Управленческий учет на предприятии

* Condition of awarding is exact execution of the budgetary task on volumes and release structure. Thus deviations can be justified only when granting by division of the relevant protocol within system of the internal arbitration fixing or the coordinated administrative decision with other service about a capture of that on to responsibility for deviations of volume and structure of release, or responsibility of adjacent division or external contractors (for example, suppliers - responsibility are fixed by the arbitration commission of the enterprise) for failure of the production program.

* Indicator of awarding is the sum of works of the actual deviations of specific cost of release by the form production on planned release of this type of production by all types of production in case the division completely supervises a production cycle of one or several types of production (divisional structure of management). Let's notice that on one of types of production, let us assume, there can be an overexpenditure of specific prime cost, but from the point of view of division stimulation as complete object of system of the accounting of responsibility the total deviation on a controlled indicator (specific expenses) is important. If at the enterprise owing to production specifics the functional (poprotsessny) control system takes place, an indicator of awarding of the center of standard costs (for example, forge or foundry shop) is the sum of works of the actual deviations of specific expenses on process on planned release of this type of production in a section of types of production. Let's say the foundry shop is awarded for the general decrease in specific expenses on molding in cost of release.

When performing a condition of awarding the absolute size of bonus fund of the center of standard costs is considered, thus, as work of coefficient of awarding and base of awarding. Let's note that it is impossible to take an indicator of cumulative expenses for base of awarding, as in case took place «justified» (documents of internal arbitration) decrease in release, it will cause decrease in cumulative expenses, thus, that a production intensification (specific expenses) remain former, that is the division will be awarded in this case for anything. It is impossible to take also as base of awarding and simply an indicator of specific cost of release if the division participates in release of several types of production. In this case the indicator «weighing» and «bringing to one denominator» deviations of specific cost of release on different types of production is necessary. Such indicator is planned release (in case of «justified» decrease - the actual release). At last, it is necessary to notice that on calculation of deviations of specific prime cost amendments of system of internal arbitration also work, that is we deal with self-supporting specific prime cost (for example, via the tool of the transfer prices). The specific center of standard costs is the supply service. For it a condition of awarding is exact implementation of the buying plan (on the physical volume and preparation structure), deviations from which besides are accepted in the presence «justificatory» documents of system of internal arbitration (we will allow, the service of production made the administrative decision on transition to purchase of semi-finished products «on the party» and I assumed additional self-supporting expenses). Indicator of planning is the favorable total deviation (price economy) (the sum of works of deviations of purchase price from planned on the planned volume of purchases» by all types of the made inventory items (II)). Conditions and awarding indicators for the centers of the income.

For the industrial enterprise the sale service, as a rule, can be the center of the income. For it conditions of awarding are:

a) not excess of a limit supervised (direct commercial and operational) expenses;

b) implementation of the plan on sales (in a section of separate types of production).

Let's notice that though the center of the income and has no powers on a variation the expenses over the set limit, its favorable effect on welfare of the enterprise consists of two components: excess of sales volume and decrease in the estimate of controlled expenses, and quantitatively this effect will differ. 1 ruble of decrease in the estimate of controlled expenses will lead to adequate increase in gross profit of the enterprise while 1 ruble of increase in sales will lead to the same effect only if the increase in revenue is reached at the expense of the price (that is the same physical sales volume, but at the bigger price of realization is sold). If the increase in revenue is reached at the expense of increase of physical sales volume, the effect on financial results of the enterprise will be less - it is caused by profitability of unit of sales. Therefore it is expedient to consider an indicator of awarding of the center of the income on such formula: excess of planned sales volume - excess physical sales volume (specific planned cost of sales - deviations of direct business expenses) - deviations (economy) of operating expenses.

Thus, such part supervised by service of sale of expenses as direct business expenses is considered in an awarding indicator through net income from realization (as a revenue and cost of sales difference), and the economy of the estimate of operating (periodic) expenses is considered directly.

Conditions and awarding indicators for the profit centers.

The profit centers at the industrial enterprise, as a rule, are allocated in isolated business units (release supervising at the same time and sale) production divisions. For them a condition of awarding is achievement of the volume of gross profit planned in the budget. The actual volume of gross profit for the centers of profit pays off as:

- the actual sales proceeds - actual direct commercial (cumulative) and production (minus the current material inputs) expenses - the actual production costs regarding the current material inputs in natural expression planned «price» (specific prime cost) units of the current material inputs).

