Conditionally variable costs include: Does it make sense to divide costs into fixed and variable?

The size of which increases or decreases in accordance with changes in the volume of production. These include: costs of raw materials and materials, main wages production workers, technological and energy, motor electricity, etc...."

Official terminology.

Akademik.ru.

2012. See what “Conditionally variable costs” are in other dictionaries:

Variable costs- (English variable costs) types of costs, the value of which changes in proportion to changes in production volumes. They are contrasted with fixed costs, which add up to total costs. The main sign by which you can... ... Wikipedia

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Conditionally fixed and conditionally variable costs

In general, all types of costs can be divided into two main categories: fixed (conditionally fixed) and variable (conditionally variable). According to the legislation of the Russian Federation, the concept of fixed and variable costs is present in paragraph 1 of Article 318 Tax Code RF.

Conditionally fixed costs (English) total fixed costs) - an element of the break-even point model, representing costs that do not depend on the volume of output, contrasted with variable costs, which add up to total costs.

In simple words- These are expenses that remain relatively unchanged during the budget period, regardless of changes in sales volumes. Examples are: administrative expenses, expenses for rent and maintenance of buildings, depreciation of fixed assets, expenses for their repairs, time wages, on-farm deductions, etc. In reality, these expenses are not constant in the literal sense of the word. They increase with increasing scale economic activity(for example, with the advent of new products, businesses, branches) at a slower pace than the growth of sales volumes, or grow spasmodically. That's why they are called conditionally constant.

This type costs largely overlap with overhead, or indirect costs that accompany the main production, but are not directly related to it.

Detailed examples conditionally fixed costs:

• Interest for obligations during the normal operation of the enterprise and maintaining the volume of borrowed funds, a certain amount must be paid for their use, regardless of the volume of production, however, if the volume of production is so low that the enterprise is preparing for bankruptcy , these costs can be neglected and interest payments can be stopped
• Enterprise property taxes , since its value is quite stable, are also mainly fixed expenses, however, you can sell the property to another company and rent it from it (form leasing ), thereby reducing property tax payments
• Depreciation deductions using the linear method of accrual (evenly for the entire period of use of the property) in accordance with the selected accounting policy, which, however, can be changed
• Payment security, watchmen , despite the fact that it can be reduced by reducing the number of workers and reducing the load on checkpoints , remains even during idle time of the enterprise, if it wants to preserve its property
• Payment rental depending on the type of production, duration of the contract and the possibility of concluding a sublease agreement, it can act as a variable cost
• Salary management personnel under conditions of normal functioning of the enterprise is independent of production volumes, however, with accompanying restructuring of the enterprise layoffs ineffective managers can also be reduced.

Variable (conditionally variable) costs(English) variable costs) are expenses that change in direct proportion in accordance with an increase or decrease total turnover(revenue from sales). These costs are associated with a business's operations to purchase and deliver products to consumers. This includes: the cost of purchased goods, raw materials, components, some processing costs (for example, electricity), transportation costs, piecework wages, interest on loans and borrowings, etc. They are called conditional variables because their direct proportional dependence on sales volume actually exists only during a certain period. The share of these costs may change over a certain period (suppliers will raise prices, the rate of inflation of selling prices may not coincide with the rate of inflation of these costs, etc.).

The main sign by which you can determine whether costs are variable is their disappearance when production stops.

Variable Cost Examples

In accordance with IFRS standards, there are two groups of variable costs: production variable direct costs and production variable indirect costs.

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

Manufacturing Variable Indirect Costs- these are expenses that are directly dependent or almost directly dependent on changes 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 the manufactured products.

Examples direct variables costs are:

• Costs of raw materials and basic materials;
• Energy costs, fuel;
• Wages of workers producing products, with accruals for it.

Examples indirect variables costs are the costs of raw materials in complex production. For example, when processing raw materials - coal– produces coke, gas, benzene, coal tar, ammonia. When milk is separated, skim milk and cream are obtained. It is possible to divide the costs of raw materials by type of product in these examples only indirectly.

Break even (BEP - break-even point) - the minimum volume of production and sales of products at which costs will be offset by income, and with the production and sale of each subsequent unit of product the enterprise begins to make a profit. The break-even point can be determined in units of production, in monetary terms, or taking into account the expected profit margin.

