Special attention should be paid to the assessment of costs included in the cost of products (works, services), since they predetermine the level of selling prices, and, accordingly, the competitiveness of products and the amount of profit of the enterprise.

When analyzing the actual cost of manufactured products, identifying reserves and the economic effect of reducing it, calculations based on economic factors are most often used. Economic factors most fully cover all elements of the production process - means, objects of labor and labor itself. They reflect the main directions of work of enterprise teams to reduce costs: increasing labor productivity, introducing advanced equipment and technology, better use of equipment, cheaper procurement and better use of labor items, reduction of administrative, managerial and other overhead costs, reduction of defects and elimination of unproductive expenses and losses. .

Factors are understood as the reasons that determine a certain level of costs, i.e. it is a set of measures that cause the dynamics of product costs.

The following factors may apply:

1. Increasing the technical level of production. This is the introduction of new, progressive technology, mechanization and automation of production processes; improving the use and application of new types of raw materials and materials; changes in the design and technical characteristics of products; other factors that increase the technical level of production.

The reserve for reducing material costs (RMZ) for the production of the planned output of products through the introduction of new technologies and other organizational and technical measures can be determined as follows:

RMZ = (UR 1 – UR 0) x VVP pl x C pl, (1.2)

where UR 0, UR 1 – consumption of materials per unit of production, respectively, before and after the implementation of organizational and technical measures;

VVP pl – planned volume of production;

Ts pl – planned prices for materials.

2. Improving the organization of production and labor. A reduction in cost can occur as a result of changes in the organization of production, forms and methods of labor with the development of production specialization; improving production management and reducing production costs; improving the use of fixed assets; improvement of logistics; reducing transport costs; other factors that increase the level of production organization.

Savings in labor costs as a result of the implementation of organizational and technical measures (ORM) can be calculated by multiplying the difference between the labor intensity of products before and after the implementation of the relevant measures by the planned level of average hourly wages and by the number of products planned for production:

RZP = (UTE 1 – UTE 0) x OT pl x VVP pl, (1.3)

where UTE 0, UTE 1 – labor intensity of products, respectively, before and after the implementation of organizational and technical measures;

OT pl – planned level of average hourly wage;

VVP pl – the number of products planned for release.

By improving the use of fixed assets, cost reduction can occur as a result of increased reliability and durability of equipment; improving the preventive maintenance system; centralization and introduction of industrial methods of repair, maintenance and operation of fixed assets.

3. Changes in the volume and structure of products, which can lead to a relative reduction in semi-fixed costs (except for depreciation), a relative reduction in depreciation charges, a change in the nomenclature and range of products, and an increase in their quality. Conditionally fixed costs do not depend directly on the quantity of products produced. With an increase in production volume, their quantity per unit of production decreases, which leads to a decrease in its cost. Relative savings on semi-fixed costs are proposed to be determined using the formula:

EP = (T x PS b): 100, (1.4)

where ES is the saving of semi-fixed costs;

PS b – the amount of semi-fixed expenses in the base year;

T – growth rate of manufactured products compared to the base year.

4. Improved use natural resources. This factor may include changes in the composition and quality of raw materials; changes in the productivity of deposits, the volume of preparatory work during extraction, methods of extraction of natural raw materials; changes in other natural conditions.

5. Introduction of innovations in the field of management, organization of production and labor: organization of controlling and management accounting, creation of automated workplaces for managers and specialists, introduction of scientific organization of labor, expansion of service areas, etc.

6. Economic factors: improving material incentives for personnel, attracting investments, introducing progressive norms and standards, etc.

7. Cost reduction can occur by creating automated control systems, using computers, improving and modernizing existing equipment and technology. Costs are reduced and as a result integrated use raw materials, the use of economical substitutes, the full use of waste in production. A large reserve also conceals the improvement of products, a reduction in their material and labor intensity, a reduction in the weight of machinery and equipment, a reduction in overall dimensions, etc.

8. A reduction in current costs occurs as a result of improving the maintenance of the main production, for example, the development of continuous production, the streamlining of auxiliary technological work, the improvement of tool facilities, and the improvement of the organization of quality control of work and products. A significant reduction in living labor costs can occur with a reduction in lost working time and a reduction in the number of workers who do not meet production standards.

9. Another factor is the improvement in the use of fixed assets, which occurs as a result of increased reliability and durability of equipment; improving the system of scheduled preventive maintenance, centralization and introduction of industrial methods of repair, maintenance and operation of fixed assets.

10. Certain reserves for reducing costs are laid down in the elimination or reduction of costs that are not necessary in the normal organization of the production process (excessive consumption of raw materials, materials, fuel, energy, additional payments to workers for deviations from normal working conditions and overtime work, etc.) . This also includes the most common production losses, such as losses from defects. Identifying these unnecessary costs requires special methods and attention of the enterprise team. Elimination of these losses is a significant reserve for reducing production costs.

11. The next factor influencing the cost of production is labor productivity. It is necessary to take into account that the reduction in production costs is largely determined by the correct ratio of the growth rate of labor productivity and wage growth. The growth of labor productivity should outpace the growth of wages, thereby ensuring a reduction in production costs.

Let us consider under what conditions, with an increase in labor productivity at enterprises, labor costs per unit of output are reduced. An increase in production output per worker can be achieved through the implementation of organizational and technical measures, due to which production standards and, accordingly, prices for work performed change, and by exceeding established production standards without carrying out organizational and technical measures.

In the first case, the company receives savings on workers' wages. This is explained by the fact that due to a decrease in prices, the share of wages in the cost of a unit of production decreases. However, this does not lead to a decrease in the average wages of workers, since the organizational and technical measures taken enable workers to produce more products with the same labor costs.

In the second case, the cost of wages workers in the unit cost of production does not decrease. But with an increase in labor productivity, the volume of production increases, which leads to savings on other expense items, in particular, production maintenance and management costs are reduced.

12. It is also important to reduce workshop and general plant expenses. This consists, first of all, in simplifying and reducing the cost of the management apparatus, saving on management costs, as well as reducing the cost of wages for auxiliary and auxiliary workers.

13. Industry and other factors. These factors include:

– commissioning and development of new workshops, production units and production facilities;

– preparation and development of production in existing associations and enterprises.

14. Significant reserves are included in reducing the costs of preparation and development of new types of products and new technological processes, in reducing the costs of the start-up period for newly commissioned workshops and facilities.

All factors influencing the level of cost reduction can be divided according to the scale of their action: national, intra-industry and intra-production.

– National ones are related to government policy in the field of economic relations.

– Intra-industry factors in the context of economic reform play a minor role and can be represented by the process of improving the standards of the price system for products and in the field of planning production activities, the adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are resolved by the enterprise itself.

– Intra-production factors are associated with improving the use of all material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise’s activities, but may also be independent of them.

Also, factors influencing the cost of production can be classified according to several criteria.

Technical factors include:

– introduction of new progressive technology;

– mechanization and automation of production;

– scientific and technical achievements;

– improving the use of fixed assets;

– technical and energy equipment of labor.

Technological factors include the following:

– change in product range;

– duration production cycle;

– improving the use and application of new types of raw materials and materials;

– use of economical substitutes and full use of waste in production;

– improving product technology, reducing its material and labor intensity.

Based on the time of occurrence, planned and sudden factors are distinguished.

An enterprise can plan the following activities:

– commissioning and development of new workshops;

– preparation and development of new types of products;

– preparation and development of new technological processes;

– optimal placement of individual types of products throughout the enterprise.

Sudden (not planned) factors include:

– changes in the composition and quality of raw materials;

– changes in natural conditions;

– deviations from established production standards;

– production losses, etc.

Based on the place of occurrence, factors are divided into external (independent of the enterprise) and internal (dependent on the enterprise). The cost of production, regardless of the enterprise, can be influenced by:

– economic situation in the country;

– inflation;

– technical and technological progress;

– changes in tax legislation, etc.

Internal ones include:

– production structure of the enterprise;

– management structure;

– level of concentration and specialization of production;

– duration of the production cycle.

By purpose, primary and secondary factors are distinguished. This group of factors depends on the specialization of the enterprise. If we consider material-intensive production, the main factors include the following:

– prices for material resources and consumption of raw materials and other materials;

– technical equipment of labor;

– technological level of production;

– production rate;

– nomenclature and range of products;

– organization of production and labor.

To a lesser extent, the following factors will affect the cost of production:

– management structure;

– natural and climatic conditions;

– wages of production workers;

– structure of other costs, etc.

Thus, we can conclude that the cost of production is the current costs of production and sales of products, expressed in monetary terms.

In economic activities, enterprises use different types of cost: total, individual and average, technological, workshop, production and total, standard, planned and actual.

There are two ways to determine the cost of products: estimates and calculations.

Depending on the object, the following main methods of calculating production costs and accounting for production costs are distinguished: order-by-order, operation-by-operation, distribution-by-product and process-by-process. Depending on the method of calculation, calculation methods are distinguished: direct calculation, calculation-analytical, normative, parametric, cost exclusion, coefficient and combined.

The following main groups of factors influencing the cost of production are also distinguished: technical, organizational, structural, natural, internal and external, planned and sudden, etc.

GOUVPO "MORDOVIAN STATE UNIVERSITY"

NAMED AFTER N.P. OGAREVA"

Faculty of Economics

Department of Economics and Logistics

COURSE WORK

ANALYSIS OF FACTORS AFFECTING REDUCTION OF PRODUCT COSTS

Specialty 080105-65 finance and credit

Course work designation KR-02069964-080105-65-25-08

Head of work

Ph.D. econ. Sciences, Art. teacher *.*. ********

Saransk 2008

GOUVPO "MORDOVIAN STATE UNIVERSITY"

NAMED AFTER N.P. OGAREVA"

Faculty of Economics

Department of Economics and Logistics

ASSIGNMENT FOR COURSE WORK

Student *** group ******* ********

1 Topic Analysis of factors influencing the reduction of production costs (using the example of a specific product)

2 The deadline for submitting the work for defense is ___________

3 Initial data for scientific research of the work of domestic and foreign authors, textbooks, periodical materials, statistical data

4.1 Theoretical aspects of analysis and management of product costs

4.2 Analysis of factors influencing the cost of production using an example

ZAO MPK Saransky

4.3 Proposals to reduce production costs

Work manager _____________________________________________________ *****

The task was accepted for execution by ______________________________

The course work contains 54 pages, 9 tables, 53 used literature sources, 3 appendices.

COST, COSTS, COST CALCULATION, FACTORS AFFECTING COST, COST ANALYSIS.