- allocation of separately «entering» material streams (the current material inputs) is caused by that the center of profit doesn't supervise supply process (and, therefore, prime cost of unit of used materials) and the prices of the third-party organizations (energy consumption, services and so forth), however supervises the physical volume of these types of expenses. Awarding indicator for the centers of profit is work of a favorable deviation (excess) of volume of gross profit on awarding coefficient.

4.4 Report of the center of investments

Conditions and awarding indicators for the centers of investments.

The centers of investments as it was already specified, large subsidiaries of industrial holdings which profits unlike the centers as legal entities have powers on are:

* to independent attraction of means (credit and other loan resources);

* independent (limited by limit limits) investment policy.

In practical activities of the Russian enterprises by the most acceptable (in order to avoid an excessive complexity) the mechanism of awarding of the centers of investments is following:

* the main condition of awarding, as well as for the profit centers, achievement of the planned volume of gross profit acts. The formula of calculation is similar to that that we brought for the profit centers behind two exceptions: a) at the target (transfer) prices «entering» material streams will calculate from « (included in industrial holding) the enterprises and b) at calculation of gross profit taxes and percent on attraction as the centers of investments as independent legal entities supervise these parameters will be subtracted. Thus, the actual volume of gross profit of the centers of investments will pay off as: the actual volume of revenue - actual cost of realization (minus the current material inputs from «the» enterprises) - the taxation - percent on attraction - the physical volume of the current material inputs of «the» enterprises ґ planned level of the transfer price).

Thus, let us assume, a part of the vertically integrated oil company of oil refinery (oil refinery) will calculate «entering» from «the» NGDP (the oil and gas extraction enterprise) crude oil at the target transfer prices:

* the first additional condition of awarding is observance of centrally established financial standards (first of all, liquidity coefficients) that the subsidiary excessively wasn't fond of attraction of means and didn't «visit» thus, debts to the holding;

* implementation of centrally established plan of capital investments (the investment budget) regarding development of the allocated resources will be the second additional condition of investments. Let's notice thus that the small investments, assigned to subsidiary, system of stimulation aren't considered as they mean capitalization of net profit, but don't influence the size of the most net profit.

Taking into account all aforesaid, it is possible to submit the list of conditions and awarding indicators for the various centers of responsibility as a part of the Russian industrial enterprise.

Questions

1. Concept of the centers of responsibility

2. Profit center

3. Center of expenses

4. Center of investments

Situational task

Situational task 1.

Prepare the short debatable document for your general managing director in whom various types of the centers of responsibility available to the organization are represented. What factors define your final choice? What you will make recommendations?

Situational task 2.

What three major factors define a measure of responsibility which can be delegated by the certain managing director?

Situational task 3.

What methods exist for an assessment of indicators of the center of responsibility? Offer two or three methods of an assessment.

Situational task 4.

What of the statements given below about reports in the account on the responsibility centers, in your opinion, are correct and what aren't present?

№	Name	The correct	The wrong
(a)	They usually show the actual or expected expenses and profit
(b)	Reports tend to concentrate on deviations from the plan and therefore mean approach «management by exception»
(c)	Reports concentrate on a contribution to profit of a separate product or a segment. To decide on this contribution, the profit and expenses are given only directly connected with a concrete product or a segment
(d)	The general expenses, such as corporate overhead costs, belong on products or organization segments for the purpose of the account on the responsibility centers.
(e)	The general expenses, such as corporate overhead costs, belong on products or organization segments for the purpose of the account on the responsibility centers.
(f)	The report on activity (for example, enterprise divisions) will concentrate rather on the marginal income, than on expenses

Tests

1. Call objects of the accounting of expenses:

A) places of emergence of expenses, centers of expenses, responsibility centers;

B) places of emergence of expenses: production, serving;

C) responsibility centers;

D) structural divisions of the enterprise;

E) main and auxiliary production.

2. What is the counter services and in what cost are estimated.

A) services of auxiliary productions are each other estimated at planned prime cost of the current period or on actual cost of last periods;

B) services of auxiliary productions to the main production are estimated on actual cost;

C) services of the main production to auxiliary productions are estimated at standard cost;

D) services of auxiliary productions are each other estimated within the estimate;

E) services of auxiliary productions to the main production are estimated at registration cost.

3. That the following accounting record means: Дт 8045 «Depreciation of fixed assets and depreciation of intangible assets» Kt 2420 «Wear of buildings and constructions».

A) wear on production buildings is added;

B) wear on buildings of administrative personnel is added;

C) depreciation on acquired by the software on production management is added;

D) wear of a warehouse on storage of finished goods is added;

E) answers And, Century.

