Features of identifying deviations in administrative and management expenses. Cost Budgeting

COURSE WORK

discipline: Management accounting

on the topic: Accounting for deviations by cost items and their analysis

Introduction

The concept of “deviation”: favorable and unfavorable deviations

Deviations for main work

Overhead Variances

Elements of standard unit costs

Deviation management

Conclusion

List of used literature

Introduction

accounting cost deviation

In any activity where standards or targets are established, deviation is inevitable. We need to know not only the magnitude of deviations of actual results from planned ones, but also the reason for their occurrence. Variance management is one of the management methods, which is based on identifying differences between actual and estimated costs or abnormal deviations in the organization’s activities, so that management’s attention is focused on these deviations. Thus, the focus is not on normal processes or estimated costs, but on emerging problems.

The subject of the work is the problem of the occurrence of deviations. Identification of causes and responsible persons.

The purpose of the work is to study the organization of deviation management, reveal the causes of deviations, and identify ways to manage deviations.

To achieve these goals, the following tasks must be solved:

-consider the essence of the normative method of cost accounting as a method of analyzing deviations;

-study the methodology for calculating and analyzing deviations;

-use an example to show the technology for detecting deviations;

-suggest ways to improve the organization of accounting for deviations.

If the enterprise carries out deviation management, it is possible to resolve problems that interfere with the achievement of the strategic goals set for the organization, for example, this could be:

-identifying supplier defects;

-delivery delays and increased costs;

-untimely completion of production tasks;

-the complexity of the corrective effect on reducing the growth of product costs;

-customer dissatisfaction with completed orders in terms of timing and quality;

-staff dissatisfaction;

This work will discuss the main components of deviation management:

Making a management decision on deviations is the implementation of actions necessary to:

-thirdly, take advantage of the opportunities that open up.

Daily summarization and analysis of deviations from the norms by cost centers and responsibility centers allows managers of production departments to promptly eliminate problems that arise in the organization of production and prevent the possibility of their occurrence in the future. In other words, the system of standard cost accounting creates the prerequisites for organizing production management based on deviations from the norms.

1 The concept of “deviations”: favorable and unfavorable deviations

Deviation - an absolute deviation from the current current standards for the consumption of raw materials, materials, semi-finished products, wages and other direct costs for manufacturing products and the relative magnitude of the differences between actual and estimated overhead costs.

Deviations can be: positive (savings) and negative (overspending); accounted for and unaccounted for; material and cost.

Negative deviations of direct costs are analyzed from the standpoint of compliance with technological processes, organizational standards and production management regarding specific products.

Positive deviations of direct costs are considered from the point of view of the validity of norms and standards calculated per unit of production. Deviations for fixed costs are analyzed based on their response to changes in production volumes and compliance with flexible budgets.

Accounted deviations are also called documented. These include identified deviations: according to signal documentation before the start of the production process; as the production task is completed; using calculations and formulas at the end of the reporting period (from several hours to several months).

Figure 1.1 - Types of deviations

Deviations from norms that are not documented in this reporting period are identified by inventory methods of work in progress, finished and rejected products, materials and other material assets. The reasons for their formation may be: inaccuracies in dispensing and counting remaining materials; concealment of marriage; additions in the volume of produced products; damage, loss and shortage of semi-finished products, parts and products; inaccuracies in the inventory of remaining materials and work in progress. Unaccounted deviations are determined at the end of the reporting period and indicate an insufficient level of organization of production and management accounting.

Material deviations arise in supply, procurement and production activities. They are distributed between the balances of materials, work in progress, finished goods and products sold in a given reporting period.

Cost variances are usually charged to cost of goods sold.

Deviations for basic materials

Two main factors influence variances in material costs in the production of products: the price of materials and the quantity consumed in production.

Price deviations are determined by multiplying the quantity of purchased material by the difference between the standard and actual price per unit of materials:

(NC-FC)*KZ (2.1)

where NC is the standard price;

FC - actual price;

KZ - quantity of purchased material.

There are two approaches to calculating deviations:

In accordance with the quantity of purchased material. Then the deviations are distributed between the balance of materials and sold products;

According to the amount of materials used. In this case, all deviations are written off to the cost of goods sold.

Main reasons for deviations:

Negative variance due to poor performance with suppliers

1.Negative variance due to market increases in supplier prices

2.Positive deviation due to poor quality of material detected during incoming inspection

3.Positive deviation due to poor quality material found during the production process

4.Increase in price by the supplier for urgent delivery

5.Positive deviation due to non-compliance of the material with the technical process

Deviations from the standards for the use of materials are determined by comparing the actual material consumed with the standard consumption for the actual output. This principle is also fundamental when drawing up flexible cost estimates. The same applies to waste.

To identify deviations from material consumption standards, the following methods are used: documentation; batch use of materials with identification of deviations in direct costs of product output; preliminary calculations based on recipes, subsequent calculations based on inventory data.

Each enterprise, in accordance with its technology and characteristics of materials, chooses its own system for detecting deviations. But in any case, the calculation is made according to the formula:

(NC-FC)*NC (2.2)

where NK is the standard consumption for actual production;

FC - actual amount of material used;

NC - standard price of the material.

A special place in the analysis of deviations in materials is occupied by research various types waste. They are classified according to the following criteria:

acceptable production waste arises immediately during the processing process, they are included in the costs of materials, the actual waste received is compared with its standard value, and the causes of deviations are determined;

production waste as a result of final defects - part of the material that is damaged during the production process is identified by comparing the finished product with the product put into production. In some industries, defects are also considered as part of cost standards;

production waste due to the fault of the administration appears as a result of erroneous decisions made by managers, the absence or weakening of procedures for controlling production waste.

Deviations in materials are summarized by the centers of their occurrence, operations, types of products and materials, by reasons, culprits and other characteristics.

Example 2.1

The ABC company uses a cost regulation system. Variable cost rates per unit of production are: for materials 2 units for $3, for production labor$5 per Man-Hour, variable overhead $3 per Man-Hour. During March, 25,000 units of materials were purchased for $74,750 and 20,750 units of materials were used to produce 10,000 units of finished goods. Direct labor costs were $49,896 (10,080 direct labor hours), variable overhead costs were $34,776. Using a general model, we will determine deviations in materials.

Table 2.1 - Deviation by materials

Actual quantity of input resources at actual price (FC*FC) Actual quantity of input resources at standard price per unit (FC*NC) Allowable quantity for a given production volume per unit 25000*2.99=7475025000*3.000=7500020000*3.000=60000 Continued table 2.1-deviation by materials Price deviation 25020750*3,000=62250 Quantity deviation 2250

It is important to note that the amount of materials purchased (25,000 units) differs from the amount of materials used in production (20,750 units). The materials purchase price variance was calculated on the basis of 25,000 units of materials purchased, while the materials use variance was calculated on the basis of 20,750 units of materials used in production. Because of this difference, it is not possible to determine the value of the total variance. On the other hand, the same deviation value for materials can be determined in the following way:

Materials-quantity deviation=(FC-NC)*NC=(20750-20000)(3,000)=62250-60000=2250

Main reasons for deviations:

1.Positive deviation due to poor control of material movement between warehouses

2.Positive deviation due to low control of receipt to the workshop and issue of materials to production

.Positive deviation due to the purchase of low quality materials

.Positive variance due to theft

.Deviations due to process changes

.Deviations due to changes in quality control requirements

Labor deviation

The total deviation of direct labor costs is defined as the difference between the actual and standard labor costs for manufactured units of production, excluding defects (both final and correctable):

total direct labor variance = actual time actual wage rate - standard work time standard wage rate. (3.1)

To assess the extent to which the plan is being implemented, management must know how much of the total variance is due to changes in labor time costs and how much is due to changes in labor rates.

