Vary with changes in production. An equation of the behavior of the total costs depending on the change in the volume of production is drawn up. Self-test questions

6. An equation of the behavior of total costs is drawn up depending on the change in the volume of production.

Let us consider the mechanism of cost differentiation by the method of maximum and minimum points based on the plant's data.

Table 3.4 shows the initial data on the volume of production and costs for the analyzed period (by months).

Cost and production data

Table 3.4 shows that the maximum production volume for the period is 170 thousand tons of cement, the minimum is 100 thousand tons. Respectively, the maximum and minimum production costs amounted to 40,086 thousand rubles. and 59,780 thousand rubles. The difference in the levels of production volume is 70 thousand tons (170 - 100), and in the levels of costs 19694 thousand rubles. (59780-40086). The rate of variable costs per item will be 281.34 rubles. (19694: 70). The total amount of variable costs for the minimum production volume will be 28134 thousand rubles. (100 * 281.34), and for the maximum volume of 47828 thousand rubles. (170 * 281.34). The total amount of fixed costs will be 11952 thousand rubles. (40086 - 28134) or (59780 - 47828).

The cost equation will look like this:

Z = 11952000 + 281.34

Differentiation of costs by a graphical (statistical) method is carried out by building a line of total production costs. All data on the total costs of the firm are plotted on the graph (Fig. 3.6). By eye, a line of total costs is drawn. The point of intersection with the cost axis shows the level of fixed costs: 11952 thousand rubles.

Figure 3.6. Graphical method for finding the amount of fixed costs

The cost equation using the graphical method is as follows:

Z = 11952000 + 281.2 * X

Least squares cost differentiation is the most accurate because it uses all of the total cost data.

The algorithm and the results of calculations based on the data of the enterprise are shown in Table 3.5.

Table 3.5.

	Volume		Total

The variable cost rate will be:

Variable costs per average monthly production volume will be:

126000 * 281.6 = 35481.6 thousand rubles.

Then the fixed costs are:

47349 thousand rubles - 35481.6 thousand rubles. = 11867.4 thousand rubles.

The least squares total cost equation will look like this:

Z = 11867.4 + 281.6 * X

3.3. Analysis of the functional relationship between costs, production and profit. Determination of the threshold of profitability and "margin of financial strength" of the enterprise.

A feature of the "direct costing" system is the combination of production and financial accounting. According to the "direct costing" system, accounting and reporting at enterprises is organized in such a way that it becomes possible to regularly monitor data according to the "cost - volume - profit" scheme. The basic model for the report for the analysis of profit by enterprise data is as follows:

Sales volume, thousand rubles 750,000

Variable costs, thousand rubles 422400

Marginal income, thousand rubles 327600

Fixed costs, thousand rubles 105,510

Profit (net income), thousand rubles 222090

In the "direct - cost" system, in addition to the division of costs into fixed and variable costs, the category of marginal income is used.

An enterprise's marginal income (gross margin) is revenue minus variable costs. The marginal income per unit of output is the difference between the price of that unit and the variable cost of it. It includes not only fixed costs, but also profits. Margin analysis (break-even analysis) is widely used in countries with developed market relations. This is an effective method for solving interrelated problems, tracking the dependence of the financial results of a business on costs and production volumes.

Analysis "Cost - volume - profit", also called operational analysis, is an integral part of management accounting and serves to answer the most important questions that arise before the financiers of the enterprise at all major stages of its cash flow (see Figure 3.7).

Figure 3.7 shows a schematic diagram of the company's cash flow. In contrast to external financial analysis, the results of operational (internal) analysis may constitute a trade secret of the enterprise.

The key elements of the cost-volume-profit analysis are: operating leverage, profitability threshold, and financial strength.

The fragment with the involvement of the operating lever in Figure 3.7 is highlighted in bold lines. The action of the operational (production, economic) leverage is manifested in the fact that any change in sales proceeds always generates a stronger change in profit. In practical calculations, the ratio of gross margin (marginal income) to profit is used to determine the strength of the effect of operating leverage. This indicator in the economic literature is also referred to as the amount of coverage. It is desirable that the gross margin be sufficient not only to cover fixed costs, but also to generate profits.

For the analyzed enterprise, the impact force of the operating lever is 327,960 thousand rubles. : 222 450 thousand rubles. = 1.5. This means that with a possible increase in sales proceeds, for example, by 5%, the profit will increase by 5% * 1.5 = 7.5%; with a decrease in sales revenue by 10%, profit will decrease by 10% * 1.5 = 15%.

The indicator of the force of influence of the production lever determines how many times the profit increases with a 1% increase in revenue from product sales. Thus, knowing the data on the growth of revenue from sales of products and the strength of the impact of production leverage, it is possible to directly determine the growth of profits with an increase in the volume of production. The greater the share of fixed costs in the structure of total costs, the stronger the effect of the operating leverage.

It should be noted that the strength of the operating leverage is always calculated for a certain volume of sales, for a given sales proceeds. Sales proceeds change - so does the operating leverage. With a decrease in sales proceeds, the force of the operating leverage increases both with an increase and a decrease in the share of fixed costs in their total amount. Each percentage decline in revenue results in a larger and larger percentage decline in profits, with the formidable power of operating leverage increasing faster than fixed costs increase. With an increase in sales revenue, if the profitability threshold (cost recovery point) has already been passed, the force of the operating leverage decreases: each percentage of revenue growth gives a smaller and smaller percentage of profit growth (while the share of fixed costs in their total amount decreases). But with a jump in fixed costs, dictated by the interests of further increasing revenue or other circumstances, the enterprise has to pass a new threshold of profitability. At a short distance from the profitability threshold, the influence of the operating leverage will be maximum, and then it will begin to decrease again ... and so on until a new jump in fixed costs with overcoming a new profitability threshold.

All this turns out to be extremely useful for:

planning of payments for income tax, in particular, advance;

development of details of the commercial policy of the enterprise.

With pessimistic forecasts of the dynamics of sales, fixed costs cannot be inflated, as the loss of profit from each percentage of revenue loss may turn out to be many times greater due to the too strong effect of operating leverage. However, if an increase in demand for products is expected in the long term, then it is possible to abandon the regime of austerity on fixed costs, since the enterprise with a greater share of them will receive a greater increase in profits.

Thus, the following conclusions can be drawn:

the strength of the impact of the operating leverage depends on the structure of the assets of the enterprise, the share of non-current assets. The higher the cost of fixed assets, the greater the proportion of fixed costs;

high proportion of fixed costs narrows the boundaries of mobile management of ongoing costs;

the greater the strength of the operating leverage, the greater the entrepreneurial risk.

Effective management of current costs is impossible without determining the threshold of profitability (critical point, "dead center", payback point - such names are found in the economic literature).

The threshold of profitability is such a proceeds from sales at which the enterprise no longer has losses, but still does not have profits. The gross margin is exactly enough to cover fixed costs, and the profit is zero.