Break-even point in monetary terms- such a minimum amount of income at which all costs are fully recouped (profit is equal to zero).

BEP = * Revenue from sales

Or, which is the same thing BEP = = *P (see below for explanation of meanings)

Revenue and expenses must relate to the same period of time (month, quarter, six months, year). The break-even point will characterize the minimum acceptable sales volume for the same period.

Let's look at the example of a company. Cost analysis will help you clearly determine BEP:

Break-even sales volume - 800/(2600-1560)*2600 = 2000 rubles. per month. Actual sales volume is 2600 rubles/month. exceeds the break-even point, this good result for this company.

The break-even point is almost the only indicator about which we can say: “The lower, the better. The less you need to sell to start making a profit, the less likely it is to go bankrupt.

Break-even point in units of production- such a minimum quantity of products at which the income from the sale of these products completely covers all the costs of its production.

Those. It is important to know not only the minimum allowable revenue from sales as a whole, but also the necessary contribution that each product should bring to the total profit - that is, the minimum required number of sales of each type of product. To do this, calculate the break-even point in in kind:

VER = or VER = =

The formula works flawlessly if the enterprise produces only one type of product. In reality, such enterprises are rare. For companies with a large range of production, the problem arises of allocating the total amount of fixed costs to individual species products.

Fig.1. Classic CVP analysis of the behavior of costs, profits and sales volume

Additionally:

BEP (break-even point) - break even,

TFC (total fixed costs) - the value of fixed costs,

V.C.(unit variable cost) - the value of variable costs for unit of production,

P (unit sale price) - cost of a unit of production (sales),

C(unit contribution margin) - profit per unit of production without taking into account the share of fixed costs (the difference between the cost of production (P) and variable costs per unit of production (VC)).

C.V.P.-analysis (from the English costs, volume, profit - expenses, volume, profit) - analysis according to the “costs-volume-profit” scheme, an element of managing the financial result through the break-even point.

Overhead- costs of conducting business activities that cannot be directly correlated with the production of a specific product and therefore are distributed in a certain way among the costs of all produced goods

Indirect costs- costs that, unlike direct ones, cannot be directly attributed to the manufacture of products. These include, for example, administrative and management costs, costs for staff development, costs in production infrastructure, costs in social sphere; they are distributed among various products in proportion to a justified base: the wages of production workers, the cost of materials consumed, the volume of work performed.

Depreciation deductions- an objective economic process of transferring the value of fixed assets as they wear out to the product or services produced with their help.

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This question may arise from a reader familiar with management accounting, which is based on accounting data, but pursues its own goals. It turns out that some management accounting techniques and principles can be used in regular accounting, thereby improving the quality of information provided to users. The author suggests familiarizing yourself with one of the ways to manage costs in accounting, which the document on calculating product costs will help with.

About the direct costing system

In relation to production, there are simple and developed direct costing. When choosing the first option, the variables include direct material costs. All the rest are considered constant and are attributed in total to complex accounts, and then at the end of the period they are excluded from total income. This is income from the sale of manufactured products, calculated as the difference between the cost of products sold (revenue from sales) and variable cost. The second option is based on the fact that conditionally variable costs, in addition to direct material ones, in some cases include variable indirect costs and part of the fixed costs, depending on the utilization rate of production capacity.

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

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

About the amount of coverage (marginal income)

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 fixed costs and the coverage amount are equal, the enterprise's profit is zero, that is, the enterprise operates at break-even.

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

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

B = DC + AC ;

c x O = DC + AC x O ;

PostZ = (ts   - AC) x O ;

PostZ   - fixed costs;

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

variable   - variable costs per unit of production;

ts   - wholesale price per unit of production (excluding VAT);

ABOUT - volume of production (sales);

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

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

- ts = (500 + 100) thousand rubles. / 400 t = 1,500 rub./t;

- variable = 500 thousand rubles. / 400 t = 1,250 rub./t;

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

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

The level of the critical selling price, below which a loss occurs (that is, you cannot sell), is calculated using the formula:

c = PostZ / O + AC

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

PostZ = O x md

If you plug in the numbers, then the upper limit of these costs is 100 thousand rubles. (250 rub. x 400 t). The calculated data allows the accountant not only to track the break-even point, but also to a certain extent to manage the indicators that affect this.