Object of study: analysis of production costs at ZAO MPK Saransky

The purpose of the work is an objective assessment of the level and dynamics of product costs, identifying ways to reduce them, as well as identifying reserves aimed at reducing the costs of production and sales of products.

Research methods: analytical and statistical.

Results obtained: the theoretical aspects of product cost analysis were studied, a factor analysis of the production cost of ZAO MPK Saransky was carried out, and the main proposals for reducing costs were identified.

The degree of implementation is partial.

Scope of application - in the practical activities of ZAO MPK Saransky.

Introduction 5

1Theoretical aspects of analysis and management of product costs 8

1.1 Concept, economic content and types of cost 8

1.2 Classification of costs that form the cost.

Calculation of product costs 11

1.3 Factors influencing the cost of production 18

1.4 The meaning and objectives of cost analysis and management 22

2 Analysis of factors influencing production costs

using the example of ZAO MPK Saransky 25

2.1 Analysis of the dynamics and structure of production and sales costs

products 25

2.2 Factor analysis of product costs 31

2.3 Cost-effectiveness analysis 39

3 Proposals to reduce production costs 43

3.1 Reserves for reducing production and sales costs 43

3.2 Proposals for changing the structure of product costs 45

Conclusion 49

References 51

Application

INTRODUCTION

Currently, production is developing in Russia, and with it the market and the country's economy. If earlier in the early nineties, when there was a shortage of goods, there was no acute problem of selling products, today we can say that it exists. With the process of filling the market with goods and services, competition is growing, which forces each market participant to fight for their place. The one who has higher quality and lower price for a product or service wins the competition. It is these two main factors that influence the outcome of the struggle, and the reserve for improving these factors is precisely contained in the cost price.

Most commercial enterprises set profit as their main goal before starting their production. The profit of an enterprise largely depends on the price of the product and the cost of its production. The price of products on the market is a consequence of the interaction of supply and demand. Under the influence of the laws of market pricing, in conditions of free competition, the price of a product cannot be higher or lower at the request of the manufacturer or buyer - it is automatically equalized. Another thing is the costs that form the cost of production. They can increase or decrease depending on the volume of consumed labor and material resources, the level of technology, the organization of production and other factors. Naturally, the higher the costs, the lower the profits and vice versa. That is, there is an inverse functional relationship between these indicators. Consequently, the manufacturer has many cost-cutting levers that it can put into action if managed wisely.

Studying the cost of production allows us to give a more correct assessment of the level of profit and profitability indicators achieved at the enterprise. In a generalized form, the cost of production reflects all aspects economic activity enterprises, their achievements and shortcomings. It can be noted that the cost price is used to calculate national income throughout the country, is one of the main factors in the formation of profit, is one of the main parts of economic activity and, accordingly, one of the most important elements of management. The cost of production is inextricably linked with almost all indicators of the economic activity of the enterprise, and they are reflected in it. From this point of view, this indicator summarizes the quality of the entire work of the enterprise.

The success of a company depends on the formation of cost for several reasons:

1) the costs of producing a product are the most important element in determining a fair and competitive selling price;

2) information about the cost of production is the basis for forecasting and managing production and costs;

3) knowledge of cost is necessary to determine the profitability of individual types of products and production as a whole, determine wholesale prices for products, and carry out intra-production cost accounting.

The cost of production reflects the achievements and shortcomings in any area of ​​the enterprise's economic activity. The importance of this indicator is especially enhanced due to the large volume of production and its continuous growth, since in this case a reduction in one of the elements of cost leads to an increase in the competitiveness and profitability of products. It is known that reducing costs by 5.9% will give the same effect if sales volume were increased by 33%.

Reducing costs is a factor in increasing profitability, increasing cash accumulation, achieving economic effect and, consequently, the success of the enterprise. A significant portion of the costs of expanding and improving production is spent on savings obtained by reducing costs. Each enterprise should pay increased attention to the analysis and management of product costs, understanding the role of this indicator in assessing its activities.

The problem of cost analysis and management faces many enterprises, including meat processing companies.

The basis for choosing the topic “Analysis of factors influencing the reduction of production costs” using the example of JSC “Meat Processing Complex Saransk” was not only the interest in studying factors that can influence the cost of production, but also interest in the enterprise itself. CJSC MPK Saransky produces about 25 types of products; the volume of costs incurred during the operation of the complex is enormous, and this emphasizes the significance and importance of studying this topic using its example.

The purpose of the study is to objectively assess the level and dynamics of product costs, identify ways to reduce them, as well as identify reserves aimed at reducing the costs of production and sales of products.

The subject of the course work is the factors influencing the reduction of production costs;

The object of research in this course work is the analysis of the cost of production at ZAO MPK Saransky.

The main objectives set in the course work are:

1. Study the theoretical aspects of product cost analysis;

2. Identify factors influencing cost and perform factor analysis;

3. Identify reserves for reducing production costs;

4. Identify the main proposals to reduce costs;

1 Theoretical aspects of analysis and management of product costs

1.1 Concept, economic content and types of cost

In the process of economic activity, the enterprise incurs costs (material, labor, financial). The costs of an enterprise consist of the entire amount of expenses for the production of products and their sale. These costs, expressed in monetary terms, are called prime costs and are included in the cost of the product. Thus, the cost is part of the price of the product, and it reflects a large part of the cost of the product and depends on changes in the conditions of production and sale of products. Cost is one of the most important indicators of the efficiency of economic activity. It represents the enterprise’s costs of production and circulation and serves as the basis for measuring expenses and income, that is, self-sufficiency. If the cost is not known, then it is almost impossible to determine the profit. And to form a selling price, you cannot do without cost. The cost shows how much the products it produces cost the company, how much you can earn from selling the products, or what kind of markup you can make above the cost, that is, it is the basis for pricing. If the cost of products sold is greater than the cost of production, then expanded production takes place. If during the sales process the products are less than the cost price, then even simple reproduction is not ensured. Without exaggeration, this indicator most sensitively reacts to the situation that develops in enterprises, in the production of certain types of products and in entire industries.

In the economic literature there is often a definition that quite briefly and clearly expresses the concept of cost:

Cost is the current costs of an enterprise expressed in monetary form for the production and sale of products (works, services).

In the Regulations on the composition of costs for the production and sale of products (works, services), approved by the Decree of the Government of the Russian Federation of August 5, 1992. No. 552, cost is defined as the valuation of natural resources, raw materials, fuel, materials, energy, fixed assets, labor resources used in the production process of products (works, services), as well as other costs for its production and sale.

When planning, accounting and calculating the cost of products, an enterprise has the right to add into the cost price also other expenses and payments made by it that are not directly related to the production and sale of products. The “legislator” allowed these expenses to be included in the cost price, and which are subsequently integral part the formed price of the product, i.e. will be compensated to the enterprise by the consumer of its products.

Conventionally, the cost of products manufactured by an enterprise can be considered from economic and legal positions. From an economic perspective, the cost of production is represented as the value expression of any costs of its production and sale, called costs. From a legal perspective, the cost of expenses incurred by an enterprise should be taken into account only when the law allows it.

a) accounting and control of all costs for the production and sale of products;

b) the basis for forming the wholesale price for the enterprise’s products and determining profit and profitability;

c) economic justification for the feasibility of making real investments in the reconstruction, technical re-equipment and expansion of an existing enterprise;

d) determining the optimal size of the enterprise;

e) economic justification and adoption of any management decisions, etc.

The cost of production is not only the most important economic category, but also a qualitative indicator, since it characterizes the level of use of all resources (variable and constant capital) at the disposal of the enterprise. The cost includes costs associated with:

Directly with production (raw materials, supplies, purchased products and semi-finished products, fuel, energy, etc.);

With maintenance of the production process and its management;

with wages and contributions to the fund social protection, as well as payments for property insurance;

With the cost of repairing major production assets;

With depreciation charges for the complete restoration (renovation) of fixed assets;

With the costs of selling products.

Moreover, it should be noted that all components are accounted for at actual costs, regardless of whether they are produced within the limits established by current legislation or exceed them. That is, these components are the costs of past work already completed. This circumstance is especially important for reasonable taxation of profits.

In domestic theory and practice, depending on the object for which costs are determined, there are the following types cost:

a) the cost of all products, which means the total cost of its production and sale. In this case, a distinction is made between the full production cost and the full (commercial) cost of production.

1) total production cost is the total amount of direct and indirect costs for the production of goods or services.

2) full (commercial) cost includes the full production cost, as well as the amount of non-production (commercial) expenses.

b) individual cost, i.e. the cost of a specific unit of production. Determined exclusively in the case of single production, for example during the construction of a ship or in the manufacture of unique equipment.

c) average cost - this indicator can be calculated for individual enterprises and for industries it is defined as a weighted average value and characterizes the average cost per unit of production.

1.2 Classification of costs that form the cost.

Product cost calculation

The cost of production includes the cost of means and labor consumed in the production process (depreciation, cost of raw materials, materials, fuel, energy, etc.), part of the cost of living labor (wages), the cost of purchased products and semi-finished products, costs of production services third party organizations. Expenses for equipping workplaces with special devices to ensure special clothing, shoes, creating lockers for special clothing, dryers, rest rooms and other conditions provided for by special requirements are included in the cost price. Many of these costs can be planned and taken into account in kind, i.e. in kilograms, meters, pieces, etc. However, in order to calculate the amount of all expenses of the enterprise, they need to be brought to a single meter, i.e. presented in monetary terms expression.

Additionally, the cost of industrial products includes: social insurance contributions (in proportion to wages), interest on a bank loan, costs of maintaining fixed capital in working condition, bonus payments provided for in the regulations on bonuses at enterprises and other costs. For tax purposes, expenses incurred by the organization are adjusted taking into account the limits, norms and standards approved in the established manner. In this manner, for example, advertising costs, entertainment expenses, training and retraining of personnel are financed on a contractual basis with educational institutions, costs of business trips related to production activities, costs of compensation for the use of personal cars for business trips, payments for emissions (discharges) of pollutants in natural environment etc.

Not all costs of the enterprise are included in the cost of manufactured products. For example, expenses of non-industrial enterprises (kindergartens, clinics, dormitories, schools, clubs, etc., which are on the balance sheet of the enterprise), expenses for health protection and recreational activities, expenses not directly related to the participation of employees are not included in the production process, one-time material incentives for workers are not included in the cost of production and are carried out using funds allocated for social needs from profits.

