The cost of gross output is a line in the balance sheet. How to find the value of gross output
The volume of production of an enterprise in value terms is characterized by the following indicators: marketable, sold, gross and standard-net products.
Task 1. Calculation of the enterprise’s gross output
Gross products are products produced by an enterprise during a planned period, regardless of the degree of its readiness. Gross output includes marketable products and changes in the balances of unfinished products, semi-finished products, balances of work in progress and spare parts for equipment of its production. The commercial output of an enterprise characterizes the volume of products prepared for transfer to consumers.
During the year, the company produced 450 devices at a price of 1,200 rubles. per unit and 500 devices at a price of 2100 rubles. for a unit. The balance of work in progress at the beginning of the year amounted to 320 thousand rubles. (NPN), and at the end of the year - 290 thousand rubles. (NPK). Determine the volume of gross output of the enterprise.
450 devices - 1200 rub. per unit
500 devices - 2100 rub. per unit
NPN - 320 thousand rubles.
NPK - 290 thousand rubles.
Solution. We determine the volume of gross output of the enterprise:
VP = TP + (NPk - NPn)
TP = Tgp + Tk + Tf + Tu + Tpf
450 x 1200 = 540 thousand rubles.
500 x 2100 = 1050 thousand rubles.
TP = 540 + 1050 = 1590 thousand rubles.
VP = 1590 + (290 - 320) = 1560 thousand rubles.
Answer: Gross output is 1560 thousand rubles.
Task 2. Calculation of products sold
Products sold include products supplied and invoiced by the customer. In the plan, the volume of products sold is defined as the cost of finished products, semi-finished products, production services and works intended for delivery and payable in the planning period to third-party enterprises.
In the reporting period, the enterprise manufactured products worth 3,000 thousand rubles, part of which went for domestic consumption - in the amount of 850 thousand rubles. Work in progress decreased by 105 thousand during the year. Additionally, the enterprise provided industrial services to third parties in the amount of 200 thousand rubles. and semi-finished products were produced for sale to third parties in the amount of 380 thousand rubles.
Determine the volume of products sold and its percentage increase in the reporting year, if last year sales amounted to 2,500 thousand rubles.
RP = TP + (He - Ok)
TP = Tgp + Tk + Tf + Tu + Tpf
TP = (3000 - 850) + 200 + 380 = 2730 thousand rubles.
RP = 2730 thousand rubles.
Answer: the products sold will be equal to 2730, and its increase in the reporting year will be.
Task 3. Calculation of products sold and gross output
The company produced main products worth 825.8 thousand rubles. The cost of industrial work performed for third-party organizations is 240.45 thousand rubles. Semi-finished products of our own production were produced for 300 thousand rubles, of which 55% were consumed in our own production. The size of work in progress decreased at the end of the year by 30 thousand rubles.
Determine the size of sales and gross output.
TP = Tgp + Tk + Tf + Tu + Tpf
TP = 825.8 + 135 + 240.45 = 1201.25 thousand rubles.
RP = TP + (GPN + On) - (GPK + Ok),
where GPn and GPk are residues finished products in the enterprise's warehouse at the beginning and end of the year, rub.;
He and Ok - goods shipped but not paid to customers at the beginning and end of the year, rub.
RP = 1201.25 thousand rubles.
VP = TP + (NPk - NPn) = 1201.25 - 30 = 1171.25 thousand rubles.
Answer: the size of products sold is 1201.25 thousand rubles; the size of gross output is 1171.25 thousand rubles.
Task 4. Calculation commercial products and gross output
According to the plan for the coming year, the company must produce the following number of products:
Table. Products
The enterprise must carry out work for its capital construction in the amount of 1350 thousand rubles, the cost of packaging manufactured by the enterprise for sale to third parties and not included in the selling price of products is 110 thousand rubles. Availability of devices and tools of own manufacture at the beginning of the year - 450 thousand rubles, at the end - 500 thousand rubles.
Determine the value of marketable and gross output.
A = 30,000 thousand rubles.
B = 4500 thousand rubles.
B = 3600 thousand rubles.
VP = TP + (NPk - NPn)
TP = Tgp + Tk + Tf + Tu + Tpf
TP = 30000 + 4500 + 3600+ 1350 + 110 = 39560 thousand rubles.
VP = 39560 + (500 - 450) = 39610 thousand rubles.
Answer: Commercial products will amount to 39,560 thousand rubles, and gross output- 39610 thousand rubles.