Deviation in the rate of payment for direct labor costs = (actual rate - standard rate) · actual work time. (3.2)

Labor productivity deviation = (actual work time - standard work time) standard wage rate (3.3)

The HR department is usually responsible for wage rate deviations. This variance occurs when a worker is hired at a salary higher or lower than expected in the plan, or certain jobs are performed by a more (less) highly paid worker. Shop controllers are responsible for deviations in labor productivity. Unfavorable performance variance may occur if an inexperienced worker is assigned a job that requires higher skill levels. Management must analyze each situation based on the prevailing circumstances.

Figure 3.1 - General deviation of direct labor costs

Deviations in the quantity of labor appear when labor is involved in production. They are set up in much the same way as material variances, except that in the 3-column model the terms labor and rate are used instead of the terms quantity and price. The production department is responsible for both the rates at which labor is paid and the quantity of labor used. Therefore, the production department must have an explanation for the reasons why any labor cost variances occur.

Table 3.1 Possible reasons deviations in wage rates and bearers of responsibility

Reasons for deviations in wage rates and who is responsible REASON RESPONSIBILITYExcessive wages or excess labor Production manager or collective agreementUnclearly formulated job requirements or overestimation of wages HR department Overtime work and unsatisfactory production schedule Production planning department Reasons for unfavorable deviation in labor intensity and responsibility REASONS RESPONSIBLE STRUCTURE Low qualifications of workers HR department Unsatisfactory control, insufficient supply of materials, downtime Foreman Failures in equipment operation Insufficient quantity of materials Maintenance department Purchasing department

Unfavorable wage rate variances can be explained by wage growth; poor production planning and, as a result, the need for overtime work; using labor that requires higher rates of pay than expected. staff rest.

Table 3.2 Calculation of deviations for labor costs

Actual capacity of labor costs in hours at the actual rate per unit (FT*FS) Actual capacity of labor costs in hours at the standard rate per unit (FT*NS) Standard permissible labor intensity for a given volume at the standard rate 10080 person/h * 4.95 = 4989610080 person/h *5.00=5040010000 person/h*5.000=50000 Continuation of table 3.2-Calculation of variances for labor costs Deviation at rate = 504 Deviation for labor intensity = 400 The same values ​​can be calculated another way:

Deviation in wage rate = FT(FS-NS)=(FT*FS)-(FT*NS)=504

Deviation in labor intensity = (FT-NT)NS = 400

The main reasons for deviations in wage rates:

1.Increasing rates at the request of staff

2.Increase in rate for overtime work

.Increasing the rate when averaging the rate

.Increase in rate when using a more qualified employee

Labor productivity deviation (DPD) is equal to:

OPT = (LF - LF) * NSZ (3.4)

NSZ - standard hourly wage rate.

Main reasons for deviations:

1.Increased deviation due to poor quality materials

2.Increased deviation due to poor machine maintenance

.Increased deviation due to new equipment

.Increased deviation due to process changes

.Change in deviations due to changes in quality control standards

The total labor deviation (TLD) is equal to:

OOT = NZ - FZ (3.5)

NZ - standard costs for actual production;

FZ - actual labor costs.

Manufacturing overhead variances

Manufacturing overhead variances are analyzed by their behavior relative to production volume and capacity utilization in order to control costs allocated to individual products.

Deviations for overhead costs are considered from the standpoint of compliance with actual production overhead costs, / their amount distributed among types of products according to pre-established absorption rates. In this case, actual overhead costs and the total amount of absorption by the cost of products, finished or sold, are divided into constant and variable components.

Fixed overhead variances are the difference between standard fixed costs included in the cost of production and actual fixed costs.

The amount of deviations can be influenced by:

) actual expenses (in composition and quantity), different from the estimated ones;

) actual output of products (in terms of assortment and volume), different from the estimated output.

These two types of variances are also called fixed overhead variances and volume variances.

Analysis of deviations for fixed overhead costs requires a comparison of the amounts of actual and standard costs for each budget item. A variety of reasons for deviations can be identified.

For example, unscheduled repairs, revision of wages for service technicians, etc. Since estimates are drawn up according to structural divisions, then the analysis of their execution is carried out by workshops and production sites. One of the main areas of analysis is the consideration of both controllable and uncontrollable overhead fixed costs. For these purposes, standards must contain permissible deviations, where the cause is direct costly deviations that depend on a given manager. In order to distinguish controllable costs from uncontrollable ones, the direct costs incurred are checked based on the production process and these costs are classified by product.

Deviations in production volume are the difference between the actual volume of production (FP) and the estimated output (SP) in the period under review, multiplied by the standard rate for the distribution of fixed overhead costs (NS):

(FP-SP)*NS (4.1)

The formula is based on the assumption that fixed overhead costs relative to production volume do not change over a short period of time.

Possible reasons for deviations may be caused by fluctuations in demand for products, product mix, deficiencies in the supply of materials, ineffective labor, low quality products, deficiencies in planning, management, production organization, equipment downtime and other factors. The magnitude of deviations in production volume is mainly influenced by deviations in efficiency and deviations in power.

Deviations of production volume in terms of labor efficiency are the difference between the output in standard hours (NL) and the actual labor time spent in hours (LF) for the period under review, multiplied by the standard rate for the distribution of fixed overhead costs (NS):

(LF-PF)*NS (4.2)

Deviations in production volume by capacity are the difference between the actual labor time spent and the estimated labor time in hours (AS) in the period under review, multiplied by the standard rate for the distribution of fixed overhead costs (NS):

(PF-MF)*NS (4.3)

Deviations for variable overhead costs are determined by the difference between the standard value of variable overhead costs (HP) and the actual variable overhead costs (FR):

The total amount is analyzed according to the following types: direct deviations (absolute) from the estimate; deviations adjusted to the actual amount of work (relative); efficiency deviations.

Absolute deviations are defined as the difference between actual and estimated costs. The analysis is carried out for each article. Separate calculations determine deviations from those adjusted for the actual volume of the estimate. In this case, the variance is equal to the difference between the estimated, adjusted variable overhead costs (AVO) and the actual variable overhead costs (AFOV):

SPNR-FPNR (4.5)

The source of information for analysis is the report on the execution of the estimate. For each budget item there may be different reasons for deviations.

Deviations of variable overhead costs by efficiency - is the difference between the output in standard hours (SN) and the actual labor time spent (LF) for the period under review, multiplied by the standard rate of variable overhead costs (NS):

(LF-PF)*NS (4.6)

The main reason for these deviations is changes in labor productivity. Variable overhead variances are calculated in a similar manner to determining labor variances. Typically, the manufacturing department is responsible for any possible deviations in variable overhead costs from standard costs. Unfavorable variable overhead cost variances can be caused by a number of factors: purchasing materials at prices different from average; greater than expected consumption of materials; theft of materials. Unfavorable efficiency variances in variable overhead costs can be caused by factors such as: poor training of workers; low quality materials; faulty equipment; suspension of work; unsatisfactory production schedule; weak control; insufficient time for staff to rest, etc. When variable overhead costs are expressed in direct labor time, the efficiency variance may be driven by the same factors that cause the effort variance. However, in cases where variable overhead is expressed in machine hours, the variable overhead variance is driven by a reduction in the factor useful action equipment.

Table 4.1 - Deviation according to commissioning work

Actual capacity of variable overheads in hours at the actual rate per unit (FU*FS) Actual capacity of variable overheads variable overheads in hours at the standard rate per unit (FU*NS) Standard allowable capacity of variable overheads for a given production volume at the standard rate per unit unit (NOT*NC) 347763024030000 Cost-intensity deviation = 4536 Total variance value - 4776 Efficiency deviation 240

The variance for variable overhead costs (VOC) is:

OPC = SNZ - FNZ (4.7)

SNZ - estimated overhead costs for the actual labor time of key workers;

FNZ - actual variable overhead costs

Deviation analysis is carried out item by item.