Known graphic and algebraic methods for calculating the level of payback.

To build a graph (Figure 3.8) and subsequent calculations, the following initial data of the enterprise were used (Table 3.6).

Table 3.6

Initial data of the cement plant for the reporting year.

implementation

Figure 3.8. Determination of the threshold of profitability.

Determination of the threshold of profitability graphically is carried out in the following sequence:

Direct sales proceeds are plotted using point A:

revenue = selling price * sales volume =

500.1500000 = 750 million rubles

The direct line of fixed costs is a horizontal line at the level of 105,510 thousand rubles.

The straight line of total costs is plotted using point B:

Total costs = Variable costs + Fixed costs

cost = Variable unit cost * volume

sales + Fixed costs = 281.6 * 1,500,000 +

105510000 = 527.91 million rubles.

The variable cost line can first be built separately and then simply raised to the height of the fixed cost.

Figure 3.8 clearly shows the located areas of possible profit and loss. The profitability threshold corresponds to the sales volume of 483,104 tons and the proceeds from sales of 241,552,198 rubles.

It is with such a volume of sales that the revenue exactly covers the total costs and the profit is zero.

Thus, every next ton of cement sold starting from 483104 will be profitable. That. using the profitability threshold, the payback period is determined. The lower the profitability threshold, the sooner the costs are recouped and vice versa = a high profitability threshold slows down the cost recovery.

As can be seen in the graph (Figure 3.8), the break-even volume of output (profitability threshold) is achieved when the total amount of costs and sales proceeds, or marginal income and variable costs are equal.

They make it possible to carry out measures to eliminate losses from rejects, reduce and most efficiently use production waste. SECTION 2 ANALYSIS OF FORMATION OF COSTS FOR PRODUCTION AND SALE OF PRODUCTS OJSC “UKRNIIO IM. A.S. BEREZHNY "2.1 general characteristics enterprises Full name - open joint-stock company"Ukrainian Research Institute ...

In one technological process production receive various types of products. With the conversion method, the prime cost of all products is first determined, and then the prime cost of its unit. 2. Estimation of costs for production and sale of products on the example of LLP "Flour of Kazakhstan" 2.1 Brief organizational - economic characteristic LLP "Flour of Kazakhstan" Limited partnership ...

As a result, the quality of financial management decreases to a dangerous level that threatens a complete loss of control over the enterprise. In recent years, there has been a tendency of growth in the costs of production and sales of products. Increase in the cost of production leads to the rise in the cost of raw materials, materials, fuel, energy, equipment, an increase in interest rates for using a loan, an increase in tariffs ...

This note was written in preparation for the course.

When in context management accounting talk about the behavior of costs, they mean how the amount of costs changes depending on fluctuations in the level of activity. The level of activity can be measured in various ways. For example, the number of units produced, the percentage of equipment power used, the number of hours worked ...

Understanding the cost behavior model allows you to predict activities and take other management decisions.

Permanent called the costs incurred during the accounting period, which [within certain limits of the volume of output] do not depend on the level of activity (Fig. 1).

Fixed costs incurred in relation to a certain period of time... For example, renting an office or warehouse, the cost of an Internet channel, wage manuals.

Rice. 1. Fixed costs

Download note in format, examples in format

In fact, fixed costs do not change only for the relevant level of activity. For example, as long as the output does not exceed a certain limit, we need only one production line... That is, fixed costs change in steps (Fig. 2).

Rice. 2. Step change of fixed costs

Forecasting outside of the area in which a certain cost behavior has been identified must be approached carefully!

If you build a dependency fixed costs per unit of production(and not the total fixed costs, as in Fig. 1 and 2), then we get something similar to the graph shown in Fig. 3.

Rice. 3. Fixed costs per unit

This graph reflects the fundamental property of business - economies of scale.

Economies of scale- decrease in specific [per unit of production] fixed costs with an increase in the level of activity. We will show later that economies of scale are limited, that is, the curve passes through a minimum, after which an increase in the level of activity leads to an increase in unit fixed costs.

Variables are called costs that change with a change in the level of activity. For example, materials, agency fees, direct labor costs. We will analyze the relevance later. different types variable costs.

Variable costs are often depicted as a line graph (Figure 4), although, as a rule, variable costs behave non-linearly. Managers need to be well aware of the assumptions on which their models are built so as not to become hostage to those assumptions.

Exercise. Based on the data in Fig. 4 Plot the unit variable cost [variable cost per unit of output] versus activity level.

Rice. 4. Linear variable costs

Solution. The slope of the graph in Fig. 4 determines the value of variable costs per unit of output. The production of 4 units required 600 rubles, therefore, the production of a unit of production will require 150 rubles.

Rice. 5. Variable unit costs

Exercise. Give examples of costs corresponding to models A and B (Figure 6).

Rice. 6. Non-linear variable costs

Answer. For example, type A costs: a progressive system of agency remuneration (than more sale, the higher the percentage of remuneration); type B costs: lower purchase prices while increasing the volume of purchases.

Conditional variables[nominally fixed] are costs that consist of both fixed and variable components, and which are partially influenced by changes in the level of activity. For example, rent structured into fixed and variable portions; the latter includes utilities(consumption of water, electricity), the size of which depends on the level of activity (Fig. 7). Conditional variable costs can behave differently (Fig. 8). Until a certain level of activity is reached, costs remain unchanged and then begin to rise. For example, tariffs for Internet access can behave this way: monthly payment + payment for exceeding traffic.

Rice. 7. Conditional variable costs. The variable part is present all the time.

Rice. 8. Conditional variable costs. The variable part is "switched on" from a certain level of activity.

In practice, the cost behavior model shown in Fig. 7 is the most common. Consider an example of analyzing this cost behavior. To begin with, the data of past periods (Fig. 9) are plotted on the graph (Fig. 10), then an approximating line is drawn. The point of intersection of the line with the y-axis gives the value of the fixed costs. The slope of the line is the amount of variable costs per unit of production. If we display the signature of the trend line on the graph, then we will immediately see the desired values: fixed costs = 8453 thousand rubles, variable costs per unit of production = 185 thousand rubles.

Fixed costs include costs that do not depend on the change in the volume of production or change abruptly, while variable costs change in a certain dependence on the volume of production. Fixed and variable costs are graphically presented in Figure 1-4. Fixed costs are divided into three groups:

- completely fixed costs (inactivity costs), which are possible even when there is no activity. These include, for example, depreciation of fixed assets;

- fixed costs to ensure the activities of the enterprise, which are produced only when they carry out activities.

For example, the costs of wages for general plant personnel, electricity costs, including lighting of premises;

Figure 1 - Dependence of the volume of fixed costs on the volume of production

Figure 2 - Dependence of fixed costs per unit of production on the volume of production

- conditionally fixed costs, not changing until a certain volume of production is reached.