Calculation of gross value added
Gross value added is the difference between the output of goods and services and intermediate consumption. GVA can be calculated in basic and market prices.
The following data are available for 1998 Russian Federation(at current prices), million rubles:
Output at basic prices - 4,618,675.4
Intermediate consumption (including indirectly measured financial intermediation services) - 2,148,410.6
Taxes on products - 305,304.1
Subsidies for products - 91,050.3
Final consumption expenses - 2,048,256.2
Determine: Gross value added:
a) in basic prices;
b) at market prices.
a) GVA at basic prices = VA at basic prices - PP (including indirectly measured services of financial intermediation)
GVA in basic prices= 4,618,675.4 - 2,148,410.6 = 2,470,264.8 million rubles.
b) GVA at market prices = GVA in basic prices+ (NNP) at current prices= GVA in basic prices+ NNP - SP = 2,470,264.8 + 305,304.1 - 91,050.3 = 2,684,518.6 million rubles.
Task 2. Gross value added in factor prices
The following conditional data are available (millions of dollars):
Gross output of industries material production(actual prices) - 4752
Revenue from rendering paid services - 948
Costs of providing free services - 1276
Interest received by banks for loans provided - 2832
Interest paid by banks on funds used - 2556
Material costs for the production of goods and services - 3736
including:
depreciation of fixed assets - 672
under-depreciated cost of retired fixed assets - 88
other elements included in intermediate consumption - 124
change in inventories working capital - (+13)
net taxes on products and imports - 247
Define: gross output; gross value added at factor prices.
1. Gross output:
BB = 4752 + 1276 + (2832-2556) = 7252 million dollars.
2. Intermediate consumption:
PP = (3736 - 672) + 124 + (2832-2556) = 3464 million dollars.
3. Gross value added in factor prices:
GVA = 7252 - 3464 = 3788 million dollars.
The general indicator of the enterprise's software is sold products (RP), or sales volume. The first term is used in domestic practice, the second – in world practice. The concept of “sold products” more objectively reflects the result of the activities of an enterprise, both producing goods and producing services. The volume of products sold is calculated using the formula
where is the volume of commercial products for a certain period (month, quarter, year), rub.;
– change in the balance of finished products in the warehouse for a certain period, rub.
;
∆OP – increase in the balance of shipped products for a certain period, rub.
Commercial products includes the cost of products that will be produced and prepared for sale in the planned period. It includes finished products; spare parts, semi-finished products of own production and products of auxiliary units supplied to other enterprises or organizations; industrial work performed externally or for non-industrial farms of a given enterprise; major repairs and modernization of equipment. Commodity products are determined at market wholesale prices.
Gross Product (GP) characterizes the entire volume of work performed by the enterprise over a certain period of time. Gross output includes both finished and unfinished products, the so-called work in progress. The volume of gross output is determined by the formula
where is the increase in work in progress balances, rub.
– increase in special equipment (which is designed and manufactured in the tool shops of the enterprise, since it is an independent product of the tool shops), rub.
Clean Products (PP)– this is the newly created value in the enterprise. This includes remuneration in the form of wages, wages not paid in the form of wages, but included in the cost of goods in the form of taxes and various charges, as well as profit. The state of emergency does not include the transferred value created at other enterprises (payment for raw materials, materials, energy, fuel and depreciation of fixed assets), i.e.
where are material costs; - depreciation deductions.
Conditionally pure products (CPP) – this is a newly created value, but taking into account depreciation charges, i.e.
Gross turnover (VO) characterizes the entire volume of products produced by the enterprise, i.e. represents the sum of the cost of production of all production divisions of the enterprise:
where is the cost of gross output i th workshop, rub., is the number of production workshops of the enterprise.
Intra-production turnover (IPR) is the volume of products produced for the internal needs of the enterprise,
,
where is the number of assembly shops of the enterprise.
Relative indicators characterize the dynamics of changes in absolute indicators: the growth rate of absolute indicators () and the growth rate of absolute indicators (). In this case, three periods are distinguished: planned, basic, reporting.
Gross output refers to general indicators of results economic activity organizations. It characterizes the enterprise's production volume in monetary terms. The cost of gross output is calculated as follows.
You will need
- Data financial statements for the period under review (Balance Sheet, Profit and Loss Statement).
Instructions
Determine the cost of products produced by all departments of the enterprise for the analyzed period (gross product turnover). For calculations, use the accounting data. Find the cost of manufactured and sold products for the period on line 020 “Product cost” of the Profit and Loss Statement.
