The cost accounting is a powerful tool in the planning and control of the activities of a company, being an effective tool to analyze the behavior of the costs in the decision-making and meet the requirements of the accounting and societies of taxes.
It is essential the perfect details all costs, which will allow the study of the correlations between the level of activity, the volume produced and the costs and revenues in a given period, giving the administrator of an overview of the performance of the production and the financial health of the company .
The definition of expenditure, as Hairstyle and Graeml in his book Production Management (Industrial Operations and Services), is “everything that the costs and source of the application that has a counterpart, a recipe that produces a residual value that call for profit. ”
Also in accordance with Coiffure and Graeml, we can classify the types of costs such as:
The first cost: the cost is only includes the raw materials (including the components) and labor directly consumed in the manufacture of a particular product.
CP = MP +MOD consumed, (MP consume = EIMP + MP costs – EFMP)
Where:
CP = initial cost
MP = Raw Material
EIMP = initial inventory of raw material
EFMP = final inventory of raw material
Cost of transformation: the company is investing to transform the raw materials and components into finished products. Represents the workforce and overhead costs of the direct production.
TC = GGF + MOD
Where:
CT = cost of processing
MOD = direct labor
GGF = expenditure generale manufacturing
Cost of production: represents, in a period of time, the cost of inputs used in the process of transformation of raw materials and components into finished products.
CPRO= MP consumes +MOD + GGF
Where:
CPRO = cost of production
MP = Raw Material
GGF = indirect costs of manufacturing
Cost of the manufactured products: is represented in a given period, the cost of production of the products (goods + services) manufactured in the period. Take into account the inventories by stage of development that are in the organization.
CPF =ILO + CPRO – TOOK
Where:
CPF = cost of manufactured goods
Stock ILO = initial property in the process
TOOK = final inventory in the process
Cost of sales: represents the cost of goods actually sold during the period. Taking into account the stocks of finished products or in production, which are in the organization.
CPV = ILO + EIPA + CPRO – TOOK – EFPA
Where:
CPV = cost of sales
ILO = initial actions of the assets in process
EIPA = initial inventory of finished products
CPRO = cost of goods produced
TOOK = final inventory in the process
EFPA = final inventory of finished products
Analysis of cost-volume-utility – CVU
The analysis of CVU is one of the tools used in business, is studying the behavior of the costs incurred in the volume of production and all income derived from a predetermined by the administrator. Despite being a powerful tool for the decision-making, must be seen as a tool to help in planning and corporate control.
The criteria for the analysis must be previously established, such as:
(A) in sales prices will remain constant for any level of activity;
(B) all costs can be classified as fixed or variable;
(C) the amount of variable costs will be directly proportional to the volume of production;
(D) input prices remain constant for any amount of purchases;
(E) the period of time for the time of planning, there are no changes in the administrative policy, the production process, the efficiency of men and machines, and cost control;
(F) the volume of production and sales volume is a high degree of synchronization, without any significant changes in inventory levels;
(G) all manufactured products are sold.
Please note that there are costs that are traditionally identified, fixed costs such as those that are for periods of time without suffering changes depending on the volume of production.
The variable cost, the change in proportion to the changes in the level of production, in this case, the raw materials vary depending on the volume that occurs.
The importance of verification of the point of balance
It is defined as the point of balance, the level at which the sales volume is equal to the total costs, better define the point at which the benefit is equal to zero.
For the managers, is essential for designing the level of production that generate income necessary and sufficient to cover the total costs, which the volume of sales needed to obtain certain benefits, that the expected profit for a certain level of sales and any change in the costs (fixed and variable), the selling price or the amount affect the gains. Understanding of the behavior of costs facilitates the analysis to determine the level of operations could maximize the benefits.
The analysis of the point of balance is based on the decomposition of the costs (fixed and variable), and follows the equation of costs in writing as:
CT = CF + CV
Where:
TC = total cost
CF = fixed costs
CV = variable cost
Income = P × Q
Where:
P = price / unit
Q = amount
Benefit = R – CT
Where:
R = Income
CT = total cost, and:
Profit Margin = total contribution – fixed Cost
The difference (P – (V) between the price and the variable cost per unit is defined as a unit of marginal contribution. This is the amount that each unit produced and sold aid to cover fixed costs and benefits. The equation of earnings is as follows:
Profit Margin = contribution x Production Units Unitary – fixed Costs
To determine the point of balance in units (Q), taking into account the benefit is equal to zero:
Q = CF / (PV-CV)
BALANCE IN UNITS = CF / Margin unit contribution
The analysis of the point of balance can be used when it is necessary to determine the level of production required to meet the expectation of a benefit default, a goal of benefits (LM).
Thus, the equation of earnings is as follows:
Q = CF + LM / (PV-CV)
Q = CF + LM / Unit (margin of contribution)
The processes of corporate planning, implies a careful selection of targets and a definition of the means to achieve.
Today, with globalization and the competition, the gain came to be a final consequence of business management, which contribute to many other variables such as income, costs, expenses, volume or levels of activity.
The maximization of profit is the goal of the business organization music and more relevant to the benefit, therefore, the high leadership of the business organizations, must have a technical analysis to study the interrelationships and influence in relation to the benefits.
Several authors the treatment of the subject of another traditional way with innovative approaches, but all are promoting the search for the maximum return of the productive capacity and the Total Quality.
In his book, The goal: a process of continuous improvement, Eliyahu M. Goldrattt, uses a sequence of the logical conclusions through the Theory of the Restrictions and concludes that the goal of the company for profit must be “make money,” both current and future “To ensure the continuity of business is achieved when the value of the economic assets of the goods and services of the company offers to the market that produced and made more than the economic value of the resources (goods and services) that the company wins the market and consumed in the process of value-added production. ”
Goldrattt In second place, the proposal by the COT is to provide the necessary information for decision-making, especially in the short term. The model is opposed to the cost accounting traditional, which is based on the apportionment of the fixed costs and consequent allocation of the products.
In view of Goldrattt, the cost of the final product is determined by the operational measures and overall figures of the costs are measured and managed in the information system of the company.
The model of the Decision Theory of restrictions, as Goldrattt
1 – Identify all the limitations of the production system;
2 – Decide how exploit these restrictions;
3 – Subordinate any change in the previous decision;
4 – The increase in the margins of the limitations of the system;
5 – In case of failure to comply with the sequence, will replace the above, but make sure that the problem becomes a system of restriction.