, you need to move into another area.
If economic profit is zero– the firm operates with normal profits, which cover all opportunity costs.
Sunk costs – costs that cannot be returned upon liquidation of the company (for registration of the company, for example).
General costs (TC) – costs for the entire volume of products produced.
Average total costs (ATS) – costs per unit of production (equal to the ratio of total costs to the volume of products produced).
Marginal cost (MC) – associated with the production of an additional unit of output (equal to the ratio of the change in total costs to the change in the volume of production).

(the table is given below) show in monetary terms how many resources the enterprise spent on the production of products/services. Practical control and management production costs necessary for pricing and increasing profits from business activities. Let's consider what production costs are and their types depending on the stated purpose of accounting.

Concept and types of production costs

Production costs arise at any enterprise where any product is manufactured or various services are provided. In this case, costs are expressed in physical or monetary terms. Components may differ in the types of products produced, work performed, industries and places of activity, volume of trade turnover, from the perspective of one company individually or the entire society/state as a whole. Also, the classification of production costs, their types and dynamics vary according to the analysis methods used, methods for estimating costs and their relationship to production volume.

Classification of production costs

The main types of production costs are given below. Each business entity chooses division methods independently, taking into account the requirements of the law and business owners.

First of all, internal and external production costs should be distinguished. To the first ones internal, include hidden costs of using resources owned by the enterprise. For example, this is the placement of production in its own premises; use in production cycle not purchased from third-party suppliers of raw materials, but produced by the enterprise, etc. TO external expenses include the costs of payment various factors production - raw materials, materials, energy resources, taxes, services, etc.

The classification of costs into direct and indirect is in demand. Direct production costs – This expenses fully attributable to the cost of products. For example, the salaries of key employees, the cost of inventory items, depreciation of capital equipment. Indirect or overhead costs are not directly related to the production cycle, but are necessary for the operation of the enterprise as a whole. This rent for office space, earnings of management/administrative personnel, interest payments on loan obligations, depreciation of non-production facilities, etc.

Total production costs are the sum of all fixed and variable costs for the production of products/services. The gross indicator is used in the analysis of product pricing for the actual formation of the subsequent cost of the production and sales cycle of the production of GP. Additionally, the following types of classification of the essence of production costs are distinguished:

• Societies and companies.
• Explicit and implicit.
• Appeals and implementations.
• Non-refundable.
• Economic and accounting.
• Variables and constants.
• Average and extreme.

Production costs - table

All the most important types of costs are collected for clarity in the table. Given a brief description of indicators.

A company's costs are the totality of all costs of producing a product or service, expressed in monetary terms. In Russian practice they are often called cost. Each organization, regardless of what type of activity it is engaged in, has certain costs. The firm's costs are the amounts it pays for advertising, raw materials, rent, labor, etc. Many managers try to ensure efficient operation of the enterprise at the lowest possible cost.

Let's consider the basic classification of a company's costs. They are divided into constants and variables. Costs can be considered in the short term and the long term ultimately makes all costs variable, since during this time some large projects may end and others begin.

The company's costs in short term can be clearly divided into constants and variables. The first type includes costs that do not depend on production volume. For example, deductions for depreciation of structures, buildings, insurance premiums, rent, salaries of managers and other employees related to senior management, etc. Fixed costs of a company are mandatory costs that an organization pays even in the absence of production. on the contrary, they directly depend on the activities of the enterprise. If production volumes increase, then costs increase. These include costs of fuel, raw materials, energy, transport services, wages of the majority of the enterprise’s employees, etc.

Why does a businessman need to divide costs into fixed and variable? This moment has an impact on the functioning of the enterprise in general. Since variable costs can be controlled, a manager can reduce costs by changing production volumes. And since the overall costs of the enterprise are ultimately reduced, the profitability of the organization as a whole increases.

In economics there is such a thing as opportunity costs. They are due to the fact that all resources are limited, and the enterprise has to choose one way or another to use them. Opportunity costs are lost profits. The management of the enterprise, in order to receive one income, deliberately refuses to receive other profits.

A firm's opportunity costs are divided into explicit and implicit. The first are those payments that the company would pay to suppliers for raw materials, for additional rent, etc. That is, their organization can guess in advance. These include cash costs for renting or purchasing machines, buildings, machinery, hourly wages of workers, payment for raw materials, components, semi-finished products, etc.

The implicit costs of a firm belong to the organization itself. These cost items are not paid to third parties. This also includes profit that could have been received for more favorable conditions. For example, the income that an entrepreneur can receive if he works in another place. TO implicit costs include rental payments for land, interest on capital invested in securities, and so on. Every person has this type of expense. Consider an ordinary factory worker. This person sells his time for a fee, but he could earn a higher salary in another organization.

