Great opportunities for reducing the cost of manufactured products lie within the production process. Work on analyzing the materials used and revising the production process must be carried out constantly, especially on products that the company has been producing for a long time.

WORK TO REDUCE PRODUCTION COSTS

In order to increase the efficiency of an enterprise, it is necessary to periodically review the production process from the point of view of finding ways to reduce costs.

Work to reduce production costs is carried out in two directions:

1) review of the product design;

2) change in production technology.

To carry out work to reduce costs it is necessary to form a working group, consisting of specialists from the design bureau, technological, production, planning and economic departments and marketing services.

The working group reviews every detail of the product and brings up the following questions for discussion:

• Can this part be made from cheaper material and in a cheaper way?
• Is there any excessive processing involved in the manufacture of the part?
• Will a change in material or technology lead to a change in consumer properties?
• If consumer properties deteriorate, how critical will this be for consumers?

After considering these issues, a reasoned decision is made.

The effectiveness of this group is determined by the amount of savings from the implementation of their proposals.

WE CALCULATE THE AMOUNT OF SAVINGS

Amount of savings when introducing new types of materials depends on change consumption rates And unit prices material and is calculated by the formula:

E nm = (N 0 C 0 - N 1 C 1) × K,

where E nm - savings from the introduction of new types of raw materials and materials, rub.;

N 0, N 1 - the rate of consumption of a given type of raw material, material, fuel per unit of production in the corresponding units of measurement before and after the implementation of organizational and technical measures;

Ts 0, Ts 1 - unit price of a given type of raw material, materials, fuel before and after the implementation of the event, rubles;

K is the volume of production (or the volume of consumption of a given type of resource) in a given period.

Members of the working group, considering the manufacture of each part, proposed replacing the material in one of them.

The part is made of cold-rolled steel with a thickness of 0.8 mm; it is proposed to replace the material with cold-rolled steel with a thickness of 0.7 mm. This will not affect the consumer properties of the product.

The calculation of savings is presented in table. 1.

Despite the fact that the price for steel with a thickness of 0.7 mm is slightly higher than the price for steel with a thickness of 0.8 mm, the amount of savings is 321 thousand rubles.

Conclusion:the solution is rational, it must be implemented into the production process.

Savings from reducing the rate of consumption of material resources calculated by the formula:

E N = (N 0 C - N 1 C) × K,

where E N is the amount of savings from reducing the rate of consumption of material resources, rub.;

N 0 and N 1 - the rate of consumption of a given type of raw material, material, fuel and energy per unit of production in the corresponding units of measurement (kg, t, m, etc.) before and after the implementation of organizational and technical measures;

P — unit price of a given type of raw material, materials, fuel, energy, rub.

K is the volume of production for which consumption rates are changed in connection with the implementation of this organizational and technical measure in the planned period, in appropriate units.

The working group reviewed the parts manufacturing process and found that some parts made from 2mm thick steel had a high percentage of business waste. This is due to the cutting of iron sheets. An option was proposed to change the cutting and, as a result, reduce the material consumption rate by 3%. The calculation of savings is given in table. 2.

The savings under this proposal amounted to 59 thousand rubles. Conclusion: offer to accept.

Salary savingsproduction workers' wages and fees charged on their salaries can be achieved through the development and implementation of organizational and technical measures that ensure a reduction in the labor intensity of manufactured products. This indicator is calculated using the formula:

E sd = (V 0 T 0 - V 1 T 1) × (1 + (C / 100)) × K,

where E sd is the amount of savings on piecework wages and fees accrued to the wage fund, rubles;

B 0, B 1 - standard time for production of a unit of product before and after events, standard hours;

T 0 , T 1 — tariff rate corresponding to the type of work performed, rub.;

C - the established percentage of deductions from the wage fund;

K is the number of products for which the time standard is reduced due to events.

Considering the technological process of manufacturing parts, the working group came up with a proposal to move the production of some parts to other technological equipment. This change in the production process will not affect the quality of manufacturing of parts; the overall time standard for the entire product will remain the same, but less qualified workers will perform the work, with a lower tariff rate. Due to this, savings will be achieved. Calculation of savings - in table. 3.