Find, according to the financial statements, the value of work in progress balances at the beginning and end of the analyzed period. In the Balance Sheet, these figures are entered in lines 130 “Construction in progress” and 213 “Costs in work in progress.” Determine on line 214 of the Balance Sheet “Finished products and goods for resale” the value of the balances of finished products at the beginning and end of the reporting period.
Calculate the gross turnover of products produced by all departments during the period (VO). To the sum of balances of finished goods and work in progress at the end of the period, add the cost of goods sold and subtract the sum of balances of finished goods and work in progress at the beginning of the period. The calculation algorithm follows from the formula for calculating the balance of active accounts at the end of the period: Balance at the beginning + Income for the period - Expense for the period = Balance at the end of the period.
Determine from data accounting the cost of products produced by divisions of the enterprise for their own needs (BC). Review receipt documents or reports of work completed from auxiliary sites for the reporting period. For its own needs, an enterprise, for example, can manufacture containers or carry out major and current repairs of buildings.
Calculate the cost of the enterprise's gross output for the period using the formula: VP = VO - BC, where VP is the estimated value of the gross output, VO is the gross turnover of all the enterprise's products for the reporting period, BC is the cost of products produced by the enterprise for its own needs. Calculate this figure for the same period last year. Swipe comparative analysis, draw conclusions about trends in enterprise production volumes.
To determine price gross products, it is necessary to apply the factory calculation method. It consists in taking into account only that part products, which participated in the production once. This allows you to avoid double counting, because the company produces intermediate products, which are then recycled.
Instructions
There are several calculated values that determine the volume of production products at the enterprise. Most fully reflects this characteristic price gross products. Mathematically, it can be found in the form of the difference between two values of trade turnover: gross turnover and intra-factory (intermediate) consumption: VP = VO - VZP, where: VP - price gross products-VO – gross turnover; VZP – intra-factory consumption.
Gross turnover represents the total price final products of all workshops of the enterprise. It does not matter whether these products were sent directly to the market or transferred to other workshops as an intermediate material or semi-finished product.
Intraplant turnover is the total price semi-finished products or materials produced at the enterprise itself and intended for processing in another workshop. For example, intermediate spare parts or mechanisms for assembling a car or other equipment.
In size gross products may include data on the following elements for the reporting period: Finished products - Semi-finished products and products manufactured for final consumption, for example, spare parts intended for sale, and not for further assembly of the vehicle means - Works By major renovation equipment, since they are included in the concept of depreciation charges, and those, in turn, are material costs associated with the main production process - work in progress balances.
IN price gross products financial results are not included for: Defective products, including those sold at reduced prices - Industrial waste - Maintenance work, since these expenses relate to intra-factory turnover - Payment of non-production expenses: transport, telephone, building repairs, household needs, etc. .- Costs of materials for painting, tinting, nickel plating, etc. (while these works themselves are taken into account).
note
In the food industry, calculations usually use the gross turnover method to account for processed semi-finished products. For example, raw sugar can be duplicated in the cost of refined sugar.
Gross output is the cost of the overall result of the enterprise’s production activities for a certain period of time. Gross output differs from marketable output by the amount of change in work in progress balances at the beginning and end of the planning period.
Changes in work in progress balances are taken into account only at enterprises with a long (at least two months) production cycle and at enterprises where work in progress is large in volume and can change sharply over time. In mechanical engineering, changes in the remains of tools and devices are also taken into account.
Gross output (GP) is calculated using the factory method in two ways.
Firstly, how is the difference between gross and intra-factory turnover:
VP = V O -V N,
where В о – gross turnover; V n – intra-factory turnover.
Gross turnover – this is the cost of the entire volume of products produced over a certain period by all workshops of the enterprise, regardless of whether these products were used within the enterprise for further processing or were sold externally.
Intra-factory turnover – This is the cost of products produced by some and consumed by other workshops during the same period of time.
Secondly, gross output is determined) as the sum of marketable output (TP) and the difference in the balances of work in progress (tools, fixtures) at the beginning and end of the planning period:
VP = TP + (N n - N k),
where N n and N k is the value of work in progress balances at the beginning and end of a given period.
Unfinished production – unfinished products: blanks, parts, semi-finished products located at workplaces, control, transportation, in workshop storerooms in the form of stocks, as well as products not accepted by the quality control department and not delivered to the warehouse of finished products.
