Total costs from the sale of products formula. Fixed costs. Formula. Calculation example in Excel. The concept of marginal cost

Every organization seeks to maximize profits. Any production incurs costs for the purchase of factors of production. At the same time, the organization seeks to achieve such a level that a given volume of production is provided with the lowest costs. The firm cannot influence the prices of inputs. But, knowing the dependence of production volumes on the number of variable costs, it is possible to calculate the costs. Cost formulas will be presented below.

Types of costs

From the point of view of the organization, the costs are divided into the following groups:

individual (costs of a particular enterprise) and public (costs of manufacturing a specific type of product incurred by the entire economy);
alternative;
production;
general.

The second group is further divided into several elements.

Total expenses

Before studying how costs are calculated, cost formulas, let's look at the basic terms.

Total cost (TC) is general expenses for the production of a certain volume of products. In the short run, a number of factors (for example, capital) do not change, and part of the costs does not depend on output volumes. It is called total fixed costs (TFC). The amount of cost that changes with output is called total variable cost (TVC). How to calculate total costs? Formula:

Fixed costs, the calculation formula for which will be presented below, include: interest on loans, depreciation, insurance premiums, rent, salary. Even if the organization does not work, it must pay rent and debt on the loan. Variable costs include salaries, materials, electricity, etc.

With the growth of output volumes, variable production costs, the calculation formulas of which are presented earlier:

grow proportionally;
slow down growth when the maximum profitable volume of production is reached;
resume growth due to a violation optimal sizes enterprises.

Average costs

Wanting to maximize profits, the organization seeks to reduce the cost per unit of product. This ratio shows such a parameter as (ATS) average cost. Formula:

ATC = TC \ Q.

ATC = AFC + AVC.

Marginal Costs

The change in the total amount of costs with an increase or decrease in the volume of production per unit shows the marginal cost. Formula:

From an economic point of view, marginal cost is very important in determining the behavior of an organization in market conditions.

Relationship

Marginal cost must be less than the total average cost (per unit). Failure to comply with this ratio indicates a violation of the optimal size of the enterprise. Average costs will change in the same way as marginal costs. It is impossible to constantly increase the volume of production. This is the law of diminishing returns. At a certain level, variable costs, the formula for which was presented earlier, will reach their maximum. After this critical level, an increase in production even by one unit will lead to an increase in all types of costs.

Example

Having information about the volume of production and the level fixed costs, we can calculate all existing species costs.

Issue, Q, pcs.	General costs, TC in rubles

Without being engaged in production, the organization incurs fixed costs at the level of 60 thousand rubles.

Variable costs are calculated using the formula: VC = TC - FC.

If the organization is not engaged in production, the amount of variable costs will be zero. With an increase in production by 1 piece, VC will be: 130 - 60 \u003d 70 rubles, etc.

Marginal costs are calculated using the formula:

MC = ∆TC / 1 = ∆TC = TC(n) - TC(n-1).

The denominator of the fraction is 1, since each time the volume of production increases by 1 piece. All other costs are calculated using standard formulas.

opportunity cost

Accounting costs are the cost of the resources used at their purchase prices. They are also called explicit. The amount of these costs can always be calculated and justified by a specific document. These include:

salary;
equipment rental costs;
fare;
payment for materials, bank services, etc.

Economic cost is the cost of other assets that can be obtained from an alternative use of resources. Economic costs = Explicit + Implicit costs. These two types of expenses often do not coincide.

Implicit costs are payments that a firm could receive if it were to use its resources more favorably. If they were bought competitive market, then their price would be the best of the alternatives. But pricing is influenced by the state and the imperfection of the market. Therefore, the market price may not reflect the real cost of the resource and may be higher or lower than the opportunity cost. Let us examine in more detail economic costs, cost formulas.

Examples

The entrepreneur, working for himself, receives a certain profit from the activity. If the sum of all expenses incurred is higher than the income received, then in the end the entrepreneur suffers a net loss. It, together with net profit, is recorded in the documents and refers to explicit costs. If the entrepreneur were to work from home and earn an income that would exceed his net profit, then the difference between these values \u200b\u200bwould be an implicit cost. For example, an entrepreneur receives a net profit of 15 thousand rubles, and if he were employed, he would have 20,000. In this case, there are implicit costs. Cost formulas:

NI \u003d Salary - Net profit \u003d 20 - 15 \u003d 5 thousand rubles.