The savings under this proposal will amount to 8.4 thousand rubles. Conclusion: The proposal is rational and must be accepted.

R. V. Kazantsev, executive director of LLC "UK Teplodar"

The material is published partially. You can read it in full in the magazine

The reduction in unit cost of production (100 rubles of income) is calculated using the formula:

where Svyp is the cost of completion, rub.;

Cpl – planned cost.

By reducing the cost per unit of production, the enterprise receives cost savings on production and sales of products, which is calculated using the formula:

Example. Determine the reduction in the cost of a unit of production (100 rubles of revenue) and the amount of cost savings due to a reduction in the cost of a unit of production according to the following data: cost of 100 rubles. income according to the plan is 74 rubles, revenue according to the plan is 98,642 thousand rubles, costs of production and sales of products will actually increase by 2.5% compared to the plan, revenue has been fulfilled by 105.6%.

1) Determine the total cost according to the plan:

rub.

Zpl=Spl*Vrpl/100=74*98642/100=72995.1 thousand rubles.

2) Let’s determine the costs of production and sales of products to fulfill:

Zvyp=72995.1*102.5/100=74819.97 thousand rubles.

3) Let’s determine the revenue completed:

Vrvyp=98642*105.6/100=104165.95 thousand rubles.

4) Determine the cost of 100 rubles. proceeds from implementation:

Swap=Zvyp/Vrvyp*100=74819.97/104165.95*100=71.83 rub.

5) Determine the reduction in cost of 100 rubles. revenue according to the formula:

6) Let’s determine cost savings by reducing production costs:

Conclusion: The cost of 100 rubles of revenue compared to the plan decreased by 2.17 rubles, which is 2.93% as a percentage, due to a decrease in the cost of 100 rubles. revenue, the company will receive savings in the amount of 2260.4 thousand rubles.

18.5 Sources and factors for reducing costs in communications organizations.

Under sources cost reduction refers to those elements or cost items the amount of which must be reduced in order to reduce cost, under factors the measures that need to be taken to achieve this are understood.

The main sources of cost reduction are:

1) increasing labor productivity, resulting in a reduction in the number of employees and the wage fund;

2) reducing the costs of materials, raw materials, fuel per unit of production;

3) reduction of maintenance costs, production management;

4) improving the use of equipment;

5) acceleration of turnover of working capital.

Cost reduction factors:

1) In-production, depending on the activities of the enterprise itself:

a) technical, aimed at improving the technical level of production;

b) organizational, aimed at improving the organization of production and labor, changing the management structure;

c) structural, aimed at changing the structure and volume of production;

2) Non-production, the change of which does not depend on the activities of the enterprise:

a) established depreciation rates;

b) changes in prices for raw materials received from suppliers;

c) changes in the tariff system and the established minimum wage;

d) changes in tax rates and contributions to the budget and extra-budgetary funds.

Analysis of actual production costs consists of establishing the degree of their compliance with planned (standard) values, studying the reasons for changes in the cost level, identifying reserves for further cost reduction and, ultimately, determining ways to use discovered reserves.

The following should be analyzed cost objects products:

• full cost of production as a whole and by cost elements;
• the cost of all commercial products;
• unit cost of the most important products according to costing items;
• level of costs per ruble of commercial products.

Analysis of the total cost of production as a whole and by cost elements includes an analysis of planned and actual data in thousands of rubles of the cost structure as a percentage according to the following table. 7.1.

Table 7.1

Analysis of production costs

It should be taken into account that the total amount of the full cost largely depends on changes in:

• volume of production;
• product structure, nomenclature and assortment shifts;
• ratio of the level of variable and fixed costs. Numerous factors influencing the level and dynamics

production costs can be reduced to the following groups: factors that improve the use of labor (fixed assets);

factors that improve the use of labor items (working capital);

factors that improve the use of labor itself; factors that improve the organization of production, labor and management.