With the subsequent growth of production volume, these costs change abruptly. This happens when the maximum level of capacity utilization is reached, in the face of market demands for increasing production volumes.

Then the company purchases new equipment and builds additional buildings. This, in turn, increases the cost of fixed assets and abruptly increases the cost per unit of output, increasing the amount of depreciation deductions (Fig. 3). When the maximum possible volume N1 is reached, new capacities are introduced and the unit cost of the product increases from C1 to C1 ", and so on.

Figure 3 - Dependence of the volume of conditionally fixed costs on the volume of production

Figure 4 - Dependence of conditionally fixed costs per unit of production on the volume of production

Variable costs are classified as (Figures 6 and 7):

- proportional variables that change in direct accordance with the increase or decrease in the volume of production;

- regressive variables that grow more slowly than the volume of production;

- progressive variables increasing faster than production expanding.

The total costs of the enterprise are made up of the sum of variable and fixed costs, which is graphically shown in Fig. 7.

Total total costs for the production of products (Z) can be represented in the form of the following formula:

where A is the sum fixed costs;

B is the rate of variable costs per unit of output;

VBП is the volume of production.

Then unit cost (Zed) should be written as

1 - progressively variable costs;

2 - proportional-variable costs;

3 - regressive variable costs

Figure 5 - Dependence of the volume of total costs on the volume of production

Fixed costs (FC)- these are costs, the value of which does not change with a change in the volume of production.

These are the previous obligations of the enterprise (interest on loans, etc.), taxes, depreciation charges, insurance premiums, rent, equipment maintenance costs, salaries of management personnel and specialists of the company, etc. Fixed costs exist even if the firm does not produce anything, i.e. at zero production.

Average fixed costs(AFC) is a fixed cost per unit of production on average.

AFC = FC / Q,

where Q is the volume of production

Hence it follows that with an increase in the volume of production, AFC will decline. Variable Cost (VC)- these are costs, the value of which changes with a change in the volume of production.

Variable costs can change quickly and easily within an enterprise as output changes. Raw materials, materials, energy, hourly wages are examples of the variable costs of most firms. From specific situation depends on which costs are fixed and which are variable.

Average Variable Cost (AVC)- are determined by dividing variable costs by the volume of output.

AVC = VC / Q

Consequently, AVCs reach a minimum when technologically optimal size enterprises. Average variable costs are needed to determine the efficiency of the firm and determine the development prospects.

The total amount of variable costs varies in direct proportion to the volume of production. But the increase in the sum of variable costs associated with an increase in production per unit of output is not constant. As optimal production volumes are achieved, there are relative savings in variable costs. But further expansion of production leads to a new increase in variable costs. This behavior of variable costs is due to the law of diminishing returns.

The sum of fixed and variable costs for any volume of production forms total costs (TC)- the amount of cash costs for the production of a certain type of product.

TC = FC + VC

With zero production total costs are equal to the firm's fixed costs.

TC = f (Q)

TS is a function of the volume of output.

The distinction between fixed and variable costs is of great importance to the entrepreneur. He can manage variable costs, change their value during short term by changing the volume of production. Fixed costs are inevitable, not subject to the entrepreneur's current control and must be paid regardless of the volume of production.

Average Variable Cost (AVC) decrease due to increasing marginal returns, but then begin to increase due to diminishing marginal returns.

With small volumes of production manufacturing process is expensive and inefficient, since not enough variable resources are connected to the firm's equipment, and variable costs per unit of output are low. More full use capital equipment, a high level of qualifications of workers will provide the company with an increase in production efficiency.

Average total costs (ATC) - are determined by dividing the total costs by the volume of production

ATC = TC / Q,

or by summing the average fixed and average variable costs

ATC = AFC + AVC = (FC + VC) / Q.

The concept of "average costs" is important for the analysis of the firm. Comparison of average costs with the level of the market price (P) allows you to determine the place of the firm in the market and the profitability of its work.

To achieve maximum profit, you need to determine required size release of products. Consider another category of costs - marginal costs (Table 5.2).

Marginal cost (MC)- an increase in the production costs of an additional unit of a product; equal to the change in total cost divided by the change in output.

They are equal to the change in total costs caused by the production of each additional unit.

MS = TS / Q

Where Q = 1 unit

Therefore, MTS = TC / Q = VC / Q

A mirror image of the change in marginal cost is the trend in marginal productivity.

Ultimate performance- change in the total volume of production as a result of the sale of an additional unit of the produced product.

2. Planning and costing.

Grouping costs by economic elements and articles of the calculation is reflected in the enterprise, respectively, in the cost estimate and cost estimate.

Production cost estimate (production estimate) is used to calculate the cost of gross, commodity and products sold... It is the basis for the development of a balance of income and expenses of the enterprise, the formation of operational financial plan(payment calendar), planning of product sales and profits.

According to the sequence of formation of the cost of a unit of production, they are distinguished technological, workshop, production and total cost.

For economic assessment options new technology and choosing the most effective of these options is calculated technological (operational) cost.

1. Technological - includes all costs directly related to the production of a specific type of product

2. Workshop - includes the technological cost and costs of the workshop

3. Manufacturing - this is the shop floor plus the costs associated with the management and maintenance of the enterprise

4. Full - reflects all the costs associated with the manufacture and sale of products, ie. production cost plus non-production (commercial) costs.

5. Individual - reflects the costs of one enterprise for production and sale.

As you know, the price is the monetary expression of the value of the goods (products, works, services). The price is formed by the market depending on supply and demand.

It is believed that the main factors affecting the price level in a market economy are supply and demand.

Production costs affect competitive prices only to the extent that they affect the supply curve. In a market economy, when prices are limited, supply and demand are not equal, since a "black market" appears and a non-price mechanism for rationing production and consumption is formed.

In a market environment, economic justice is established through the tax system, and efficiency through the market.

In a market economy, the process of price formation includes a number of stages (Fig. 1).

Rice. 1. Price formation

Stage 1. Statement of the pricing problem. An enterprise economist must answer the question: what is desirable to achieve with the help of a price policy for goods (works, services)? For example, a company would like to use the price: to increase sales; capture the market; achieve the stability of the range of products; reduce production costs; improve product quality; get the maximum profit, which is typical for prestigious goods, etc.

Stage 2. Determination of demand for products (goods, works, services). It is not the capacity of the market that is determined, but the volumes of sales of goods at different price levels. Graphically, the dependence of sales on the price level is shown in Fig. 2.

is. 2. Dependence of sales on the price level

The price elasticity graph shows how much the volume of goods sold decreases with an increase in prices for them, how much it can increase with a decrease. It follows from this that the maximum sales volume at the minimum price is not always good, as is the maximum price with the minimum sales volume.

The supply and demand elasticity (or price elasticity) is the quantitative change in supply and demand in response to price changes. Determined using the coefficient of elasticity:

where is the coefficient of elasticity;

Supply and demand ratio.