Another example: an organization uses in its activities a room that belongs to it by right of ownership. Explicit costs in this case include the amount of utility costs (for example, 2 thousand rubles). If the organization leased this premises, it would receive an income of 2.5 thousand rubles. It is clear that in this case the company would also pay monthly utility bills. But she would also get net income. There are implicit costs here. Cost formulas:

NI \u003d Rent - Utilities \u003d 2.5 - 2 \u003d 0.5 thousand rubles.

Refundable and sunk costs

The entry and exit fees for an organization are called sunk costs. Expenses for registering an enterprise, obtaining a license, paying advertising campaign no one will return, even if the company ceases operations. In a narrower sense, sunk costs include the cost of resources that cannot be used in alternative ways, such as the purchase of specialized equipment. This category of expenses does not apply to economic costs and does not affect the current state of the company.

Costs and price

If the organization's average cost is market price, then the firm earns zero profit. If favorable market conditions increase the price, then the organization makes a profit. If the price corresponds to the minimum average cost, then the question arises about the feasibility of production. If the price does not cover even the minimum of variable costs, then the losses from the liquidation of the firm will be less than from its functioning.

International division of labor (MRI)

The world economy is based on MRI - the specialization of countries in the manufacture certain types goods. This is the basis of any kind of cooperation between all the states of the world. The essence of MRI is manifested in its division and unification.

One manufacturing process cannot be divided into several separate ones. At the same time, such a division will allow uniting separate industries and territorial complexes, establishing a relationship between countries. This is the essence of MRI. It is based on the economically advantageous specialization of individual countries in the manufacture of certain types of goods and their exchange in quantitative and qualitative proportions.

Development factors

The following factors encourage countries to participate in MRI:

Volume of the domestic market. At major countries there is more opportunity to find the necessary factors of production and less need to engage in international specialization. At the same time, market relations are developing, import purchases are compensated by export specialization.
The lower the potential of the state, the greater the need to participate in MRI.
The country's high endowment with mono-resources (for example, oil) and the low level of endowment with minerals encourage active participation in MRT.
The greater the share of basic industries in the structure of the economy, the less the need for MRI.

Each participant finds economic benefit in the process itself.

The variety of ways to make a profit for enterprises in any industry of production and sale of services, on the one hand, creates unlimited opportunities for the development of a particular business, on the other hand, each type of activity has a certain threshold of efficiency, determined by break-even.

In turn, the amount of revenue that guarantees a profit directly depends on the total costs of production and sale of products.

What it is?

The total expenses of the enterprise for the purpose of analyzing the break-even activity are usually divided into two main categories:

- costs, the amount of which directly depends on the volume of production and sale of services (depending on the chosen direction of the company's operation), i.e., in fact, are directly proportional to any fluctuations in the volume of core activities carried out;
fixed - these are costs, the amount of which does not change in the medium term (a year or more) and does not depend on the volume of the company's core activities, i.e. they will exist even if the activity is suspended or terminated.

Having considered fixed costs on the example of an enterprise, it is easier to understand their essence and interdependence with the volume of core activities.

So, they include the following items of expenditure:

depreciation charges on fixed assets of the company;
rent, tax payments to the budget, contributions to off-budget funds;
bank expenses for servicing current accounts, loans of the organization;
wage fund for administrative and managerial personnel;
other general business expenses necessary to ensure the normal functioning of the enterprise.

Thus, the essence of the fixed costs of any organization is reduced to their functional necessity for the implementation of activities. They can and most often change over time, but the reason for this is external factors(changes in the tax burden, adjustment of bank service conditions, renegotiation of contracts with service organizations, change of tariffs for utilities etc.).

Internal factors affecting the change in fixed costs are significant change corporate policy, remuneration systems for personnel, a significant change in the volume or direction of the company's activities (not just a change in volume, but a radical transition to a new level).

Under the influence of all these factors, there is a change in fixed costs, usually they are characterized by sharp fluctuations in the amount of expenses.

For the purposes of accounting and analysis, the expenses of an enterprise are usually divided into fixed and variable, using the following methods:

Based on experience and knowledge, through managerial decision expenses are assigned to a certain category. This method is good when the company is just starting its activities and there are simply no other ways to allocate costs. It is characterized by a high level of subjectivity and requires revision in the long term.
Based on the data of the analytical work carried out on the search, evaluation and differentiation of all expenses by categories based on their behavior under the influence of the factor of changes in the volume of core activities. It is the most acceptable, since this method is more objective.

For information on which of the expenses to which group you need to determine, see the following video:

How to calculate them?