4. Management accounting represents a subsystem:

A) statistical account;

B) financial account;

C) accounting.

D) B,C, D answers;

E) there is no right answer.

5. Basis of management accounting is:

A) financial accounting;

B) tax accounting;

C) production account;

D) statistical account.

E) B,C, D answers

6. The main objective of management accounting consists in providing information:

A) to external users;

B) to internal users;

C) to executive authorities

D) to the management

E) B,C, D answers.

7. The requirement of obligation of maintaining the account most extends on:

A) financial account;

B) management accounting;

C) operational account.

D) production account

E) B,C, D answers.

8. Into functional duties of the accountant-analyst of the enterprise enter:

A) analysis of financial statements;

B) administrative consultation on questions of planning, control and regulation of activity of the centers of responsibility;

C) tax consultation.

D) administration

E) B,C, D answers

9. The principles of management accounting are:

A) uniform approach to a choice of the purposes and tasks of the management and financial accounting of production;

B) uniform planned and registration units for two types of the account;

C) single introduction of primary information for all types of the account;

D) continuity and addition of information of one type of the account with another.

E) B,C, D answers.

10. The main object of accounting management accounting is:

A) organization as independent legal entity;

B) the group of companies, united on branch accessory;

C) responsibility center;

D) the answer depends about the purpose of management accounting.

E) B,C, D answers.

11. Accounting management accounting can be defined as

A) synthetic accounting of expenses;

B) synthetic accounting of expenses and results;

C) analytical accounting of expenses;

D) analytical accounting of expenses and results.

E) B,C, D answers;

12. The greatest economic independence possesses:

A) center of expenses;

B) center of the income;

C) profit center;

D) center of investments.

E) B,C, D answers

13. The centers of responsibility is:

A) structural units of the enterprise for which plans are formed and which report for results of their performance;

B) structural units of the enterprise which report for the rest of cash money;

C) center of expenses;

D) center of investments;

E) B,C, D answers.

14. The assessment of activity of the centers of responsibility will be objective when performing the following conditions:

A) the management knows a method of calculation of indicators on which the assessment, and their value is carried out;

B) to the management specific conditions of activity of the corresponding segments of business are known; calendar expenses), have to be distributed between them on a fair basis;

C) all answers are right;

D) center of investments;

E) B,C, D answers.

15. The center of expenses is:

A) division responsible for costs planning;

B) division which is responsible for implementation of expenses;

C) all answers are right;

D) center of investments;

E) B,C, D answers.

16. Into the list of possible reports for «the center of expenses» enter including the following:

A) production plan;

B) cash flow budget;

C) budget of the income and expenses;

D) center of investments;

E) B,C, D answers.

17. The center of profit is:

A) division responsible only for financial results;

B) division which is responsible for expenses and financial results;

C) enterprise accounts department;

D) center of investments;

E) B,C, D answers.

18. In the reports made on the centers of profit, all-firm overhead costs:

A) are distributed between centers responsibility according to the base determined by the management;

B) aren't distributed between centers responsibility and are compensated from gross profit of the company by total amount;

C) any of the called options depending on the management decision is possible;

D) center of investments;

E) B,C, D answers.

19 . Not all assets of the company are identified with the concrete centers of responsibility. It means that:

A) the level of rate of return established to divisions, shouldn't exceed the cost of the capital of the company;

B) the level of rate of return established to divisions, has to be higher than the cost of the capital of the company;

C) the answer depends on branch accessory of business units when performing the following conditions;

D) expenses, the general for all segments of business (all-firm on - kladny expenses), have to be distributed between them on a fair basis;

E) all answers are right.

20 . Basis of the centralized structures of management make:

A) administrative divisions;

B) production and marketing divisions;

C) production and serving divisions;

D) center of investments;

E) B,C, D answers.

21. Need of decentralization can be caused:

A) change of form of ownership of the enterprise;

B) integration of scales;

C) release of new production;

D) center of investments;

E) B,C, D answers.

22. The control report is:

A) comparison of the actual results with predicted indicators of activity;

B) the report following the results of division work;

C) the report following the results of enterprise work;

D) center of investments;

E) B,C, D answers.

Literature

1. Horngren, T and Foster, G (1991), Cost Accounting: A Managerial Emphasis, Prentice Hall, Englewood Cliffs

2. Reece, J S & Cool, U R (1978), Measuring Investment Centre Performance, Harvsrd Business Review Vol 56, No. 3, May-June

3. Horngren, T and Sundem, G H (1991), Introduction to Management Accounting, Prentice Hall, Englewood Cliffs

4. Shillinglaw, G (1982), Management Cost Acoounting, 5th edition, Richard Irwin, Homewood

Chapter 5. Methods of the accounting of expenses for production and prime cost accounting. Job order сosting of expenses and prime cost calculation.