The following classic variants of the development of the elasticity of demand are possible:

· Elastic demand - an increase in demand with a decrease in prices leads to an overall increase in producer income;

· Single elastic demand - a decrease in prices leads to an increase in demand and output while maintaining income;

· Inelastic demand - the rate of growth of output and income is less than the rate of decline in prices.

The elasticity of demand is determined for individual goods, which are divided into goods with inelastic and elastic demand.

For the goods of the first group, the sales volumes hardly change with the rise in prices. This group includes:

· Essential goods (bread, salt, etc.);

· Goods for which there is no substitute or which are produced by a monopolist (cars, etc.);

· Products that consumers are used to and find it difficult to change their habits;

· Goods, the increase in prices for which is justified by an increase in quality or inflation.

Elastic demand goods are characterized by a strong dependence of the volume of sales on the level of prices: when prices rise, the volume of sales decreases sharply (for example, luxury goods, jewelry, etc.).

This dependence is shown graphically in Fig. 3.

Rice. 3. Dependence of sales volumes on the price level

Using the resulting curve, an enterprise can determine in advance the consequences of various options for its commercial activities and choose the most appropriate one depending on the saturation of demand (or the presence of competitors), the emergence of stocks of unsold goods or the need to reduce prices, etc.

Stage 3. Cost assessment, which includes the search for ways to reduce the cost of products (works, services) through various organizational, technical and economic measures.

It should be borne in mind that the form of the supply elasticity curve depends on the cost price level, which can be seen from Fig. 4.

Rice. 4. Dependence of sales volumes on the price level with additional investment

The graph confirms that the higher the price of a product, the larger quantities the manufacturer produces this product. At the same time, an increase in volume requires additional investments, and their source at the enterprise can only be the profit of the enterprise itself. In other words, the lower the cost of production, the greater the profit, the more opportunities to increase the volume of production.

At this stage, you should also analyze the dependence of gross income, cost and production level (Fig. 5).

Rice. 5. Dependence of gross income, cost and production level

As you can see, the curves of cost price and gross income intersect twice. As a result:

Zone 1: the cost curve is higher than the gross income curve, the result is a loss (this is the start of production, development new products);

Zone 2: the intersection of the curves is the break-even point, the gross income curve is higher than the cost curve.

The data confirm that the breakeven point of production is highly dependent on the selling price.

Example 1

The conditionally fixed costs at the enterprise are 40 thousand rubles, the conditionally variable costs are 60 rubles. per unit of production. It is necessary to calculate how many items are required to be manufactured in order to recover all costs. Calculations show that the volume of production depends on the selling price (Table 1).

Table 1. Dependence of the volume of production on the selling price

Table data. 1 clearly show the dependence of the break-even point on the selling price. It is logical to make 500 units of products at a price of 140 rubles. per unit, but is it possible to sell the entire volume at this price? For this, it is necessary to take into account the elasticity of demand and the state of the market (Table 2).

Table 2. Elasticity of demand and market conditions

The data indicate that it is most profitable to produce 800 units of products at a price of 120 rubles, but even this price must be set with extreme caution: if an enterprise on the market is a monopolist, then such a price is acceptable; if there are competitors, then you should analyze the situation and move on to the next stage.

Stage 4. Analyzing the prices and products of competitors is one of the difficult stages, since the issues of pricing at the enterprise are trade secret... This section has a specific purpose: to determine the so-called price of indifference (the price at which the buyer does not care whose product to buy). Having determined this price, the company starts from it and decides what and how to do so that the buyer overcomes this indifference due to the quality of the products, expanding the service, extending the warranty period, changing the terms of payment, etc.

Stage 5. The choice of the method of setting prices. There are a number of methods for setting prices, that is, ways of setting prices for various goods (works, services). Currently, the following price strategies are mainly used:

· Low production and sales costs;

· The uniqueness of the characteristics of the goods (products);

· Mixed (from the two previous approaches);

· Devices;

· Cost-marketing.

The low-cost strategy involves reducing costs while increasing production, saving resources, reducing indirect and irrational costs. The main thing with this strategy is to achieve a low price for standard goods (products). This strategy changes depending on the market situation. Various cost tactics apply:

· If the share of the enterprise in the market is significant and there is an opportunity to get the maximum profit, then the main thing is to reduce operating costs and effectively improve an already well-developed product;

If the market share is small, then an intensive innovation activity, the technical and technological capabilities of production are being updated, capital investments are increasing, the range of products is being improved, the costs of design, advertising, and sales are increasing.

Strategy of uniqueness of characteristics product involves giving unique features to the product, for which there is a surcharge. The introduction of a margin is most often provided due to the quality characteristics of the product (durability, reliability, etc.), as well as for the design, high quality customer service, uninterrupted supply of spare parts, prolongation of the warranty period and quality of after-sales service, etc.

A blended strategy involves the development and implementation of a cost-cutting program while introducing and taking into account the uniqueness of product characteristics.

The adaptation strategy involves following the leader: find out the price of the main competitor and follow him. This method is called "foolish following a competitor." It is typical for small enterprises and is the most dangerous, since, following a competing leader and not knowing its production capabilities, it is easy to find yourself in a difficult financial situation... This method assumes that it is necessary to foresee the possibility of reducing prices by competitors, to calculate options for response actions: maneuvering production capacities, nomenclature and product range; production stocks; employment level; changes in the price structure; packaging finished products etc.

A cost-effective marketing strategy is one of the most difficult methods, but it is the most reliable because it includes the analysis and implementation of measures to reduce production and distribution costs and pricing, taking into account marketing tactics.

It should be noted that cost reduction is the main focus of any pricing strategy. At all enterprises, they are very demanding regarding the accounting of overhead costs - for the repair, maintenance and operation of equipment, depreciation deductions, for the maintenance of administrative and managerial personnel, advertising, interest to banks, social contributions, etc.

In practice, two methods of direct price calculation are used - average cost and marginal (marginal). Average cost - calculation based on the totality of all cost elements (materials, labor, operational, administrative, marketing, depreciation). The margin is applied based on the assessment of additional costs for the release of an additional unit of production:

where M s - the value of marginal costs;

ΔЗ is the increase in total costs;

ΔОП is an increase in the volume of production.

Changes in the cost structure of firms (changes in labor and overhead shares) lead to a preference for the marginal approach.

In accordance with the marginal approach, the price (P) consists of fixed costs (Z post), variable costs (Z per) and profit (P):

C = Z post + Z lane + P.

Fixed costs calculated per unit of production change upward or downward when the volume of production changes. These include rent, interest on a loan, depreciation, and administrative expenses.

Variable costs depend on the volume of production and change in direct proportion to the change in the volume of production. Variable costs per unit of output are constant. These include the cost of raw materials and supplies, wages of production workers, etc.

To determine the price by the margin method, the margin profit (MP) is calculated:

MP = C - Z lane or MP = Z post + P.