Fixed costs are calculated using the formula:

POSTz \u003d W salary + W rent + W banking services + Depreciation + Taxes + General Household, where:

POSTz - fixed costs;
W salary - the cost of salaries of administrative and managerial personnel;
R rent - rental expenses;
3 banking services - banking services;
General economic expenses - other general economic expenses.

To find the indicator of average fixed costs per unit of output, it is necessary to apply the following formula:

SrPOSTz \u003d POSTz / Q, where:

Q - the volume of output (its quantity).

The analysis of these indicators must be carried out in dynamics, evaluating the retrospective of values at different time intervals, including with a joint analysis of other economic indicators. This will allow you to see the relationship of processes specific to the enterprise, which means you can get a cost management tool in the future.

economic sense

Fixed cost analysis, performed both on an operational basis and for the purpose of strategic planning, allows you to assess the ability of the enterprise to improve the efficiency of its activities. This is the key economic sense this category.

The easiest and most accessible way to analyze the effectiveness of a company's activities is to evaluate the break-even point indicator, including in dynamics. For calculations, information about the amount is required fixed costs, unit price and average variable costs:

Tb \u003d POSTz / (Ts1 - SrPEREMz), where:

Tb - breakeven point;
POSTz - fixed expenses;
C1 - price per unit. products;
Avperemz - average variable costs per unit of output.

The break-even point is an indicator that allows you to see the boundary beyond which the company's activities begin to make a profit, as well as analyze the dynamics of the impact of changes in costs on the volume of production and profit of the organization. The decrease in the break-even point at constant variable costs is positively assessed, this signals an increase in the efficiency of the enterprise's expenses. The growth of the indicator should be assessed positively when it occurs against the background of an increase in sales volumes, that is, it indicates an increase and expansion of the scope of activities.

Thus, accounting, analysis and control of fixed costs, reducing their load per unit of output are mandatory measures necessary for each enterprise to achieve competent resource and capital management.

All types of costs of the company in the short run are divided into fixed and variable.

fixed costs(FC - fixed cost) - such costs, the value of which remains constant when the volume of output changes. Fixed costs are constant at any level of production. The firm must bear them even in the case when it does not produce products.

variable costs(VC - variable cost) - these are costs, the value of which changes with a change in the volume of output. Variable costs increase as output increases.

Gross costs(TC - total cost) is the sum of fixed and variable costs. At a zero level of output, gross costs are equal to fixed costs. As the volume of production increases, they increase in accordance with the growth of variable costs.

Examples should be given various kinds costs and explain their change in connection with the law of diminishing returns.

The average costs of the firm depend on the value of the total fixed, total variable and gross costs. Medium costs are determined per unit of output. They are commonly used for comparison with unit price.

In accordance with the structure of total costs, firms distinguish between average fixed (AFC - average fixed cost), average variables (AVC - average variable cost), average gross (ATC - average total cost) costs. They are defined as follows:

ATC=TC:Q=AFC+AVC

One important indicator is marginal cost. marginal cost(MC - marginal cost) - this is the additional cost associated with the production of each additional unit of output. In other words, they characterize the change in gross costs caused by the release of each additional unit of output. In other words, they characterize the change in gross costs caused by the release of each additional unit of output. Marginal cost is defined as follows:

If ΔQ = 1, then MC = ΔTC = ΔVC.

The dynamics of the total, average and marginal costs of the firm using hypothetical data is given in Table.

Dynamics of total, marginal and average costs of the firm in the short run

Output volume, units Q	Total costs, rub.			Marginal cost, p. MS	Average costs, r.
Output volume, units Q	permanent FC	VC variables	gross vehicle	Marginal cost, p. MS	permanent AFCs	AVC variables	gross ATS
1	2	3	4	5	6	7	8
0	100	0	100	—	—	—	—
1	100	50	150	50	100	50	150
2	100	85	185	35	50	42,5	92,5
3	100	110	210	25	33,3	36,7	70
4	100	127	227	17	25	31,8	56,8
5	100	140	240	13	20	28	48
6	100	152	252	12	16,7	25,3	42
7	100	165	265	13	14,3	23,6	37,9
8	100	181	281	16	12,5	22,6	35,1
9	100	201	301	20	11,1	22,3	33,4
10	100	226	326	25	10	22,6	32,6
11	100	257	357	31	9,1	23,4	32,5
12	100	303	403	46	8,3	25,3	33,6
13	100	370	470	67	7,7	28,5	36,2
14	100	460	560	90	7,1	32,9	40
15	100	580	680	120	6,7	38,6	45,3
16	100	750	850	170	6,3	46,8	53,1

Based on the table. we will construct graphs of fixed, variable and gross, as well as average and marginal costs.