All costs that form the cost of production are grouped in connection with their economic content into the following elements (items):

Material costs (minus the cost of returnable waste);

Labor costs;

Contributions for social needs;

Depreciation of fixed assets;

Other expenses.

It can be noted that for all five elements, grouped in accordance with the economic content, the main condition for including costs in the cost is the criterion of the need for their participation in the process of production and sales of products. These are costs directly related to the production of products, determined by the technology and organization of production, associated with the use of natural raw materials, maintenance of the production process, ensuring normal working conditions and safety precautions.

For in-production analysis and identification of reserves for reducing product costs, it is necessary to know not only the total amount of costs of each enterprise for a particular economic element, but also the amount of costs depending on the place of their origin. This opportunity is provided by the classification of costs by costing items, which can be presented in the following form:

1. raw materials and supplies;

2. components, semi-finished products and production services purchased from other enterprises;

3. fuel and energy of all types for technological purposes;

4. returnable (used in production) waste (subtracted from the cost and taken into account at the price of possible use, which the enterprise determines independently);

5. losses from marriage;

6. wages (basic and additional) of production workers;

7. contributions for social needs (to compulsory insurance funds);

8. costs of maintaining and operating equipment;

9. general production (shop) costs (overheads)

10. general economic (general plant or general factory) costs; :

11.non-production (commercial) costs of selling products.

As a result of sequential addition of the listed costing items, a system of cost indicators is obtained:

a) production cost (PC) = 1+2+3-4+5+6+7;

b) shop cost (CS) = PS + 8 + 9;

3) full production or factory cost (FZS) = CC + 10;

4) total (commercial) cost (CC) = FZS + 11.

The first three indicators are characteristics of production, and the fourth includes costs associated not only with the production of products (as reflected in the name of this unit), but also with the process of its sale. These are, for example, expenses for direct operations for selling products, i.e. associated with a change in the owner of a product (for example, costs for all types of advertising, including participation in exhibitions, payment of interest on loans), referred to in economic literature as net costs. In addition, non-production expenses include additional costs, i.e. costs of carrying out operations directly related to the continuation of the production process in the sphere of circulation. These costs are included in business expenses and include: costs of containers and packaging; costs of transporting products (costs of delivering products to the station or pier of departure, loading into wagons, onto ships, cars, etc.); commission fees and deductions paid to sales enterprises and organizations in accordance with contracts; advertising costs, other sales costs (storage, part-time, sub-sorting costs).

General production and administrative expenses are classified as overhead expenses. Manufacturing overhead is the cost of maintaining and managing production.

Manufacturing overhead costs include:

a) costs of maintaining and operating equipment;

b) shop management costs.

The costs of maintaining and operating equipment are depreciation of equipment and vehicles; costs of operating equipment in the form of costs of lubricants, cleaning agents, cooling materials and other similar materials; wages of workers servicing equipment and contributions for social needs; consumption of all types of energy, water, steam, compressed air, auxiliary production services; expenses for equipment repairs, technical inspections, maintenance; expenses for intra-plant movement of materials, semi-finished products, products; wear and tear of low-value and fast-wearing tools and accessories and other costs associated with the use of equipment.

Shop management costs include: wages of the shop management staff with deductions for social needs; costs for depreciation of buildings, structures, equipment, maintenance and repair of buildings, structures, ensuring normal working conditions and safety precautions, for workwear and safety footwear; wear and tear of low-value and high-wearing tools and other similar costs associated with managing production units.

Each of these groups of overhead costs has its own specifics - they are planned and taken into account at the places of their occurrence, i.e. By production units, and not by type of product. Both of these groups are complex costs, indirectly distributed between individual types of products and between finished products and work in progress.

General business overhead costs are associated with the functions of leadership and management, which are carried out within the enterprise, company, and firm as a whole. These expenses include several groups: administrative and managerial, general business, taxes, mandatory payments, deductions, etc.

Grouping by costing items, in addition, gives us the opportunity to subsequently divide costs into direct and indirect.

Direct (technological) costs are characterized by a direct connection with the production process and can be quite easily distributed among specific types of products.

Indirect costs cannot be directly attributed to the specific type of good or service produced. The corresponding costing items are complex. In particular, these are administrative and management costs, property insurance costs, etc.

The division into direct and indirect costs occurs in the case of the production of a wide range of goods; in simple production, all costs are considered as direct.

The classification of costs into variable costs and fixed costs reflects the direct proportional dependence of the volume of product output and, accordingly, the costs of its production on the degree of utilization of production capacity. Variable costs are those whose value is a derivative of the level of production capacity utilization. These are, for example, the costs of raw materials and labor costs. Costs are recognized as constant, the size of which is not linked to the volume of production and the level of use of production facilities - costs for equipment, rental of production premises, payment of management staff. At the same time, per unit of production, the size of fixed costs is inversely proportional to the growth of production output as a result of an increase in the utilization of production capacity. This grouping is given special attention in the international practice of cost accounting.

Important for the analysis and management of production costs at an enterprise in order to reduce them is the classification of costs into semi-fixed and semi-variable.

Conditionally fixed costs are costs that do not change or change slightly depending on changes in production volume. These include: depreciation of buildings and structures, costs of managing production and the enterprise as a whole, rent, etc.

Conditionally variable costs are costs that change in direct proportion to changes in production volume. These include: piecework wages of workers, costs of raw materials, materials, components, process fuel and energy, etc.

Calculation of the cost of a unit of products (works, services) in current practice is called calculation, and the document in which this calculation is drawn up is calculation. Purpose of costing:

ensure the determination of the cost of products and all manufactured products; create a basis for setting prices; promote the opening and use of production reserves. Industrial enterprises organize the calculation of the cost of industrial products on the basis of industry instructions for planning, accounting and calculating the cost of products, developed in accordance with the basic provisions for the use of this indicator.

This document establishes the procedure for determining the composition of costs that form the cost, the application of fundamentally uniform principles and methods for their planning at enterprises in all industries.

There are standard, planned and reporting calculations. Standard costing of a unit of production is the cost of a unit of production, calculated on the basis of the norms and standards for resource consumption in force at the beginning of each month, accounting prices and approved cost estimates for servicing and managing production. These expenses (according to estimates) are included in the cost calculation in accordance with the accepted methodology for their distribution. Standard costing is essentially the starting point for calculating standard costing.

The planned costing of a unit of production is compiled on the basis of direct costs according to the standard costing of this product at the beginning of the planned year, taking into account the planned change in these costs in the planning period, determined by the plan of organizational and technical measures. Indirect costs are included in the planned cost in accordance with the cost estimates for them and the accepted methodology for their distribution. Planned costing is developed, as a rule, for 1 year, and in some cases for a quarter.

The objects of calculation can be parts, assemblies and products. Standard cost estimates for parts and assemblies are compiled according to direct items, and for the product as a whole - according to all costing items.

Reporting estimates are compiled based on the actual costs of production during the reporting period.

Costing items can be single-element (wages of production workers, etc.) and complex (general shop, general plant expenses, etc.), i.e. consisting of a number of elements. When calculating product costs, you need to consider the following:

with a large range of products, planned cost estimates can be compiled for a group of similar products;

The products of auxiliary industries are also subject to calculation, especially if they are sold externally.

1.3 Factors influencing the reduction of production costs

Factors influencing the level of cost reduction reflect a set of particular reasons (circumstances) that cause changes in production conditions in the directions of their impact on the production process in order to reduce them. They are associated with cost savings for all types of resources (for all items and elements). Reducing costs for products (works, services) is necessary for the following:

Increasing profits from the sale of products, through which an entrepreneur can develop his own production, in to a greater extent stimulate individual workers, pay more income (dividends) to shareholders and solve social problems;

Increasing the competitiveness of manufactured products due to the possibility of establishing a lower contract price compared to its competitors;

Production of new products and introduction of advanced technologies;

Reducing production costs represents the unity of two sides: factors of production and economic relations. The main areas of cost reduction in production are:

Technological progress;

Improving the organization and management of production;

Use of effective raw materials, materials, machinery and equipment, technological processes;

Reducing costs for products, work, and services depends on several groups of factors: technological, organizational and economic. Technological factors are related to technology and production technology. They provide:

a) increasing the progressiveness and quality of products, works, services;

b) the use of more modern and high-performance equipment and technology (machines and mechanisms);
c) increasing the degree of mechanization and automation of production;

d) application of resource and energy-saving technologies;

e) increasing the level of technical and energy equipment of labor;

f) accelerating the implementation of new technology and tools;

g) use of highly efficient materials.

Organizational factors are associated with the organization of production and labor and their management and include:

a) increasing the level of concentration, specialization and cooperation;

b) reducing the duration of the production cycle;

c) ensuring the rhythm of production and other conditions for the rational organization of labor;

d) reduction and complete elimination of production defects, downtime of equipment and workers;

e) improving the qualifications of workers and selecting personnel according to the technical level of production.

Economic forces consist in increasing the level of management and management methods. They include:

a) improving the production structure of the enterprise;

b) increasing the level of planning, accounting, control and analytical work;

c) improving the social living conditions of the workforce;

d) improving the production culture and the state of industrial aesthetics;

e) increasing the competence of administrative and managerial personnel (managers) of the enterprise.

All factors influencing the level of cost reduction can be divided according to the scale of their action: national, intra-industry and intra-production.

National ones are related to government policy in the field of economic relations. Intra-industry factors in the context of economic reform play a minor role and can be represented by the process of improving the standards of the price system for products and in the field of planning production activities, the adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are resolved by the enterprise itself.

Intra-production factors are associated with improving the use of all material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise’s activities, but may also be independent of them.

In addition to the listed groupings, factors based on signs of use are divided into promising and current, and based on methods of identification - explicit and hidden.

From the point of view of the influence of factors on this phenomenon, factors of the first, second, and K-th order are distinguished from objectively determined factors, subjective ones should be distinguished. They are also divided into external and internal and, primary and secondary.

The classification of factors that determine economic categories and indicators of reducing costs for products (works, services) is the basis for the classification of production reserves. Reserves should be understood as unused opportunities to reduce costs at a given level of production and economic relations. Elimination of all kinds of losses and irrational costs is main path use of production reserves. Another way is associated with great opportunities to accelerate scientific and technological progress and use the achievements of science and technology as the main lever for increasing production efficiency.

