Управленческий учет на предприятии

Example 3. Change of structure of prime cost in system of poprotsessny accounting of expenses for production Process A Process B 1 000 1 000 1 000 3 000 3 000 2 000 1 000 500 6 500 Materials рудозатраты Overhead costs Is transferred to process B 3 000 From process A Labour costs Materials Overhead costs transferred to process C 6 500 Process the C Finished products 6 500 3 000 2 000 1 000 12 500 transferred to finished goods warehouse 12 000 B Labour costs Materials Overhead costs of Poprotsessny a method of the account and calculation Are transferred from process of C 12 000 From process is applied in extracting industries, an energy drink, processing industries with simple technological process of production. The products are at the same time object of the account and objects of calculation. At a poprotsessny method of the account and calculation factor and indirect cost is considered under accounting articles on all volume of let-out production. Therefore average prime cost of a unit of production determine by division of the sum of all the costs made in a month of quantity of finished goods. Main features of this method:

* production expenses are grouped in separate divisions or sites;

* expenses are written off for the calendar period (week or month), instead of in time, necessary for end of the separate order.

At a poprotsessny method the following sequence of the account is carried out:

1. documenting and the accounting of expenses on elements (on direct costs);

2. documenting and the accounting of the expenses carried on complex articles (due to the need of the accounting of expenses for auxiliary productions and expenses on management);

3. distribution of expenses on processes

4. determination of the total value of expenses in a month;

5. distribution of expenses (it is made in case the account is organized not on production as a whole, and on separate processes).

At poprotsessny accounting all overhead costs of one site or all production share on quantity of production made for this period of time. Thus there are problems of distribution of overhead costs between the finished and incomplete products. Therefore the concept of an equivalent unit of production (for measurement of quantity of the products made for the certain period of time) is used. It allows to distribute total amount of direct costs for the period between finished and incomplete goods by recalculation of incomplete products in conditional and ready equivalent units. The accounting of expenses and calculation of prime cost can correspond not fully to sequence of processing of products in technological process. So occurs when carry out calculation of expenses by a method of average cost. He assumes that stocks of units of production for the beginning of the period were begun and finished within the current reporting period. Calculation when using a method of average cost is carried out according to the following scheme:

1. the sum of direct costs for the period is determined by their types, the sum of expenses on a work in progress for the beginning of the period and the sum of expenses for the period is for this purpose summarized;

2. the quantity of products of a work in progress for the period is defined:

incomplete products for the period end = quantity of incomplete products for the period beginning + the begun production for the period - the finished goods accepted on a warehouse;

3. the percent of readiness of a work in progress on types of expenses pays off: on a material and other expenses;

4. there is a total of equivalent units by summation of the actual units of finished goods and the calculated equivalent units;

5. the sum of expenses by the types falling on an equivalent unit pays off. Formulas of calculation of equivalent expenses will be the following:

6. equivalent expenses on materials = the general expenses of materials / equivalent products (on materials) where equivalent expenses = an other expenses all / equivalent products (on an other expenses);

7. at the last stage calculation becomes: the received sum shares on the actual quantity of units of a work in progress therefore the cost of one unit of a work in progress will be determined:

4. there is a total of equivalent units by summation of the actual units of finished goods and the calculated equivalent units;

5. the sum of expenses by the types falling on an equivalent unit pays off. Formulas of calculation of equivalent expenses will be the following:

6. equivalent expenses on materials = the general expenses of materials / equivalent products (on materials) where equivalent expenses = an other expenses all / equivalent products (on an other expenses);

7. at the last stage calculation becomes: the received sum shares on the actual quantity of units of a work in progress therefore the cost of one unit of a work in progress will be determined: cost incomplete = quantity of equivalent units incomplete + equivalent expenses.

The Poprotsessny method of the accounting of expenses is applied as well in branches where objects of the account don't coincide with objects of accounting, for example in agricultural production, at the enterprises processing production of a rasteniyevodkstvo, animal husbandry. In these branches the accounting of expenses is kept on analytical accounts of plants, animals, by processings during all technological process. Then expenses distribute by separate types of production economically reasonable methods of accounting: exception of expenses for collateral production; the coefficient; proportional, etc.

In the conditions of the economic crisis, the increased complexity and dynamism of environment of managing the special attention needs to be paid to the account and the analysis of expenses. Reliable calculation of product cost (its unit or part) is necessary for definition of selling price of products, detection of expediency of their production and realization, justification of the range of output, planning arrived, etc.

Crisis is accompanied by economic decline in production. As a result, in a number of branches and on many the enterprises single production that causes use of a job order method of calculation starts prevailing.