The fixed cost graph FC is a horizontal line. Graphs of variables VC and gross TC costs have a positive slope. In this case, the steepness of the curves VC and TC first decreases, and then, as a result of the law of diminishing returns, increases.

Average fixed cost AFC has a negative slope. Average variable cost curves AVC, average gross cost ATC and marginal cost MC are arcuate, i.e. they first decrease, reach a minimum, and then become towering.

Attracts attention dependence between plots of mean variablesAVCand marginal MC costs, as well as between curves of average gross ATC and marginal MC costs. As can be seen in the figure, the MC curve intersects the AVC and ATC curves at their minimum points. This is because as long as the marginal, or incremental, cost associated with the production of each additional unit of output is less than the average variable or average gross costs that were before the production of this unit, the average cost decreases. However, when the marginal cost of a particular unit of output exceeds the average that was before its production, the average variable and average total costs begin to increase. Consequently, the equality of marginal costs with average variable and average total costs (points of intersection of the MC graph with the AVC and ATC curves) is achieved at the minimum value of the latter.

Between marginal productivity and marginal cost there is a reverse addiction. As long as the marginal productivity of a variable resource increases and the law of diminishing returns does not apply, marginal cost will decrease. When marginal productivity reaches its maximum, marginal cost is at its minimum. Then, as the law of diminishing returns kicks in and marginal productivity declines, marginal cost rises. So the marginal cost curve MC is mirror reflection limiting productivity curve MR. A similar relationship also exists between the graphs of average productivity and average variable costs.

Consider the variable costs of an enterprise, what they include, how they are calculated and determined in practice, consider methods for analyzing the variable costs of an enterprise, the effect of changing variable costs with different production volumes and their economic meaning. In order to understand all this simply, at the end, an example of variable cost analysis based on the break-even point model is analyzed.

Variable costs of the enterprise. Definition and their economic meaning

Enterprise variable costs (Englishvariablecost,VC) are the costs of the enterprise/company, which vary depending on the volume of production/sales. All costs of the enterprise can be divided into two types: variable and fixed. Their main difference lies in the fact that some change with an increase in production, while others do not. If a production activity company ceases, then variable costs disappear and become equal to zero.

Variable costs include:

The cost of raw materials, materials, fuel, electricity and other resources involved in production activities.
The cost of manufactured products.
Wages of working personnel (part of the salary depending on the fulfilled norms).
Percentage of sales to sales managers and other bonuses. Interest paid to outsourcing companies.
Taxes that have a tax base of the size of sales and sales: excises, VAT, UST from premiums, tax on the simplified tax system.

What is the purpose of calculating enterprise variable costs?

Behind any economic indicator, coefficient and concept one should see their economic meaning and the purpose of their use. If we talk about the economic goals of any enterprise / company, then there are only two of them: either an increase in income or a decrease in costs. If we generalize these two goals into one indicator, we get - the profitability / profitability of the enterprise. The higher the profitability of an enterprise, the greater its financial reliability, the greater the opportunity to attract additional borrowed capital, expand its production and technical capacities, increase its intellectual capital, increase its market value and investment attractiveness.

The classification of enterprise costs into fixed and variable is used for management accounting, and not for accounting. As a result, there is no such stock as "variable costs" in the balance sheet.

Determining the amount of variable costs in the overall structure of all costs of the enterprise allows you to analyze and consider various management strategies to increase the profitability of the enterprise.

Amendments to the definition of variable costs

When we introduced the definition of variable costs / costs, we were based on a model of linear dependence of variable costs and production volume. In practice, often variable costs do not always depend on the size of sales and output, therefore they are called conditionally variable (for example, the introduction of automation of a part of production functions and, as a result, a decrease in wages for the production rate of production personnel).

The situation is similar with fixed costs, in reality they are also conditionally constant, and can change with the growth of production (an increase in rent for industrial premises, change in the number of staff and a consequence of the volume of wages. You can read more about fixed costs in detail in my article: "".