Main reasons for deviations:

1.Deviation for the labor of support workers

2.Variance for indirect material costs

.Electricity consumption deviation

.Maintenance deviation

Variable overhead efficiency variance (VAE) is equal to:

OEPR = (LF - LF) * NSR (4.8)

LF - standard time in hours spent on actual production;

FC - actual time in hours worked during the period under review

NSR - standard hourly rate of variable overhead costs.

The reasons for the deviations, as we see, are related to the labor productivity of the main employees.

The fixed overhead variance (FOC) is:

OPR = SPR - FPR (4.9)

SPR - estimated fixed overhead costs;

FPR - actual fixed overhead costs.

The analysis is carried out item by item in the context of cost centers.

Main reasons for deviations:

1.Changes in salaries of mid-level employees

2.Appointment of additional managers

.Change in indirect material costs

.Electricity consumption deviation

5 Elements of standard unit costs

In the literature devoted to management accounting, it is defined as a system of standard cost accounting. As practice shows, variance analysis is an effective tool for controlling costs and the entire enterprise management system. Regulatory accounting can be used by an enterprise as a holistic concept that allows it to analyze the overall situation and make decisions. But if this is not relevant for an enterprise, it can use the system partially (for example, a block of labor or material costs).

Regulatory cost accounting helps an enterprise solve a number of issues. The main purpose of standard cost accounting is to:

) simplify planning and budgeting processes;

) identify deviations, their significance and nature, contribute to the development of regulatory actions;

) give a forecast of the expected costs and set prices based on the pre-calculated cost of production;

) simplify accounting of costs for the final product of production;

) monitor current activities, contribute to the assessment of management effectiveness;

) set (adjust) goals that need to be achieved, outline ways to improve objects and processes.

Organization and procedure for calculating standard costs

Standard costs are carefully calculated predetermined (standard) costs, which are usually expressed per unit of finished product.

In the general case, standard costs include three elements of production costs, each of which in turn can be represented in the form of two components - natural and cost for direct and variable and constant for indirect:

Direct material costs:

-Standard price of basic materials.

-Standard quantity of basic materials.

Direct labor costs:

-Standard working hours (based on direct labor costs).

-Standard direct wage rate.

General production expenses:

-Standard coefficient of variable overhead costs.

-Standard coefficient of fixed overhead costs.

If we're talking about not only about production, but also about general economic costs, then another (fourth) element should appear - general economic expenses.

Many standards have been applied by the enterprise for a long time without changes. Only a change in the design or production technology of a product, modification or development of a new product necessitates a revision of the natural part of the standards. Price components of standard costs are updated more frequently to reflect the impact of inflation and other factors on purchased materials prices and labor costs.

Standard costs of basic materials are determined by multiplying the standard price of these materials by their standard quantity.

The standard price of basic materials is a careful assessment of the costs of a certain type of basic materials for the next accounting period. The purchasing agent is responsible for setting standard prices for all major materials. When determining standard prices, he must take into account all possible price increases, quantitative changes in the materials market, new sources of supply, etc. He also makes all actual purchases.

Standard quantity of basic materials - an estimate of the expected quantity that will be used. This assessment is one of the most difficult tasks in establishing standards. It is influenced by the specific design of products, the quality of basic materials, the age and productivity of machinery and equipment, performance lification and worker experience. Some defects and losses are inevitable, and this must be taken into account when calculating the standard amount of materials. Typically, production managers or cost accountants set these standards, using engineers, material purchasing agents, and machine operators to develop them.

Standard direct labor costs are calculated by multiplying standard labor hours by the standard rate of direct labor compensation.

Standard labor time (based on direct labor costs) reflects the time required for each department, machine or process to produce one unit or one batch of products. In many cases, the standard time per unit is a small fraction of an hour. Standard labor hours should be revised if machinery and equipment are replaced or the qualifications of the workforce change. The manager of the relevant department and the supervisor are responsible for the development of this standard.

The standard direct labor rate expresses the hourly direct labor costs expected in the next accounting period for each function or type of work. In practice, direct wage rates are quite easily determined, since they are either fixed in labor contract, or are established by the organization itself. Although a range of rates is provided for each category of worker, within which these rates differ, average standard rates are accepted for each operation. And even if the worker who manufactured the product actually receives less, the standard rate of payment is used when calculating standard direct labor costs.

Standard overhead costs are the sum of estimates of variable and fixed overhead costs for the next accounting period. These estimates are based on standard ratios calculated in the same way as the standards discussed earlier. However, there is one main difference: the standard coefficient of overhead costs consists of two parts - for variable and for fixed costs, the calculation of which uses different bases.

The standard coefficient of variable overhead costs is found by dividing the total planned variable overhead costs by the planned quantitative expression of a certain base, for example, the expected number of standard machine hours or standard labor hours. (Another base may be used if machine hours or standard hours are not an appropriate measure for variable overhead costs.) The formula based on standard hours is: in the following way:

Normative coefficient of ODA variables = (5.1)

The standard coefficient of constant overhead costs is found by dividing the total planned constant overhead costs by normal productivity (power), expressed in standard labor hours:

Standard coefficient of constant ODA = (5.2)

Using normal capacity as a basis provides assurance that all fixed manufacturing overhead costs will be allocated to the product produced when normal capacity is achieved.

If actual output exceeds planned output and standard labor costs are higher than normal, a favorable situation arises. In fact, the fixed overhead costs per unit of production will be less than the standard ones. But if the actual output does not meet expectations (planned level), i.e. falls below normal capacity, then the planned amount of constant ODA will fall on a smaller volume of production.

Using cost standards when calculating allows you to avoid calculating the cost of a unit (or batch) of products every week or month based on actual costs. Having once determined the standard costs of basic materials, labor costs and overhead costs, you can calculate the total standard costs per unit of production at any time. Let us illustrate the application of the standard cost accounting system with an example.

The company has developed standards for a line producing automatic pencils. The standard costs of basic materials are 0.025 m2 of special plastic per pencil and one moving mechanism per pencil. Standard prices for basic materials are 10 CU per 1 m2 of plastic and 2.75 CU for each moving mechanism. Standard labor costs are 0.01 hours per pencil in the stamping shop and 0.05 hours per pencil in the assembly shop. The standard rates of payment for labor costs are 8.00 CU per 1 hour in the stamping shop and 10 CU per 1 hour in the assembly shop. Standard coefficients of overhead costs are 12.00 CU per 1 hour of total labor costs for the variable part and 9.00 CU per 1 hour of total labor costs for the constant part.

Below is shown how the standard cost per unit of production is calculated by component.

Table 5.1 - Calculation of standard production costs for one automatic pencil

Components: Main materials: plastic (10 units/m2 × 0.025 m2)0.25 movable mechanism (2.75 units/pc. × 1 pcs.) 2.75 Direct labor costs: stamping shop (0.01 h/pencil ×8 unit/hour)0.08 assembly shop (0.05 hour/pencil × 10 unit/hour) 0.50 General production costs: variable (0.06 h/pencil × 12.00* u/h)0.72 constant (0.06 h/pencil × 9.00** unit/hour)0.54 Total standard costs per pencil: 4.84

*The number of direct labor costs in hours (0.01 + 0.05 = 0.06) is taken as the basis for the distribution of the variable and constant parts of overhead costs in the example.