5.3 Documenting of registration operations in system of job order accounting

Primary registration documents are applied to documenting of transactions of the accounting of expenses. For the accounting of material inputs - limit and intaking cards, requirements, requirements consignment notes. For the accounting of labor costs - settlement pay-sheets, razrabotochny tables of distribution of a salary. The accounting of expenses on service of productions and management - sheets of the accounting of expenses of shops. The accounting of losses from idle times and other production costs - prostoyny leaves. The account and work in progress inventory - inventories, collation sheets. The accounting of normalized expenses: travel expenses - expense reports, expense accounts - estimates of expenses.

Orders open on one product in individual and on some products in small-scale production. Contracts with customers for production of this or that type of production form the basis for opening of orders. Orders open in planned and production department of the enterprise on special forms which then arrive in shops performers of orders and accounts department. To each order appropriate a code which put down in a card of the accounting of expenses for production and on all documents according to the consumption of materials, salary charge by the worker, etc. Therefore, the analytical account keep in the cards opened on each order in which write down expenses under accounting articles.

Thus, the main registration register at a job order method of calculation is the card of the accounting of orders. The same card can carry out control function. On it compare estimated and actual expenses to order, come to light a deviation and the reasons which have caused them.

Let's characterize a card of registration of expenses by request. The card of registration of expenses by request contains order number, permission to work and their description, the time interval necessary for implementation of the order is defined, and also the quantity of units which needs to be made is specified. Expenses are registered in process of product passing on the stages of production which are usually correlated to certain structural divisions. Thus, the card provides a control device of separate stages of the order and differentiates personal responsibility of heads of divisions for implementation of the order.

In many cases the card of the production order can join additional data, for example sale prices, the name of the buyer, the instruction on transportation, etc., and also a total on expenses that supplements the report on prime cost. It is obvious that extent of specification of information necessary for providing the order, varies depending on conditions of the concrete contract or enterprise requirements.

The list of operations which have to be made for order execution, makes the production schedule. In this part this form repeats one of functions considered before the card of the order which is also providing registration of operations. However the production schedule, as a rule, doesn't demand reference of operations to the concrete order therefore it also can be used for several orders at the same time and as already being in production, and what else have to begin.

The purpose of the production schedule - coordination of stages of production of orders and transactions of the order, made by concrete structural unit of the enterprise. The schedule is integrated with the production plan and calculation system. This form can be used for control as it forms many indicators necessary for the production program, both in a total form, and in the detailed look depending on demanded organizational procedures and accounts.

Production schedules are part of the actual system of calculation, act as a control device, registration and collecting expenses.

Application of the schedule containing movement of physical units, will depend generally on its use in the general system of the enterprise. It can replace a card of the production order regarding control of natural indicators for each order. It can be applied to registration of orders or stages of the works performed in each production division. At last, it can be used as the general program on production planning for the enterprise as a whole. In the last two cases production schedules can take the form of plans. production division. At last, it can be used as the general program on production planning for the enterprise as a whole. In the last two cases production schedules can take the form of plans.

5.4 Technique of accounting of prime cost and the accounting of expenses at a job order method

Expenses gather on each ended game, instead of for a period; only one account of a work in progress which is deciphered by maintaining separate cards of the accounting of expenses by each order being in production is kept.

As already it was told above, group expenses in orders and estimate prime cost of each customer in cards of the accounting of production. On the basis of cards make reporting accounting of prime cost of a unit of production.

All factor cost considers in a section of the established nomenclature of articles by separate orders.

In a separate card by request of the consumer the following is considered:

1. the materials acquired specially for implementation of the order (on the basis of reception acts or invoices of suppliers);

2. the materials taken from stocks (on the basis of demands);

3. salary production workers (on the basis of a card of the organic accounting of time spent for implementation of the order);

4. other factor cost (depreciation of the production equipment, the works performed by subcontractors).

On performance of the order, in a calculation card total amount of a factor cost then on the basis of one of the accepted methods overhead costs are counted and brought is removed. Overhead costs not always get into the order account. If their size is insignificant in comparison with the sum of a factor cost, they are reflected as a part of period expenses.

Losses from marriage are, as a rule, written off for those orders at which performance there was a marriage. Their reflection in prime cost of a work in progress can be only in case they treat a certain incomplete order.

Prime cost of the order is defined by the sum of all expenses of production from the date of its opening about day of performance and closing. Therefore, make accounting at a job order method after performance of work on the order is finished. Completion of work by request fix in the document (the consignment note, the act) on delivery of the executed finished products or works. After that the order close: extract of documents with designation of number of the closed order stop.