Classification of enterprise variable costs

In order to better understand how to understand what variable costs are, consider the classification of variable costs according to various criteria:

Depending on the size of sales and production:

proportionate costs. Elasticity coefficient =1. Variable costs increase in direct proportion to the increase in output. For example, the volume of production increased by 30% and the amount of costs also increased by 30%.
Progressive costs (similar to progressive variable costs). Elasticity coefficient >1. Variable costs are highly sensitive to changes depending on the size of output. That is, variable costs increase relatively more with output. For example, the volume of production increased by 30%, and the amount of costs by 50%.
Degressive costs (similar to regressive variable costs). Elasticity coefficient< 1. При увеличении роста производства переменные издержки предприятия уменьшаются. Данный эффект получил название – “эффект масштаба” или “эффект массового производства”. Так, например, объем производства вырос на 30%, а при этом размер переменных издержек увеличился только на 15%.

The table shows an example of changing the volume of production and the size of variable costs for their various types.

According to the statistical indicator, there are:

General variable costs ( EnglishTotalvariablecost,TVC) - will include the totality of all variable costs of the enterprise for the entire range of products.
Average variable costs (English AVC, Averagevariablecost) - average variable costs per unit of production or group of goods.

According to the method of financial accounting and attribution to the cost of manufactured products:

Variable direct costs are costs that can be attributed to the cost of production. Everything is simple here, these are the costs of materials, fuel, energy, wages etc.
Variable indirect costs are costs that depend on the volume of production and it is difficult to assess their contribution to the cost of production. For example, during the production separation of milk into skimmed milk and cream. It is problematic to determine the amount of costs in the cost of skimmed milk and cream.

In relation to the production process:

Production variable costs - the cost of raw materials, materials, fuel, energy, wages of workers, etc.
Non-manufacturing variable costs - costs not directly related to production: selling and management costs, for example: transportation costs, commission to an intermediary / agent.

Variable Cost/Cost Formula

As a result, you can write a formula for calculating variable costs:

Variable costs = Cost of raw materials + Materials + Electricity + Fuel + Bonus part of Salary + Percentage of sales to agents;

variable costs\u003d Marginal (gross) profit - Fixed costs;

The totality of variable and fixed costs and constants make up the total costs of the enterprise.

General costs= Fixed costs + Variable costs.

The figure shows a graphical relationship between the costs of the enterprise.

How to reduce variable costs?

One strategy to reduce variable costs is to use economies of scale. With an increase in the volume of production and the transition from serial to mass production, economies of scale appear.

scale effect graph shows that with an increase in production, a turning point is reached, when the relationship between the size of costs and the volume of production becomes non-linear.

At the same time, the rate of change of variable costs is lower than the growth of production/sales. Consider the causes of the “scale effect of production”:

Reducing the cost of management personnel.
The use of R&D in the production of products. The increase in output and sales leads to the possibility of costly research research work to improve production technology.
Narrow product specialization. Focusing the entire production complex on a number of tasks can improve their quality and reduce the amount of scrap.
Release of products similar in the technological chain, additional capacity utilization.

Variable costs and the break-even point. Calculation example in Excel

Consider the break-even point model and the role of variable costs. The figure below shows the relationship between the change in the volume of production and the size of variables, constants and total costs. Variable costs are included in total costs and directly determine the break-even point. More

When the enterprise reaches a certain volume of production, an equilibrium point occurs at which the amount of profit and loss coincides, net profit at the same time equals zero, and marginal profit is equal to fixed costs. This point is called breakeven point, and it shows the minimum critical level of production at which the enterprise is profitable. In the figure and the calculation table below, it is achieved by producing and selling 8 units. products.

The task of the enterprise is to create security zone and ensure that the level of sales and production that would ensure the maximum distance from the break-even point. The farther the company is from the breakeven point, the higher the level of its financial stability, competitiveness and profitability.

Consider an example of what happens to the break-even point as variable costs increase. The table below shows an example of a change in all indicators of income and expenses of the enterprise.

As variable costs increase, the break-even point shifts. The figure below shows a schedule for reaching the break-even point in a situation where the variable costs for the production of one unit of the product became not 50 rubles, but 60 rubles. As we can see, the break-even point began to equal 16 units of sales / sales, or 960 rubles. income.

This model, as a rule, operates with linear dependencies between the volume of production and income/costs. In real practice, dependencies are often non-linear. This arises due to the fact that the volume of production / sales is affected by: technology, seasonality of demand, the influence of competitors, macroeconomic indicators, taxes, subsidies, economies of scale, etc. To ensure the accuracy of the model, it should be used in the short term for products with stable demand (consumption).