5.1 Product cost - a quality indicator of activity of the subject

Each enterprise or production link have to know, in what production (works, services) manages to it. This factor is especially important in the conditions of the market relations as level of expenses for production influences competitiveness of the enterprise, its economy [4].

In order that the nobility, in what manages product production, the enterprise has to make a cost assessment of expenses on material and quantitative structure (means and objects of the labor), and also on quality and quantity of expenses of the work demanded for its production.

In system of the indicators characterizing production efficiency and realization, one of leading places belongs to product cost.

As the economic category product cost carries out a number of the major functions:

1. account and control of all expenses for release and production realization;

2. base for formation of wholesale price for production of the enterprise and profit and profitability definition;

3. economic justification of expediency of an investment of real investments on reconstruction, modernization and expansion of the operating enterprise;

4. determination of the optimum sizes of the enterprise;

5. economic justification and adoption of any administrative decisions, etc.

Distinguish the following types of prime cost: shop, production and full.

Shop prime cost represents expenses the shops connected with production.

Production prime cost besides expenses of shops includes general production and general running costs.

Full prime cost reflects all costs of production and production realization, develops of production prime cost and extra production costs (expenses on container, packing, production transportation, an other expenses).

Distinguish individual and industry average prime cost.

Individual prime cost is caused by specific conditions in which this or that enterprise works.

The industry average prime cost is defined as the average size and characterizes average costs of a unit of production on branch therefore it is closer to socially necessary expenses of work.

As structure of prime cost are understood its structure on elements or articles and their share in full prime cost. It is in movement, and it is influenced by the following factors:

1) specifics (features) of the enterprise. Proceeding from it, distinguish: labor-consuming enterprises (big share of a salary in product cost); material-intensive (big share of material inputs); capital productive (big share of depreciation); power-intensive (a big share of fuel and energy in prime cost structure);

2) acceleration of scientific and technical progress. This factor influences structure of prime cost is multidimensional. But the main influence is that under the influence of this factor the share of live work decreases, and the share of the substantiated work in product cost increases;

3) level of concentration, specialization, cooperation, combination and production diversification;

4) geographical location of the enterprise;

5) inflation and change of an interest rate of the bank credit.

The structure of product cost is characterized by the following indicators: ratio between the live and substantiated work; share of a separate element or article in full expenses; ratio between constants and variable expenses, between the main and overhead costs, between production and business (non-productive) costs, between direct and indirect, etc.

The structure of expenses allows to reveal the main reserves on their decrease and to develop concrete actions for their realization at the enterprise.

The structure of expenses at each enterprise has to be analyzed both in bit-by-bit, and in an itemized section. It is necessary for management of expenses at the enterprise for the purpose of their minimization.

The main document by which it is necessary to be guided when forming product cost at the enterprise, the Provision on structure of expenses on production and production realization (works, services) and about an order of formation of the financial results considered at the taxation of profit, approved by the resolution is.

In product cost according to the instruction join:

· costs of preparation and production development;

· the expenses connected directly with production, caused by technology and the production organization;

· labor costs;

· the expenses connected with use of natural raw materials;

· the expenses of non-capital character connected with a sovershenkstvovaniye of technology and the organization of production, and also with improvement of quality of production;

· the expenses connected with invention, technical improvement and improvement suggestions;

· expenses on production service (current, average and overhaul);

· expenses on providing normal working conditions and safety measures;

· the expenses connected with a set of labor;

· the operating costs connected with the contents and operation of funds of nonconsumptive value;

· the expenses connected with production management;

· costs of preparation and retraining of personnel;

· expenses on transportation of works of peaks to a place of work and back, assignments on the state social insurance and provision of pensions, in the state fund of employment from labor costs of the workers occupied in production of the corresponding production;

· assignments on obligatory medical insurance;

· payments on insurance of property of the enterprise;

· costs of payment of percent on short-term loans of banks, fee of banks;

· expenses on warranty service;

· the expenses connected with sale of production (packing, storage, transportation);

· costs of reproduction of the fixed business assets (depreciation on a complete recovery);

· wear (depreciation) on intangible assets;

· losses from marriage;

· losses from idle times for the intra production reasons.

The size of these expenses depends on the prices of the resources necessary for production of goods, and also on technology of their use.