The break-even point (TBU) is determined:

The break-even price (TS TBU) is calculated:

where OP is the volume of production in natural units.

The company, having calculated the break-even price, based on its profitability, customer, sales region and a number of other factors, sets the required selling price for consumers.

Example 2

Sales volume - 4800 thousand rubles, variable costs - 3200 thousand rubles, fixed costs - 1100 thousand rubles, profit - 500 thousand rubles, production volume - 600 units.

In our example, the margin profit is 1600 thousand rubles. (4800 - 3200 = 1600 thousand rubles or 1100 + 500 = 1600 thousand rubles).

Coverage ratio - 0.333 (1600 thousand rubles / 4800 thousand rubles).

We determine the break-even point or the so-called threshold revenue: 1100 thousand rubles. / 0.333 = 3303.3 thousand rubles.

We calculate the break-even price: 3303.3 thousand rubles. / 600 units = RUB 5505.5

Using the above indicators, the company can easily determine the selling price and get the desired profit.

Example 3

The enterprise plans to sell 3000 units of products. Average variable costs for the production and sale of one product are 800 rubles, fixed costs - 1.3 million rubles. The company plans to make a profit of 2 million rubles. At what price to sell the product to ensure the projected profit?

We find the marginal profit as the sum of fixed costs and expected profit: 1.3 million rubles. + 2 million rubles. = 3.3 million rubles.

Determine the marginal profit per product (MP unit). To do this, we divide the amount of the marginal profit by the number of products sold: 3.3 million rubles. / 3000 units = RUB 1100

We calculate the price of the product (C ed). To do this, add the average marginal profit per product to the average variable costs: 800 rubles. + 1100 rub. = 1900 RUB

We check the performed calculations. We calculate the volume of sales at a set price by multiplying the volume of sales by the price of the product: 3000 units. × 1900 RUB = 5.7 million rubles.

We determine the amount of variable costs for the entire volume of sales: 800 rubles. × 3000 pcs. = 2.4 million rubles.

We calculate the marginal profit, subtracting the amount of variable costs from the total sales volume: 5.7 million rubles. - 2.4 million rubles. = 3.3 million rubles.

We calculate the expected profit (P ex), for which we subtract fixed costs from the amount of the marginal profit: 3.3 million rubles. - 1.3 million rubles. = 2 million rubles.

As you can see, selling products for 1900 rubles. per product, the company provides the expected profit.

The performed calculations confirm the advisability of using the method of the marginal approach and calculating the break-even point, which is an important element of management accounting and allows you to form a flexible pricing system of the enterprise.

Currently, in pricing practice, there are two main methodological approach:

· Determination of the base price, that is, prices without discounts, margins, etc .;

· Determination of the price taking into account the specified elements - discounts, markups, etc.

When determining the base price, the pricing methods shown in table are most often used. 3.

Table 3. Pricing methods, their advantages and disadvantages

Method	Advantages	disadvantages
Full cost method	Provides full coverage of variable and fixed costs and the receipt of projected profit	Elasticity of demand is not taken into account, cost reduction at the enterprise is not stimulated
Price reduction method based on reduced costs	Provides the choice of the most profitable nomenclature and assortment; formation of additional costs	Difficulty in clearly allocating fixed and variable costs across the product range
ROI Method	Paying is taken into account financial resources, interest for a loan	High interest rates for loans and their uncertainty, especially in the context of inflation
Return on assets method	Accounting for profitability certain types assets by the issued nomenclature, which ensures a certain level of return on assets	Difficulty in determining the employment of individual assets by nomenclature
Method marketing assessments	Taking into account market conditions and assessing customer reaction	A certain convention of quantitative estimates

Enterprises most often use the full cost method and the method of determining the price based on the reduced costs.

Example 4

The enterprise produces 10 thousand units of products, the costs of production and sale are shown in table. 4.

Table 4. Indicators of production

The full cost method assumes that the necessary rate of return is added to the sum of full costs, that is, all variable and fixed costs, which should cover all production and sales costs and provide the desired profit. The method is widely used in many industries with a large range of products and the release of new types of goods (products).

The calculation of profitability (P) is determined as the ratio of the desired amount of profit to the total total costs. The profitability is calculated as follows:

For our example, it will be 20% (124,000 / 620,000 × 100%).

Price (P) is calculated using the following formula:

In our example, the price will be 74.4 rubles. (62 + 62 × 20/100).

To determine the price of individual products (goods, works, services), the full cost method can be calculated using the following formula:

We get the same figure - 74.4 rubles. (62 rubles / (1 - 16.7)).

At the same time, the company can include in the price profitability, which it considers acceptable for itself. If it is impossible to enter the market with this price, then you should first of all reduce your costs and provide for a different profit.

The reduced cost pricing method provides that a profitability is added to the variable costs, which covers all fixed costs and provides a profit. In recent years, this method has been widely used in many industries at enterprises where the "direct costing" system has been introduced, that is, the costs are divided into fixed and variable ones.

P = ((P standby + C total + C ka) / C lane) × 100%.

The profitability will be 191.8%: (((124,000 + 190,000 + 175,000) / 255,000) × 100%).

The price is determined by the formula:

C = C floor + C floor ×.

The price is 74.4 rubles. (25.5 + 25.5 × 191.8 / 100).

As you can see, the price set by these methods is the same. Since the same initial data are used, and when using different indicators to calculate (full costs or fixed costs) per unit of production, the difference is compensated for by different levels of profitability.

The method of return on investment assumes that the total cost of production must ensure a return not lower than the cost of interest on a loan.

The method of return on assets provides that a percentage corresponding to the return on assets, which is set by the enterprise itself, is added to the total costs of production and sale of products.

The calculation of the price by this method is carried out according to the formula:

where C is floor. units - total costs per unit of production, rubles. cop .;

С act - the value of the assets of the enterprise, rubles;

RP expect - the expected sales volume, in natural units.

The method of marketing estimates provides for setting prices depending on the proposals received at the auction, in the competition. The winner is the one whose offer price provides an acceptable time frame for the work, the required quality and a reasonable price that ensures a profit. This method is used in the selection of executors of the state order, socially significant works.

In practice, other methods of pricing are also widely used (for example, the method of pricing based on profitability of sales). The price is determined by the full cost method, and the profitability is determined by the formula:

The method of pricing on the basis of gross profit provides for the calculation of prices also according to the method of full costs, and the calculation of profitability is carried out according to the formula:

Certain industries (chemical, light, etc.) widely use the pricing method by relanga, that is, the life cycle of the product is planned (introduction, growth, maturity, decline), and the price of the product is set according to the timing of its actual development. The need to use this method of setting prices is associated with the requirement to observe and constantly monitor the passage of the product on the market, and for this, the ratio of demand and price is taken into account and, if necessary, changes.