Summary

In this article, we examined various aspects of the variable costs / costs of the enterprise, what forms them, what types of them exist, how changes in variable costs and changes in the break-even point are related. Variable costs are the most important indicator of the enterprise in management accounting, for creating planned targets for departments and managers to find ways to reduce their weight in total costs. To reduce variable costs, you can increase the specialization of production; expand the range of products using the same production capacity; increase the share of research and production developments to improve the efficiency and quality of output.

Variable costs are the company's expenses spent on the production or sale of goods and services, the amount of which varies depending on the volume of production. This indicator is used to calculate the possibility of reducing the costs of the enterprise.

The main purpose of calculating variable costs

Any economic indicator serves a single goal - to increase the profitability of the enterprise. Variable costs are no exception. They allow you to analyze the company's activities and develop a strategy to increase profitability. Accordingly, this indicator is absent in the balance sheet, since it is needed not for accounting, but for management accounting.

Important! A clear distinction should be made between fixed and variable costs. The first are those whose amount does not change for a long time. For example, office rent, tuition fees, retraining of employees of the enterprise and other fixed costs.

The main types of variable costs

First of all, variable costs are divided into two main subgroups:

Direct- these are expenses that are directly related to the cost of goods (services). For example, the cost of materials, wages, etc.
Indirect- these are expenses related to the cost of a group of goods (services). For example, general factory, general warehouse and other types of general costs that affect the cost of all goods or their individual groups.

Some businessmen believe that variable costs are proportional to the volume of production. However, this is not always the case. According to the volume of production, variable costs are divided into three types:

Progressive. This is a type of cost in which costs increase faster than the growth in sales or production of goods.
Regressive. With this type of cost, the costs lag behind the pace of production or sales.
Proportional. This is precisely the case when the increase in costs is directly proportional to the increase in production volumes.

Consider an example of changing variable costs by volume of production:

You can also distinguish the type of costs by interconnection with the production process:

Production costs are costs that are directly related to the goods produced. For example, raw materials, consumables, energy, wages, etc.
Non-production costs are costs that are not directly related to the production of products. For example, transportation, storage, commission payments to dealers and other types of indirect costs.

Accordingly, variable costs include:

Piecework bonus payments to employees (bonuses, commissions, percentages of sales, etc.);
travel and other related payments;
costs of storage, transportation and warehousing of goods;
outsourcing and other types of services used to service production;
taxes for the manufacture and / or sale of goods and services;
payment for fuel, energy, water and other utility bills;
the cost of purchasing raw materials and Supplies for the production of products.

Detailed instructions for calculating variable costs

To calculate costs, you need to determine the material costs for the production of products. This is done on the basis of the following documents:

reports on the write-off of raw materials, consumables and other materials for the production of goods;
acts of work performed on the main and auxiliary production processes;
reports of outsourcing companies involved in the production of products;
returns for waste materials.

Important! Into the amount material costs data are included only for the first three items from this list. The last point (on the return of waste) is deducted from the amount of costs.

Then you need to determine the amount of costs for paying the variable part of salaries to employees of the enterprise. This includes premiums, interest, commissions, allowances, payments to the Social Insurance Fund and other types of additional payments.

Based on the data on actual consumption and prices set in the region of production, the amount of costs for utility costs and fuel is determined.

After that, the sum of the costs for packaging, storage and delivery of products is calculated. This can be done based on internal documents company or reports of third parties responsible for these stages of work.

After all this, the amount of tax costs is determined on the basis of declarations or accounting reports of the company.

Important! Please note that you can reduce variable costs for taxes, fees and other obligatory payments only by making appropriate changes to federal or regional legislative acts. However, in the calculation they must be taken into account without fail.

Formula for calculating variable costs

The easiest way to calculate variable costs is to simply add up all the costs and then divide by the volume of goods produced during the analyzed period of time. The calculation formula is:

PI \u003d (VI¹ + VI² + VI∞) ÷ OP, where:

PI - variable costs;
VI - type of costs (fuel, taxes, premiums, etc.);
OP is the volume of production.

Variable Cost Example

In 2017, Romashka LLC spent on the production and sale of products:

350 thousand rubles for the purchase of materials;
150 thousand rubles for packaging and storage of goods;
450 thousand rubles to pay taxes;
750 thousand rubles for piecework bonus payments to employees.

Accordingly, the total amount of variable costs amounted to 1.7 million rubles. (350 thousand rubles + 150 thousand rubles + 450 thousand rubles + 750 thousand rubles). The volume of production amounted to 500 thousand units of goods. Accordingly, the variable costs per unit of production amounted to:

RUB 1.7 million ÷ 500 thousand units = 3 rubles 40 kop.