Economic assessment of cost reduction measures is carried out using two methods:

1. The factor calculation method consists of identifying factors that reduce it and economic assessment using the formula:

C c = (DxI)/100%,

where С с - cost reduction (in%); And - change in this calculation article (economic element); D - the share of this article (element in the total cost).

2. The direct counting method is similar to the method for determining current cost savings when introducing new technology.

In this case, the cost is considered as a combination of material, labor and overhead costs.

Accordingly, the total savings from cost reduction will consist of savings in these costs:

where E m - savings in material costs; Ezp - wage savings; E nr - savings on overhead costs.

Saving material costs E m is defined as:

E I = xAx C-

where R o is the specific consumption of materials before implementation; R n - also after implementation; A is the volume of production in natural units of measurement; P is the price per unit of material resources.

Wage savings for temporary workers EZPP are determined by the formula:

E and = (H - H) x 3 x K,

where Ch, Ch n - number of temporary workers before and after implementation; Zp - average annual salary of temporary workers; Kn - wage accrual coefficient.

Savings in wages of piecework workers Ezps with accruals are determined by the formula:

E n = (P"-P")xA 1 xK,

where Р^, - price per unit of product (work) before and after

implementation; A 2 - volume of production in natural units of measurement after implementation; Kn - wage accrual coefficient.

Overhead savings E nr:

E = C x K x D,

nr nr r ^y-p’

where C n ^ is the amount of overhead costs in the cost of all marketable products; K p - production growth rate; D is the share of semi-fixed costs in overhead costs.

Cost reduction percentage C:

C = (E/s) x 100,

where C c is the full cost of commercial products before implementation; E () - total cost savings.

Using an economic assessment of cost reduction allows you to analyze cost reductions and gain insight into individual cost savings.

For a more in-depth analysis of the reasons for changes in the cost of individual, usually the most important, types of products, a comparison is made of the actual level of costs per unit of product with planned and data from previous reporting periods.

The influence of factors on changes in the level of cost per unit of production is determined by the formula:

I 4 POST /" / 7 per/’

where C is the cost per unit of product type /; Z post / - the amount of fixed costs for the type of product /; 3. - sum of changes

ny costs per unit of product of the type /"; VP (. - volume of output of the type of product / in natural units of measurement.

Conditional example. The initial data for factor analysis of the product cost are presented below:

We determine the influence of various factors on changes in the cost of a product using the chain substitution method:

We calculate the cost of production of the product according to plan C pl:

14,000 thousand rubles. 11,500 pcs.

2200 rub. = 3417.4 rub.

We calculate the cost of the product based on the actual volume of production and planned costs Av

14,000 thousand rubles. 14,500 pcs.

2200 rub. = 3165.5 rub.

We determine the cost of the product at actual fixed costs and actual output volume and at planned variable costs C 2:

„ 3 P0STF, 18,500 thousand rubles.

with 2 = „g, + Zperpl = -+ 2200 RU 6 " = 4340 rub.

VPF 14,500 pcs.

We calculate the actual cost of product C (|) based on actual costs:

P 3 postf, ^ 18,500 thousand rubles. „ 7, p -

S f = -- + 3 PERF = ----+ 2600 rub. = 3875.9 rub.

^ VPf ^ 14500 pcs.

Thus, the total change in the cost per unit of the drug product total was:

DS 0b Ш = S f - S pl = 3875 ' 9 - 3417 ' 4 = 458 ' 5 RU 6 -

The change in cost occurred due to the following factors:

Volume of production of AS VP:

DS = C, - C = 3165.5 -3417.4 = -251.9 rub.;

Amounts of fixed costs DS constant:

AC,just = s 2 “С, = 3475.9 - 3165.5 = 310.4 rub.;

Specific variable costs DS per:

AC,.sr = s f - C 2 = 3875.9 - 3475.9 = 400 rub.