The price at which production resources are got, doesn't depend on enterprise activity. It is defined by supply and demand on resources. From here for the enterprise the technological aspect of formation of the costs of production, causing, on the one hand, quantity of attracted production resources, and with another - quality of their use is extremely important, and the enterprise has to use such methods of production which would be effective as with technological, and the economic point of view.

Each enterprise seeks to choose such technically effective process which would provide the smallest costs of production. In the solution of this task production function of Kobba - Douglas which sets output (Y) as capital functions/expenses (To) and work (L) is used:

Y = f (AKaLb), (5.1)

where And, and and b - positive constants.

Costs of production are formed directly at the enterprise and therefore reflect individual expenses and the conditions of production existing on it.

From here costs of production (prime cost) at the different enterprises aren't identical. As market prices of production develop on the basis of public industry average expenses, each enterprise seeks to make them is lower public or equal to them to get profit.

According to appointment the above-named expenses are grouped in economic elements, calculation articles, on a way of reference on prime cost of a product and in relation to output. In the first case it reflects their distribution according to the economic contents irrespective of use form in production of this or that type of production and a place of implementation of expenses and is applied by drawing up the estimate of expenses for production of all products. It is formed for a certain period of time (year, quarter, month) and reflects costs of production on economic elements.

The estimate is necessary not only for decrease in expenses on their elements, but also for drawing up material balances, rationing of current assets, development of financial plans, etc. For the enterprises of all industries the following obligatory nomenclature of expenses for production on economic elements is established:

· material inputs (minus the cost of returnable waste);

· labor costs (all types of compensation and other payments);

· assignments on social needs;

· depreciation of fixed assets;

· other monetary expenses.

On economic elements accounting is conducted and the final statement on total amount of expenses on production is formed. Classification of expenses by economic elements gives the chance to know structure of prime cost and allows to pursue purposeful policy on improvement of economy of the enterprise on the basis of economy of expenses.

When developing the estimate of expenses for production the following methods are used:

· the Budget method is based on calculation of all expenses of the enterprise as a whole and provides an agreement of sections of the plan as the sum of expenses is determined by economic elements by data of appropriate section «The plan technical and economic an enterprise razkvitiya».

· the Summary method provides the arch in uniform system of the general expenses on all shops of the main, auxiliary production and serving master's. In the shop estimate of expenses join: direct expenses of this shop (material inputs both purchased components and semi-finished products, the main and additional salary of production workers, charges on their salary, other direct cash expenditures).

The group of expenses according to calculation items of expenditure reflects their structure depending on the direction (purpose) of expenses (on production or its service) and emergence places (the main production, auxiliary services, economy service, etc.).

Distribution of expenses for production can be direct or indirect. At direct distribution exist obvious interrelation between quantity of the spent resource; and quantity of let-out production. At indirect distribution interrelation between the spent resources and quantity: production is established by an analytical way.

Accounting happens: the planned - is formed for the planned period on the basis of progressive norms of expenses of work and means of production; by the reporting - it is calculated on the basis of data of the account and characterizes the actual level of expenses; the standard - in its basis the existing rules characterizing reached level of expenses lie current.

Accounting are formed by types of production. In accounting main types of expenses are estimated depending on their appointment (the expenses connected directly with technological process of production of concrete types of production) are allocated: on raw materials and materials, fuel and energy, on the technological purposes; on a salary of production workers and assignment on social insurance; on preparation and production development; on the contents and equipment operation, including its depreciation, maintenance, etc.; all-shop, manufacturing and other expenses.

In reporting accounting non-productive costs (losses from marriage) are allocated. Calculation expenses are conducted on special forms in which data on planned and actual costs on calculation articles of expenses for all release of products for the reporting period are reflected. The document in which these expenses are entered, is called as accounting, and system of calculations for determination of product cost - calculation. Unlike group on economic elements accounting allows to consider the expenses which have been directly connected with production of a concrete type of a product. Into these expenses enter both material inputs, and expenses on creation, service and production management of this type of production. On the basis of calculation calculations its shop, production and full prime cost is defined.

By drawing up the summary estimate of expenses on the enterprise it is necessary to consider except shop expenses general production and general running costs on the enterprise as a whole for what the corresponding estimates on these expenses are formed.

The group of expenses according to calculation items of expenditure reflects their structure depending on the direction (purpose) of expenses (on production or its service) and emergence places (the main production, auxiliary services, economy service, etc.).

For calculation of accounting for products it is necessary to make in addition estimates of expenses under complex articles of accounting:

· general production expenses (on shops and the enterprise as a whole);

· general running costs (on shops and the enterprise as a whole);

· business expenses.