If at the end of the registration period the order isn't complete, the general size of expenses for the certain number, written down in a calculation card, gives figure on a work in progress. Prime cost of the order can be compared to estimation that gives the chance to analyse a difference between real (actual) and estimated (planned) cost.

Let's review an example. Omega LLP treats medium-sized enterprises with mass productions. It is characterized by periodic repeatability of production and release of identical products which form a series. The following features are inherent in it: limited product range; rather broad specialization of workplaces. Separate working sites function within one production shop. Development of finished goods is defined by dresses on pieceworks.

At this enterprise the job order method of the accounting of expenses and calculation of prime cost of a product is applied. Production of the electrotechnical equipment - difficult and long process, is characterized, as a rule, by heterogeneity of structure of technological process depending on a type of a product.

Thus, in this case object of the account and calculation is the separate production order for this production (the machine gas-cutting), created on in advance defined quantity of production (10 pieces).

In the analytical accounting of Omega LLP production expenses are grouped in the order in a section of established articles of accounting. The planning section of Omega LLP established the following articles of accounting for production of this type of production:

1. Raw materials and materials

2. Fuel and energy on the technological purposes

3. Salary of production workers

4. Assignments from compensation

5. Expenses on preparation and production development

6. Overhead costs

7. Losses from marriage

Number which further put down on all documents on a factor cost of production (on limit and intaking cards, in requirements, route sheets and other documents for works on implementation of the order) is assigned to the order. In the order for production of the machine gas-cutting it is specified that production will be carried out in three shops of the enterprise within 2 months.

Group of expenses by this order carry out in the table of distribution of the consumption of materials, a salary in cards of the accounting of production. Prime cost of one type of products determine by division of the sum of expenses by request on quantity of the made products. Having divided the sum under each article into number of release, receive the itemized sum of expenses for one product. At production and implementation of the single order for production of the machine gas-cutting the following direct and indirect costs, tenge (table 5.3) took place.

Table 5.3 - Costs of production of the order 727

Accounting articles	May	June	Total expenses
	№ 1	№ 2	№3	№ 1	№ 2	№3
Raw materials and materials	24000	15000	12000	32000	18000	6000	107000
Fuel and energy on the technological purposes	1000	900	600	800	800	600	4700
Salary of production workers	12720	8480	10600	13460	13780	8800	67840
Assignments from compensation	2404	1603	2003	2544	2604	1663	12821
Expenses on preparation and production development	1850			1850			3700
Overhead costs	12230	11290	10370	13290	12740	9170	69090
total	55504	37273	35573	65044	47924	26233	267551

Besides, the first assembly shop returned materials on a warehouse in the sum of 1200 tenges in May and 1100 tenges in June as they exceeded need for materials for implementation of the order. The cost of materials is defined at the end of every month on the basis of the average cost (the periodic system is used).

Also in the first assembly shop accessories on the machine which were classified by accounting service of the enterprise as losses from marriage were damaged. These accessories were considered by the enterprise as raw materials and materials, cost made them 1300 tenges in May, 2012 and 1100 tenges in June. Let's calculate cost of output:

1) Calculation of factor material inputs:

- material inputs on shops in May, 2007 made 51000 tenges;

- material inputs on shops in June, 2007 made 56000 tenges;

- total 107000 tenges

- returnable waste (-1200) + (-1100) =-2300 tenges.

- costs of fuel and energy in the sum of 4700 tenges (2500 in May + 2200 in June).

Total factor material inputs made 109400 tenges.

2) Calculation of a factor cost on compensation of production workers:

- compensation of production workers of three assembly shops in May, 2012 made - 31800 tenges;

- assignments from payment in May made - 6010 tenges;

- compensation of production workers of three assembly shops in June, 2012 made - 36040 tenges;

- assignments from payment in June made - 6811 tenges;

Total a factor cost on compensation made 80661 tenges.

3) Overhead costs in two months made 69090 tenges.

4) Expenses of auxiliary productions on preparation and production development which were then are carried on expenses of the first assembly shop in the sum of 3700 tenges.

5) Losses from marriage in two months made 2400 tenges.

Total prime cost of the order No. 727:

109400 + 80661 + 69090 + 3700 + 2400 = 265251 tenges.

This prime cost of the order is reflected as in a card of the accounting of production. Prime cost of the order can be compared to estimation that gives the chance to analyse a difference between real (actual) and estimated (planned) cost. The accounting service Omega LLP by each order is formed reporting accounting of prime cost in which the actual and planned cost is compared and deviations come to light.