So, the overall change in the cost of the product occurred due to an increase in the volume of production - the cost decreased by 251.9 rubles, and due to an increase in fixed and variable costs, the cost of the product increased by 310.4 rubles, respectively. and 400 rub.:

DS ob W = dS vl + dS „os T + ds „er = -251.9 + 310.4 + 400 = 458.5 rub.

Analysis of cost reduction per 1 rub. marketable products makes it possible to determine to what extent the results of fulfilling the plan for the cost of production depended on the enterprise and to what extent - on factors independent of the enterprise.

Cost indicator per 1 rub. commercial products are universal, since they can be calculated at any enterprise in various industries. In addition, it shows the direct relationship between cost and profit.

Cost indicator per 1 rub. commercial products Z tp is determined by the formula:

where Z tp - costs per 1 rub. commercial products; C p - the total cost of marketable products; TP - commercial products at negotiated prices.

The lower this indicator, the lower the cost, the greater the profit from the sale of commercial products, the higher the profitability.

Reduced costs by 1 rub. marketable products in the planning period compared to the level of costs of the reporting period is determined by the formula:

C c =- °-- 3п xОО, where С с is the result of reducing costs by 1 rub. TP; Z o - costs per 1 rub. TP of the reporting period; Z p - costs per 1 rub. TP of the planning period.

Cost per 1 rub. commercial products depend on changes in a number of factors, in particular:

• production volume;
• structural changes in production;
• specific variable and fixed costs;
• selling prices and other factors, which is confirmed by the data in Table. 7.2 and 7.3.

Thus, the amount of profit decreased mainly due to changes in the level of fixed and variable costs, and increased due to rising prices for the company’s products and changes

Table 7.2

Initial data and calculations of the influence of factors on the change in the amount

costs per 1 rub. commercial products

Table 7.3

Calculation of the influence of factors on changes in the amount of profit

production structure, increasing the share of more profitable products.

For a comprehensive study of the reasons for changes in cost, it is recommended:

• in material-intensive industries, analyze changes in the amount of material costs both for the enterprise as a whole, and changes in specific material costs for individual types of products;
• in labor-intensive industries (in wage-intensive ones), analyze the change in the unit cost of each type of product due to the labor intensity of the product and the level of average hourly wages. It is also advisable to analyze the impact of indirect costs

at cost, in particular: costs of maintaining and operating equipment, commercial, general production and general business expenses. The analysis of these expenses is carried out by comparing their actual value with planned data and their value in dynamics over a number of years.

Based on the analysis performed, reserves for reducing product costs are determined due to:

• increasing production volumes and better use of the enterprise's production capacity;
• reducing production costs (raw materials, materials, fuel, water, energy, increasing labor productivity, reducing defects, etc.);
• economical use of overhead expenses (for repairs of fixed assets, entertainment and travel expenses, postal, telegraph and office expenses, etc.);
• better organization of production: launching materials into production, issuing them from the warehouse; reducing losses of materials and finished products, eliminating emergency situations and unscheduled downtime of machinery and equipment, paying for downtime, etc.

TEST QUESTIONS AND TASKS

• 1. Define the cost of production (production costs). What are the differences between them?
• 2. What is the difference between production cost and social cost of production?
• 3. How are the costs of production and sales of products classified in practice?
• 4. On what factors does the product cost structure depend?
• 5. How are industries divided according to their cost structure?
• 6. What is the difference between cost elements and costing items?
• 7. How are material costs written off for tax purposes?
• 8. What types of expenses are considered entertainment expenses; expenses on advertising and on training and retraining of personnel?
• 9. How are costs classified depending on the nature of participation in the production process; by economic content; according to the complexity of calculations; by the method of attributing costs and by the degree of dependence on production volume?
• 10. How are costs determined by cost elements?
• 11. How are expenses classified according to costing items?
• 12. How is the rate of shop and general plant expenses calculated?
• 13. What methods of distribution of indirect costs are used?
• 14. What product cost calculations are used in practice at enterprises?
• 15. Explain the method of calculating the cost of products (works, services) based on the amount of coverage.
• 16. What costing methods are used in practice?
• 17. How are expenses classified in the accounting system?
• 18. What expenses are considered justified for tax purposes?
• 19. How is the cost of work in progress assessed and accounted for by industry?
• 20. How are direct costs attributable to manufactured finished products determined?
• 21. How are direct costs attributable to shipped but not sold finished products calculated?
• 22. How are direct costs attributable to shipped and sold finished products calculated?
• 23. What are the main directions of analysis of production cost objects?
• 24. What are the main factors influencing the level and dynamics of costs and products?
• 25. What are the main factors that determine the reserves for reducing production costs?