Table 5.2 - The resulting deviations are determined as follows

No. Types of deviations Calculation of deviations I. By materials1 By price of materials used (Standard price of a unit of material - actual price) * quantity of purchased material 2 By quantity of materials used (Standard quantity of material for actual production - actual consumption of materials) * standard price of materials 3 Cumulative deviation of material consumption (Standard costs per unit of material - actual costs per unit of material) * actual quantity of materials used for production II. By labor 1 By wage rates (Standard hourly wage rate - actual hourly wage rate) * time actually worked 2 By labor productivity (Standard time for actual production - actual time worked) * normative hourly wage rate Continuation of table 5.2 - The deviations that arise are determined as follows 3 Cumulative deviation for labor costs (Standard labor costs per unit of production - actual labor costs per unit of production) * actual volume of production III. By overhead By fixed overhead (Estimated fixed overhead rate per unit - actual fixed overhead rate per unit) * actual output By variable overhead (Estimated variable overhead rate per unit - actual variable overhead rate per unit products) * actual volume of production

In order to be able to use the normative method with real impact, an enterprise needs not only to create a reporting base for standardizing and planning costs. In addition, you must:

-ensure the collection of data on actual and standard production costs;

-registration and prompt recording of changes in norms and standards, deviations from norms by location and reasons for their occurrence (workplaces, teams, sections, stages, redistributions, workshops, etc.);

-control and summarization of data on actual losses and unproductive expenses, as well as unused reserves for increasing operational efficiency; determination of a rational standard level of costs (cost) for production;

-calculation of the actual cost of products (works, services) based on pre-calculated standard costs.

At the same time, the reliability, accuracy and efficiency of accounting must be high. It is advisable to develop a personnel motivation system in such a way that it takes into account the assessment of the performance of departments and the enterprise as a whole, carried out within the framework of regulatory cost accounting

Deviation management

Deviation management is a management technology based on the fact that:

minor deviations do not require adjustments to the management process;

minor deviations can be overcome by the performers themselves.

The manager's intervention occurs only when the deviations are significant.

Basic principles of deviation management:

preliminary preparation of standard calculations based on technically sound standards for the main items of production costs;

accounting current standards assets and determining their impact on the level of cost of products or work performed;

accounting for actual production costs, dividing them into costs according to standards and with deviations from standards;

accounting for deviations of actual expenses from standard ones according to the places of their occurrence, reasons and culprits.

Deviation management is management carried out in order to restore the normal course of the production process when deviations occur. With an appropriate organization, internal reports must contain data reflecting deviations from planned income, costs and other indicators at the time of a particular business process operation in the areas of responsibility of specific managers. When managing by deviations, great importance is attached to the principle of materiality, i.e. Managers focus their attention on operations where significant deviations have been identified.

Deviations may be caused by changes in technology and standards; rework of poorly performed construction and installation works; irreparable marriage; lack of materials, fuels and lubricants, electricity, vehicles; breakdown of construction machinery, equipment and mechanisms; lack of scope of work; downtime due to weather conditions; replacing materials with more expensive ones; excessive consumption of materials; correction of building structures received from suppliers; overexpenditure of the number of machine shifts of construction machines and mechanisms; excess road transport; violations labor discipline etc.

The culprits for deviations from the norms may be the work foreman, foreman and mechanic, work teams, supply department, repair and maintenance area for construction equipment, etc.

Main components of deviation management:

Figure 5.1 - Components of management decision making

There are six such components:

1.Measurement is an assessment, often quantitative, of various activities that a manager has performed in the past or is currently performing. Without such an assessment, it is impossible to identify exceptions requiring intervention.

2.A forecast is an analysis of the estimates obtained during measurement, based on an understanding of the organization’s development objectives and extrapolation of identified trends for the future.

.Selection - ensuring knowledge of the criteria that should guide management personnel in achieving the goals of the organization.

.Observation is the stage of assessing the situation, which gives the manager information about the current state of affairs.

.Comparison - the actual state of affairs is compared with the planned one, deviations from the norm that require attention are highlighted and brought to the appropriate level of management.

6.Decision making is the implementation of actions necessary to:

1.first, regain control course of events,

2.secondly, to adjust the standards for assessing business information in accordance with the changed situation,

.thirdly, take advantage of the opportunities that open up.

As a basis for comparison with actual values, you can use various options standards:

1.Ideal (theoretical) - calculated under the assumption of ideal conditions: the best market conditions, no losses, etc.

2.Normal - calculated for the average value for the period under review: the average level of tension of norms, average prices, average output volume, etc.

.Current (expected) - calculated from the forecast of the situation for a certain accounting period: expected output volume or production conditions, predicted price level, etc.

.Basic - calculated for a certain moment, which is taken as the basic (reference).

The main attention in the deviation management system is aimed at identifying deviations not by type of product, but by the places of occurrence and establishing the fact of responsibility. This requires the enterprise to have a new approach to organizing on-farm accounting, planning, cost analysis, and transferring not only workshops, but also services to self-accounting, which will increase their responsibility for generating costs locally. Each service, department, workshop must have its own estimate, cost budget and meet it. In this regard, there is a need to organize cost budgeting. The cost management process should be aimed at timely identification of deviations from the norms, limits and creating conditions for the interest of cost centers in their elimination, as well as in the reasonable distribution of deviations among responsibility centers.

Figure 5.2- Concept of a multi-layer enterprise cost management process

An important issue is the establishment of responsibility centers of the first level, that is, the primary expenditure of funds and enlarged responsibility centers of the second, third, etc. levels. Each responsibility center should be assigned only those expenses that are directly controlled by this service. Control over direct costs is carried out by recording and analyzing deviations from the norms: documented and undocumented, and for other cost items by comparing actual costs with planned ones at the end of the month. Of great importance is not only the analysis of deviations from the norms, but also the analysis of changes in norms, which, as a rule, are a consequence of measures aimed at improving production (with the exception of private adjustments to norms due to various types of errors). Using data on changes in standards and their causes, it is possible to trace the dynamics of technical progress and the impact of production intensification on changes in costs.

Based on the idea of ​​control by deviation, a concept can be formed early warning systems for potential hazards . Early warning system - special Information system, thanks to which the management of the enterprise receives information about potential dangers threatening from the external environment and/or the internal environment of the enterprise itself, in order to promptly and purposefully respond to threats with appropriate measures. If, in addition to the fact that it represents data about possible dangers, the information system has the ability to recognize emerging chances or positive opportunities, then we will be talking about an early recognition system.

The elements of early warning systems are people, machines and their combinations. There are peripheral and central elements of the early warning system with corresponding specific information processes.

Early warning data is obtained at a time when information about the state or development of certain processes and events becomes important. external environment or at an enterprise whose impact has great value for the enterprise, including for its survival, which indicates a high probability of these events occurring.

It is quite difficult to imagine how to determine the moment of acquisition important of this or that information about the development of certain processes, it would seem that any source of disturbance is either constantly controlled or neglected. But let's move on.

The process of creating an early warning system includes the following steps:

Determination of the observation area.

The starting points for building any early warning system are a clear understanding of the goals of the enterprise and the characteristics of areas outside and inside the enterprise that may be a potential source of danger, i.e. serve as a reason for the crisis development of the enterprise, or can provide special chances. External areas of observation can be, for example, specific markets and technological areas: internal - product programs, enterprise functions, etc.

Definition of early warning indicators.

Indicators should, as early as possible, indicate in the observed areas the development of phenomena that may signal possible dangers for the enterprise. Such indicators of the early warning system at the enterprise are the following:

-about receipt of orders;

-about prices in supply markets;

About investments;

-about the demands of trade unions;

-on legislative initiatives

Determination of target indicators and intervals of their change for each indicator.

To recognize, using indicators, critical developments in the observed area, it is necessary to have special meters, since this is not about identifying hitherto unknown sources of danger. Moreover, these dangerous and supercritical areas can be determined in advance.

Defining tasks for information processing centers.

