Examples of variable costs. Conditionally fixed costs Conditionally variable costs include

In the activities of any enterprise, making the right management decisions is based on an analysis of its performance indicators. One of the objectives of such analysis is to reduce production costs, and, consequently, increase business profitability.

Fixed and variable costs and their accounting are an integral part of not only calculating product costs, but also analyzing the success of the enterprise as a whole.

Correct analysis of these items allows you to make effective management decisions that have a significant impact on profits. For analysis purposes, in computer programs at enterprises, it is convenient to provide for the automatic breakdown of costs into fixed and variable costs based on primary documents, in accordance with the principle adopted in the organization. This information is very important for determining the “break-even point” of a business, as well as assessing the profitability of various types of products.

Variable costs

To variable costs These include costs that are constant per unit of production, but their total amount is proportional to the volume of output. These include the costs of raw materials, consumables, energy resources involved in the main production, salaries of the main production personnel (together with accruals) and the cost of transport services. These costs are directly included in the cost of production. In monetary terms, variable costs change when the price of goods or services changes. Specific variable costs, for example, for raw materials in physical terms, can be reduced with an increase in production volumes due, for example, to a reduction in losses or costs for energy resources and transport.

Variable costs can be direct or indirect. If, for example, an enterprise produces bread, then the costs of flour are direct variable costs, which increase in direct proportion to the volume of bread production. Direct variable costs may decrease with the improvement of the technological process and the introduction of new technologies. However, if a plant processes oil and as a result produces, for example, gasoline, ethylene and fuel oil in one technological process, then the cost of oil for the production of ethylene will be variable, but indirect. Indirect variable costs in this case, they are usually taken into account in proportion to the physical volumes of production. So, for example, if when processing 100 tons of oil, 50 tons of gasoline, 20 tons of fuel oil and 20 tons of ethylene are obtained (10 tons are losses or waste), then the cost of producing one ton of ethylene is 1.111 tons of oil (20 tons of ethylene + 2.22 tons of waste /20 t ethylene). This is due to the fact that, when calculated proportionally, 20 tons of ethylene produce 2.22 tons of waste. But sometimes all waste is attributed to one product. Data from technological regulations are used for calculations, and actual results for the previous period are used for analysis.

The division into direct and indirect variable costs is arbitrary and depends on the nature of the business.

Thus, the costs of gasoline for transporting raw materials during oil refining are indirect, but for a transport company they are direct, since they are directly proportional to the volume of transportation. Wages of production personnel with accruals are classified as variable costs for piecework wages. However, with time-based wages, these costs are conditionally variable. When calculating the cost of production, planned costs per unit of production are used, and when analyzing actual costs, which may differ from planned costs, both upward and downward. Depreciation of fixed assets of production per unit of production volume is also a variable cost. But this relative value is used only when calculating the cost of various types of products, since depreciation charges, in themselves, are fixed costs/expenses.

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

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

Synonyms

semi-fixed expenses

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More found about semi-fixed costs