Relangi method allows:

· Change the physical characteristics of the product;

· Change performance indicators;

· Make a symbolic change of indicators (for example, change the year of product release);

Change the product at the expense of additional services(advising, expanding service and etc.);

· Update the product.

It should also be borne in mind that currently, the life of durable goods is artificially reduced due to design changes. In addition, the range of products is expanding and at the same time the trade network is changing and expanding.

In industries where it is possible to take into account changes in the technical and economic parameters of products, parametric methods of price formation are widely used.

The essence this method consists in the fact that various parameters of the product are taken into account (weight, productivity, power, volumes, consumed electricity, maintenance costs, production costs, etc.) and compared with the base case.

The price by the parametric method (C p) is calculated by the formula:

where Pi n and Pi b - respectively the value of the i-th parameter of the new and basic goods;

Ц i - unit price of the i-th parameter;

n is the number of parameters taken into account.

In this case, the unit price of the i-th parameter is determined different methods:

· The use of expert assessments of the significance of the parameters by points;

· Determination of the unit price for the main parameter of product quality;

· Establishing the dependence of the price on changes in several fundamental quality parameters for the product.

In the practice of enterprises when making pricing decisions the concepts of minimum and maximum prices are often used.

The minimum price (C min), or the price of the lower limit, is the price that minimally covers the full costs of the enterprise for the production and sale of products (C floor), that is, C min = C floor.

This is the long-term floor of the price, and if the price covers only the variable part of the cost of production, then this is the short-term floor of the price, which provides the enterprise with zero marginal income.

The maximum price (P max), or the price of the upper limit, provides not only full coverage of production and sales costs, but also the possibility of deducting funds for the development of production and social security of the working team, as well as the fulfillment of all tax obligations to the state.

Thus, the market price (C p) must be within the minimum and maximum prices, that is, C min< Ц р < Ц max .

Stage 6. Establishment of the final price levels and the rules for its future changes. This stage of pricing should solve two problems:

· create own system discounts for buyers and learn how to use it;

· To determine the mechanism for adjusting prices in the future, taking into account the stages of the product's life and inflationary processes.

The implementation of planning, control and regulation of costs is directly related to their dynamics depending on changes in the volume of production, dividing costs into variable, constant, semi-variable and semi-permanent.

Different costs behave differently depending on changes in the volume of production. Without understanding this dependence, it is impossible to create an effective cost management system at the enterprise.

Typically, costs are categorized into fixed and variable costs. However, there are certain types of costs that have both variable and constant properties.

Variables the costs depend on the change in the volume of production. With an increase in output, the amount of variable costs increases, and vice versa.

The increase in variable costs with an increase in production can be as follows:

■ directly proportional (linear);

■ faster than the growth in production;

■ less rapid than the growth of production volumes.

If the total variable costs depend on the volume of production, then calculated per unit of production are constant. Variable costs include direct costs, both material and labor.

Fixed costs in total, they do not change with changes in the level of business activity, however, calculated per unit of output, they change with changes in production volumes. Fixed costs include rental costs, the amount of accrued depreciation, property tax costs, etc. Semi-permanent costs are of particular importance. At a certain interval of values of the volume of output, their sum remains unchanged, and when the boundaries of this interval are reached, the amount of costs increases. For example, to increase the number of products produced at the site, it is necessary to involve another master. The salary of the master will increase the amount of fixed costs abruptly.

Fixed costs in their behavior differ from variable costs. However, it should be borne in mind that fixed costs remain unchanged within the relevant level of output (the level within which it is possible with a certain degree of confidence to judge the activity with which the company intends to work). If we consider a very long period, then all costs tend to change, fluctuate. Significant change in production capacity, equipment, labor resources and others production factors leads to an increase or decrease in fixed costs. Thus, costs are constant only within a limited period of time. For purposes operational planning and controls use an annual time span. The fixed costs are expected to remain constant within this period.

Some costs cannot be classified as either variable or fixed. Semivariable cosls have both variable and fixed cost components. Some of these costs change when the volume of production changes, and some remain fixed for a certain period of time. Examples of such semi-variable costs include telephone charges. Part of these costs is a fixed amount of subscription fees, and the other part - the amount of charges for long distance and international calls, is variable. Such costs are analyzed not as a whole, but their individual constituent components and accounted for in the group of fixed and variable costs.

The relationship between costs and production is shown in Fig. 14.2.

Rice. 14.2. Dependence of costs on production volume: 1 - variable costs; 2 - semi-variable costs; 3 - fixed costs

Since the graph of each dependence is a straight line, the function can be described by the equation

where y - the total amount of costs for the volume of production, g;

a - the coefficient of change in costs relative to the volume of production;

B - component of fixed costs. Or:

where ПЗ - fixed costs;

PrZsd - variable costs per unit of output; X - volume of production.

The equation of the three straight lines shown in Fig. 14.3 is as follows:

1) for variable costs - 3 = OH;
2) for fixed costs - 3 = 300,000 rubles;
3) for semi-variable costs - 3 = 100,000 rubles. + 2X. Let's plot the cost versus volume graph based on the following data:
1) fixed costs in the current period are 300,000 rubles, regardless of the volume of production for this period;
2) variable costs are 4000 rubles. per unit of production;
3) semi-variable costs have a constant component of 100,000 rubles. for the same period and variable component - 2000 rubles. per unit of production.

Since semi-variable costs can be divided into fixed and variable components, we get a fixed component - the sum of fixed costs for the period, and a variable component - the sum of variable costs per unit of output. Thus, the permanent component in the end is equal to 400,000 rubles. (300,000 + 100,000), and the variable component is 6,000 rubles. per unit products (4000 + + 2000). Thus, the equation of the graph of the dependence of the total amount of costs on the volume of production has the form:

3 = 400,000 + 6,000 x X.

For example, when X = 200 pcs. the costs will be: 400,000 + 6,000 x 200 = 400,000 + 1,200,000 = 1,600,000 rubles.

Note that in this equation, partially variable costs as an independent component no longer exist. The variable and constant components were derived from the partial variable costs, which were then added to the variable and fixed costs.

The graph of the ratio of the total cost and volume of production is shown in Fig. 14.3.

Rice. 14.3.

If the volume is expressed by the number of units sold (we denote it X), and the selling price of a unit is denoted as ПЦ, .Л, then the total amount of proceeds (В) will be equal to:

Thus, if we take the selling price of a unit of production in the amount of 9,000 rubles, then the proceeds from the sale of 200 products will amount to 1,800 thousand rubles. According to our example, the dependence of costs - volume - profit is shown in Fig. 14.4.

Rice. 14.4.

In the theory and practice of domestic accounting, the grouping of costs for variables and constants has not been given due attention for a long time. Meanwhile, in countries with developed market economy this division is the basis modern systems cost management.