Work in progress is accounted for at cost. To convert work in progress balances into wholesale prices, two methods are used: I) according to the degree of readiness of work in progress based on the ratio of the labor intensity of work already completed and the labor intensity of the finished product; 2) according to coefficients characterizing the ratio of the cost of finished products in wholesale prices and the actual cost of the same products.
The expected balances of work in progress at the beginning of the planning year in the shops are determined from reporting data based on inventory.
At the end of the planning year, the standard for the balance of work in progress (N k) is calculated using the formula
N k = N day ´ C ´ T c ´ K r ,
Where N day – daily production output in physical terms;
T c – duration of the production cycle, days;
C – production cost, rub.;
Кг – readiness factor of work in progress.
The readiness ratio of work in progress is determined according to the methodology outlined above - by labor intensity or cost.
Gross output is calculated in current comparable prices, i.e. enterprise prices that are unchanged on a certain date. Using this indicator, the dynamics of total production volume, the dynamics of capital productivity and other indicators of production efficiency are determined.
Products sold characterizes the cost of the volume of products supplied to the market in a given period and subject to payment by consumers.
The cost of products sold is defined as the cost of finished products intended for delivery and payable in the planning period, semi-finished products of own production and industrial work intended for external sales (including major “repairs of own equipment and Vehicle, carried out by industrial production personnel), as well as the cost of selling products and performing work for its capital construction and other non-industrial enterprises on the balance sheet of the enterprise.
Cash receipts associated with the disposal of fixed assets, tangible current and intangible assets, the sale value of foreign currency assets, securities are not included in the proceeds from the sale of products, but are considered as income or losses and are taken into account when determining the total (balance sheet) profit.
The volume of products sold is calculated based on current prices without value added tax, excise taxes, trade and sales discounts (for exported products - without export tariffs). Products sold for industrial works and services, semi-finished products of own production are determined on the basis of factory contract prices and tariffs.
The volume of products sold (RP) according to the plan is determined by the formula
RP = O n + TP – O k,
where TP is the volume of marketable products according to the plan;
O N and O K – balances of unsold products at the beginning and end of the planning period.
The balance of unsold products at the beginning of the year includes:
Finished products in the warehouse, including shipped goods, the documents for which have not been transferred to the bank;
Shipped goods for which payment is not due;
Shipped goods not paid for on time by the buyer;
Goods are in safe custody of the buyer.
At the end of the year, the balance of unsold products is taken into account only for finished products in the warehouse and shipped goods for which payment has not yet arrived.
All components of sold products are calculated in selling prices: balances at the beginning of the year - in current prices of the period preceding the planned one; marketable products and balances of unsold products at the end of the period - in prices of the planned year.
In accounting it is highlighted products shipped and delivered locally by the customer and products sold, in this case, the moment of implementation is considered to be receipt Money to the supplier's bank account. An enterprise can choose one of the accounting policy options: determine profit either by the difference between the cost and the cost of shipped products (i.e., until the customer actually pays for them), or only after the customer pays for physically shipped products. The company has no right to change its accounting policy during the year.
Based on the volume of products sold, its total cost and profit from sales are calculated.
A number of enterprises plan and evaluate activities based on net production, which is determined by subtracting material costs and the amount of depreciation of fixed assets from marketable products, which in market conditions corresponds to the concept of “gross income.”
The essence of gross output in the agro-industrial complex system.
Gross agricultural production represents the value of the total product created as a result of the production of agricultural raw materials, its processing and bringing it to its final consumer form. In the agricultural sector of the agro-industrial complexunder gross output refers to the cost of products obtained as a result of growing plants, animals and their economic use for a certain period of time (day, month, quarter, season, calendar year, etc.).
Cost of gross output Agriculture comprises:
1. the cost of means of production spent in the process of production during of this period(of the year), i.e. from the value transferred to the product, created by past labor (the cost of material production costs, i.e. the cost of seeds, feed, fuel and other material resources, consumed in the production process);
2. newly created value by the labor of workers during a given period (year), or net agricultural products.
Gross agricultural output consists of gross output of crop production and livestock production.
Gross crop production includes:
1. the cost of gross harvest of agricultural crops;
2. the cost of growing perennial crops for agricultural purposes;
3. the value of the increase in work in progress (usually winter crops) from the beginning to the end of the year.
Gross livestock production includes the cost of animal rearing products, i.e. offspring, gain and live weight gain, as well as products obtained from economic use animals (milk, wool, eggs, etc.).