Job order and poperedelny (poprotsessny) accounting of expenses.

In the previous blocks of this workbook we considered procedure of reflection of all expenses of production of the enterprise in account books of this enterprise. Then we saw how production overhead costs are charged at first on the centers of expenses, and then on the separate units of cost released by the enterprise. In this block the questions connected with methods by means of which expenses are considered and accumulate on separate orders and processes are raised.

At linkng of expenses with units of cost complexity of system of the account and character of the necessary additional analysis will depend, generally by nature considered unit of cost.

Two main methods of accounting of expenses are used:

* job order accounting of expenses;

* poprotsessny accounting of expenses.

The method of job order accounting of expenses can be defined as:

Such form of accounting of expenses of a certain order where separate work is performed according to special requirements of the customer, and a date of performance of each order rather small. Work is usually carried out at plant or in a workshop where the order passes through a number of operations as continuously defined unit.

In other words, job order accounting of expenses includes reference of expenses on the units of cost representing individually estimated orders. It can be orders of clients or the works estimated in the enterprise for the purpose of accounting of expenses.

This method is applied where each unit of cost differs from any other unit of cost and though certain orders repeat from time to time, it is desirable every time when these expenses arise, to define them anew.

Example of the unit of cost corresponding to definition of job order accounting, the car of the company of Rolls made to order the Royce is. Each of these cars is considered at plant as the separate order, and expenses accumulate on them in an individual order.

Poprotsessny (poperedelny) accounting of expenses is defined as:

Method of accounting of the expenses, used for establishment of average cost of party of identical units of cost during time.

This method is applied when it is almost impossible to establish the expenses connected with separate units of cost (as it occurs when using a method of job order accounting), because of continuous nature of process of production. Example of the unit of cost suitable under definition of accounting on processes, the oil barrel at oil refinery is. Barrels of oil are processed continuously, and each barrel has the same characteristics, as previous. It is impossible to establish exact costs of the certain barrels which have passed a cycle of processing.

The method of popartionny accounting of expenses combines elements both job order, and poprotsessny accounting of expenses. The party is defined as quantity of identical units of cost (as when accounting expenses of production on processes), considered as the order (as at job order accounting of expenses) separately from all other orders or the processes which are carried out by the enterprise.

For example, the method of popartionny accounting is suitable for a situation when the client does the order on 100 identical kitchen products of the joiner's workshop making to order kitchen furniture. This «party» in hundred products will be considered by a joiner's workshop as the separate order (and expenses will accumulate respectively), but separate kitchen products in party will be regarded with use of a method of accounting of expenses of production on processes (i.e. the average value of expenses counting on a kitchen product will be calculated).

5.5 The synthetic accounting of expenses for production at a job order method

The summary synthetic accounting of expenses by orders will be organized by several options with the help:

- control accounts;

- separate account;

- prime cost accounting under the contract.

The separate account - the system of the account providing separate opening of accounts in the management and financial accounting, thus in accounts of expenses don't make entries about financial operations. This option provides duplication of records in two types of the account.

Control accounts - the system of the account providing opening of accounts of expenses and accounts corresponding to them in a traditional order of the financial account. The control account - is the total account in which records are made on total amounts of operations of the period. For example, the rest on the control account of the warehouse book will be confirmed by data of voluminous volume of accounts of the warehouse book which in the sum have to equal to total figure of the control account of the warehouse book. The system of control accounts allows to check correctness of various accounts as the sum of all separate records on various accounts of the warehouse book has to correspond to the control account in which the result of all operations is brought. All accounting records make in sheets, results transfer to ledger accounts.

Thus, the summary synthetic accounting of expenses by orders in Omega LLP is organized on system of control accounts in a traditional order of the financial account.

For a job order method of the accounting of expenses and accounting of prime cost there are eight typical correspondence of accounts:

1. Receipt of the main and auxiliary materials from suppliers;

2. Holiday of the main and auxiliary materials in production;

3. Salary charge;

4. Payment of a salary in a month;

5. Record of an other general production expenses;

6. Distribution of general production expenses by orders;

7. Termination of the order or release of finished goods;

8. Realization and write-off of prime cost of realized production.

Thus, at a job order method accounting of the order can't be made until all work on the order that is an essential lack of a job order method of the account, especially will be performed if orders carry out within several months and during this period of time from a series of cars, machines, etc. make partial release. In this case it is necessary to define prime cost of partially executed order. Before the end of implementation of the order prime cost of part it usually define conditionally, on the basis of planned accounting or the actual accounting of the product produced earlier, taking into account change of specifications of its production. The analysis of system of the accounting of expenses is under construction according to 2007. In 2007 the enterprise accounts department applied complex system of accounts which included accounts of the subsections 8110 «Main Production», 8210 «Semi-finished products of own production», 8310 «Auxiliary productions», 8410th «Overhead costs» according to Standard book of accounts on IFRS to the accounting of expenses for production.