Reserves also influence the final results of the enterprise's production activities due to changes in the nature of production and the transition from extensive methods to intensive methods. Cost reduction factors affect reserves while ensuring an increase in the volume of products (works, services), improving their quality, improving the structure and range of products. They also create conditions for increasing the profitability of the enterprise, increasing its level of profitability and strengthening financial situation. Their action is determined by many factors of production, economic and organizational nature. In mechanical engineering, the proportion of work in progress is high. At food and light industry enterprises, the main place in costs is occupied by raw materials and supplies. In enterprises where a large number of tools, fixtures, and devices are used, the proportion of low-value and wearable items is high.

In the extractive industries there are practically no reserves of raw materials and basic materials, but the share of future expenses is high. In addition, for example, in the oil industry, an increased share is made up of auxiliary materials and spare parts for the repair of fixed assets.

Cost management refers to the actions of managers aimed at changing the factors affecting the cost of production. Such as the structure of product output, production volume, distribution and cost accounting, quality and raw materials used, etc. Cost management is associated with the enterprise's implementation of planning, control and decision-making functions. The importance of product cost analysis is determined by the fact that it is the most important qualitative indicator characterizing economic efficiency production, and that only on the basis of its comprehensive analysis it is possible to identify reserves and determine ways to increase final results with minimal labor, material and financial costs. Cost analysis allows you to find out trends in changes in this indicator, the implementation of the plan at its level, determine the influence of factors on its growth and, on this basis, assess the enterprise’s work in using opportunities and establish reserves for reducing product costs.

The objectives of cost analysis are as follows:

Determining the amount of costs for specific products, services or divisions of the organization;

Product cost management based on obtaining accurate data on product costs and using them to make decisions on issues such as pricing, product composition, production technology;

Cost analysis, researching cost data, presenting them in the form of information suitable for management planning and control, making short-term and long-term decisions.

Cost analysis:

a) designed to provide necessary information management personnel of the enterprise, who are responsible for planning, for monitoring business operations and making various administrative decisions;

b) aimed at identifying opportunities to improve the efficiency of using material, labor and monetary resources in the process of production, supply and sales of products;

c) provides data necessary for management purposes, determining performance indicators, making strategic decisions on pricing, product composition, technological process, product development. It is, guided by analysis, that specialists and managers make tactical decisions and actions.

Cost management and cost analysis are an integral part of management, which operates with cost data. Costs are an indicator of past or future ability to manage economic resources in order to achieve a certain goal. The management and analysis process is divided into the following main stages:

a) cost planning - determining the goals of the organization and its divisions in the form of setting production goals and choosing the means to achieve them. Plans are specified in estimates that include indicators in monetary terms. For example, cost estimate drawn up as a plan of expected costs.

b) cost control - establishing initial standards on the basis of which performance indicators can be determined. Cost control helps to identify the reasons for deviations from the plan and make appropriate adjustments.

c) cost management for decision making - assessing accurate and meaningful cost data and analyzing this information for decision making. The decision-making process, which can also be called a problem-solving process, is essentially a process of choosing between alternative actions (whether to start producing a new product, whether to suspend the production of a product or the production of some services). A cost management system is designed to assist management in making optimal decisions regarding product development, pricing, marketing, assortment, and to facilitate improvements on an ongoing basis.

This chapter examined the theoretical aspects of analysis and management of product costs. Based on the results of the chapter, it can be noted:

a) cost is one of the most important indicators of the economic activity of an enterprise;

b) cost is one of the main factors in generating profit, which means the financial stability of the enterprise and the level of its competitiveness depend on it;

c) planning, control, management, and at the same time calculating the cost of manufactured products is one of the most intensive areas of management of any enterprise, therefore any enterprise must first pay special attention to the importance of analyzing and managing the cost of production, through its comprehensive study;

2 Analysis of factors influencing production costs

using the example of ZAO MPK Saransky

2.1 Analysis of the dynamics and structure of production costs

and sales of products

In the Republic of Mordovia, one of the largest meat processing enterprises is the Saransky Meat Processing Complex CJSC. It was created in 2001 on the basis of the Saransky meat processing plant. In the same year, the enterprise became part of the Talina agro-industrial holding and operates to this day. The complex has a warehouse for basic raw materials, two administrative buildings, workshop buildings, a canteen, a repair and construction site, warehouses, and wastewater treatment facilities. The territory of the enterprise (about 2 hectares) has its own access road railway track. The number of employees is 450 people. The main activity is the production of various types of sausage (boiled, raw smoked, half-smoked), as well as semi-finished products (dumplings, pancakes, cutlets) and other products. The complex is capable of processing up to 12 thousand tons of beef and pork per year. On the territory of ZAO MPK Saransky there is a motor transport enterprise LLC Talina-Avtotrans, which in turn delivers the finished products of the complex.

The enterprise operates the following shops: a culinary shop, a semi-finished products shop, a hot and cold smoking shop, a packaging shop, a mechanical shop, a cooking shop, an ammonia refrigeration shop and a sausage shop, which will be the object of analysis. The choice of the sausage shop was not accidental. Firstly, this workshop is the largest workshop in the enterprise. Secondly, the sum of the costs and profits of a sausage shop far exceeds the costs and profits of other shops. This is due to the large supply of production time for raw smoked sausage, since its production period is 35 days, and this allows you to produce a large quantity and then sell it within six months. And the shelf life of, for example, culinary products (dumplings) is only 72 hours (in deep-frozen conditions), which limits their sale.

Among the most important tasks that an economist sets for himself when analyzing costs is the study of the composition of costs or, in other words, the structure of costs. This is a question the study of which is of particular practical importance.

The cost structure is understood as its composition by elements or items and their share in the total cost. It is in motion and is influenced by the following factors:

Specifics (features) of the enterprise. Based on this, they distinguish: labor-intensive enterprises (a large share of wages in the cost of production); material-intensive (large share of material costs); capital-intensive (large share of depreciation); energy-intensive (large share of fuel and energy in the cost structure);

Accelerating scientific and technological progress. This factor influences the cost structure in many ways. But the main influence is that under the influence of this factor the share of living labor decreases, and the share of materialized labor in the cost of production increases;

Location of the enterprise;

Inflation and changes in bank loan interest rates.

Which of the above factors affect the cost of the enterprise under study? We can say that all of them certainly have an impact on the cost structure. The peculiarity of meat processing enterprises is that they are material-intensive and a large part of the cost is occupied by material costs (raw materials).

ZAO MPK Saransky has a good location. Near the railway, within the city, it has a convenient developed infrastructure. Of course, we can also note the disadvantage of the location of the enterprise. For example, remoteness from resource supply enterprises.

It would be nice to introduce a technical innovation to the enterprise. For example, it would be nice to at least partially mechanize the process of deboning and trimming meat (cutting half carcasses, separating meat from bones and separating meat by grade). The introduction of a mechanized meat deboning process would allow, first of all, to save on human labor resources. It would also be nice to purchase new equipment for smoking sausage, which would also save on electricity, since smoking efficiency is higher, reduce the number of workshop staff and the space occupied by this equipment in the workshop. This equipment is several times more compact than the current one.

The problem of inflation and credit is also acute not only for the meat processing industry, but also for other enterprises. Inflation in Russia is 13%, the average rate on industrial loans is 14-15% per annum (depending on the bank, term, amount and risk). In countries with developed economies, the interest rate on loans is 6 - 10%. It is not difficult for the complex to take out a 15% loan, since there are large reserves of fixed assets that can be used as collateral. The difficulty is that the profitability from the production and sale of products is small, and if a loan is received, the profitability is sharply reduced and the complex works, as it were, not for itself, but for the bank.

A systematic analysis of the cost structure of an enterprise is very important, first of all, for managing costs in order to minimize them, identifying the main reserves for reducing them and developing specific measures for their implementation in the enterprise. At each enterprise, the cost structure should be analyzed both element-by-element and item-by-item. This is necessary to manage costs in an enterprise with a view to minimizing them.

Let's consider the cost structure for recent years(2005 2007) in general for the production of ZAO MPK Saransky. Costs can be divided into five elements and all of them will form the full cost of sausage products:

Table 2.1 – Cost structure of ZAO MPK Saransky:

Article title		Amount of costs, thousand rubles			Cost structure, %				Growth rate in % compared to the previous year
		2005	2006	2007	2005		2 006	2007	2006 to 2005	2007 to 2005	2007 to 2006
Material costs		48016	49621	53993	74,3		74,0	73,2	103,3	112,4	108,8
Depreciation of fixed assets funds		3467	3640	4504	5,3		5,4	6,1	105,0	129,9	123,7
Remuneration		5802	6166	7390	8,9		9,2	10,0	106,3	127,4	119,9
Social contributions funds		1530	1649	1967	2,3		2,5	2,7	107,8	128,6	119,3
other expenses		6 320	6231	5499	9,7		9,3	7,5	98,6	87,0	88,3
Variable costs		47155	48938	52481	72,4		73,3	72,0	103,8	111,3	107,2
Fixed costs	17980		17792	20403	27,6	26,7		28	99,0	113,5	114,7
Total costs	65 135		67 037	73 723	100,6	100,0		100,0	102,9	113,2	110,0
Full cost	65135		66 730	72884	100	100		100	100	100	100

Analysis of the data in this table allows us to determine that the share of material costs over three years decreased by 2.2% and in 2007 amounted to 73.2%. Their structure in full cost in 2006 was 74.0%, and in 2007 73.2%. A decrease in material costs in the overall structure indicates their rational use and the growth of another predominant factor. The influence of material costs in overall production occupy a key place, which means ZAO MPK Saransky is a material-intensive enterprise and the main reserve for reducing costs lies here.

The decrease in the share of material costs may mean that the complex in 2007 generally used cheaper raw materials. The total amount of material costs for 2007 is about 48 million rubles, and the deviation from 2006 to 2007 was almost 3 million rubles upward. This figure increased due to an increase in production volume in the sausage shop.

The element “Depreciation of fixed assets” occupies a small place in the cost structure. In 2006 5.4% and in 2007 6.1%. The increase over one year was 1.5%. This happened due to changes in the depreciation policy for sausage products by the management of the enterprise and the addition of new equipment to the workshop. In 2006, the amount of deductions was 3 million 640 thousand rubles, and in 2007 4 million 504 thousand rubles, which is 864 thousand rubles. more. Depreciation charges tend to increase, which indicates gradual wear and tear of equipment.

There was also an increase in wages in the structure. This is mainly due to the fact that over three years the range and volume of manufactured products has increased. The amount of labor costs in 2005 was 5 million 802 thousand rubles. per person, in 2006 6 million 166 thousand rubles, and in 2007 7 million 390 thousand rubles, that is, the change over three years amounted to 1 million 588 thousand rubles.