The volume of agricultural production can be determined for a calendar, agricultural year and other periods. For this, two indicators are used:
1. gross output determined using the gross turnover method, i.e., as a simple sum of raw crop and livestock products (characterizes the size of agricultural production);
2. gross output without recounting or final output(more accurately reflects the volume of products produced that can be used for non-productive consumption and accumulation within the enterprise and outside it).
Final products agriculture is calculated by subtracting from the gross output the cost of crop and livestock products consumed in the process of agricultural production in a given year.
The value of gross agricultural output is divided into:
1. the cost of material production costs, i.e.
Enterprise products: concept, cost indicators, competitiveness
the cost of seeds, feed, fuel and other materials used in the production process;
2. newly created value, or net agricultural products.
Clean products agriculture is defined as the difference between the gross output of a given period (year) and the cost of material production costs in the production process of these products. It is part of the country's national income.
Based on the nature of use, gross output is divided into two parts:
1. commodity (that part of the gross output that is sold by agricultural organizations to the outside (sold, given in exchange, for services, etc.));
2. non-commodity (used for on-farm needs, and in personal subsidiary plots of workers and employees - also for personal consumption (food)).
Main types It is customary to consider those products for which production is organized and operates (grain, flax products, sugar beets, potatoes, vegetables, milk, live weight gain of large cattle, pigs, eggs). They play a leading role.
Many crops and animal groups produce two or more types of products at the same time, which are called conjugated . Conjugate types are those products that can be obtained in parallel with the main ones. When growing flax, the main product is flax straw, associated - flaxseeds. In dairy production milk - main products, animal offspring - conjugated.
Products that are obtained simultaneously with the main products and which are not the purpose of production are called side .In crop farming, by-products include straw, green fodder, tops, etc., and in livestock farming - manure, bird droppings, fluff, feathers, etc.
Gross output of auxiliary sphere- the cost of the entire volume of work and services intended for the normal functioning of the agricultural sector of the agro-industrial complex during a certain period.
Gross output of the processing sector- the total cost of all types of final products produced by processing organizations of the agro-industrial complex during a certain period of time.
Gross output of trade and sales sector represents the cost of work performed and services for the preparation, delivery, sale of agricultural products and food and consumer goods created in the agro-industrial complex system.
Add to favoritesSend by email Gross profit- this is one of the main indicators characterizing the results of the company’s economic activities. Calculating gross profit - the formula is presented in our article - allows you to highlight promising areas of business activity and redistribute financial flows to obtain a more effective result. What does "gross profit" mean? Gross profit is the difference between revenue and costs. How to calculate gross profit (by what formula)? What items are used in the gross profit formula? Results What does the concept of “gross profit” mean? Gross profit is one of the intermediate types of profit shown in the income statement. financial results(clause 23 of PBU 4/99, approved by order of the Ministry of Finance of the Russian Federation dated July 6, 1999 No. 43n).
What is gross profit and how is it calculated
A balance sheet is a document about financial condition compiled for a specific date. The profit and loss statement reflects the financial results accumulated over a period of time (month, quarter, year), divided according to the principle of the type of costs incurred and income generated.
How to calculate gross profit (calculation formula)?
Let us describe the calculation algorithm according to the lines of the balance sheet:
- Net profit is listed on line 2400, and the amount of revenue is listed on line 2110.
- Compute the result of the private string 2400 and 2110.
- Multiply the resulting number by 100%.
- The result of the actions performed is the net profit rate.
In addition to Np.ch., in financial analysis apply the value of net profit margin. Profitability is an indicator of the effectiveness of economic activity.
In the case under consideration, it characterizes the amount of profitability of sales. The formula for calculating net profit margin or net profitability ratio looks like the ratio of net profit to the amount of revenue: Kch.r.
=
Pch ÷ V. The coefficient shows how much net income is generated per ruble of work, services or goods sold. Using the balance, you can calculate the value using the ratio of lines 2400 to 2110.
Which line shows gross profit on the balance sheet?
Most often, to determine sales efficiency, the net profitability indicator is calculated:
- NPM = Net Profit: Revenue.
These formulas determine the share different types profit in revenue. By analyzing the value of the coefficient over time, you can determine what changes have occurred in the organization’s activities.
Important Explanations for reporting Each type of financial report is accompanied by an explanatory note. It contains information:
- about the chosen method of accounting for fixed assets, inventory items;
- description of some balance sheet items (terms of debt repayment, rent payments, etc.)
Often an explanatory note gives more information O financial situation than reports. According to data from the balance sheet and f.