The sum of expenses under complex articles is distributed then on products of one of the standard methods:

a) general production, general running costs are defined as a percentage to the main salary of production workers;

b) business expenses are distributed in proportion to production product cost.

On a way of reference of expenses for product cost, at its calculation, expenses are subdivided on:

· direct, directly connected with production of certain production and carried to its separate types or orders;

· the indirect shops connected with work or the enterprises as a whole.

The last treat prime cost of separate types of production as distribution (i.e. indirectly) on any established sign (in proportion to output or expenses, etc.).

In relation to output of expense and expenses are subdivided on:

· constant expenses which remain invariable at output change: depreciation, rent of rooms, property tax, time wage of work of workers, salary and insurance of the administrative device, etc.;

· the variable expenses changing in proportion to output of products (a price-work salary, raw materials and materials, technological fuel, the electric power, taxes and assignments from a price-work salary, expenses according to the contents and operation of cars and the equipment excepting depreciation), etc.

The need for the accounting of expenses and calculation of product cost arose during origin and blossoming of manufactory production. Poprotsessny and job order accounting were the first methods used for the production account. These two types of systems of distribution of expenses find broad application and today. So, the job order method is most often applied in mechanical engineering with individual production of the difficult equipment, cars, units, reactors, and a poprotsessny method - in extracting industries and an energy drink.

Now in world accounting practice and calculations of product cost, the great value is attached to questions of production and administrative accounts, including techniques of planning and the accounting of expenses. The method of calculation assumes system of the production account at which are defined actual cost of production, and also an unit cost. The choice of a method of calculation of product cost is connected with the production technology, its organization, features of products. It characterizes relevance of a subject of a term paper.

5.2 Characteristic of job order сosting

The job order system of calculation provides information on prime cost of an individual product or group of uniform products. The main characteristic of this method is that all information belongs to the concrete order. And such information doesn't belong to the concrete reporting period and isn't received as a result of averaging, except cases when it is necessary to establish the cost of a unit of production for the order consisting of several identical units. The data relating to the concrete order, can be presented in a section of elements of expenses in that degree as far as it is necessary for control and the analysis.

Job order сosting belongs to the class of systems of accounting of the expenses used in the organizations where each unit or party of products or services is unique. Therefore it is necessary to know costs for each let-out unit of production and therefore they should be calculated separately.

Thus, the term «order» (as a synonym «work») in this case belongs to each separate unit or products party. Systems of job order accounting are applied and in those branches where goods or services are issued or provided to order. For example, such services provide to the clients auditor фир¬мы as to each their client services for which granting the different volume of used resources is necessary are required.

The engineering companies also often let out the equipment on the basis of the special specifications, required to their customers.

As a rule, very strongly differ from each other and projects, vykpolnyaemy the construction and engineering companies for each customer. In this regard in all organizations of expense of this kind have to be traced in relation to each separate order.

The job order method of accounting - is a method of calculation of the prime cost, applied at the enterprises where production costs consider by separate orders for a product or work. The enterprises with individual and small-scale production types are such, mainly. In a broad sense the order represents one or a small series of uniform products considered so that to allocate this production from another. Object of the account and calculation is the order to which assign number. In narrower sense as the order understand - «… a difficult product (its units, knots) in single production, small parties of identical products in small-scale production, and also separate types of works (repair, construction, etc.)».

For the accounting of expenses for each order open the separate analytical account (card) with the indication of a code of the order which is put down in all primary documents. Production expenses are aggregated in the analytical account in accurate compliance with open orders. Thus, this method allows to allocate costs of production and to individualize them on each kalkuliruyemy object. Application of a job order method of calculation is proved only when the following conditions are met: opportunity to allocate object of calculation at a certain stage of its creation and realization; there is an objective need to obtain data not about average, and about individual prime cost of objects by each open order.

The job order card of the accounting of expenses is presented in table 5.1.

Table 5.1 - Job order card of the accounting of expenses

Job order card of the accounting of expenses
Order number:	Customer:
Term of implementation of the order:	The coordinated price:
Link to the work plan:
Help data	Materials	expenditure of labour	Overhead costs	Factor cost
Requirement of holiday of materials	quantity	$	hour	$	hour	$	$
№ 1234	Х	Х
Salary No. 5678 sheet			Х	Х
Fee to consultants							$
etc.
Results
Total list:	$	Notes:
Materials
expenditure of labour
Overhead costs
Expenses
Sale price
Profit (/loss)

Basic advantages of a method of job order calculation are that this method does possible comparison of expenses between orders, shows most and the least profitable orders, and also what operations in similar orders the most expensive, and what most effective. The job order method provides base for costs planning and sale prices by future orders. The method provides data for control of expenses by orders by calculation of deviations between estimated and actual data, and also does rather exact distribution of overhead costs between orders.