1. Multi-product break-even point Vi thousand rubles 2400 3500 4800 2100 12 800 Conditionally permanent costs Ci thousand rubles 736 918 1104 442 3200 Total costs Vi Ci thousand
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6. Material costs Fixed costs Conditionally permanent costs One-time costs Indirect costs Direct product costs Operating costs Cost center
7. Key aspects of profit management of an organization This method is based on the principle of dividing costs into conditionally permanent and conditional variables and calculation of marginal profit of gross profit P ∑ P i
8. Product costs These include salaries of management personnel as part of general production costs, expenses for the operation of machinery and equipment Conditionally permanent costs are costs that are practically independent of changes in the volume of production
9. Is there enough money to bring the company’s plans to life X 90.8% Values ​​for other items of variable costs are calculated similarly conditionally permanent expenses, then they can be taken equal to the previous reporting period As soon as
10. Analysis and assessment of the effectiveness of the organization’s financial policy In addition, the increase conditionally permanent costs such as depreciation when commissioning new fixed assets and their incomplete
11. Operating leverage Operating leverage is a factor in changes in financial results expressed in the structure of current costs and measured in particular as the share of material non-financial conditionally permanent costs in total costs The effect of operating leverage is calculated in the FinEkAnalysis program in the block
12. Operating leverage Operating leverage is a factor in changing financial results, expressed in the structure of current costs and measured in particular as the share of material non-financial conditionally permanent costs in total costs The effect of operating leverage is calculated in the FinEkAnalysis program in the block
13. Production leverage Production leverage is a factor in changes in financial results expressed in the structure of current costs and measured as the share of material non-financial conditionally permanent costs in total costs Varying the level of operating leverage means more or less attention to
14. Working capital management policy in the holding Aggregated balances thousand rubles Costs in thousand rubles associated with the sale of products consist of conditionally permanent and conditionally variable aggressive 200000
15. A system of discounts as an instrument of flexible pricing policy in conditions of shortage of working capital Volume of gross output in actual prices 1,619,495,613,374,789,562 Costs of production, including 1,530,662,594,441,744,498 conditionally variable Costs of production, including 1,530,662,594,441,744,498 semi-variable costs 1,444,749 522,637.0 670,748 conditionally permanent costs 85913 71,804.0 73,750 Production profit 88,833 18,933 45,064
16. Production risk The higher the share conditionally permanent expenses in their total amount, the higher the production risk Production risk factors incomplete utilization... Production risk factors incomplete utilization of production capacity against the background of an increase in fixed costs or a decrease in revenue The first sign of incomplete utilization of capacity is an excess of the passive part of the main
17. Formation of a production program for a machine-building enterprise on the basis of operational analysis When solving the problem of profit maximization, you can manipulate the change in both fixed and variable costs and, depending on this, calculate by what percentage the profit will change. The strength of the impact of the operating... Moreover, the strength of the impact increases with increasing specific gravity conditionally permanent expenses, which leads to a decrease in the business activity of the enterprise and an increase in profit losses. However, if
18. Problems of recognition of estimated liabilities in terms of repair of fixed assets In relation to the repair of fixed assets, the organization's responsibility is to ensure a continuous production process, reduce downtime, reduce the risks associated with unscheduled stoppages of production and trading activities that can lead to failure to fulfill contractual obligations to buyers and customers by paying for downtime to personnel growth specific gravity conditionally permanent expenses in the cost of production In addition, more serious consequences associated with non-compliance are possible... In this regard, it should be recognized that the organization has an obligation to maintain fixed assets in good condition, in many cases due to the requirements of current legislation and in almost all cases arising from established practice which in turn, inevitably leads to the emergence of an estimated liability equal to the cost of repair work. Second, Repair of fixed assets is an objective necessity, the inevitability of which
19. A comparative analysis of the faster growth rates of the analyzed indicators does not allow us to talk about the effectiveness of the policy in the field of cost optimization of the enterprise; if sales revenue increased by 297.1%, then costs increased by 304.74%. As can be seen from Figure 4, in the income structure of OAO Nizhnekamskneftekhim... Regarding the expenses of the enterprise, Fig. 5 in its structure, the largest share is given to conditionally variable expenses, which are 4 times higher than the share conditionally permanent expenses The conditionality of certain expenses is due to the absence in the financial statements and accounting system
20. Reserves for growth in labor productivity Reducing labor costs ensures an increase in labor productivity The introduction of more productive equipment also increases labor productivity 6. Increase... Labor productivity increases due to conditionally constant number, that is, those categories of workers whose number depends little on the growth of production volume

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Conditionally fixed costs include costs, the value of which does not change relatively with changes in production volume (for example, this could be depreciation of fixed assets using the linear method of calculating it, remuneration of management personnel, security costs).

Fixed costs are usually classified into useful and useless (“idle”):

Zpost. = Healthy + Useless

Waste costs arise when a factor of production is not used to its full capacity. The occurrence of such costs may be associated with the indivisibility of the production factor (for example, means of labor or labor).

This division is especially relevant when analyzing the use of expensive equipment, since if it is not fully used, depreciation is still charged and interest is paid on the invested capital, which in this case is only partially useful.

If we designate the optimal use of equipment capacity (output in natural units) as Mopt., and its planned level of use as Mplan., then useful and idle costs can be calculated as follows:

Useful = Mplan. x Zpost. / Mopt.

Useful = Zpost. x% power usage,

Where % power utilization = Mplan. / Mopt.

Useless = (Mopt. - Mplan) x Zpost. / Mopt.

Unnecessary expenses are in this case direct losses of the enterprise.