When distributing tasks within an early warning system and thereby defining its structure, the following points are of particular importance:

peripheral elements (sensors) that detect changes in indicators can be employees of all departments of the enterprise. In some cases, it is advisable for some departments to centrally prepare and evaluate early warning signals. Despite the strong emphasis and love for the human aspect, they still understood that it was the person responsible for some area of ​​​​activity who would be the first to try to hide as long as possible all the production troubles he had. Creating a centralized division of controllers will not change anything, because in order to know about troubles, you need to work with them, and not ask about them in one department or another.);

in enterprises with a functional organizational structure, the tasks of centralized processing of early warning information are assigned to the marketing or corporate planning departments;

at enterprises with a divisional (product or regional) organizational structure, such signals are processed centrally within each division. Additional at level senior management information from branches, as well as signals received from external sources, come together.

After all this, the following statement: in the form preliminary calculations expected implementation of the plan as part of operational planning and as background information for target and strategic planning indicators that have the nature of early warning indicators.

Conclusion

Deviation management is management carried out in order to restore the normal course of the production process when deviations occur. With an appropriate organization, internal reports must contain data reflecting deviations from planned income, costs and other indicators at the time of a particular business process operation in the areas of responsibility of specific managers.

So, we found out that deviation can be “positive” and “negative”. Both of these types of deviations adversely affect the activities of the enterprise. If we observe a negative deviation, then the enterprise did not work effectively enough. If the deviation is positive (which implies operational efficiency), then the standards were not sufficiently thought out and the organization has the resources to perform a larger volume of work.

The main task of deviation management is the timely prevention of irrational spending of all types of resources, which is achieved by promptly recording deviations of actual costs from current standards by division of the enterprise, types of products, causes and culprits. For this purpose, accounting for production costs is carried out separately in the following parts: costs according to standards; changes in regulations; deviations from the norms.

Deviation management involves:

-Assigning all elements of production costs to production service and functional departments.

-The presence of internal cost accounting, which creates an objective interest in not being the culprit of deviation.

-Creation of a strict system of sanctions for those responsible for deviations, especially undocumented ones.

-Availability of services and departments responsible for the correct and timely submission of information about deviations.

-Within each cost center, variance analysis is carried out in terms of causes and culprits.

The establishment of management accounting for deviations should be carried out individually for each company, taking into account the characteristics and specifics of its activities. A well-designed management accounting system for deviations will allow you to quickly receive the information necessary for managers in the most convenient formats, which contributes to the timely adoption of the right management decisions.

To more effectively manage deviations and ensure the identification of deviations from approved cost standards at the point of cost occurrence and the transfer of information to responsible managers and specialists, you should:

-develop a classifier of the causes of deviations from the norms;

-ensure interaction of management accounting specialists with the operational divisions of the enterprise and determine those responsible for deviations by groups of reasons;

-develop forms of signaling documents and internal reports recording deviations from the norms; and also determine routes and frequency of their movement.

To organize the accounting of deviations, it is necessary to develop codifiers of the causes of deviations and those responsible for deviations. The reasons for deviations can be internal and external, for example, defects in purchased material, defects in the execution of business process operations, double wages for unplanned overtime hours. Those responsible for deviations are managers and specialists who can influence business process operations in order to eliminate the consequences of deviations and reduce negative influence these deviations. They are also responsible for organizing preventive measures to prevent similar deviations in the future. The effectiveness of regulatory accounting increases if the emphasis moves from punishing deviations from norms to operational management these deviations.

A codifier of the reasons for deviations and those responsible for deviations is necessary to organize all deviations. It is like an address book, where addresses are recorded for transmitting information about deviations; The codifier makes it easier for shop workers to determine the nature of deviations and record them in the primary signal documentation or on electronic media. The use of a codifier helps to increase the efficiency of transferring information to department heads and specialists who can help eliminate the causes of negative deviations. The presence of a codifier of reasons and those responsible for deviations makes it possible to increase the speed of response of managers to deviations within their competence, to systematize deviations by reason for their subsequent analysis in order to ensure staff motivation.

Deviations from norms must be analyzed. A favorable variance means cost savings; negative ones are caused by overuse of resources. There is a certain relationship between favorable and negative deviations in the enterprise. A favorable variance in one responsibility center may lead to unfavorable variances in other responsibility centers.

Variance analysis not only identifies the problem area (area of ​​inefficiency) that requires priority attention, but also identifies bottlenecks.

In some cases, deviation analysis helps to identify new opportunities, that is, reserves for increasing the efficiency of employees, departments and the enterprise as a whole, which were not taken into account when determining the regulatory framework.

List of used literature:

1 Colin Drury “Management Accounting. Introductory course", Moscow, 2012

USAID “Management Accounting 1. Tutorial", 2008

Vrublevsky N. “Management Accounting”, 2010

Horngren C.T., Foster J.S. Datar “Management Accounting”, St. Petersburg, 2007

Internet resources:

6

7

Tutoring

Need help studying a topic?

Our specialists will advise or provide tutoring services on topics that interest you.
Submit your application indicating the topic right now to find out about the possibility of obtaining a consultation.

An administrative expenses budget is necessary to manage the administrative and management expenses of a company. It is believed that if a company’s management costs exceed 5% of revenue, then this should serve as a signal for a serious analysis of the reasons for the current situation.

Administrative costs are the costs that are most difficult to directly relate to the business. This budget must be drawn up by department, because this can significantly simplify its analysis during planning, control, and summing up budget execution.

The administrative expenses budget may contain, for example, the following groups of indicators characterizing the effectiveness of the “Management” business process:

total general company expenses;

share of administrative expenses in revenue (or total expenses);

general business expenses by division;

general company administrative costs.

When managing a budget for administrative expenses, you need to look for all possible ways to reduce them. These expenses are not directly related to the production/sale of the company's products and services, but they have one very bad feature, which is that these cost items can grow even if the financial and economic indicators of the business decrease.

Some of the budget items for management expenses are financed as services of third-party organizations, that is, the costs themselves are generated by the contractor, and the company pays for the services under the contract. You need to immediately accustom yourself to the fact that, if possible, you need to control your contractors. To do this, you need to request detailed estimates of work, analyze alternatives, etc. In any case, the choice of a specific contractor must have a certain economic justification.

One of the budget items for general company expenses is the cost of personnel training. In relation to this article, clear regulations must also be observed. As for the formation of this expense item, there are several approaches. The first approach is to simply determine a fixed amount for training. This is often done in large companies.

On the one hand, training is a good thing, but what can such an approach lead to? At first, many people show interest in learning and willingly enroll in various courses. But over time, there are fewer and fewer people willing to do so, despite the fact that there is staff turnover and new employees come in who need to be trained. But the budget for training is still allocated in the same amount, if not more.

And the picture that emerges is that HR managers are literally catching those in their departments who “want” to be trained. Training becomes a voluntary-compulsory event and its effectiveness decreases. It turns out that in such a situation, personnel service employees seem to be working out a plan for financing training without particularly thinking about the goals and effectiveness of training. I'm by no means saying that absolutely all or even most large companies do this, but it happens.

Companies that are not burdened with excess cash tend to do things differently. They operate according to regulations, according to which departments, if they want to train their employees, must submit applications in advance and coordinate the training plan with the personnel directorate. If the training plan is approved, these costs will be allocated to the appropriate department. That is, the amount of training costs is determined each time based on the needs, and, of course, taking into account the company’s capabilities. In this case, a reserve can be planned in case information is suddenly received, for example, about some interesting seminar. But usually this reserve is not large.

Thus, you need to clearly understand that general business expenses need to be monitored very strictly, because they are not standardized. One of the ways to manage administrative expenses, which also applies to other non-standardized expenses, is to introduce a system of restrictions.