Modern management systems are based on the analysis of the relationship between changes in production volume, revenue from product sales, costs and net profit. This analysis is called operational (from the English CVP - Cost - Volume - Profit, or costs - volume - profit). CVP analysis is the main tool for operational financial planning within an enterprise, it allows you to track the dependence of the financial results of an enterprise on costs, production volumes and prices.

The key elements of operational analysis are:

1) the threshold of profitability;
2) operating lever;
3) a margin of financial strength.

Profitability threshold. CVP analysis allows you to determine the revenue at which the company no longer has a loss, but does not yet receive a profit. This amount of revenue is called the tipping point. To find it, you can use three methods: graphical, the method of formulas and margin profit.

In Figure 14.5, the point at which the sales revenue line crosses the total cost line (K) is the critical point at which the total revenue is equal to the total cost (equilibrium point). The equilibrium point itself is of little practical importance, since attention is usually drawn to the profit-making zone. The area below the tipping point is the loss area. The area above is the profit area. Thus, the tipping point is the point from which the enterprise begins to make a profit. The breaking point is also called the break-even point or the profitability threshold.

Equilibrium point is determined using formula 14.4.

If revenue (B) with volume X is equal to B = TsRel x X, and the total cost (3) with the volume X is equal to 3 = PZ + (Pr3, d x X), then at the point of equilibrium these two values should be equal. The equation takes the following form:

Based on this equation, we can derive the basic equation for finding the critical point:

In other words, the equilibrium point can be found by dividing the sum of fixed costs by the difference between price and variable costs per unit of output.

Let's consider an example of using this equation to find a critical point.

Example 14.1

Let us assume that variable costs are 1000 rubles. per unit of production. Fixed costs - 400,000 rubles. in a year. The selling price of a unit of production is 1800 rubles. Using this information and denoting through X sales volume in units, we get

1800 x X = 1000 x X + 400 000;
800X = 400,000.

From here X = 500.

Another way to determine the tipping point is based on the concept of the so-called profit margin.

Contribution margin - this is the excess of sales proceeds over all variable costs.

If fixed costs are subtracted from the marginal profit, then we get the operating profit:

The tipping point can be defined as the point at which the difference between the marginal profit and the fixed cost is zero, or the point at which the marginal profit equals the fixed cost.

The equilibrium point (critical point) equation for the marginal approach in units of production can be expressed as follows:

Profit-adjusted tipping point analysis can be used as a basis for assessing the profitability of an enterprise. In this case, the equation is used.

Sales revenue = Variable costs + Fixed costs + Profit (target).

Thus, the volume of sales of products, which would ensure the receipt of the target profit, can be calculated using the formula

When using the marginal approach, this equation will look like:

Example 14.2

Consider the use of tipping point analysis in profit planning.

The company would like to make a profit next year in the amount of 200,000 rubles. Variable costs are 1000 rubles. per unit of production, fixed costs - 400,000 rubles. per year, sale price - 1800 rubles. for a unit. What should be the volume of sales of products in order to receive a given amount of profit?

1800 x X = 1000 x X + 400 000 + 200 000.
1800X- 1000 * = 600,000

SH = 600 000.

X = 750.

Therefore, to make a profit of 200,000 rubles, the volume of sales must be equal to 750 units.

To analyze the relationship between costs, volume and profit, certain assumptions should be made:

1) the behavior of variable and fixed costs can be accurately determined;
2) costs and revenues have a close direct relationship;
3) within the relevant level, the profitability and productivity of production do not change;
4) costs and prices do not change during the planning period;
5) the structure of products will not change during the planning period;
6) the volume of production will be approximately equal to the volume of sales.

Operating lever. The effect of operating leverage is that any change in sales revenue always generates a larger change in profit. The degree of profit sensitivity to changes in revenue from product sales (the strength of operating leverage) depends on the ratio of fixed and variable costs in the total costs of the enterprise. The higher the proportion of fixed costs in the total cost of production and sales of products, the greater the strength of the operating leverage. This means that enterprises that use expensive equipment and have a high share of non-current assets in the balance sheet have greater operating leverage. Conversely, the lowest level of operating leverage is observed in those enterprises where the share of variable costs is high. For enterprises with high operating leverage, profits are very sensitive to changes in sales volumes (sales proceeds). Even a slight decrease in revenue can lead to a significant decrease in profit. The action of the operating leverage gives rise to special types of risk: production (entrepreneurial) risk, the risk of excessive fixed costs in the face of a deteriorating market environment, since fixed costs will interfere with the reorientation of production, make it impossible to quickly diversify assets or change the market niche. Thus, production risk is a function of the structure of production costs.

In a favorable market environment, an enterprise with high operating leverage (high capital intensity) will have an additional financial gain. Therefore, to increase the capital intensity of production or any other type entrepreneurial activity should be done with great care.

Example 14.3

Let us explain the essence of the operating leverage using an example.

Suppose that the enterprise in the reporting year, the proceeds amounted to 11,000 thousand rubles. at variable costs 9300 thousand rubles. and fixed costs - 1,500 thousand rubles. What will happen to the profit if the volume of sales for the next year increases to 12,000 thousand rubles?

Let's make the traditional calculation of profit for the planned year.

As follows from our calculations, sales revenue increased by 9.1%, and profit - by 77%. This is the effect of the operating leverage.

In practical calculations, the ratio of gross margin to profit is used to determine the strength of the operating leverage:

The strength of the operating leverage shows how much the profit will change if there is a 1% change in revenue. According to our example, the strength of the operating lever is (11000 - 9000): 200 = = 8.5.

This means that with a 9.1% increase in revenue, profit will increase by 77% (9.1 x 8.5). With a decrease in sales proceeds by 10%, profit will decrease by 85% (K) x 8.5).

Thus, by setting one or another of those of the increase in the volume of sales (revenue), it is possible to determine the extent to which the amount of profit will increase with the existing force of the operating leverage at the enterprise. Differences in the achieved effect at different enterprises will be determined by differences in the ratio of fixed and variable costs.

Understanding the mechanism of action of the operating lever allows you to purposefully manage the ratio of fixed and variable costs in order to increase efficiency current activities enterprises. This control is reduced to a change in the value of the strength of the operating lever under various trends in the market situation. commodity market and stages life cycle enterprises.

In an unfavorable conjuncture of the commodity market, as well as in the early stages of the life cycle of an enterprise, its policy should be aimed at reducing the strength of the operating leverage by saving on fixed costs. With favorable market conditions and with a certain margin of safety, the requirements for the implementation of the regime of saving fixed costs can be significantly weakened. During such periods, an enterprise can expand the volume of real investments by modernizing fixed assets. It should be noted that fixed costs are less susceptible to rapid change, so enterprises with greater operating leverage lose flexibility in managing their costs.

With regard to variable costs, the basic principle of variable cost management is to ensure their constant savings.