In the conditions of market economy product cost is the most important indicator of production economic activity of the enterprise. Calculation of this indicator is necessary for an assessment of implementation of the plan on this indicator and its loudspeakers; determination of profitability of production and separate types of production; identifications of reserves of decrease in product cost; determination of prices for products; calculations of the national income in country scales; calculation of economic efficiency of introduction of new equipment, technology, organizational and technical actions; justifications of decisions on production of new types of production and removal from production of the outdated.

Product cost is costs expressed in a monetary form of its production and realization. Product cost is a quality indicator in which it is concentrated results of economic activity of the enterprise, its achievements and available reserves are reflected. The product cost is lower, the work is more saved, fixed assets, materials, fuel, the cheaper production are better used manages both to the enterprise, and all society [1, page 43].

The method of the accounting of expenses for production and calculation of product cost is a set of methods of documenting and reflection of production expenses which define actual cost of production [13, page 657]. The method of the accounting of expenses and calculation gets out the enterprise independently as depends on a number of private factors: the branch accessory, applied technology, the product range, etc.

At manufacturing enterprises the accounting of expenses can be organized various methods depending on a way: estimates of expenses, nature of production, completeness of inclusion of expenses in product cost. All methods use at adoption of administrative decisions.

Depending on a way of an assessment of expenses, allocate methods of the accounting of expenses on actual cost, standard and planned. Depending on nature of production of the accounting of expenses allocate poperedelny and job order methods. The Poperedelny method of the accounting of expenses is applied in productions where the ready-made product turns out as a result of serial processing of an initial material at separate stages, repartitions.

The job order method is usually used in construction, printing houses, aircraft construction, furniture factories, mechanical engineering, when performing repair work, rendering auditor or consulting services, research and development, etc.

Thus, technological process between shops is interconnected; the finished goods are let out by the last shop in a technological chain. Production expenses collect in the beginning on shops, then summarize on the organization as a whole and count prime cost of a unit of production on the sum of expenses of all shops. Object of accounting is the separate production order.

The organization of system of the job order accounting of production expenses is possible under certain conditions productions. The main condition is opportunity to allocate and individualize production of a product unique or carried-out by the special order or a small lot of products and to receive information not about average, and about individual prime cost of a unit of production.

Product cost is costs expressed in a monetary form of its production and realization. Product cost is a quality indicator in which it is concentrated results of economic activity of the enterprise, its achievements and available reserves are reflected. The product cost is lower, the work is more saved, fixed assets, materials, fuel, the cheaper production are better used manages both to the enterprise, and all society [1, page 43].

The method of the accounting of expenses for production and calculation of product cost is a set of methods of documenting and reflection of production expenses which define actual cost of production [13, page 657]. The method of the accounting of expenses and calculation gets out the enterprise independently as depends on a number of private factors: the branch accessory, applied technology, the product range, etc.

At manufacturing enterprises the accounting of expenses can be organized various methods depending on a way: estimates of expenses, nature of production, completeness of inclusion of expenses in product cost. All methods use at adoption of administrative decisions.

Depending on a way of an assessment of expenses, allocate methods of the accounting of expenses on actual cost, standard and planned. Depending on nature of production of the accounting of expenses allocate poperedelny and job order methods. The Poperedelny method of the accounting of expenses is applied in productions where the ready-made product turns out as a result of serial processing of an initial material at separate stages, repartitions.

The job order method is usually used in construction, printing houses, aircraft construction, furniture factories, mechanical engineering, when performing repair work, rendering auditor or consulting services, research and development, etc.

Thus, technological process between shops is interconnected; the finished goods are let out by the last shop in a technological chain. Production expenses collect in the beginning on shops, then summarize on the organization as a whole and count prime cost of a unit of production on the sum of expenses of all shops. Object of accounting is the separate production order.

The organization of system of the job order accounting of production expenses is possible under certain conditions productions. The main condition is opportunity to allocate and individualize production of a product unique or carried-out by the special order or a small lot of products and to receive information not about average, and about individual prime cost of a unit of production.

The job order system of calculation provides information on prime cost of an individual product or group of uniform products. Thus, the job order system of accounting of expenses is applied to calculation of prime cost of an individual product for the customer. Besides, there are also intra factory orders when one shop produces production or performs works for other shop or enterprise department. Intra factory orders open single (single) and annual (for example, the annual order to a repair shop on maintenance of the equipment of any shop of the main production).