Restrictions can be introduced both on the total amount of administrative expenses and on the largest items. Everyone is equal before the regulations

Note: more information about the use of the administrative cost budget in company management can be found in Part I "Budgeting as a management tool" workshop seminar Alexander Karpov.

Budget regulations for administrative costs

Regulations for budgeting management costs are essentially a procedure for planning, accounting, control and analysis of general company expenses, that is, those that are not directly related to the company’s business. But on the other hand, it is clear that a certain infrastructure is needed for any company. The administrative budget generally determines the cost of this management infrastructure.

As for the regulations for budgeting administrative expenses, one of the problems here is that responsibility for these expenses, as a rule, is not distributed across the Central Federal District, which means it shifts to more high level, that is, to the executive or general director. Thus, it turns out that the budget items for administrative expenses are directly influenced by the company’s top officials, which imposes a certain psychological limitation on the control of these expenses by the financial directorate.

The financial directorate needs to learn to treat any expenses with suspicion, even if they are initiated by the general director (see Book 5, “The Role of the Financial Directorate in Budgeting”). Thus, it is necessary to ensure that the financial management begins to demand a clear explanation of costs, including from top managers, and is not limited only to, for example, production departments.

At the same time, the financial director must understand that resistance in in this case will be much higher than in the case of the same producers or suppliers. After all, it’s one thing to convince middle managers, and another thing for the CEO. This will also mean that the CEO must openly admit his mistake. In fact, it is obvious that everyone can make mistakes, but in the case of the CEO, everything is much more complicated.

It is clear that here you need to be able to cross a certain psychological barrier, but in fact the CEO will appreciate such a step on the part of the CFO. Even if the CEO’s first reaction is indignation that his decisions are being discussed and questioned, he will still draw a positive conclusion for himself that finally at least someone is starting to care and is trying to control the financial and economic condition of the company .

Example of budget regulations for administrative expenses

An example of the main functions that can be performed as part of administrative budgeting during the planning phase (see Rice. 1):

planning the expenditure part of the budget;

creating a budget for administrative expenses;

coordination and adjustment of the budget for administrative expenses;

preliminary approval of the budget for administrative expenses.

Fig.1. Example of budgeting regulations for administrative expenses (during the planning phase)

An example of the main functions that can be performed as part of administrative budgeting in the accounting, control and analysis phase (see. Rice. 2):

collection of data for the actual budget of administrative expenses;

formation of the actual budget for administrative expenses;

analysis of budget execution of administrative expenses;

coordination and approval of the results of the analysis of the administrative expenses budget.

Fig.2. An example of a budgeting regulation for administrative expenses (at the accounting, control and analysis phase)

Note: More information about the budgeting regulations for administrative expenses can be found in Part II "Regulations of the budgeting system" workshop "Budget management of an enterprise", which is conducted by the author of this article - Alexander Karpov.

Administrative Cost Budget Model

As noted above, quite often administrative and management costs tend to grow, and this growth can become unmanageable (see Book 1, “Budgeting as a management tool”). The main reason is the difficulty of rationing these cost items.

On the one hand, it seems clear that it is necessary to allocate resources to finance the company’s management infrastructure, but, on the other hand, these costs are very difficult to directly relate to business, unlike production and commercial costs.

One of the ways to combat the growth of administrative and management costs is to introduce a strict system of restrictions (limits). Moreover, these limits can be introduced both for total administrative and management costs and for individual items. In addition, part of the administrative and management costs are direct in relation to the divisions.

Therefore, limits on administrative and management costs can also be introduced by division. In addition, these costs can be included in the budgets of the Central Federal District so that they are taken into account when forming the FMP of the Central Federal District (see Book 4 “Financial structure of the company”).

In addition to limits, you need to constantly monitor and analyze administrative and management expenses. Naturally, the analysis must be carried out for all other expenses, but the difficulty here is that it is difficult to estimate both the volume and price components of these costs.

At the same time, it is necessary to pay attention to the fact that sometimes some companies are so carried away by the analysis of administrative and managerial costs that doubts arise about the effectiveness of the time spent on such analysis and control. It turns out that there is enough time for “trifles”, but not for more important positions.

We can say that in such a situation a certain psychological factor manifests itself. People are more willing to perform those functions that are simplest and most understandable. That is, it turns out that all departments seem to be actively involved in the budgeting process - they even write requests for office supplies. And the financial directorate, with its stern and suspicious gaze, very carefully checks all these applications.

If you look from the outside, it’s an almost perfect picture, because... everything seems to be working. It just turns out that all sorts of paper clips are budgeted with microscopic precision, and much less attention is paid to more significant indicators, on which the final financial and economic condition of the company depends to a much greater extent.

This should not be allowed under any circumstances. One of the problems may be that the financial directorate is active in areas that do not require deep knowledge. To effectively manage the budgeting process, the financial directorate must know how all budgeting objects are structured (see Book 5 “The role of the financial directorate in budgeting”). Otherwise, economists will deal mainly with paper clips.

Example of an administrative cost budget model

This example of an administrative expense budget model presents all the items associated with supporting the company's management infrastructure (see Table 1). Some of the items in this budget model are consolidated from departmental requests.

Table 1. Example of an administrative budget

Budget item
Administrative and management costs (thousand rubles)		13 722	1 096	1 096	1 243	1 096	1 096	1 242	1 096	1 096	1 227	1 096	1 096	1 242
	Depreciation	1296	108	108	108	108	108	108	108	108	108	108	108	108
	Office rental	1 200	100	100	100	100	100	100	100	100	100	100	100	100
		600	50	50	50	50	50	50	50	50	50	50	50	50
	Salary of management personnel	8316	693	693	693	693	693	693	693	693	693	693	693	693
	Office expenses	120	10	10	10	10	10	10	10	10	10	10	10	10
	Communication services	360	30	30	30	30	30	30	30	30	30	30	30	30
	Travel expenses	1200	100	100	100	100	100	100	100	100	100	100	100	100
	Interest on loan	0	0	0	0	0	0	0	0	0	0	0	0	0
	Property tax	570	0	0	147	0	0	146	0	0	131	0	0	146
	other expenses	60	5	5	5	5	5	5	5	5	5	5	5	5
AUZ share in revenue		8%	10%	8%	8%	7%	8%	9%	12%	15%	8%	7%	6%	7%
Payment of administrative and management costs (thousand rubles)		4 114	445	295	295	442	295	295	441	295	295	426	295	295
	Office rental	1 200	100	100	100	100	100	100	100	100	100	100	100	100
	Maintenance of buildings and structures	600	50	50	50	50	50	50	50	50	50	50	50	50
	Office expenses	120	10	10	10	10	10	10	10	10	10	10	10	10
	Communication services	360	30	30	30	30	30	30	30	30	30	30	30	30
	Travel expenses	1 200	100	100	100	100	100	100	100	100	100	100	100	100
	Interest on loan	0		0	0	0	0	0	0	0	0	0	0	0
	Property tax	574	150	0	0	147	0	0	146	0	0	131	0	0
	other expenses	60	5	5	5	5	5	5	5	5	5	5	5	5
Administrative and management expenses		13 182	1 051	1 051	1 198	1 051	1 051	1 197	1 051	1 051	1 182	1 051	1 051	1 197
Payments for administrative and management costs including VAT		3 540	295	295	295	295	295	295	295	295	295	295	295	295

When planning some articles, the results of processing statistical information are used. It must be remembered that when agreeing on a budget for administrative expenses, it is especially important to obtain a clear justification for each item. Otherwise, the addictive effect may work. That is, if you miss an inflated cost item once, it will appear in all subsequent budgets.

It should be noted that this administrative budget may be linked to some other functional budgets. In particular, information on the salaries of administrative and managerial personnel can be taken from the wage budget. The amounts of transport costs, which in this case, of course, are associated with the management block (servicing top managers and administrative and management services), can come from the transport costs budget.