The accounts of this subsection intended for the accounting of expenses for the main production, consist of one generalizing account and several «transit» that allows to group expenses in their contents, places of emergence and other signs. Information reflected in «transit» accounts, represents part of certain information on actually made expenses, having generalized which (with use of the established (chosen) principles and rules), it is possible to obtain data on the actual production cost of all output, a unit of production, etc.

On the debit of account 8410 and the credit of the corresponding accounts according to the accounting of overhead costs. On the debit of account 8110 and the credit of the corresponding accounts according to the accounting of a factor cost. On the debit of account 8310 and the credit of the corresponding accounts according to the accounting of expenses of auxiliary productions. On the credit of account 8110 and the debit of account 1320 reflect release of finished goods if production is handed over on a warehouse or to account 1330 debit - if production incomplete.

By the reviewed example, production of the order No. 727 was carried out in two months, therefore expenses on every month were reflected separately (table 5.4).

Table 5.4 - Correspondence of accounts on the accounting of expenses of year on Omega LLP

Contents operations	Basis for records	correspondence	Sum, tenge
		debit	credit
1	2	3	4	5
Write-off raw materials	Sheets of an expense of raw materials and materials on shops	8110	1310	51000
Return of materials on a warehouse	Returnable sheet	1310	8110	1200
Fuel and energy on the technological purposes is released	Accounts of suppliers	8110	3310	2500
It is added wage a stalemate to workers of the main production	Sheet of the accounting of working hours, Pay-sheet	8110	3350	31800
Assignments from compensation (a social tax) are made		8110	3150	6010
Expenses on preparation and production development are made	The estimate of expenses, the act of the performed works	8310	3310	1850
Expenses of auxiliary productions are written off		8410	8310	1850
Services in equipment repair to the third-party organizations are paid	The estimate of expenses, the act of the performed works	8410	3310	33890
Losses from marriage are reflected	Brakirovochny act	8410	1310	1300
Overhead costs are written off		8110	8410	35190
Work in progress cost for the end of May, 2007 is reflected	Inventory sheet	1330	8110	127150

As already it was considered above, expenses on production of the concrete order, for example the order No. 727 «The machine gas-cutting universal» for the analytical account gather in a section of shops in a card of the accounting of production. In production of the equipment the quantitative and qualitative account is carried out, i.e. consider quantity and quality of the spent raw materials, materials, spare parts and loss by request. On each order keep production magazines for record of these data which receive by means of measuring devices and precisely measured capacity of devices and container. On the basis of these magazines production reports by results of which in comparison with planned norms of an exit and a raw materials expense, it is estimated both the executed order, and production as a whole for the reporting period are formed.

5.6 Accounting of prime cost of the special order, consignment of goods and contract

Accounting of prime cost of the special order is the general term designating accounting of prime cost of the order, a consignment of goods and the contract. Distinctive features include that:

1. Unlike a continuous stream, division of working process takes place;

2. Work can be identified according to a certain consumer order or the contract.

This method of accounting of prime cost is applied in that case when the company issues the order on production of one cost unit by request of the consumer. The firms which are carrying out orders, are engaged in production of special single goods, such as, tools, machines, spare parts, etc. The firm can satisfy demand for production which quality standard has to be above the quality standard of production of mass production, or quantity of necessary production so small that it doesn't make sense to involve other firms in production and specially to be engaged in planning and installations.

Many companies unite accounting of prime cost of the order with accounting of prime cost of a consignment of goods. Such cases take place in the companies which are carrying out assembly of a product according to technical requirements of the client, and the design (assembly) contains a number of accessories which can be used in other designs. I.e. the party of accessories and all expenses is produced are considered in the cost sheet of a certain lot of products. Upon completion of production of accessories, the order is closed and made production is transferred to a warehouse of ready details at average prime cost of all lot of products. When the client orders any certain design, the new order is formed, demanded details get from a warehouse and expenses are charged on account of the order order on assembly.

When production is made by parties and then transferred to a warehouse waiting for further sale or use in production of a certain design (assembly), the main and frequent problem is definition of quantity of necessary details. For the solution of this problem it is necessary to consider the next moments: 1 . Norm of consumption.