The share of wages in the structure is 8.9% in 2005, 9.2% in 2006 and 10.0% in 2007. The increase in wages and the increase in material costs for 2006 suggests that production volumes have increased over the year, since wages depend on the work done. The growth of this indicator in the structure was 21.1% or RUB 2,810,323.05. for 1 year.

Along with the increase in wages, there was an increase in contributions to social funds. This indicator is also a reserve for reducing production costs.

Contributions to social funds are calculated from wages. Consequently, as wages increased in 2007, contributions also increased. With an increase in wages of almost 1.6 million rubles, the increase in deductions amounted to almost two million rubles. This is to be expected, since the following 1/3 relationship exists. This is due to the fact that deductions to the social protection fund come from the wage fund in the amount of 36.7%, but this percentage of deductions varies depending on the benefits applicable to shop floor workers. The share of contributions to the social protection fund in the overall cost structure is small: 2.3% in 2005, 2.5% in 2006 and 2.7% in 2007. The change in this indicator occurred due to an increase in wages.

The cost structure for the analyzed period was influenced by the following factors:

a) the use of cheaper raw materials and materials in production;

b) increase in wages and contributions accordingly;

c) revaluation of depreciation funds and their gradual depreciation;

d) increase in the share of loans and interest rates, which significantly increased the fee for the participation of borrowed capital in production;

e) increase in the cost of energy and heat tariffs;

Over three years, other expenses decreased significantly by 10.3%. The change in “Other expenses” for 2007 amounted to 732 thousand rubles. This is the smallest change that occurred out of all the cost elements. Other expenses occupy second place in the cost structure after material costs. In 2005 their share was 9.7%, in 2006. 9.3%, and in 2007 7.5%.

Data on fixed and variable costs show that in the structure of the cost of sausage products in 2005, variable costs occupied 72.4%, in 2006 73.3%, and in 2007. 72.0% change for was 3.4%, and in monetary terms variable costs increased by 5 million 326 thousand rubles. An increase in variable costs in the structure indicates the use of more expensive raw materials in the production of products, and an increase in monetary terms indicates an increase in production volume. The share of variable costs is almost 3 times higher than fixed costs in the cost of production: in 2005, fixed costs amounted to 27.6%, in 2006 26.7%, and in 2007 28%.

As a result, under the influence of the growth of all cost elements, the total cost of production over three years increased by 7 million 749 thousand rubles. This is due to an increase in production volume. This factor was the reason for the increase in all elements of costs and, above all, material costs and wages.

2.2 Factor analysis of production costs

In order to conduct factor analysis for a sausage shop, it is necessary to select certain types of sausage. The complex produces two main groups of sausages: boiled and raw smoked. For analysis, I chose a group of raw smoked sausages. More precisely, the following types: Madera s/k, Braunschweig s/k, salami Moscow s/k, Sergeevskaya s/k and Prestige s/k. It is this product that occupies heaviest weight in the general release for the two analyzed years (see Appendix B, Table 2.2 and Table 2.3). The share in the annual output of five types of raw smoked products reaches a high level of 68.93% in 2006 and 65.0% in 2007.

Table 2.2 – The share of the main types of raw smoked products in the total volume of production of ZAO MPK Saransky

Product type	Release volume, kg			Specific gravity, %
	2006	2007	+,-	2006	2007	+,-
1	2	3	4	5	6	7
1. Madera s/k	38847	37647	-1200,00	25,46	22,8	-2,66
2. Braunschweig s/k	30385	28900	-1485,00	19,92	17,5	-2,42
3. Salami Moskovskaya s/k	13753	15311	1558,00	9,01	9,3	0,29
4. Sergeevskaya s/k	13677	15096	1419,00	8,97	9,1	0,13
5. Prestige s/k	8490	10314	1824,00	5,57	6,2	0,63
6. Other types of cured sausages	47406	57851	10444	31,07	35,03	3,9

Continuation of Table 2.2

Total total output for the year

152559

165120

12561

100,00

100,00

-

As follows from the table. 2.1. Madera s/c occupied the largest share in 2006, output amounted to 25.46% of the total volume, also in 2007 Madera s/c 22.8%. This change occurred due to the fact that the demand for s/k Madera decreased slightly due to the release of new varieties of sausage (Anzhu, Pipperoni, Tatarskaya). The output structure of Braunschweig s/k decreased by 2.42% (1485 kg), this is also due to market demand. For other types of raw smoked sausage, the share of structure in the total production volume reaches up to 9%. Consequently, the influence of the above five types of raw smoked products in the total production output is significant.

Table 2.3 – Production of the main types of raw smoked products of ZAO MPK Saransky for 2006 and 2007

Product type	Production volume, kg			Specific gravity, %
	2006	2007	+,-	2006	2007	+,-
1	2	3	4	5	6	7
1. Madera s/k	38847	37647	-1200,00	36,9	35,1	-1,8
2. Braunschweig s/k	30385	28900	-1485,00	28,9	26,9	-2
3. Salami Moskovskaya s/k	13753	15311	1558,00	13,1	14,3	1,2
4. Sergeevskaya s/k	13677	15096	1419,00	13,0	14,1	1,1

Continuation of Table 2.3

5. Prestige s/k	8490	10314	1824,00	8,1	9,6	1,5
Total	105152	107268	2116	100,00	100,00	-

To perform a factor analysis of cost, it is necessary to determine the number of factors influencing cost. It is known that each factor affects the cost in its own way, some of the factors influence directly, while others indirectly, but each phenomenon can be considered as a cause and effect. Hence, an important issue in the analysis of economic activity is the study and measurement of the influence of factors on the value of the economic indicators under study. Without a deep and comprehensive study of factors, it is impossible to draw reasonable conclusions about the results of activities, identify production reserves, and justify plans and management decisions.

Factor analysis is understood as a methodology for a comprehensive and systematic study and measurement of the impact of factors on the value of performance indicators.

The total cost of sausage products may change due to the volume of production, its structure, and unit cost of production:

С=VPxДixСi (1.1)

where, C – cost

VP – volume of production

Di – cost structure

Ci – cost per unit of production

In turn, the cost per unit of production (Ci) depends on resource intensity (Remk) - an internal factor and resource prices (Ci) - an external factor:

Ci = VpxDixRemk To xХi (1.2)

where, Ci is the cost per unit of production

VP - Volume of output

Di – cost structure

Remk - resource intensity - internal factor

Ci – resource prices – external factor

The total cost of raw smoked products is determined by multiplying the volume of products produced by the cost per unit of production:

where X is the volume of products produced

Сi - cost per unit of production

The cost per unit of production is determined by dividing the total costs for the reporting period by the quantity produced during this

production period and is calculated by the formula:

where Ci is the cost per unit of production, rub.

Z – volume of products produced in monetary terms, rub.

X - volume of products produced during the reporting period

Table 2.4 – Initial data for factor analysis of the total cost of raw smoked products for 2007:

Types of products	Production volume, kg.					Cost per unit of production, rub.		Full cost of production. rub.
	base 2006			fact 2007		base 2006	fact 2007	base 2006	fact 2007	off
	quantity		specific weight,%	quantity	beat weight, %
1	2		3	4	5	6	7	8 = 2x6	9 = 4x7	10 = 9 - 8
1. Madera s/k	38847		36,9	37647	35,1	134,41	147,15	5 221 581,85	539 787,66	318 205,81
2. Braunschweig s/k	30385		28,9	28900	26,9	157,42	150,94	4 783 301,57	4 362 166,00	- 421 135,56
3. Salami Moskovskaya s/k	13753		13,1	15311	14,3	98,49	126,36	1 354 622,81	1 934 760,47	580 137,65
4. Sergeevskaya s/k		13677	13,0	15096	14,1	102,21	120,80	1 397 963,54	1 823 604,22	425 640,67
5. Prestige s/k		8490	8,1	10314	9,6	156,915	153,25	1 332 207,89	1 580 708,47	248 500,58
Total		105152	100,00	107268	100,0	-	-	14 089 677,67	15 24126,83	1 151 49,16

Determining the influence of factors on changes in the cost of sausage products:

1. С0 = ВП0xДi0xСi 0;

2. C1scor = VP1xDi0xCi 0;

3. С2speed = ВП1xДi1xСi 0;

4. С1 = ВП1xДi1xСi1.

Influence of factors on changes in product costs:

1. volume of commercial products ∆С∆VP = С1scor - С0

2. structure of commercial products ∆С∆Дi = С2scor - С1scor

3. unit cost of production ∆С∆Сi = С1 - С2scor

Table 2.5 – Calculation of the total cost adjusted: with the actual volume of commercial products, the basic structure of commercial products and the basic cost of a unit of production:

Types of products	Actual output of commercial products with the basic structure, kg. (from Table 2.4 total gr. 4 x gr. 3/100)	(column 6 of table 2.3)
1	2	3	4 = 2x3
1. Madera s/k	39581	134,41	5320360,43
2. Braunschweig s/k	31000	157,42	4880184,15
3. Salami Moskovskaya s/k	14052	98,49	1384090,48
4. Sergeevskaya s/k	13944	102,21	1425343,93
5. Prestige s/k	8688	156,91	1363388,61
Total	-	-	14373367,61

Table 2.6 – Calculation of the total cost adjusted: with the actual volume of commercial products, the actual structure of commercial products and the basic cost of a unit of production:

Types of products	Actual output of commercial products with actual structure, units. (column 4 of table 2.4)	Basic cost per unit of production, rub. (column 6 of table 2.3)	Adjusted cost, rub.
1	2	3	4 = 2x3
1. Madera s/k	37647	134,414	5060283,85
2. Braunschweig s/k	28900	157,423	4549524,7
3. Salami Moskovskaya s/k	15311	98,497	1508087,56
4. Sergeevskaya s/k	15096	102,213	1543007,44
5. Prestige s/k	10314	156,915	1618421,31
Total	-	-	14279324,88

Table 2.7 – Scheme for conducting analytical calculations to find the influence of the main factors on the total cost of canned products:

Indicators	Amount, rub.	Cost drivers
		output volume	production structure	unit cost
Cost of the base period	14 089 677,67	VP0	Di0	Ci0
Adjusted cost: based on the actual volume of commercial products, the basic structure and the basic cost per unit of production	14373367,61	VP1	Di0	Ci0

Continuation of Table 2.7

Adjusted cost: based on the actual volume, the actual structure of commercial products and the basic cost per unit of production	14279324,88	VP1	Di1	Ci0
Actual cost	15 241 026,83	VP1	Di1	Сi1

From the data in Table 2.7 we will identify the influence of factors on changes in the cost of sausage products:

Volume of sausage products:

14373367.61 – 14089677.67= 14232470.83 (rub.)