In the example of the administrative expenses budget there is such an item as interest on a loan. In this case, we are talking about a loan that is taken out to replenish working capital the company as a whole. In principle, this cost item can also relate to processes and departments, if it can be clearly stated that the loan is taken, for example, to conduct a large-scale advertising campaign or to purchase production equipment. True, in the latter case, the financial flow resulting from the payment of these interests in the BDDS will relate not to the main activity, but to investment activity.

From the given example of the administrative and management expenses budget, it is clear that in this company the periods of accrual of costs coincide with the periods of payment. Otherwise, it would be necessary to draw up a payment schedule for administrative and management costs.

Note: More information about the financial model of the budget for administrative expenses can be found in Part III "Financial model of budgeting" workshop "Budget management of an enterprise", which is carried out by the author of this article -

Definition

Administrative expenses- these are the costs of managing an organization that are not directly related to the production process. Thus, if management costs can be associated directly with any production process, then these costs cannot be attributed to management costs, but are included in the corresponding products. For example, the head of a workshop is included in the cost of products produced by that workshop. At the same time, the salaries of the general director, personnel department employees, etc. included in administrative expenses.

At the same time, administrative expenses can be included in the cost of production, but not directly, but by distribution among all types of products in proportion to an economically justified indicator (for example, wages of key production personnel or depreciation of production equipment, etc.).

Administrative expenses may include:

• Administrative expenses;
• maintenance of management personnel not directly related to the production process;
• and expenses for repairs of fixed assets for management and general economic purposes;
• rental of general purpose premises;
• expenses for information, auditing, consulting, etc. services;
• other administrative expenses similar in purpose.

Management Cost Analysis

From the point of view of financial analysis, management expenses are classified as semi-fixed, because their value does not directly depend on the volume of output. An increase in production volumes leads to a decrease in the amount of management costs per unit of production, resulting in an increase in profit per unit of production due to positive economies of scale.

Information about the total amount of management expenses can be found in line 2220 of the income statement (income statement). More detailed information on management expenses is accumulated in accounting in the “General business expenses” account.

Still have questions about accounting and taxes? Ask them on the accounting forum.

Management expenses: details for an accountant

• Organizational management expenses: analysis of judicial practice

  It is only indicated that the management costs of an organization mean the costs: for management... reduced by the amount of management costs. The question of the legality of accounting for management expenses for the purposes of calculating... part of the income tax was the management expenses of the organization. Between the company and... JSC it was possible to prove the legality of accounting for management expenses for the purposes of calculating tax on... competence. Services of an interdependent manager ≠ management expenses. Apparently, the “scheme”...

• Transformation of accounting (financial) statements: practice

  ...) = (1) × 30% Liability Dr Administrative expenses: labor costs and... 546 (3) = –(1) Liability Dr Administrative expenses: insurance contributions to extra-budgetary funds... period (46,578 ) Liability Kt Administrative expenses: labor costs and... 35,829 (5) Liability Kt Administrative expenses: insurance contributions to extra-budgetary funds...: depreciation 339,380 Liability Dt Administrative expenses: depreciation 26,122 Liability Dt...

• How to account for expenses until the organization has revenue?

  Next - Regulations). Administrative - they are also management expenses do not apply to the types of assets named in ... the above-mentioned PBUs. Administrative expenses (account 26 “General business expenses... in the accounting of administrative expenses incurred by the organization will depend on the procedure established ... products) no, then, we believe, it is necessary to write off administrative expenses in the preparatory period in ...: Debit 20 Credit 26 - administrative expenses are reflected in expenses for...

As part of the cost price) commercial and administrative expenses. These positions are filled in if the company... is proposed to be reflected: as part of the “Administrative expenses” line of the financial results statement; in... financial results after selling and administrative expenses, but before sales profit... . Part of the overhead costs is allocated to administrative expenses. In the accounting of enterprises there will be...

• Accounting for costs for services to provide access to the electronic trading platform

  Payment for access to the ETP are management expenses that form the costs of ordinary... (clause 7 of PBU 10/99). Administrative expenses may be recognized in the cost of sales... PBU 10/99, the procedure for recognizing administrative expenses must be disclosed as part of...

• Harmful working conditions in pharmacies

  Costs can be taken into account as management expenses and fully recognized in the financial statements...

• “Predicting” an on-site tax audit

  000,000.00 rubles, including management expenses. Administrative and commercial expenses (rent...

• VAT on advertising materials (brochures, leaflets) can be deducted!

  Essentially, they should be included (as general business and administrative expenses) in the cost of production. And if...

• Changes in PBU 18/02: permanent and temporary differences and assets will be taken into account in a new way

  Different ways recognition of commercial and administrative expenses in the cost of products sold, goods...

The following levels of analysis allow us to examine in more detail the impact of a cost factor on profit. This is due to the fact that the total amount of expenditure of any resource (in monetary terms) depends on the influence of two components:

• - unit prices of this resource;
• - norms of resource consumption in physical terms per unit of production.

The second level of analysis involves calculating deviations in resource prices. The third level of analysis allows you to find out how the deviation of the actual consumption of a particular type of resource from the planned consumption affected profit. regulatory framework. Deviations identified at the second and third levels of analysis are subject to registration in the standard-cost system. Let's consider the procedure for their calculation and accounting.

Analysis of deviations by materials. As noted above, the standard cost of consumed materials depends on two factors - the standard consumption of material per unit of production (third level of analysis) and the standard price for it (second level of factor analysis). Let's determine the deviation of actual costs from standard ones under the influence of the first factor - prices for materials. The formula for calculating this deviation (LCM) can be presented as follows:

CM = (Actual price per unit - Standard price per unit) * Quantity of material purchased. (2)

Based on the data in table. 1 and 2, we determine the size of deviations of actual costs from standard prices for paper and printing ink:

• - paper:
  • ?Tsm. 6 = (2.8 - 3) * 11,100 = -2220 rub. (B) (3)
• - printing ink:
• ?Tsm. cr = (1.1 - 1) * 19 LLC = +1900 rub. (H) (4)

Calculating deviations is not an end in itself. The accountant-analyst is obliged to reveal the causes of adverse deviations that arise, so that in the future responsibility for them will be assigned to the head of the corresponding responsibility center.

The second factor influencing the amount of material costs is specific consumption materials, i.e. their costs per unit of production.

The formula for calculating the deviation of actual costs from standard materials used? (IM) is as follows:

MI = (Actual consumption of materials - Standard consumption of materials) * Standard price of materials (5)

• - on paper
• ?THEM. b = (19000 - 16700) * 1 = + 2300 rub. (H) (6)
• - on printing ink
• ?Them. cr = (11100 - 9200) * 3 = + 5700 rub. (H) (7)

The identified overexpenditure may be associated, for example, with the low quality of purchased materials. In this case, responsibility for identified deviations should be assigned to the purchasing department.

Next, we will calculate the total deviation of paper consumption from the standard, taking into account both factors. Cumulative materials variance (?sov) is the difference between actual material costs and standard costs, taking into account actual production output

Sov. b = 20900 - 16700 = 4200 RUB. (H) (8)

It develops under the influence of two factors:

• - price deviations
• (?CM. b) + 1900 (N)
• (? Name b) + 2300 (N) + 4200 (N)

We will perform similar calculations for printing ink. The sum of the cumulative deviation? kr in this case will be:

Asov. kr = 31080 - 27600 = 3480 rub. (N). (9)

It adds up:

• - from price deviation
• (? Tsm. kr) - 2220 (B)
• - deviations in material use
• (? Name cr) + 5700 (N) + 3480 (N)

Before proceeding to the calculation of the following deviations, let us turn to accounting techniques. As noted above, a feature of the “standard-cost” system is the accounting of standard costs and, separately, the resulting deviations of actual costs from standard ones. To account for deviations, special analytical accounts are allocated.