2. Costs of storage and operational readiness

3. Time necessary for installation and dismantling of production lines

4. Productivity of machines, labor and services concerning requirements to other production

Estimation of party of optimum size can be executed by means of:

1. Carrying out analysis of tabular data; calculation of prime cost of a unit of production for various number of parties for determination of the lowest prime cost of a unit of production.

2. Graphic analysis: drawing on the schedule of data on costs of storage in comparison with production expenses.

Accounting of prime cost of a consignment of goods is usually applied where there is a big variety of products in a warehouse. The accountant on the accounting of expenses needs to submit detailed information on product cost for satisfaction of the following requirements:

- planning and production control. Planning of maintenance of a stock rate and satisfaction of fluctuations of demand can become the big problem demanding continuous receipt of information on expenses for installation, loadings of machines and movements of stocks.

- accounting of profitability of a product. Management, most likely, will demand carrying out regular analyses of product cost and profit; maintenance or increase in a difference between prime cost and the size of profit can become problematic. Information received as a result of carrying out the analysis, helps with process of regulation of sales and formations of policy of sales.

- researches. In special cases data on prime cost can be demanded in the course of development of new production or improvement of existing production operations.

Many organizations (for example, on production of motorcycles) use in production one or several production lines, carrying out individual tasks on each production line and receiving as a result finished goods. Such organizations don't work according to special requirements of clients, however, they can use accounting of prime cost of a consignment of goods for determination of prime cost.

Prime cost accounting under the contract - system of the account and calculation of large products with a long cycle of production. The contract provides intermediate payments to the producer on stages for the performed works. The sum of payments is defined by the cost of the realized works confirmed with the act of the customer. In process of receipt of payments define expenses which need to be included in prime cost of realized production for calculation of profit for this period. Here the size of unexpired expenses, i.e. cost of the works incomplete and not handed over to the customer is defined.

In the course of accounting of prime cost of the contract, each contract represents a separate cost unit therefore under each contract of expense gather on the separate account in the main account book. Various elements of expenses are connected with:

- main materials. The materials carried on the contract, can include both specially acquired materials, and materials from a warehouse of the contractor. The corresponding expenses are thus debited into the contract account. On place of production difficulty of the organization of effective procedures of the accounting of receipts and returns of surplus of a material from a construction site on a The cost of each contract will be coordinated between the company and the client and contract cost is known under the name. In a case when large contracts take place and where work lasts for many months or even years, the contractor will expect receiving intermediate payments from the client according to contract cost. Such payments will correspond to the amount of works on the contract, performed at present time.

When using system of accounting under the contract it is recommended to adhere to the principles established for this system:

1. Not to count profit at early stages of implementation of the contract - it is low reliability of an assessment of the income and expenses.

2. To show discretion - the losses revealed in the reporting period, have to be carried to cost of the realized works of the same period. If losses are expected, their sum joins in prime cost of realized production after the probability of losses is established. For example, the reserve on payment of holidays of workers and the charges connected with payment of the holiday sums is created.

3. To be circumspect at considerable costs of the contract executed within 35 - 85%.

Making the decision concerning what size of profit can be attributed under incomplete contracts, the following aspects have to be taken into account:

1. Before to take any size of intermediate profit, it has to be precisely known that the contract will be successful;

2. Any profit has to undertake in proportion to extent of work on the contract, finished on this number;

3. Measures concerning any amount of expected general losses under the contract have to be as soon as possible taken.

Thus, calculation of profit for the incomplete project includes five stages:

Stage 1. To define a total cost of implementation of the contract (for the contract with the fixed price it will be contract cost).

Stage 2. To calculate the general size of expenses which can arise during implementation of the contract:

1. The actual expenses incurred on this number - plus

2. Approximate future expenses necessary for end of the contract.

Stage 3. The approximate general profit is determined by the contract by means of subtraction of results of a stage 2 of results on a stage 1 warehouse according to contract requirements can prevent control of materials:

- salary of production workers. The work referred on the contract, can include office work connected with drawing up plans and documents (including the accounting of working hours for workers with a firm salary), production operations directly at factory and work on a construction site. All work on a site under the contract is considered as direct work. For operating time disclosure by builders on various sites it can appear не0бходимым to prepare sheets of the accounting of working hours. All expenses on such work are debited into the contract account.

- direct costs. Besides a material and work, there is factor cost under the contract which are of great importance. Two main articles, namely production rooms and work on a subcontract fall under this category.