Consequently, due to an increase in the output of sausage products in 2007, the cost increased by 14232470.83 (rubles). This growth is natural, since the volume of production from 2006 to 2007 for five types of raw smoked sausage increased by 2 .01% or 2116 kg (See Table 2.3).

Structure of commercial products:

14279324.88 – 14373367.61 = - 1294543.51 (rub.)

The change in the structure of sausage production in 2007 influenced the reduction in costs. Table 2.3 indicates that the production of Madera cured meat decreased slightly, its share occupied 25.46% of the total production of raw smoked products in 2006 and 22.8% in 2007, and there was also a decrease in the volume of production of Braunschweig sausage. The decrease in production volumes is associated, first of all, with the start of production of new types of raw smoked products in 2007. It follows from this that, as a result of a reduction in the production of certain types of sausage, the total amount of costs included in the cost price decreased.

Unit cost:

15,241,026.83 14279324.88 = 961701.95 (rub.)

Due to an increase in the cost of a unit of production, the meat complex increased the cost of producing raw smoked products by almost a million rubles. It can be noted that this adversely affected the possibility of increasing the final financial result of the enterprise.

The sum of factor scores was:

14232470.83 + (-129454351.23) + 961701.95 = 12947544.34 (RUB)

This result suggests that in general, in 2007, the meat complex increased the cost of raw smoked products by one million rubles compared to 2006, or by 8.2%. This is due to the fact that material-intensive production involved more expensive raw materials, which sharply increased the unit cost of production.

2.3 Cost-benefit analysis

Cost-benefit analysis is an analytical tool that is often used in business research to assist decision makers in assessing and comparing the costs and efficiencies of alternative ways to achieve goals. Analysis of the cost efficiency of ZAO MPK Saransky combines two clearly demarcated processes:

a) analysis of the efficiency of use of material costs.

b) Analysis of the efficiency of use of fixed production assets.

The most important thing is the efficiency of using material costs, and we will consider this first. The reason for the increase in cost may be the ineffective use of materials and their rise in price. Ineffective use of materials can be indicated by an increase in material consumption, which causes additional consumption of materials.

Table 2.8 Indicators of efficiency of use of material resources:

Article title		2006	2007	Change
1. Material costs, thousand rubles.	1	49621	53993	4372
	1a	46006	48968	2962
2. Product output, thousand rubles	2	152559	165120,00	12561,00
3. Material consumption of products, rub	3=1:2	0,3252578	0,32699249	0,00173
a) including raw materials and materials, rub	4=1a:2	0,301562	0,29656008	-0,0050

Increase in material consumption by 1.73 rubles. caused additional consumption of materials by 7584.10 thousand rubles. = (0.0017 * 4372). Thus, while maintaining the same level of material consumption, the cost of production would be lower by this amount. The change in cost is also influenced by the volume of production and the level of costs of a certain type.

The influence of production volume on production costs:

Szm = ZM1 – ZM0 *In (1.5)

where Szm is the cost of production depending on the volume of production;

ZM1 – material costs for 2007;

In – production volume index (ЗМ1-ЗМ0);

Szm = 53993 - 49621* 1.08 =4721.76;

The influence of material costs on product costs:

Сn = ЗМ0 * In ЗМ0 (1.6)

where Cn is the cost of production depending on the level of material costs;

ЗМ0 – material costs for 2006;

Сn = 49621 * 1.08 – 49621 = 3969.68;

An increase in material costs by 4,372 thousand rubles increased the cost of production by 3,969.68 thousand rubles, and the increase in production volume did not affect the reduction in costs.

Next, we will analyze the efficiency of using fixed production assets. The cost expresses the state of fixed assets through the depreciation rate. The increase in costs is affected by depreciation capacity, i.e. depreciation charges paired with capital productivity.

Table 2.9 - Analysis of the efficiency of use of fixed assets:

Indicators		2006	2007	Change
1. Cost of fixed assets, thousand rubles.	1	112410	175915	63505
2. Product output, thousand rubles.	2	152559	165120	12561,00
3. Capital productivity, rub.	3=2:1	1,36	0,94	-0,42
4. Depreciation charges,	4	3640	4504	864

The impact of depreciation on product costs:

CA= A1 – A0 * In (1.7)

where, CA is the cost of production depending on the volume of depreciation;

A1 – depreciation charges for 2007;

A0 – depreciation charges for 2006;

In – production volume index;

CA = 4504 - 3640 * 1.81 = 1563.84 thousand rubles.

The costs of depreciation of fixed production assets remained at the same level of 1563.84 thousand rubles. and did not in any way affect the change in cost, but the decrease in capital productivity reduced the profitability of fixed production assets.

In this chapter, an analysis was made of the factors influencing the reduction of production costs. CJSC MPK Saransky is a major meat processing plant in the Republic of Mordovia. An analysis of the cost structure of a sausage shop showed that the majority of the cost of canned goods is occupied by material costs (74%). Factor analysis highlighted the main reasons that influenced the change in production costs in 2007. The main factor in increasing production costs was the cost per unit of production. This factor increased production costs by 143,73367.61 rubles.

3 Proposals to reduce production costs

3.1 Reserves for reducing costs of production and sales of products

To reduce the costs of production and sales of products at the ZAO MPK Saransky enterprise, it is recommended to carry out the following organizational and technical measures:

1. Improving the organization of production and labor. This process, in almost all cases, ensures an increase in labor productivity and stimulates a better use of the labor resources available at the enterprise. Hence the reduction in production costs. At this stage, the enterprise is recommended to improve the ergonomics of workers in every possible way by creating a full-fledged socio-psychological climate. It is proposed to introduce the position of a psychologist who will monitor the mental health of workers. Since most lost working time is associated with various diseases, the most significant of which is the flu, it is necessary to create your own medical center that will monitor the health status of workers.

2. Reducing production maintenance and management costs also reduces production costs. The size of these costs per unit of production depends not only on the volume of output, but also on their absolute amount. This can be achieved in two ways:

- Improving the structure of the management apparatus. To implement this project, you can create an economic planning department, one of the main directions of which will be planning and forecasting the activities of the enterprise. At the moment, forecasting and development of targeted projects to improve the operation of the enterprise are not given due attention. Therefore, on the basis of the economic department, it is proposed to organize an economic planning department and focus its work on planning and forecasting the activities of the enterprise.

Improving the work of management personnel. At the moment, all departments related to the processing of economic information and management decision-making do not sufficiently use computer software, replacing them with primitive calculators. Thus, it is necessary to improve the qualifications of management personnel and attract permanent experts in the field of computer technology. This will maximize management efficiency and ultimately reduce the cost of maintaining management personnel, and this in turn will lead to a reduction in the cost of production as a whole.

3. Organization of a full-fledged marketing service at the enterprise. Marketing is an integral part market economy and in the conditions of constantly changing market conditions, it has become a vital element of management of such a business entity as production. At this stage of the existence of the enterprise ZAO MPK Saransky, one sales department is not able to solve the whole range of problems associated with positioning and promoting its own goods on the local market. These and other tasks are solved by the marketing service. Thus, the company should take the following measures that will allow it to further strengthen its position in the local market and increase production volumes, which will ultimately lead to a reduction in the cost of production:

Advertising. Since the company's products are of quite high quality and its advertising in all media, including the Internet, will create or strengthen the image of the products of ZAO MPK Saransky as a high-quality product.

Sales network . Expanding the network of company stores will increase the company’s share in the local market and thus increase product sales volumes.

Search for new suppliers. Raw materials and supplies are included in the cost price at their purchase price, taking into account transportation costs, so the correct choice of material suppliers affects the cost of production. A qualitatively new method of finding partners can be provided by the Internet as an advanced worldwide communication system. Any more or less serious enterprise places information about itself and its product on a website created specifically for these purposes, and communication with this manufacturer is possible within a few seconds.

3.2 Proposals for changing the structure of product costs

The economic analysis, which was carried out using the example of ZAO MPK Saransky, revealed an increase in the cost of manufactured products. To reduce costs, a number of measures can be proposed aimed at changing its main elements: material costs, wages, depreciation. Let's look at each of them separately:

a) Reducing material costs for production, as a result of increasing the technical level of production. This includes the introduction of new, progressive technology, mechanization and automation of production processes; improving the use and application of new types of raw materials and supplies, as well as reducing prices for purchased raw materials; In particular, the following activities can be carried out at ZAO MPK Saransky:

Develop and apply innovative packaging for raw smoked sausage;

At least partially mechanize the process of deboning and trimming meat;

Apply a new method of defrosting meat using the “hot steam” method;

b) Improving the organization of production and labor. A reduction in cost can occur as a result of changes in the organization of production, with the development of specialization of production, improvement of production management and reduction of costs, improvement of the use of fixed assets, improvement of logistics, reduction of transport costs, and other factors that increase the level of organization of production.

A serious reserve for reducing production costs is the expansion of specialization and cooperation. In specialized enterprises with mass production, the cost of production is significantly lower than in enterprises producing the same products in small quantities.

Decline running costs occurs as a result of improving the maintenance of the main production, for example, the development of continuous production, the streamlining of auxiliary technological work, the improvement of tool facilities, and the improvement of the organization of control over the quality of work and products. A significant reduction in living labor costs can occur with a reduction in lost working time and a reduction in the number of workers who do not meet production standards. Additional savings arise when improving the management structure of the enterprise as a whole. It is expressed in a reduction in management costs and in savings in wages and salaries due to the release of management personnel.
By improving the use of fixed assets, cost reduction occurs as a result of increasing the reliability and durability of equipment, improving the system of planned preventive maintenance, centralization and introducing industrial methods of repair, maintenance and operation of fixed assets.

funds. Improvement of logistics and use of material resources is reflected in a reduction in the consumption rates of raw materials and materials, reducing their cost by reducing procurement and storage costs. Transportation costs are reduced as a result of reduced costs for the delivery of raw materials and materials and for the transportation of finished products.
Certain reserves for reducing costs are laid down in the elimination or reduction of costs that are not necessary in the normal organization of the production process (excessive consumption of raw materials, supplies, fuel, energy, additional payments to workers for deviations from normal working conditions and overtime work, payments for regressive claims, etc.). p.). This also includes the most common production losses, such as losses from defects. Identifying these unnecessary costs requires special methods and attention of the enterprise team. Eliminating these losses is a significant reserve for reducing production costs.
c) Relative reduction in depreciation charges. This is a change in the volume and structure of products, which can lead to a relative reduction in semi-fixed costs, changes in the nomenclature and range of products, and an increase in their quality. Conditionally fixed costs do not depend directly on the quantity of products produced. With an increase in production volume, their quantity per unit of production decreases, which leads to a decrease in its cost. With regard to ZAO MPK Saransky, we can offer the following:

Modernization of existing outdated equipment;

Increase in production volume;

Also, the structure of the cost of production of ZAO MPK Saransky may be influenced by a number of other factors, such as complex costs, costs of preparing and mastering the production of new types of products, losses from defects; other production costs; non-production expenses. The following can be suggested:

a) improve the management apparatus, for example, transform the administrative and economic department and the logistics and technical support group into a single administrative - technical department, which would provide production management and technical and economic support.

b) tighten control over the production of products, to reduce the percentage of defects - create a production laboratory.

c) introduce and develop new workshops and production facilities, for example, it would be nice to create the production of other various semi-finished products (cutlets, dumplings, cabbage rolls, etc.)