Financial safety margin. The financial safety margin is the safety edge of the enterprise. The calculation of this indicator makes it possible to assess the possibility of an additional reduction in proceeds from sales of products within the boundaries of the break-even point. Therefore, the margin of financial strength is nothing more than the difference between sales proceeds and the threshold of profitability. The financial strength margin is measured either in monetary terms or as a percentage of revenue from product sales:

Example 14.4

We use the data from the previous example.

The profitability threshold is 9709 thousand rubles.

The financial strength margin is 1291 thousand rubles. (11,000 - - 9709), or as a percentage: 1291: 11,000 x 100% = 12%

Financial safety margin = 1: operating leverage strength = 1:: 8.5 x 100% = 12%.

14.3. Assessment of the interaction of financial and operational leverage

The strength of the operating leverage depends on the share of fixed costs in their total amount and predetermines the degree of flexibility of the enterprise, causing the emergence of entrepreneurial risk.

An increase in fixed costs due to an increase in interest on a loan in the capital structure contributes to an increase in the effect of financial leverage.

In turn, operating leverage generates stronger profit growth than the growth in sales (revenue), increasing earnings per share and thereby increasing the power of financial leverage. Thus, financial and operational leverage are closely related, mutually reinforcing each other.

The combined effect of the operating and financial leverage is measured by the level of the combined effect of the action of both levers, which is calculated using the formula

The level of the conjugate effect of the action of both levers indicates the level of the total risk of the enterprise and shows how many percent changes in earnings per share when the volume of sales (sales proceeds) changes by 1%.

The combination of strong operating leverage with strong financial leverage can be detrimental to the enterprise because the entrepreneurial and financial risks mutually multiply, multiplying the adverse effects. The interaction of operating and financial leverage exacerbates the negative impact of declining revenues on net income.

The task of reducing the total risk of an enterprise is reduced to choosing one of three options:

1) a combination of a high level of the effect of financial leverage with a weak effect of operating leverage;
2) combination of low level of financial leverage effect with strong operating leverage;
3) a combination of moderate levels of effects of financial and operating leverage.

In the very general view the criterion for choosing one or another option is the maximum possible market value of an enterprise share at minimal risk... As you know, this is achieved through a compromise between risk and return.

The level of the associated effect of operating and financial leverage allows making planned calculations of the future value of earnings per share depending on the planned volume of sales (revenue), which means the possibility of direct access to the company's dividend policy.

Manufacturing and financial activities commercial organization accompanied by expenses (costs) of various composition, type, structure and relative importance for the formation of the financial result.

V financial management two approaches are used to increase the rate of profit:

1. comparison of marginal revenue with marginal costs;

2. comparison of sales proceeds with total costs (fixed and variable).

The formalization of the analysis and cost management procedures is based on their classification depending on the change in the volume of sales:

Variables (in a simplified form, proportional) are costs that vary in proportion to the volume of production or sales. These costs include material costs; costs for electricity, steam, water for technological purposes; commission expenses, etc. (Appendix 8);

Fixed (disproportionate) - costs that practically do not depend on the volume of production activities and are most often fixed and contractual. These include depreciation charges, interest on loans, rent, administrative expenses, etc. (Appendix 9);

Mixed (semi-variable) - costs that change abruptly, i.e. stable when varying the volume of production in a certain interval and changing outside the relevant range. 5 such costs include postage and telegraph costs, maintenance of equipment, transportation costs, etc. Mixed costs can be neglected if they are negligible. For convenience and simplicity, mixed costs in practice are combined with either variables or fixed ones.

In practice, variable costs have a less rigid dependence on the volume of production. So, for example, if a large batch of raw materials is purchased, then the organization may require a discount on the price of raw materials, as a result of which the cost of raw materials will grow more slowly than the volume of production. In turn, fixed costs do not depend on the volume of production (sales) until a certain point. So, for example, if the scale of production (sales) increases by 50% or more, then managers will be required and, as a result, an increase in administrative costs.

The given classification of expenses is conditional and simplified, but quite convenient and acceptable for analytical calculations. The most interesting are conditionally fixed costs from the standpoint of assessment financial sustainability an economic entity, because management decisions that result in these costs are reflected in financial results for many years. As a confirmation of this thesis, we can give an example,
associated with the decision of the management and shareholders of the company to invest in new expensive equipment or technology. Conditionally fixed costs according to V.V. Kovalev can be divided into two types: material, associated with material and technical supply, and financial, associated with attracting loans and credits.

Regarding the conditionally fixed costs, the following can be stated: first, they must be reimbursed without fail and, second, the source of compensation for this must be current income.

Consequently, the value of conditionally fixed costs must be comparable with some income, otherwise, the enterprise is threatened with bankruptcy.

Indicators of material and financial fixed costs are interconnected, at the same time, the tasks of investment and financing are in a certain sense separated from each other. To assess the feasibility and effectiveness of investment and financial decisions, it is necessary to divide the income in the same way as the corresponding expenses, using the income statement.

By means of simple combinations of data available in the Profit and Loss Statement, it is possible to separate material and financial conditionally fixed costs (Fig. 2).

In the above diagram, the process of transition from revenue to net profit is conventionally divided into two stages:

1. receiving profit before interest and taxes;

2. making a net profit.

Thus, the effect of material and financial fixed costs is to a certain extent separate, namely:

The amount of profit before interest and taxes is influenced by material

conditionally fixed costs;

The amount of net profit is influenced by financial conditionally fixed costs.

In the theory of finance, the relationship between profit and costs of assets or funds, for the formation of this profit, is reflected through the leverage indicator. Leverage is an indicator that characterizes the relationship between potential conditionally fixed costs and the amount of profit. Depending on the division of costs into material and financial, there are respectively two types of leverage or leverage:

Operational (production) lever;

Financial leverage.

Based on Figure 2, it is easy to see that financial leverage affects changes "" ^^^^^

only net profit, while operating leverage (leverage) affects both the change in profit before interest and taxes, and the change in net profit.

Both operational and financial leverage are not current, but long-term characteristics of an economic entity's activities. As a consequence, we have given Special attention conditionally fixed costs, since they significantly influence strategic decisions.

Practical benefits of cost classification:

1. Profit maximization and its growth by reducing total costs. In economics, there is a rule - reducing costs by only 6% gives economic effect comparable to an increase in the production of ilp ojsh?%; new

2. Cost recovery and definition of "4tr2gfidansovygChrochno.sri" і ^ eE-Pa-RkolkR can reduce the volume of production without a serious threat to the financial condition of the organization;

3. Separation of conditionally fixed costs has a significant importance for determining the level of production and financial risks. Calculation of the critical volume of production or sales based on break-even requirements.

When differentiating costs, it is necessary to remember about the nature of the movement of total costs and per unit of product, depending on changes in the volume of production or sales. The behavior of these costs is shown in Table 2.1. when the volume of production changes in the relevant range.

Finding the optimal ratio between the volume of sales (production), total costs and profits depends on the accuracy of the division of costs, i.e. break-even point or critical sales (production).

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