Let's determine the annual savings from cost reduction for the year using the formula:

Eug = (C1 - C2) * Br, (32)

where C1 and C2 are the cost per unit of production, respectively, before and after the implementation of measures, rub. /PC.;

Вг - planned annual production volume of products after the implementation of measures, natural units of measurement, tons.

Annual savings are calculated separately for meat and fish products and then added up.

Meat shop:

The planned annual production volume after the events is 180 tons.

Apple= (99.7-88.97) *180=1931.4 thousand rubles

Fish shop:

The planned annual production volume after the measures taken is 42 tons.

Apple= (69.31-60.80) *42=357.42 thousand rubles

Total savings per year:

1931.4+357.42=2288.82 thousand rubles.

By reducing production costs, in addition to increasing profits, savings of 2,288.82 thousand rubles are expected.

Loan calculation

To implement the proposed measures, the company needs additional funds in the amount of 995.39 tr. At this time, the company does not have sufficient cash reserves to implement the proposed project, so the best option would be to obtain a loan from Sberbank of Russia in the amount of 1 million rubles for a period of 5 years at 10% per annum.

The loan repayment plan is presented in Table 34.

Table 34 - Loan repayment plan

Economic efficiency of project activities

After all the activities carried out, we can conclude that the performance of the enterprise has improved. They are presented in Appendix A and Table 35.

Table 35 - Economic indicators of work after the activities carried out

Thus, after all the measures taken, sales of meat products are expected to increase by 62.3 tons and for fish products by 10.2 tons. The increase in revenue will occur by 6327.2 thousand rubles. for meat products and by 689.46 tr. for fish products. Profits will also increase:

for 2042.58 tr. for meat products

by 339.77 tr. for fish products

The cost of production is expected to decrease:

for the meat shop for 10.73 rubles;

for the fish shop for 8.51 rubles.

Costs such as:

1) Meat shop

for electricity by 14.34 tr. or 10.51%

general production costs by 97.9 or 10.09%

2) Fish shop

wage fund for 42.4 thousand rubles. or by 51.8%

fees from the payroll fund for 8.63 tr. or by 59.9%

electricity consumption by 1.14 tr. or by 5.3%

rent for 1.4 tr. or by 20%

costs for repairs of fixed assets by 11.4 thousand rubles. or by 30.48%

Annual savings from cost reduction will amount to 2288.82 thousand rubles. The measures taken will bring significant economic benefits to the company and, if this project is successful, the opportunity for further development.

Summary table 36 shows the profit that these activities will bring.

Table 36 - Summary table of activities

Thus, having incurred costs in the amount of 995.39 thousand rubles, the company will receive an increase in net profit of 1905.89 thousand rubles, which is 2 times more expenses, which indicates the effectiveness of the measures taken. Profitability will increase: for the meat shop by These indicators indicate that if profit indicators continue to remain at a high level, then the enterprise, in addition to possible further development and expansion, will have the opportunity to repay the loan they took out ahead of schedule.

Note. The text of the problem was taken from the forum.

Task. Determine cost reduction

A comment.
Thanks to the teachers for replacing “rubles” with hryvnias, but... this was the cost of ore mining around the 80s of the 20th century. That is, the task has been preserved “since the times of Soviet power.” It was worth at least taking an interest in the real figures in the mining industry.

The task, again, is simply on the student’s ability to count in a column. Requires knowledge within the 6th grade of secondary school and a general understanding of the principle of "variable costs / fixed costs." So, approximately 9th grade. In extreme cases, it will be suitable for a technical school.