Conclusion

Cost is one of the important indicators of the economic activity of an enterprise. It is one of the main factors in generating profit, which means the financial stability of the enterprise and the level of its competitiveness depend on it. Planning, control, management, and at the same time calculating the cost of manufactured products is one of the most intensive areas of management of any enterprise. A qualified economist, financier, accountant must pay special attention to the importance of analysis and management of product costs, through its comprehensive study. The analysis of cost using traditional methods allowed us to identify reserves and ways to reduce them.

CJSC MPK Saransky is a large meat processing enterprise in the Republic of Mordovia. An analysis of the cost structure of a sausage shop showed that the majority of the cost of sausage products is occupied by material costs - 74%, variable costs - 72.4% and fixed costs - 27%. Factor analysis highlighted the main reasons that influenced the change in production costs in 2007. The main factor in increasing production costs was the cost per unit of production. This factor increased production costs by 143,73367.61 rubles. This is despite the fact that the production volume in 2007 increased for the analyzed products by 2116 kg compared to 2006.

Based on all this, the complex needs to create an extensive network of trading houses or representatives in other regions and territories of Russia, to create large customers for the products, which would allow for a continuous process of production and marketing of sausage products.

Having studied in this work the issues of product cost analysis using the example of ZAO MPK Saransky, the following conclusions can be drawn:

· The result of cost analysis is the identification of reserves for further improvement of indicators. Reserves must be generalized, mutually linked, their total amount and the main directions of implementation must be determined.

· The objectives of product cost analysis are: assessment of the validity and intensity of the plan for product cost, production costs and circulation based on cost circulation analysis; establishing the dynamics and degree of implementation of the plan at cost; identification of factors that influenced the dynamics of cost indicators and the implementation of the plan for them, the magnitude and reasons for deviations of actual costs from planned ones; analysis of the cost of certain types of products; identification of reserves for further reduction of production costs.

· Product cost analysis aimed at identifying opportunities to improve the efficiency of the use of material, labor and monetary resources in the process of production, supply and sales of products.

· Studying the cost of production allows us to give a more correct assessment of the level of profit and profitability indicators achieved at the enterprise.

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Factors influencing the level of cost reduction reflect a set of particular reasons (circumstances) that cause changes in production conditions in the directions of their impact on the production process in order to reduce them. They are associated with cost savings for all types of resources (for all items and elements). Reducing costs for products (works, services) is necessary for the following:

Increasing profits from the sale of products, through which an entrepreneur can develop his own production, stimulate individual workers to a greater extent, pay more income (dividend) to shareholders and solve social problems;

Increasing the competitiveness of manufactured products due to the possibility of establishing a lower contract price compared to its competitors;

Production of new products and introduction of advanced technologies;

Reducing production costs represents the unity of two sides: factors of production and economic relations. The main areas of cost reduction in production are:

Technological progress;

Improving the organization and management of production;

Use of effective raw materials, materials, machinery and equipment, technological processes;

Reducing costs for products, work, and services depends on several groups of factors: technological, organizational and economic. Technological factors are related to technology and production technology. They provide:

a) increasing the progressiveness and quality of products, works, services;

b) the use of more modern and high-performance equipment and technology (machines and mechanisms);

c) increasing the degree of mechanization and automation of production;

d) application of resource and energy-saving technologies;

e) increasing the level of technical and energy equipment of labor;

f) accelerating the implementation of new technology and tools;

g) use of highly efficient materials.

Organizational factors are associated with the organization of production and labor and their management and include:

a) increasing the level of concentration, specialization and cooperation;

b) reducing the duration of the production cycle;

c) ensuring the rhythm of production and other conditions for the rational organization of labor;

d) reduction and complete elimination of production defects, downtime of equipment and workers;

e) improving the qualifications of workers and selecting personnel according to the technical level of production.

Economic factors consist of increasing the level of management and management methods. They include:

a) improving the production structure of the enterprise;

b) increasing the level of planning, accounting, control and analytical work;

c) improving the social living conditions of the workforce;

d) improving the production culture and the state of industrial aesthetics;

e) increasing the competence of administrative and managerial personnel (managers) of the enterprise.

All factors influencing the level of cost reduction can be divided according to the scale of their action: national, intra-industry and intra-production.

National ones are related to government policy in the field of economic relations. Intra-industry factors in the context of economic reform play a minor role and can be represented by the process of improving the standards of the price system for products and in the field of planning production activities, the adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are resolved by the enterprise itself.

Intra-production factors are associated with improving the use of all material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise’s activities, but may also be independent of them.

In addition to the listed groupings, factors based on signs of use are divided into promising and current, and based on methods of identification - explicit and hidden.

From the point of view of the influence of factors on this phenomenon, factors of the first, second, and K-th order are distinguished from objectively determined factors, subjective ones should be distinguished. They are also divided into external and internal and, primary and secondary.

The classification of factors that determine economic categories and indicators of reducing costs for products (works, services) is the basis for the classification of production reserves. Reserves should be understood as unused opportunities to reduce costs at a given level of production and economic relations. Elimination of all kinds of losses and irrational costs is the main way to use production reserves. Another way is associated with great opportunities to accelerate scientific and technological progress and use the achievements of science and technology as the main lever for increasing production efficiency.

Reserves also influence the final results of the enterprise's production activities due to changes in the nature of production and the transition from extensive methods to intensive methods. Cost reduction factors affect reserves while ensuring an increase in the volume of products (works, services), improving their quality, improving the structure and range of products. They also create conditions for increasing the profitability of the enterprise, increasing its level of profitability and strengthening its financial position. Their action is determined by many factors of production, economic and organizational nature. In mechanical engineering, the proportion of work in progress is high. At food and light industry enterprises, the main place in costs is occupied by raw materials and supplies. In enterprises where a large number of tools, fixtures, and devices are used, the proportion of low-value and wearable items is high.

In the extractive industries there are practically no reserves of raw materials and basic materials, but the share of future expenses is high. In addition, for example, in the oil industry, an increased share is made up of auxiliary materials and spare parts for the repair of fixed assets.

This chapter examines the structure of product costs. Based on the results of the chapter, it can be noted:

a) cost is one of the most important indicators of the economic activity of an enterprise;

b) cost is one of the main factors in generating profit, which means the financial stability of the enterprise and the level of its competitiveness depend on it;

c) planning, control, management, and at the same time calculating the cost of manufactured products is one of the most intensive areas of management of any enterprise, therefore any enterprise must first pay special attention to the importance of analyzing and managing the cost of production, through its comprehensive study.

For any organization, the quality of decisions made regarding cost management is a guarantee of its effective operation.

For literate and effective management cost, you need to know what it depends on, i.e. what factors have an impact? However, knowing only which factors have an influence is clearly not enough; it is necessary to establish the nature of this influence and evaluate it in an acceptable quantitative interpretation. An extensive methodological apparatus of economic analysis is designed to solve this problem. The theory of factor economic analysis is based on a number of key concepts, among which the definition of a factor (factor characteristic) and the resulting indicator is of interest for consideration in this paragraph of the project.

In economic research, a factor is usually understood as the conditions for carrying out economic processes and the reasons influencing them. The activities of enterprises are complex and multifaceted. It is a complex of interconnected economic processes, characterized by a system of indicators that depend on numerous and varied factors. An in-depth study of the entire complex of factors that influenced the progress of plans and economic dynamics allows us to correctly evaluate the results of enterprises, identify and use reserves for growing their economic potential, and increasing the efficiency of social production.

The resulting indicator in our case is the cost of manufactured products; let’s move on to a more detailed consideration of the factors that influence it.

At first glance, the main ways to change the cost of manufactured products are, of course, saving all the resources used in the production and sales process. However, production cost is a complex concept, and it depends on the influence large number various factors. Let's classify them.

All factors, firstly, can be divided into two main categories: external origin, i.e. located outside this enterprise, and internal order. TO external factors include: changes in prices for materials, semi-finished products, fuel, tools and other valuables received by the enterprise for production needs; changing the established minimum wage, as well as all kinds of mandatory contributions, deductions and charges. The main internal factors are reducing the labor intensity of manufacturing products, increasing labor productivity, reducing the material intensity of manufactured products, eliminating losses from defects, etc.

Secondly, the most important technical and economic factors influencing the level of production costs can be divided into four groups: factors determined by the technical level of production; factors determined by the level of organization of production, labor and management; factors associated with changes in the volume and range of products; national economic factors.

The first group of factors takes into account the influence of scientific and technological progress on reducing production costs through the introduction of new equipment, technology and modern resource-saving equipment, mechanization and automation of production processes, improving design and technical characteristics manufactured products. Reducing standards for material consumption and increasing labor productivity, achieved as a result of technical progress, makes it possible to reduce costs by reducing the cost of materials and wages with deductions from it.

The second group of factors influences the reduction of production costs by improving methods of organizing production and labor, better use of working time, reducing the technological cycle of production and sales of products, improving production management, reducing management costs on this basis, etc. When assessing the influence of factors in this group the results of reducing downtime and lost working time should be taken into account. This same group of factors includes improved use of fixed assets, leading to a reduction in depreciation costs.

The third group of factors takes into account the impact of changes in the volume and range of products on production costs. So, for example, an increase in production output on the same production space and equipment leads to a reduction in production costs by reducing the share of fixed costs.

The fourth group of factors determines the impact on the cost of changes in prices, tariff rates, transport tariffs, tax rates, inflation rates, interest rates on bank loans, etc. Factors of the fourth group are external to the industrial enterprise.