This classification is of particular practical importance in cases where a certain divisibility of factors that determine the constancy of costs is specified. If, for example, the equipment consists of four identical units, then if production is reduced by more than 25%, one of the units can be sold or leased, which will eliminate unnecessary costs.

The amount of most fixed costs is not absolutely fixed. That is, we are dealing with semi-fixed costs, which are constant for a specific volume of production, but at some critical moment they increase by a certain amount. Such costs are classified as constant or variable depending on the frequency of step increments and the magnitude of increments at each point.

In practice, the “pure” classification of costs into fixed and variable that we have considered is distorted due to the impact on the size of costs of a combination of factors (and not just production volume), therefore one of the widespread tolerances when classifying costs is linearity.

The linear approximation method allows you to turn costs with nonlinear dependencies into linear ones. This method uses the concept of relevant levels. The relevant level is the level of expected business activity within which many nonlinear costs can be estimated as linear.

It is necessary to take into account the fact that costs of the same type can behave differently. There are costs that are variable in one situation and constant in another. This classification cannot be determined once and for all, even for a specific enterprise, but must be revised (clarified) taking into account changing operating conditions; A strict, legally enshrined classification is impossible in this case.

An example of solving the problem of cost classification is the transition to using the classification of costs per product and per period discussed above. In this case, the main feature of classifying costs into fixed and variable is only partially present, and some confusion of features that occurs here is justified by the convenience of practical application.

Conditionally fixed costs are part of production costs, the value of which at the enterprise, within certain limits, does not depend on the volume of production (work performed, services provided). Therefore, with an increase in production volumes, beats. value of U.-p.r. (per unit of products, works, services) decreases accordingly, and when production decreases, it increases.

In construction, production to U.-p.r. up to 50% of overhead costs can be attributed to: administrative and household expenses. expenses, wear and tear of temporary buildings and structures, taken into account as part of overhead costs, costs of maintaining fire and security guards, landscaping buildings, sites, cultural events, maintaining buildings, laboratories, testing materials and structures, rationalization and standardization of labor, labor protection and technology security and some other U.-p.r. can be considered about 1% of the cost of materials, mainly procurement and storage costs, approximately 15% of the cost of operating machines and mechanisms.

In economic calculations. efficiency, the savings in construction and installation work are taken into account if the increase in the volume of construction and installation works was a consequence of a reduction in the duration of their implementation. If a reduction in the duration of construction of an object is achieved through the development and application of a more economical design solution, which ensures a reduction in the volume and estimated cost of work compared to the one being replaced, then the savings in U.-p.r. y builds, an organization is not formed and therefore is not subject to accounting.

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Depending on how the value of individual types of expenses changes when the volume of production (sales) of products (works, services) changes, all types of expenses can be divided into conditionally variable and conditionally constant.

Conditionally variable (proportional) (note) expenses change in proportion to changes in production (sales) volume, and their level remains practically unchanged in the cost of a unit of production (work, services).

Conditionally variable expenses include:

Cost of basic materials used in production;

Energy consumption (electricity, fuel, etc.) for production (for the operation of machines, machines, and other production equipment);

Wages of the main workers with piecework wages and taxes calculated from the wage fund of such workers;

Most customs duties (customs duties, excise taxes, VAT);

Transport costs;

Taxes, fees and deductions calculated from revenue (gross income).

As a rule, semi-variable expenses are so-called direct expenses.

The amount of semi-fixed (disproportionate) costs practically does not depend on the dynamics of production (sales) volume, and therefore, when the volume of production (sales) changes, the level of semi-fixed costs in the cost of a unit of production (work, services) changes: with an increase in production volume (sales), the amount (share) of these expenses decreases, and with a decrease in production volume, it increases.

TO semi-fixed expenses usually include:

Depreciation of fixed assets and intangible assets;

Expenses for rent and maintenance of office, production and warehouse premises;

Leasing payments;

Expenses for repairs of fixed assets;

Expenses for heating, lighting of premises;

Salaries of administrative and managerial personnel and time-wage personnel, as well as taxes calculated from the wage fund of such personnel;

Costs associated with the management and organization of production;

Payment for certain types of services of third-party organizations (banking services, telephone communications);

Some fixed taxes (for example, land taxes), included in the cost of products (works, services).

Conditionally fixed expenses, as a rule, are indirect costs.

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