The debt to the supplier for purchased materials (D-t. 10 “Materials”, K-t. 60 “Settlements with suppliers and contractors”) should be taken into account at standard (accounting) prices: write-off of materials for main production (D-t. 20 “Main production” Account 10 “Materials”) is produced at standard costs, adjusted to the actual production volume.

Deviations that arise are reflected separately in the standard-cost system. For this purpose, any account can be used, for example, balance sheet account 16. This account reflects all deviations that have arisen from standard costs - for materials, labor costs, overhead (indirect) costs. In this case, favorable deviations are recorded on the credit of the account, unfavorable ones - on the debit.

The actual amount of debt to material suppliers, formed under the credit of account 60 “Settlements with suppliers and contractors”, will be the algebraic sum of two indicators - the term calculated according to established standards and the deviation that has arisen.

The next stage of calculations is to identify deviations in the actual wages of the main production workers from the standard and establish the reasons for their occurrence. The total amount of accrued wages for hourly wages depends on the amount of time actually worked (third level of factor analysis of profit) and the wage rate (second level of analysis). Accordingly, the size of the deviation of the actual accrued wages of the main workers from its standard value is determined by two factors - the deviation in the wage rate and the deviation in the number of hours worked, i.e., in labor productivity.

The wage rate deviation (?ZPst) is defined as the difference between the actual and standard wage rates, multiplied by the actual number of hours worked:

Salary = (Actual wage rate - Standard wage rate) * Actual hours worked. (10)

Based on the data in table. 1 and 2 we have:

ZPst = (3 - 2.5) * 28500 = +14250 rub. (H) (11)

Is this unfavorable variance dependent on the production manager? The answer to this question should be given by an accountant-analyst.

The labor productivity deviation (?ZPPt) is determined as follows:

ZPpt = (Actually worked time in hours - Standard time for actual production) * Standard hourly wage rate. (12)

The deviation in labor productivity will be:

Salary = (28500 - 2.5 * 10OOO) * 2.5 = +8750 rub. (H) (13)

The reasons for these deviations can be both objective (independent of the work of the workshop) and subjective (depending on the activities of the shop manager) in nature. They need detailed analysis.

Salary = Actual accrued wages of the main workers - Standard wage costs taking into account the actual volume of production. (14)

Taking into account the printing house data, the total deviation for labor costs (ZPsov) will be determined as follows:

Salary = 85500 - 62500 = + 23000 rub. (H) (15)

According to calculations, it was formed under the influence of two factors:

• - deviations in wage rates
• (? Salary) + 14250 rub. (H)
• - deviations in labor productivity
• (? Salary) + 8750 rub. (N) + 23,000 rub. (H)

In management accounting, the write-off of wages accrued to the main production workers is reflected at standard costs, identified deviations are reflected in account 16.

At the next stage, deviations from the norms of actual overhead costs (OPR) are calculated. Variable and fixed overhead costs are analyzed separately. For this purpose, the standard rate for the distribution of overhead costs is calculated (Table 8).

Given in table. 8 rates are needed in order to further adjust the estimated ODA taking into account the actual production volume achieved.

Table 8. - Estimated and actual overhead costs, rub.

The deviation for general production fixed costs (? OPRp) is determined similarly to previous calculations - as the difference between the actual OPR and their estimated value, adjusted for actual output. The actual value of constant ODA is 130,000 rubles.

Next, calculate the value of constant OPR, which according to the norm should have corresponded to the actual production volume achieved. To do this, the actual production volume in standard hours is multiplied by the overhead distribution rate:

ODA = 25,000 - 5 = 125,000 rubles (16)

Hence the deviation of actual fixed overhead costs from the estimated ones is

OPRpost = 130,000 - 125,000 = 5,000 rubles. (H) (17)

The variance of variable overhead costs is calculated similarly. The standard value of variable costs is:

25,000 * 2 = 50,000 rub. (18)

deviation occurred:

OPRper = 52000 - 50000 = 2000 rub. (H) (19)

Returning to the accounting technique, we note that the write-off of overhead costs for the main production is carried out taking into account the standard rate and the actual production output, calculated in standard hours. Identified deviations are taken into account separately (for example, on account 16).

Calculations end with an analysis of deviations of actual profit from the estimated one. This indicator (P) is calculated as the difference between the actual profit, determined on the basis of standard costs (SF), and the estimated profit, also calculated on the basis of standard costs (SP).

Revenue from the actual volume of books sold amounted to 400,000 rubles. The deductible SP will be equal to 118,000 rubles.

It remains to determine the amount of actual profit recalculated taking into account standard costs. This procedure is performed because the sales department is responsible only for the quantity of products sold and its price, but not for the production costs incurred. Standard cost of one copy of the book:

(53000 + 75000 + 60000 + 150000) / 12000 = 338000 / 12000 = 28.1 rub. / copy

The standard cost of actual sales volume is:

28.1 * 10000 = 281000 rub. (21)

Hence the FP is equal to:

400,000 - 281,000 = 119,000 rub. (22)

The deviation of the profit indicator from its estimated value will be:

P = 119000 - 118000 = 1000 (B) (23)

Paragraph 20 of PBU 10/99 determines that any enterprise has the right to independently determine its accounting policies, including management ones. They can become part of the cost by type of business activity: production or sale of goods, provision of services, performance of work (Letter of the Ministry of Finance No. 07-05-06/191 dated 02.09.208). When developing accounting policies, you should be guided by the Instructions for the chart of accounts.

Management costs include costs that do not have a direct connection with the production or sale of goods, services, or work. If costs can be associated with one of the areas of business activity, they are considered commercial (for example, wages and deductions for the head of a production department).

Management costs can be included in the composition if they are distributed in proportion to revenue across all types of manufactured products (sold goods, works, services). When developing an accounting policy, an enterprise (organization) must be guided by Law No. 129-FZ and paragraph 4 of PBU 1/2008.

There are 3 options for writing off the conditionally variable part:

• K 26, D 20 - if they relate to the main production
• K 26, D 23 - if they relate to auxiliary production
• K 26, D 29 - if they relate to service facilities or production

Administrative costs are included in the cost price after the sale of products (goods) and are written off to “Sales” (account 90). B are reflected in line 040.

Some economists express the opinion that administrative costs can be written off on D 91 if there were no sales during the reporting period.

Disputes with the tax office most often arise over expenses for the services of management companies. If there is an agreement, a document confirming payment, and an acceptance certificate for work performed, there should be no claims. Tax authorities may consider this type of service to be economically unprofitable and aimed at tax evasion. Analyzing the decisions made by the courts in similar cases, we can conclude that most entrepreneurs manage to prove that such expenses are justified.

Financial analysis of management costs

Management costs in financial analysis are classified as semi-fixed, since their value does not depend on production volume. If the volume of products produced (sold) increases, the unit of goods increases due to scale.

Difficult economic conditions force entrepreneurs to take a different look at staffing table administration. Enterprise managers are trying to combine the functions of departments in order to reduce the number of employees. This allows you to reduce costs for salaries, rent, transportation, office equipment, and business trips. The amount saved is the amount of increased profit.

Some choose a different path - reducing wages, allowances and bonuses while maintaining the size of the administrative apparatus. This option is preferable because it does not increase the unemployment rate or reduce employee loyalty.

A good option is to transfer part of the office staff to the “home” mode, which allows saving on rent of premises, utility bills, and official transport. Almost all staff can work via the Internet.

Competent allows you to use the optimization of administrative costs as a means of increasing profits. The funds saved on optimizing the management staff can be invested in development, reorganization, renewal, and innovation.

Write your question in the form below