Planning of cost and sales proceeds
Proceeds from the sale of products (works, services) can be calculated on the basis of two methods: cash and accrual. When using the cash method, revenue is determined as cash flows to bank accounts or when cash is paid to the organization's cash department. The accrual method assumes that revenue is recorded as the products are shipped (works, services) and documents are presented to buyers. The right to choose the method for determining revenue from sales is provided to organizations, and this choice must be enshrined in the company's accounting policies.
The amount of revenue from the sale of the organization's products depends on a combination of factors that depend on the activities of the organization itself, both on and off. The first group includes the following factors: the volume of production, the quality of the output and its range, the level and flexibility of prices, the rhythm of production and shipment, the order and timing of document circulation, etc. The second group of factors includes the disciplinedness of customers, the level of development of the payment system, the level of development transport network.
Timely receipt of proceeds from the sale of products is a prerequisite for the activities of any organization. This is due to the fact that revenue, on the one hand, is the main regular source of the organization's funds, and on the other hand it predetermines the organization's ability to finance expenses incurred in the course of activities and to carry out continuous activity.
The rhythm of revenue receipt significantly affects the financial position of the organization, the state of working capital, the ability to make current payments.
Planning of sales proceeds (works, services) is done using the formula
where В - revenue; Onp - unrealized balances of finished products at the beginning of the analyzed period; TP - planned output in the analyzed period; Okp - unrealized balances of finished products at the end of the analyzed period.
At the same time, the leftovers of finished goods at the beginning of the analyzed period are taken into account in the effective prices of the period preceding the planned period, while the marketable output and finished product balances at the end of the analyzed period - in the prices of the reporting period.
The value of commodity output is calculated on the basis of concluded contracts for sales, received orders, consumer orders or market analysis.
Revenue from sales consists of three parts: cost, profit and indirect taxes and deductions (value added tax, excises, deductions to off-budget funds).
Cost price is a valuation of current, material, labor and money resources for the production and sale of products (works, services). Accordingly, the cost of production can be included only those costs that are directly related to the production and sale of products, are associated with the current activities of the organization, documented, legislated, refer to the activities of the organization.
There are different classification costs,
- depending on the operational formation - planned and actual;
- depending on the completeness of the included costs - workshop, production, full;
- depending on the calculation - the cost of a unit of output and the total output.
Since the prime cost is an important element in the price of the products (works, services) being sold, it is necessary to calculate the planned costs for the production and sale of products (works, services), as well as calculation of costs for production and sales of products for the planned year:
where Z - the cost of production and sales of products for the planned year; Z1 - expenses on the balances of unrealized production at the beginning of the planned year; T - the cost of output in the planned year; Z2 - expenses on the balances of unrealized production at the end of the planned year; B - non-production and commercial expenses.
The cost of unrealized production at the beginning of the year is calculated using the formula
where Z1 - expenses on the balances of unrealized production at the beginning of the planned year; Zскл - expenses for the rest of finished goods in the warehouse at the beginning of the planned year; Zdz - the cost of products shipped at the beginning of the year, the payment term of which has not come; Zср - costs but shipped, but not paid on time products at the beginning of the year; Zхр - expenses for the products, which are in the custody at the beginning of the year.
The cost of unrealized production at the end of the year is determined by the formula
where Z2 - expenses on the balances of unrealized production at the end of the planned year.
To determine the cost of using different methods - protsessny, transverse and ordering. The process method is used for mass production, a short production cycle and the absence of work in progress. In this case, based on the selected stages of production and realization (processes), the actual costs for the entire output are established, and then the average unit cost of production is calculated. The method of the counter is used for sequential processing of raw materials, where the cost value is determined for each stage. Custom method assumes the calculation of the cost price for the entire order, and the final cost value can be adjusted after the order is fulfilled.
Managing the cost level is one of the functions of a financial manager. The task in this case is primarily to find ways to reduce costs. This can be done by increasing labor productivity, reducing the cost of materials and eliminating overexpenditures, improving the efficiency of using the organization's assets, reducing losses from marriage, reducing management costs.
Also We Can Offer!
- Argumentative essay
- Best college essays
- Buy custom essays online
- Buy essay online
- Cheap essay
- Cheap essay writing service
- Cheap writing service
- College essay
- College essay introduction
- College essay writing service
- Compare and contrast essay
- Custom essay
- Custom essay writing service
- Custom essays writing services
- Death penalty essay
- Do my essay
- Essay about love
- Essay about yourself
- Essay help
- Essay writing help
- Essay writing service reviews
- Essays online
- Fast food essay
- George orwell essays
- Human rights essay
- Narrative essay
- Pay to write essay
- Personal essay for college
- Personal narrative essay
- Persuasive writing
- Write my essay
- Write my essay for me cheap
- Writing a scholarship essay