The above grouping of cost change factors seems quite rational from the point of view of analysis.

The degree of influence on the level and structure of product costs is different for each group of factors. For example, when production volume increases to a certain limit, cost reduction is achieved by reducing the share of fixed costs per unit of production, as well as by increasing labor productivity as a result of increasing work skills. It should, however, be noted that when this limit is overcome, the savings, i.e. cost reduction ceases to take place, which is associated with some leveling of the “economy of scale effect” due to growing production, warehouse and transportation costs.

Increasing the technical level of production can have a significant impact on reducing production costs as a result of the introduction of advanced equipment and production technology, modernization and replacement of obsolete equipment, mechanization and automation of production processes.

Factors influencing the level of cost reflect a set of particular reasons (circumstances) that determine changes in production conditions in the directions of their impact on the production process in order to reduce them. They are associated with cost savings for all types of resources (for all items and elements). Reducing costs for products (works, services) is necessary for the following:

Increasing profits from the sale of products, through which an entrepreneur can develop his own production, stimulate individual workers to a greater extent, pay more income (dividend) to shareholders and solve social problems;

Increasing the competitiveness of manufactured products due to the possibility of establishing a lower contract price compared to its competitors;

Production of new products and introduction of advanced technologies;

All factors influencing the level of cost reduction can also be classified according to the scale of their action: national, intra-industry and intra-production.

National ones are related to government policy in the field of economic relations. Intra-industry factors in an imperfect market economy play a minor role and can be represented by the process of improving the standards of the price system for products and in the field of planning production activities, the adoption of price and tariff, labor (industry) agreements regulating certain types of costs. Issues of specialization and cooperation are resolved by the enterprise itself. Intra-production factors are associated with improving the use of all material, technical, labor and financial resources available to the enterprise. They mainly depend on the results of the enterprise’s activities, but may also be independent of them.

In addition to the listed groupings, factors based on signs of use are divided into promising and current, and based on methods of identification - explicit and hidden.

From the point of view of the influence of factors on this phenomenon, factors of the first, second, and K-th order are distinguished from objectively determined factors, subjective ones should be distinguished. They are also divided into external and internal and, primary and secondary.

The classification of factors that determine economic categories and indicators of reducing costs for products (works, services) is the basis for the classification of production reserves. Reserves should be understood as unused opportunities to reduce costs at a given level of production and economic relations. Elimination of all kinds of losses and irrational costs is the main way to use production reserves. Another way is associated with great opportunities to accelerate scientific and technological progress and use the achievements of science and technology as the main lever for increasing production efficiency

Reserves also influence the final results of the enterprise's production activities due to changes in the nature of production and the transition from extensive methods to intensive methods. Cost reduction factors affect reserves while ensuring an increase in the volume of products (works, services), improving their quality, improving the structure and range of products. They also create conditions for increasing the profitability of the enterprise, increasing its level of profitability and strengthening its financial position. Their action is determined by many factors of production, economic and organizational nature. In mechanical engineering, the proportion of work in progress is high. At food and light industry enterprises, the main place in costs is occupied by raw materials and materials. In enterprises where a large number of tools, fixtures, and devices are used, the proportion of low-value and wearable items is high.

To conduct an economic analysis of the cost of manufactured products: the resulting indicator - cost and factors influencing it. A scientifically based classification of factors by group has been studied classification characteristics, developed by domestic economists, the need to classify factors as a prerequisite for conducting cost analysis is substantiated.

Let's move on to consider the goals and objectives that are solved during the cost analysis, the information base for its implementation and the importance of cost analysis in the enterprise management system.

Cost and ways to reduce it

1.4 Factors influencing the cost of production and their classification

Classification of factors

Factors influencing the cost of production can be classified according to several criteria.

Technical ones include, for example, the introduction of new progressive technology, mechanization and automation of production, scientific and technical achievements, improving the use of fixed assets, technical and energy equipment of labor.

Technological - changing the product range; duration of the production cycle; improving the use and application of new types of raw materials and materials, the use of economical substitutes and the full use of waste in production; improving product technology, reducing its material and labor intensity.

Based on the time of occurrence, planned and sudden factors are distinguished. An enterprise can plan the following activities: commissioning and development of new workshops; preparation and development of new types of products and new technological processes; optimal placement of certain types of products throughout the enterprise. Sudden (unplanned) factors include production losses; changes in the composition and quality of raw materials; changes in natural conditions; deviations from established production standards and others.

Based on the place of occurrence, factors are divided into external (independent of the enterprise) and internal (depending on the enterprise). The cost of production, regardless of the enterprise, can be affected by the economic situation in the country, inflation; natural and climatic conditions; technical and technological progress; changes in tax legislation and other factors.

Internal include the production structure of the enterprise; management structure; level of concentration and specialization of production; duration of the production cycle.

By purpose, primary and secondary factors are distinguished. This group of factors depends on the specialization of the enterprise. If we consider a material-intensive production, for example, a meat processing plant, then the main factors include the following factors: prices for material resources and consumption of raw materials and other materials; technical equipment of labor; technological level of production; production rate; nomenclature and range of products; organization of production and labor. To a lesser extent, the cost of production will be affected by the management structure; natural and climatic conditions; wages of production workers; structure of other costs and other factors.

Ways to reduce production costs

The following main directions for reducing the cost of production of an industrial enterprise can be identified:

1. Increasing the technical level of production. This is the introduction of new, progressive technology, mechanization and automation of production processes; improving the use and application of new types of raw materials and materials; changes in the design and technical characteristics of products; other factors that increase the technical level of production. For this group, the impact on the cost of scientific and technological achievements and best practices is also analyzed.

Cost reduction can occur by creating automated control systems, using computers, improving and modernizing existing equipment and technology. Costs are also reduced as a result of the integrated use of raw materials, the use of economical substitutes, and the complete use of waste in production. A large reserve conceals the improvement of products, a reduction in their material and labor intensity, a reduction in the weight of machinery and equipment, a reduction in overall dimensions, etc.

2. Improving the organization of production and labor. A reduction in cost can occur as a result of changes in the organization of production, with the development of production specialization; improving production management and reducing production costs; improving the use of fixed assets; improvement of logistics; reducing transport costs; other factors that increase the level of production organization.

A serious reserve for reducing production costs is the expansion of specialization and cooperation. In specialized enterprises with mass production, the cost of production is significantly lower than in enterprises producing the same products in small quantities.

A reduction in current costs occurs as a result of improving the maintenance of the main production, for example, the development of continuous production, the streamlining of auxiliary technological work, the improvement of tool facilities, and the improvement of the organization of control over the quality of work and products. A significant reduction in living labor costs can occur with a reduction in lost working time and a reduction in the number of workers who do not meet production standards. Additional savings arise when improving the management structure of the enterprise as a whole. It is expressed in a reduction in management costs and in savings in wages and salaries due to the release of management personnel.

With improved use of fixed assets, cost reduction occurs as a result of increased reliability and durability of equipment; improving the preventive maintenance system; centralization and introduction of industrial methods of repair, maintenance and operation of fixed assets.

Improving material and technical supply and use of material resources is reflected in reducing the consumption rates of raw materials and materials, reducing their cost by reducing

procurement and storage costs. Transportation costs are reduced as a result of reduced costs for the delivery of raw materials and materials and for the transportation of finished products.

Certain reserves for reducing costs are laid down in the elimination or reduction of costs that are not necessary in the normal organization of the production process (excessive consumption of raw materials, supplies, fuel, energy, additional payments to workers for deviations from normal working conditions and overtime work, payments for regressive claims, etc.). p.). This also includes the most common production losses, such as losses from defects. Identifying these unnecessary costs requires special methods and attention of the enterprise team. Eliminating these losses is a significant reserve for reducing production costs.

The next factor influencing the cost of production is labor productivity. It is necessary to take into account that the reduction in production costs is largely determined by the correct ratio of the growth rate of labor productivity and wage growth. The growth of labor productivity should outpace the growth of wages, thereby ensuring a reduction in production costs.

Let us consider under what conditions, with an increase in labor productivity at enterprises, labor costs per unit of output are reduced. An increase in production output per worker can be achieved through the implementation of organizational and technical measures, due to which production standards and, accordingly, prices for work performed change, and by exceeding established production standards without carrying out organizational and technical measures.

In the first case, the company receives savings on workers' wages. This is explained by the fact that due to a decrease in prices, the share of wages in the cost of a unit of production decreases. However, this does not lead to a decrease in the average wages of workers, since the ongoing organizational and technical measures make it possible

workers can produce more output with the same labor input.

In the second case, the cost of workers' wages in the unit cost of production does not decrease. But with an increase in labor productivity, the volume of production increases, which leads to savings on other expense items, in particular, production maintenance and management costs are reduced.

It is also important to reduce shop floor and general plant expenses. This consists primarily in simplifying and reducing the cost of the management apparatus, in saving on management costs; as well as in reducing the cost of wages for auxiliary and auxiliary workers.

3. Changes in the volume and structure of products can lead to a relative reduction in semi-fixed costs (except for depreciation), depreciation charges, changes in the nomenclature and range of products, and an increase in their quality. With an increase in production volume, the number of semi-fixed costs per unit of production decreases, which leads to a decrease in its cost.

Changing the nomenclature and range of products produced is one of the important factors, affecting the level of production costs. With different profitability of individual products (relative to cost), shifts in the composition of products associated with improving its structure and increasing production efficiency can lead to both a decrease and an increase in production costs.

4. Improved use of natural resources. This takes into account: changes in the composition and quality of raw materials; changes in the productivity of deposits, the volume of preparatory work during extraction, methods of extraction of natural raw materials; changes in other natural conditions. These factors reflect the influence of natural conditions on the amount of variable costs.

5. Industry and other factors: commissioning and development of new workshops, production units and production facilities, preparation and development of production in existing associations and enterprises; other factors.

Significant reserves are included in reducing the costs of preparation and development of new types of products and new technological processes, in reducing the costs of the start-up period for newly commissioned workshops and facilities.

The impact on the cost of commercial products of changes in the location of production is analyzed when the same type of product is produced at several enterprises that have unequal costs as a result of the use of different technological processes. In this case, it is advisable to calculate the optimal placement of certain types of products at the enterprises of the association, taking into account the use of existing capacities, reducing production costs and, based on a comparison of the optimal option with the actual one, to identify reserves.

If changes in the amount of costs during the analyzed period are not reflected in the above factors, then they are included among others: for example, a change in the size or termination of various types of mandatory payments, a change in the amount of costs included in the cost of production, etc.

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