About variable and fixed costs

Sum fixed costs over a certain time does not change in proportion to changes in production volume. If production volume increases, then the amount of fixed costs per unit of output decreases, and vice versa. But fixed costs are not absolutely constant. For example, security costs are classified as permanent, but their amount will increase if the administration of the institution considers it necessary to increase the salaries of security workers. This amount may decrease if the administration purchases such technical equipment that will make it possible to reduce security personnel, and the savings on wages will cover the costs of purchasing these new technical equipment.

Some types of costs may include fixed and variable elements. Example - telephone expenses that include a constant term in the form of fees for long-distance and international telephone calls, but vary depending on the duration of the conversations, their urgency, etc.

The same types of costs can be classified as fixed and variable, depending on specific conditions. For example, total amount repair costs may remain constant as production volumes increase, or increase if production growth requires the installation of additional equipment; remain unchanged when production volumes are reduced, unless a reduction in the equipment fleet is expected. Thus, it is necessary to develop a methodology for dividing disputed costs into semi-variable and semi-fixed ones.

To do this, it is advisable for each type of independent (separate) expenses 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, this can be considered the ratio between the growth rate of costs and production volume in the amount of 0.5: if the growth rate of costs is less than this criterion compared to the growth of production volume, then the costs are classified as fixed costs, and in the opposite case, they are classified as 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 constant:

Abi   - 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.

Let's say that in the previous period the volume of production was 10 thousand units, and in the current period it was 14 thousand units. Classified costs for repair and maintenance of equipment are 200 thousand rubles. and 220 thousand rubles. respectively. The specified ratio is satisfied: 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:

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

Accumulation and distribution of variable costs

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

The company is introducing simple direct costing in production, which results in the production 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 selling price of which was 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 cost distribution coefficients in proportion to sales prices (thousand rubles) and natural indicator output (thousand units). In particular, the first will be 20% (200 thousand rubles / ((200 + 500 + 300) thousand rubles)) for product 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:

Options for distributing variable costs are different, and more objective, in the author’s opinion, is assignment to one or another group based on quantitative output.

Accumulation and distribution of fixed costs

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 for specific products:

• proportional to variable cost, including direct material costs;
• in proportion to the shop cost, including variable cost and shop expenses;
• in proportion to special cost distribution coefficients calculated on the basis of fixed cost estimates;
• natural (weight) method, that is, in proportion to the weight of the products produced or another natural measurement;
• in proportion to the “selling prices” accepted by the enterprise (production) according to market monitoring data.

The total amount of fixed costs and the total amount of expenses according to the distribution base (variable cost, shop cost or other base) are determined from the estimate for the planned period (year or month). Next, the distribution coefficient of fixed expenses is calculated, reflecting the ratio of the amount of fixed expenses to the distribution base, using the following formula:

Salary   - fixed costs;

Zb   - distribution base costs;

n , m   - number of cost items (types).

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 based on the distribution of variable costs (by product output) will be increased by 2 times for each type of product. We will show the final results taking into account the data from the previous example in the table.

The distribution coefficient is calculated similarly for applying the “proportional to sales prices” method, but instead of the sum of the costs of the distribution base, it is necessary to determine the cost of each type commercial products and all marketable products at prices of possible sales for the period. Further overall coefficient distributions ( Kr ) is calculated as the ratio of total fixed costs to the cost of marketable products in prices of possible sales using the formula:

p   - 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 sales prices is 200 thousand rubles, 500 thousand rubles. and 300 thousand rubles. respectively.

In this case, the distribution coefficient of fixed costs is equal to 1 (1 million rubles / ((200 + 500 + 300) thousand rubles)). In fact, fixed costs will be distributed according to sales prices: 200 thousand rubles. for product No. 1, 500 thousand rubles. for product No. 2, 300 thousand rubles. 