How to correctly calculate the net profit of an organization?
Formulas for calculating operating and gross profit Gross profit characterizes the efficiency of a business. The indicator is used to analyze any type of enterprise.
AttentionGross profit is determined by the formula: Pv = B – Seb, where:
- IN - total amount sales proceeds;
- Seb – cost of goods sold (work, services).
As can be seen from the formula, gross profit shows the amount of income received from sales, not including other income/expenses and income tax. Gross profit value in full reflects the results of the implementation process.
Operating profit allows you to see the financial result of the enterprise. The calculation formula consists of the difference between total income and expenses, production costs, and depreciation charges.
Sales profit: formula
Analytical accounting for the subaccount should ensure that each type of cost is broken down into separate accounts in such a way that it is possible to isolate the amounts for commercial expenses (packaging, storage, transportation and sales) of each type of product and administrative expenses (maintenance of the administrative and managerial apparatus).
Calculation of the cost of gross output at current sales prices in the Tundutovo agricultural enterprise in 2011.
Where is sales profit used in mandatory reporting forms? In mandatory reporting forms, the indicator is reflected as follows:
- profit from sales in the balance sheet - there is no line with this name;
- profit from sales in the income statement - line 2200.
The absence of a separate line (indicator) of sales profit in the balance sheet is due to the fact that the task of the balance sheet is to group the liabilities and assets of the organization according to the principle of their urgency.
Net sales in the balance sheet: line. sales volume on the balance sheet: how to calculate?
Because in these calculations it is necessary to calculate income from the markup for each item of goods. The formula for gross income is as follows: VD = N n + N p – N in – N to N n – markup on goods at the beginning of the month; N p – markup on goods that were received during the reporting period; N in – for retired goods trade margin; Nk - markup on goods that remained at the end of the reporting period.
Net profit: formula for calculating the balance sheet
Often the enterprise bears fixed costs, therefore the gross profit will be less than the marginal profit. TO fixed costs include rent, depreciation and utility bills. Gross profit is important to manufacturing enterprise, because it allows you to evaluate the magnitude and significance of the technological cost. The indicator must be taken into account when planning for a period of 1-3 years. Video - what is the difference between profit and gross income: (12 votes, average: 4.70 out of 5) Loading…
Gross output formula
The concept of gross output
Gross output can be distinguished from marketable output by the amount of change in the balances of work in progress (the beginning and end of the planning period), which is the only evaluative indicator of the company's activities.
The volume of gross output includes:
- Finished products,
- Work in progress, which is unfinished production that is subject to further processing.
- Change of semi-finished products balances.
The corresponding composition of gross output depends on the sectoral affiliation of the enterprise (production). For example, at machine-building enterprises, most often the gross output does not include work in progress and semi-finished products due to their small volume. In such situations, gross and marketable products are the same in composition, but may differ in price.
Gross output formula
The gross output formula can be calculated by summing the marketable output and the difference in the balances of work in progress (at the end and beginning of the reporting period).
Formula for gross output in general view as follows:
VP = TP + Nnp – Nkp
Here VP is gross output (in rubles);
TP – volume of commercial products (rub.);
Nnp and Nnp – the corresponding value of the balances of work in progress at the beginning and end of the period (rub.).
Features of calculating gross output
Accounting for changes in work in progress balances occurs at enterprises that are characterized by:
- long production cycle (from 2 months),
- large volume of work in progress, can change quickly over time.
The gross output formula can only be calculated in comparable prices. It is used in the process:
- Accounting and planning of production costs,
- Determining the needs for material resources,
- Calculation of the number of employees,
- Establishing the dynamics of products, including the proportions of development of industries.
Disadvantages of gross output
It should be noted that assessing a company's performance in accordance with the gross output formula has several disadvantages.
The main drawback of the formula is that the value of gross output is influenced, in addition to the balances of work in progress, by the cost of the objects of labor consumed in the production process.
Unjustified excess of work in progress, decrease in product quality and changes in its assortment create only the appearance of successful work of the company.
In addition, the gross output indicator does not create an incentive for organizations to reduce the material intensity of products, so it is often excluded from the list. assessment indicators company activities.
All indicators of production volume are determined in prices that include, together with the newly created value, the transferred cost of production assets (current and fixed assets).
Determining the value of the gross output of the ORGANIZATION
At the same time, the higher the material intensity of a product, the higher its price, therefore the greater the production volume in value terms. In order to eliminate this deficiency, enterprises calculate the net production indicator.