Production installations and the equipment can be acquired specially for the contract. In this case the account of the contract is debited at prime cost. Or production installations can be transferred by other contract. In this case we have partially written off cost which is debited into the account of our contract and is credited into the account of the contract off which it was charged. At the end of each financial period the cost of depreciation of the production installations being in property, is represented as credit conducting on the contract account (i.e. the balance is postponed to the beginning of the next period). The pure result of accounting transactions is that depreciation of production installations is automatically debited into the contract account. Production installations can be rented for use under a certain contract. As the company doesn't own these production installations, expenses on rent which are debited into the contract account will be the only journal conducting. It is also possible to debit the contract account conditional expenses on rent of the production installations belonging to the company, thereby, leased production installations will be considered as separate economic unit.

Stage 4. The explainable profit on this number has to reflect the amount of the work performed to this timepoint. It pays off as follows:

Stage 5. The profit under the incomplete contract the current year (i.e. debited into the contract account in the current year) represents the cumulative explainable profit calculated according to a step of 4 minus profit on the contract for previous years.

The profit which will be got in the current year represents profit on this number (underestimated if it is necessary) minus profit under the contract for previous years.

The job order method of the accounting of prime cost is used at production of a product unique or carried-out by the special order. In the industry it is applied, as a rule, at the enterprises with single type of the organization of production. Such enterprises will be organized for production of products of limited consumption.

The essence of this method consists in the following: all factor cost (expense of the main materials and a salary of the main production workers with charges on it) is considered in a section of established articles of accounting by separate production orders. Other expenses are considered in places of their emergence and join in prime cost of separate orders according to the chosen base of distribution. Thus, the system of the job order account and accounting of prime cost is characterized:

- concentration of data on expenses and reference of expenses for separate types of works or series of finished goods;

- change of size of expenses on each ended game, instead of for a period;

- maintaining in the account ledger «Main production» on which debit rest work in progress size is shown.

In job order accounting of prime cost and accounting of prime cost of the contract the role of the management accountant is very responsible. Accountants make decisions concerning many aspects:

Information requirements. Dresses, etc. have to be developed the sheet of the accounting of working hours, instructions concerning their filling are issued. If the system is computerized, files have to be created and instructions concerning introduction of data are issued.

Control methods behind expenses. It becomes especially important in that case when the price is to order appointed in advance. The management accountant has to provide existence of the relevant information which will allow to supervise costs of this number and to carry out a preliminary estimate until end in comparison with in advance defined budget levels. In case a difference between expenses above the coordinated size of in advance defined budget levels, actions on adjustment have to be undertaken.

Ways of distribution of overhead costs by orders; the subsequent correcting conductings in case of situations with not completely or excessively distributed overhead costs.

The main lack of a job order method is considered that at production of difficult, not repeating or seldom repeating orders is difficult to organize rationing of material and labor inputs, implementation of preliminary control, and also control of expenses is complicated during production.

Questions

Give definition:

(a) job order accounting of expenses

(b) Popartionny accounting of expenses

Explain:

(c) as prime cost of separate units of cost by means of a method of poprotsessny accounting is defined

(d) Where the term a standard loss is used

Situational tasks

Task 1.

Tick note what of the following productions, in your opinion, has to be considered by means of a method of job order accounting and what - a method of poprotsessny accounting of expenses of production.

	Job order accounting of expenses	Poprotsessny accounting of expenses of production
(a) Production of jam
(b) Engineering works
(c) Tailoring of outer garments
(d) Production of forms
(e) Production of paper

Tests

1. At a job order method of the accounting of production expenses:

A) expenses are considered by each order or a lot of products;

B) constants and variable expenses are considered;

C) the accounting of expenses and determination of product cost conduct on each repartition, a phase, a production stage;

D) factor cost on each object is fixed within the estimated standard costs and separately the sum of deviations from standard costs;

E) only variable expenses are considered.

2. At what method the accounting of expenses and determination of product cost conduct on each repartition, a phase, a production stage?

A) poperedelny;

B) straight line;

C) the job order;

D) the standard;

E) on Direkt-kosting system.

3. Methods of the accounting of expenses are:

A) poprotsessny, poperedelny, job order methods;

B) poprotsessny method;

C) job order method;

D) poperedelny method;

E) standard method.

4. In what productions the job order method of the accounting of expenses and calculation of product cost is applied?

A) in the enterprises with small-scale and individual production;

B) at the enterprises developing uniform production;

C) at the enterprises developing diverse production;

D) on productions with complex use of raw materials;

E) in manufacturing industry.