On a number of the enterprises with large-lot and mass production (mechanical engineering and light industry) also apply annual orders to the account by types of products and even details.

For use of job order system of calculation it is necessary that the product was made in a job lot in accurately distinguishable quantities. Thus, there have to be differences in quantity, a look, the size or quality of a product, or in the sum of the main expenses incurred on production of a product, or in operations on product production in various production divisions.

As it was already noted, the job order system of calculation provides information on prime cost of an individual product or group of uniform products. Information can be based both on actual data, and on estimated or planned expenses, and also to represent a combination of both approaches depending on extent of use of the actual and estimated data. However the main characteristic of this method is that all information belongs to the concrete order. And such information doesn't belong to the concrete reporting period and isn't received as a result of averaging, except cases when it is necessary to establish the cost of a unit of production for the order consisting of several identical units. The data relating to the concrete order, can be presented in a section of elements of expenses in that degree as far as it is necessary for control and the analysis.

In practice working conditions can differ from the considered classical option. For example, the shipbuilding has a long cycle of production with simultaneous production of parts of a vessel. The parallel manufacturing techniques don't allow to collect expense consistently. In this case in addition to the main order open some internal orders which number corresponds to constructional elements of a product. The accepted order provides localization of expenses by separate parts of the general order.

Besides, separate details and knots of production of some branches of mechanical engineering are interchangeable to 60 - 70%. The enterprise opens for such details and knots the separate order that localizes expenses and gives the chance to distribute them by individual orders.

In that case when the order includes some products, actual cost of each of them is defined by a way of division of the sum of the production expenses considered on the relevant articles of accounting, on quantity of the products let out by this order. Sometimes products are given to the customer or on a warehouse parts, before the order termination as a whole. Such products are estimated or at planned (budget) prime cost, or on actual cost of the uniform products which were issued earlier, taking into account the made changes at their design and the production technology.

Often implementation of the order mentions some reporting periods. In this case it isn't necessary to expect completion date of all works on the order to receive payment of the performed works. In this case the expert of the customer together with the representative of manufacturing enterprise determine amount of completed work by the order and mark out him in the relevant documents. The customer pays the performed works or in proportion to the relation of the actual expenses to budget expenses, or in proportion to physical amount of completed work.

Important feature of an ostentatious method consists that because of distinctions between parties of made production any attempt to average expenses of two or more various parties leads to wrong determination of cost of each party.

The lack of a job order method is that at production of difficult, not repeating or seldom repeating orders is difficult to organize rationing of material and labor inputs, drawing up preliminary control and control of expenses is complicated during production. For its elimination at production of large products with a long cycle of production orders are recommended to be opened on its separate knots (units, constructional elements), the representing finished designs. In small-scale production in the order include such quantity of products which plans to let out current month.

Accounts at a job order method show material, labor and overhead costs, and also the distribution of overhead costs made at demanded level of specification, but this process is always limited to the concrete order.

Technological process and registration procedures in job order system of calculation differ on branches and types of productions, however the majority of the enterprises to some extent apply:

- production planning as a whole and in a section of streams of expenses;

- card of registration of expenses by request;

- production schedule;

- collecting and distribution of expenses;

- preparation of reports on prime cost of the order;

- maintaining calculation accounts, magazines, books and other registration registers forming structure of the account and its communication with system of calculation.

All registration procedures and records in job order system have to be coordinated with a structural basis for implementation of the appropriate organization of the account and control.

Job order a method of the accounting of expenses - a method used at the enterprises, making products single, unique or carried-out by the special order. The Poprotsessny method of the accounting of expenses is applied by those enterprises which serially produce mass production or have continuous production (the food, chemical, metallurgical, textile industry). Prime cost of a unit of production is defined by division of total amount of the production costs carried on certain division for a certain period, into quantity of the units of production made for the same period.

1. Poprotsessny accounting of expenses. Consists of the similar units of a produkution estimated at average cost of a unit of production.

It isn't made attempts to distribute costs of separate units of production. Factor cost and manufacturing overhead costs are distributed on A process, B process, etc. Upon completion of production of a unit of production are transferred to finished goods warehouse at average prime cost of unit продукции.2. Job order accounting of expenses the Stock of finished goods a work in progress Stock the Order A Order B Order of C Consists of separate neszozhy types of production the Factor cost and manufacturing overhead costs are distributed (belong) on separate units of production of Fig. 1. Comparison of job order and poprotsessny accounting of product cost.

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