It should be noted that the author of the problem understands the term “cost” as the full cost of marketable products. Because under other assumptions, the problem simply cannot be solved, since we are talking exclusively about ore production, but not a word about sales. And in “real life” semi-fixed costs will be written off not on extracted, but on sold products! For some reason, university teachers forget about such “little things.”

An economist should at least think about the level of growth of semi-fixed costs based on inflation data and expectations of wage growth, etc.

Solution.
We define conditionally variable expenses.
98.30 - 44.50 = 53.80 hryvnia per ton

We determine the level of semi-fixed expenses.
44.50 * 1,850 = 82,325 thousand hryvnia

Determining the level of semi-variable expenses
53.80 * 1,980 = 106,524 thousand hryvnia

Total production costs will be
82,325 + 106,524 = 188,849 thousand hryvnia

Planned cost per ton of marketable products (see comment)
188,849 / 1,980 = 95.38 hryvnia per ton

The reduction in the planned cost of marketable products due to increased production volumes will be:
(98,30 - 95,38) / 98,30 * 100% = 2,97%

Answer: 1) 2,97% 2) 95,38

Task. Determine material cost reduction

In the planning period, material cost rates and planned prices for its purchase change. These changes are characterized by the following data:

Determine the overall reduction in material costs in the planning period in absolute and percentage terms.

Solution.

To produce one item for each of the products in the base year.

Costs for one product A in the base year = 0.9*184=165.6 UAH.

Costs for one product B in the base year = 0.15*198=29.7 UAH.

Costs for one product B in the base year = 1.5*172=258 UAH.

Let's find production costs all products in the base year.

Costs for products A = 400 * 165.6 = 66240 UAH.

Costs for products B = 1200 * 29.7 = 35640 UAH.

Costs for products B = 800*258=206400 UAH.

Let's find the costs of material resources to produce one item for each product in the plan year.

Costs for one product A in the planning year = 0.8 * 191 = 152.8 UAH.

Costs for one product B in the planning year = 0.10 * 202 = 20.2 UAH.

Costs for one product B in the planning year = 1.4 * 175 = 245 UAH.

Let's find production costs about all products in the planning year.

Costs for products A = 400 * 152.8 = 61120 UAH.

Costs for product B = 1200 * 20.2 = 24240 UAH.

Costs for product B = 800*245 = 196,000 UAH.

In the planning period in value terms for each product.

Reducing costs for products A = 66240-61120 = 5120 UAH.

Reduced costs for products B = 35640-24240 = 11400 UAH.

Reducing costs for products B = 206400-196000 = 10400 UAH.

Find a reduction in material costs in the planning period in relative terms for each product.

Cost reduction for products A = 61120/66240 = 0.9227

1-0,9227= 0,0773

Resource costs decreased by 7.73%

Reduced costs for products B = 24240/35640 = 0.6801

1-0,6801= 0,3199

Resource costs decreased by 31.99%

Reduced costs for products B = 196000/206400 = 0.9496

1-0,9496= 0,0504

Resource costs decreased by 5.04%

Find the cost reduction for all products in the planning period in value terms.

Cost reduction for all products = (66240+35640+206400)-(61120+24240+196000)=308280-281360=26920 UAH.

Let's find the cost reduction in relative terms and for all products in the planning period.

Cost reduction in relative terms = 281360/308280 = 0.9127

Resource costs decreased by 8.7%

Answer: total costs for production of products decreased by 26,920 UAH. in the planning period. In relative terms, the decrease was 8.7%. The most effective was the reduction in costs for product B. The savings amounted to 11,400 UAH.

Task. Selecting a cost reduction project

The Interval enterprise produces products B and D. In the planning year, the company's managers are tasked with reducing the cost of production for one of the products in such a way that the greatest cost savings are achieved. Product output in the planned year remains unchanged.

Determine and justify for which product the cost should be reduced. Set prices for products that the enterprise produces and determine the profit of the enterprise in the planning year. Data for calculations are given in the table.