5. What is the distribution of expenses:

A) process of reference of expenses to certain objects to expenses;

C) registration unit on which data on expenses gather;

C) the cost of processes, production of works is measured;

D) constant expenses;

E) organizational division, contract.

Recommended literature

1. Aldaniyazov, K.N.Upravlenchesky accounting and analysis: studies. grant / Korkembay Nazarovich Aldaniyazov. - Almaty: Yurid. litas. 2008 . - 364 pages.

2. Druri K. Introduction in the management and production accounting. - M: Audit, 1994. - 10 pages.

Chapter 6. Methods of castings: Process costing and Job costing

6.1 Features of a Process costing method of calculation

The method is used in branches with limited product range and where the work in progress is absent or is insignificant (in a mining industry, at power plants, etc.). Let's consider other system, such in which production expenses accumulate on identical products of production. Straight lines and indirect expenses are considered under calculation articles of expenses for all release of finished goods. Average prime cost of a unit of production is defined by division of the sum of all expenses for the reporting period on quantity of the finished goods let out in the period. That it demands smaller number of economic operations belongs to pluses of this system. However the accuracy of the received prime cost of a separate product is low.

At Process costing accounting production expenses are grouped in divisions or in productions. This method provides the differentiated accounting of expenses on each technological process, on sites and shops and other centers of emergence of expenses as the monitoring system behind costs of production and prime cost of a product. Full production expenses accumulate under two main articles straight lines to materials and conversion expenses (to the sum of a factor cost on compensation and carried on prime cost of finished goods of factory overhead costs).

Process costing is convenient for those companies which make the continuous mass of identical production by means of a number of operations or processes. [4, page 68]. The Process method of calculation is applied in extracting industries (coal, mining, gas, oil, logging), in an energy drink [4], and as in processing industries with the simplest production cycle of production i.e. where there is a mass type of production, the short production cycle, limited product range, a uniform unit of measure and calculations, absence, or the insignificant sizes of a work in progress. As a result the products (rendered service) are at the same time and object of the accounting of expenses, and object of calculation. Often process method consider as the simplified version of job calculation.

So, when the method of accounting of expenses of production on the processes is used, all made units of cost are intended for creation of stocks. All orders for sales are satisfied then at the expense of this stock of uniform goods. As released goods identical, need to establish prime cost of any concrete unit of cost and as production process continuous, it is usually impossible to establish a certain quantity of a material or the production time, taken away on each separate product disappears.

The only opportunity is summation of all expenses of the enterprise (or expenses of the centers of the expenses which are a part of the enterprise) for the certain period of time and division of these expenses on total of products, made for this period, for receiving an average value of expenses of production counting on a unit of production.

Usually production of the enterprise includes more than one production. The method of accounting of expenses of production on processes considers it by opening separate «accounts of processes» for each process and accumulation of all expenses on process on these accounts. In process of production of a product the stage of an exit of production of one process becomes an input stage for another, and it is reflected in accounts of processes in such a way that the total expenses of production relating to all made units of cost until the accounting of them as finished products, it is possible to define easily at any time. For example, we will consider a product for which production two processes are necessary, then the form of the accounting of data of expenses for it will be similar to the shown. Notice that this concrete example doesn't allow any losses at a stage between an entered resource and finished products.

Excess losses or profit- these are losses or the income rejecting norm (i.e. they represent a difference between expected standard losses and the actual losses from process). Similar losses or profits are estimated and established separately in data of accounting of expenses of production on processes. Throughout the example given above if from the used one thousand beefsteaks only eight hundred dinners then there will be excess losses at a rate of hundred beefsteaks turn out and the size of these losses will be determined by usual prime cost of a unit of production and considered separately in the corresponding account of process.

Let's consider other system, such in which production expenses accumulate on identical products of production. At poprotsessny accounting production expenses are grouped in divisions or in productions. This method provides the differentiated accounting of expenses on each technological process, on sites and shops and other centers of emergence of expenses as the monitoring system behind costs of production and prime cost of a product. Full production expenses accumulate under two main articles - direct materials and conversion expenses (to the sum of a factor cost on compensation and carried on prime cost of finished goods of factory overhead costs).

Process costing is convenient for those companies which make the continuous mass of identical production by means of a number of operations or processes. [8 pages 68] the method of calculation is applied by Process costing in extracting industries (coal, mining, gas, oil, logging), in an energy drink [4], and as in processing industries with the simplest production cycle of production i.e. where there is a mass type of production, the short production cycle, limited product range, a uniform unit of measure and calculations, absence, or the insignificant sizes of a work in progress. As a result the products (rendered service) are at the same time and object of the accounting of expenses, and object of calculation.

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