So, in conditions market economy it is necessary to strictly monitor the organization’s expenses, it is necessary to create new technologies and train employees. This will help improve production and plan costs more effectively. This means it will lead to an increase in the company’s income.

Any business involves costs. If they are not there, then there is no product supplied to the market. To produce something, you need to spend money on something. Of course, the lower the costs, the more profitable the business.

However, following this simple rule requires the entrepreneur to take into account a large number of nuances reflecting the variety of factors influencing the success of the company. What are the most remarkable aspects that reveal the essence and varieties production costs? What does business efficiency depend on?

A little theory

Production costs, according to a common interpretation among Russian economists, are the costs of an enterprise associated with the acquisition of so-called “factors of production” (resources without which a product cannot be produced). The lower they are, the more economically profitable the business is.

Production costs are measured, as a rule, in relation to the total costs of the enterprise. In particular, a separate class expenses may be those associated with the sale of manufactured products. However, everything depends on the methodology used in classifying costs. What are the options here? Among the most common in the Russian marketing school are two: the “accounting” type methodology, and the one called “economic”.

According to the first approach, production costs are the total set of all actual expenses associated with the business (purchase of raw materials, rental of premises, payment utilities, personnel compensation, etc.). The “economic” methodology also involves the inclusion of those costs, the value of which is directly related to the company’s lost profit.

In accordance with popular theories adhered to by Russian marketers, production costs are divided into fixed and variable. Those that belong to the first type, as a rule, do not change (if we talk about short-term time periods) depending on the growth or reduction in the rate of production of goods.

Fixed costs

Fixed production costs are, most often, such expense items as rent of premises, remuneration of administrative personnel (managers, executives), obligations to pay certain types of contributions to social funds. If they are presented in the form of a graph, it will be a curve that is directly dependent on the volume of production.

As a rule, enterprise economists calculate average production costs from those that are considered constant. They are calculated based on the volume of costs per unit of manufactured goods. Typically, as the volume of goods produced increases, the average cost “schedule” decreases. That is, as a rule, the greater the productivity of the factory, the cheaper the unit product.

Variable costs

The enterprise's production costs related to variables, in turn, are very susceptible to changes in the volume of output. These include the costs of purchasing raw materials, paying for electricity, and compensating staff at the specialist level. It’s clear: it’s required more material, energy is wasted, new personnel are needed. A graph showing the dynamics of variable costs is usually not constant. If a company is just starting to produce something, then these costs usually grow more rapidly in comparison with the rate of increase in production.

But as soon as the factory reaches a sufficiently intensive turnover, then variable costs, as a rule, do not grow so actively. As in the case of fixed costs, for the second type of costs it is often calculated average- again, in relation to the output of a unit of production. The combination of fixed and variable costs is the total cost of production. Usually they are simply added together mathematically when analyzed economic indicators companies.

Costs and depreciation

Phenomena such as depreciation and the closely related term “wear and tear” are directly related to production costs. By what mechanisms?

First, let's define what wear is. This, according to the interpretation widespread among Russian economists, is a decrease in the value of production resources. Wear and tear can be physical (when, for example, a machine or other equipment simply breaks down or cannot withstand the previous rate of production of goods), or moral (if the means of production used by the enterprise, say, are much inferior in efficiency to those used in competing factories ).

A number of modern economists agree that obsolescence is fixed costs production of products. Physical - variables. The costs associated with maintaining production volumes of goods subject to wear and tear of equipment form the same depreciation charges.

As a rule, this is associated with the purchase of new equipment or investments in the repair of current equipment. Sometimes - with change technological processes(for example, if a machine producing spokes for wheels breaks down at a bicycle factory, their production may be outsourced temporarily or on an indefinite basis, which, as a rule, increases the cost of producing finished products).

Thus, timely modernization and procurement quality equipment- a factor that significantly influences the reduction of production costs. Newer and modern technology in many cases involves lower depreciation costs. Sometimes the costs associated with equipment wear and tear are also influenced by the qualifications of the personnel.

As a rule, more experienced craftsmen handle equipment more carefully than beginners, and therefore it may make sense to spend money on inviting expensive, highly qualified specialists (or invest in training young people). These costs may be lower than investments in depreciation of equipment subject to intensive use by inexperienced beginners.

(measured in monetary terms for simplicity) used in the process economic activity enterprises for (for) a certain time stage. Often in Everyday life people confuse these concepts (costs, expenses and expenses) with the purchase price of a resource, although such a case is also possible. Costs, costs and expenses have not historically been separated in the Russian language. IN Soviet time economics was an “enemy” science, so there was no significant further development in this direction, except for the so-called "Soviet economy".