300 (300 x 1)

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

and their structural divisions, cost management centers (CM) and responsibility centers for cost formation (CO) are created. The former calculates the costs that are collected in the latter. At the same time, the responsibilities of both the control center and the central authority include planning, coordination, analysis and cost control. If both there and there are distinguished between 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 resolved depending on how effectively they are controlled, which also implies monitoring the profit (break-even) of the enterprise.

Order of the Ministry of Industry and Science of the Russian Federation dated July 10, 2003 No. 164, which introduced additions to the Methodological provisions for planning, accounting for costs of production and sales of products (works, services) and calculating the cost of products (works, services) at chemical enterprises.

2012. This method is used with a predominant part of the main product and a small share of by-products, valued either by analogy with its costs in stand-alone production, or at the selling price minus the average profit.

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 are variable costs?

Variable costs have the main distinctive feature- they vary depending on 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 key production personnel (together with accruals);

cost of transport services.

These variable costs are directly allocated to the product.

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

How to Find Variable Costs Per Unit

In order to calculate variable costs per piece (or other unit of measurement) of products produced by a company, you should divide the total amount of variable costs incurred by the total quantity finished products, expressed in natural quantities.

Classification of variable costs

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

By the nature of the dependence on the volume of output:

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

degressive. As production growth increases, the variable costs of the enterprise decrease. For example, production volume increased by 30%, but variable costs increased only by 15%;

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

According to the statistical principle:

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

average – average variable costs per unit of product or group of goods.

By 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 are 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-productive.

Direct and indirect variable costs

Variable costs can be 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 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 the manufactured products.

The concept of direct and indirect expenses 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;

remuneration of production personnel;

depreciation on fixed assets.

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

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

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

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

If the cost object is a warehouse, then the storekeeper's wages will be included in direct expenses, 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 attributing it to a cost object - cost.

Examples of direct variable costs and indirect variable costs

Examples of direct variable costs are:

for wages of workers involved in production process, including charges on their salaries;

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;

costs for scientific development, transportation, travel expenses, etc.

conclusions

Due to the fact that variable costs change in direct proportion to 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 product is initially taken into account. In connection with this property, variable costs are the basis for solving many production problems related to planning.

Still have questions about accounting and taxes? Ask them on the accounting forum.

Variable costs: details for an accountant

• Operating leverage in the main and paid activities of accounting

  They are useful. Management of fixed and variable costs, as well as associated operating costs... in the cost structure of fixed and variable costs. Effect operating leverage arises...variables and conditionally constants. Conditionally variable costs change in proportion to the change in the volume of services provided... constant. Conditionally fixed costs Conditionally variable costs Maintenance and servicing of buildings and... the price of the service falls below variable costs, all that remains is to curtail production,...

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

• Financing government tasks: examples of calculations
• Does it make sense to divide costs into variable and fixed?

  The difference between revenue and variable costs shows the level of reimbursement of fixed... costs; PeremZ – variable costs for the entire volume of production (sales); variableS – variable costs per unit... increased. Accumulation and distribution of variable costs When choosing simple direct costing... semi-finished products of own production are taken into account according to variable costs. Moreover, complex raw materials, with... The total cost based on the distribution of variable costs (based on product output) will be...

• Dynamic (temporal) 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... of 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 costs/ (price - variable costs/unit) = fixed costs: marginal... fixed costs + target profit): (price - variable costs/unit) = (fixed costs + target profit... equation: price = ((fixed costs + variable costs + target profit)/ target sales volume..., which takes into account only variable costs. Contribution margin - revenue...

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. wage costs for 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;
• 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;
• - reconstruction of buildings and structures, etc.

Conditionally - 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.

Under marginal cost is understood 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 the smallest possible amount of fixed costs per unit of output (work, services), which is achieved with the maximum possible volume of production (sales) with the available number of machines and equipment, production space, and human (labor) resources. In the event of a decrease in production (sales) volume, the amount of conditionally variable costs (for the organization as a whole) is reduced in proportion to such a decrease, and the amount semi-fixed expenses- No. As a result, there is an increase specific gravity cost in the selling price of the product, which means a decrease in the share of profit (and therefore 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 is the total amount of fixed expenses 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.

Clarification of the issue of whether each type of expense is classified as semi-variable or semi-fixed is also necessary for the correct preparation of calculations (formation of selling price) per unit of product (work, services).