In world practice, there are two main schools of understanding costs. This is a classic Anglo-American, which can include Russian and continental, which rests on German developments. The continental approach structures the content of costs in more detail and therefore is becoming more widespread throughout the world, creating a high-quality basis for tax, accounting and management accounting, costing, financial planning and controlling.

Cost Theory

Clarifying definitions of concepts

To the above definition, you can add more clarifying and delimiting definitions of concepts. According to the continental definition of the movement of value flows at various levels of liquidity and between different levels liquidity, we can make the following distinction between concepts for negative and positive value flows of organizations:

In economics, four basic levels of value flows can be identified with respect to liquidity (pictured from bottom to top):

1. Available capital level(cash, highly liquid funds (checks..), operational bank accounts)

payments And payments

2. Level of money capital(1. Level + accounts receivable - accounts payable)

Movement at this level is determined costs and (financial) revenues

3. Level of productive capital(2. Level + production required subject capital (tangible and intangible (for example, patent)))

Movement at this level is determined costs And production income

4. Net capital level(3. Level + other subject capital (tangible and intangible (for example, accounting program)))

Movement at this level is determined expenses And income

Instead of the level of net capital, you can use the concept level of total capital, if we take into account other non-material capital (for example, the company’s image..)

The movement of values ​​between levels is usually carried out at all levels at once. But there are exceptions when only a few levels are covered and not all. They are indicated in the image by numbers.

I. Exceptions to the movement of value flows of levels 1 and 2 are due to credit transactions (financial delays):

4) payments, not costs: repayment of credit debt (="partial" loan repayment (NAMI))

1) costs, non-payment: the appearance of credit debt (=the appearance (of US) of a debt to other participants)

6) payment, non-receipt: entry of accounts receivable (="partial" repayment of debt by other participants for a product/service sold (by US))

2) receipts, non-payment: appearance of receivables (= provision (by OUR) of installment plans to pay for the product/service to other participants)

II. Exceptions to the movement of value flows of levels 2 and 4 are due to warehouse operations (material delays):

10) costs, not expenses: payment for credited materials that are still in the warehouse (=payment (US) by debit regarding “stale” materials or products)

3) expenses, not costs: delivery of still unpaid materials from the warehouse (to (OUR) production)

11) receipts, not income: pre-payment for the subsequent delivery of ((OUR) “future” product by other participants)

5) income, non-receipts: launch of an independently produced installation (="indirect" future receipts will create an influx of value for this installation)

III. Exceptions in the movement of value flows of levels 3 and 4 are due to the asynchrony between the intra-periodic and inter-periodic production (main) activities of the enterprise and the difference between the main and related activities of the enterprise:

7) expenses, not expenses: neutral expenses (= expenses of other periods, non-production expenses and unusually high expenses)

9) costs, not expenses: calculator costs (= write-offs, interest on equity, leasing of own real estate to an enterprise, owner’s salary and risks)

8) income, non-production income: neutral income (= income from other periods, non-production income and unusually high income)

It was not possible to detect production income that was not income.

Financial balance

The foundation of financial balance Any organization can be simplified into the following three postulates:

1) In the short term: superiority (or compliance) of payments over payments.
2) In the medium term: the superiority (or compliance) of revenues over costs.
3) In the long term: the superiority (or matching) of income over expenses.

Costs are the “core” of expenses (the main negative value flow of an organization). Production (core) income can be classified as the “core” of income (the main positive value flow of an organization), based on the concept of specialization (division of labor) of organizations in one or more types of activities in society or the economy.

Types of costs

• Third-party company services
• Other

A more detailed structuring of costs is also possible.

Types of costs

• By impact on the cost of the final product
  • indirect costs
• In relation to production capacity utilization
• In relation to the production process
  • Production costs
  • Non-production costs
• Constant over time
  • time-fixed costs
  • episodic costs
• By type of cost accounting
  • accounting costs
  • calculator costs
• By divisional proximity to manufactured products
  • overhead costs
  • general business expenses
• By importance to product groups
  • group A costs
  • group B costs
• By importance to manufactured products
  • product 1 costs
  • product costs 2

• By importance for decision making
  • relevant costs
  • irrelevant costs
• By removability
  • avoidable costs
  • sunk costs
• By adjustability
  • adjustable
  • unregulated costs
• Refund possible
  • return costs
  • sunk costs
• By cost behavior
  • incremental costs
  • marginal (marginal) costs
• Cost to quality ratio
  • corrective action costs
  • costs of preventive actions

Sources

• Kistner K.-P., Steven M.: Betriebswirtschaftlehre im Grundstudium II, Physica-Verlag Heidelberg, 1997

See also

Wikimedia Foundation.

Synonyms:

Antonyms

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