General production expenses are included in production costs. What do overhead costs include?
are calculated by drawing up appropriate estimates with their subsequent distribution by type of product.
General estimate production costs includes costs for the maintenance and operation of equipment, depreciation and repair costs of fixed assets for production purposes, costs for heating, lighting and maintenance of production premises, rent for production premises, machinery and equipment, other leased assets used in production, wages of production personnel , engaged in servicing production, other expenses similar in purpose.
IN general running costs costs associated with the maintenance and organization of production and management of the enterprise as a whole are included: expenses for remuneration of management staff, expenses for business trips and official travel, expenses for the maintenance and operation of inter-shop transport, current expenses associated with environmental protection measures, depreciation, maintenance of buildings , structures and equipment for general economic purposes, costs of paying for consultations, information and audit services, entertainment expenses, depreciation of intangible assets and others.
In practice, the total amounts of estimates of general production expenses and general business expenses are distributed to the cost of specific types of products in proportion to the basic wages of production workers.
IN " Other production costs" includes costs for warranty service and product repair. These include the costs of enterprises for maintaining personnel to ensure the normal operation of consumer products within the established warranty period, and the costs of warranty repairs of these products in accordance with established standards. Warranty repair costs are included in the cost of those products for which the warranty period is established. The amount of these expenses is determined on the basis of special estimates. These costs are included in the cost of specific types of products directly or in proportion to the production cost of products without other production costs.
Business expenses include the enterprise's costs of marketing products. These are the costs of containers and packaging of products in warehouses finished products, transportation of products, costs associated with market research, advertising costs, participation in bidding on commodity exchanges and others. The amount of commercial expenses is determined on the basis of the plan for the supply of commercial products to consumers and the conditions for their sale, standards of material, labor, and monetary costs for the manufacture of containers, packaging, and delivery of products to the departure station. Selling expenses should be charged directly to the cost of specific types of products. If such assignment is not possible, they are distributed taking into account the number of types of products, their volume, and the value of production costs in the manner prescribed by industry instructions.
To draw up planned calculations of the cost of a unit of production, it is necessary to first prepare specifications for raw materials, materials, purchased semi-finished products and a number of estimates of complex expenses (general production costs, general business costs, production costs for auxiliary workshops, costs for the preparation and development of production of new products, other production costs, commercial expenses ).
The development of comprehensive cost estimates begins with auxiliary production shops, where estimates are compiled according to costing items and economic elements. The costs of auxiliary shops are transferred to the cost of the main products through the cost of services of these shops to the main shops. The services of auxiliary workshops are valued at the planned workshop cost. They are reflected in all other cost estimates. Therefore, balances are drawn up for the distribution of products and services of auxiliary departments in the relevant areas and cost estimates.
Based on planned calculations of the unit cost of products of all types and the planned output, the full cost of all marketable products is determined.
The considered methodology for developing planned costing is typical for mechanical engineering and many other industries.
In complex industries, such as the oil refining industry, coke industry and others, where several dissimilar products are produced from feedstock. Calculation methods have significant specificity. In this case, the methods of cost elimination, cost allocation and the combined method are used.
Cost Elimination Method assumes that all products obtained from processing raw materials are divided into main and by-products. The cost of processing raw materials excludes the cost of by-products; the remaining ones are included in the cost of the main product.
Cost Allocation Method It is used when several main products are produced from initial raw materials and there are no by-products. Costs are distributed in proportion to scientifically based coefficients.
The combined method is used where several main and by-products are obtained. It integrates both methods discussed above.
IN market conditions is effective program-target method of product cost planning. An enterprise is set by a goal - a certain amount of costs for the production and sale of specific products, which would ensure its competitiveness in a specific market. Then a program is developed to achieve this goal, i.e. a plan of technical and organizational measures to minimize the costs of production and sales of products at a given level of quality.
General production expenses – represent costs associated with the maintenance, organization and management of main, auxiliary and service production. These expenses include:
- Maintenance and operation of machinery and equipment;
- Depreciation;
- Funds spent on repairs of property used in production;
- Costs for heating, lighting and other maintenance of premises;
- Expenses for renting premises;
- Expenses for remuneration of workers who are engaged in production maintenance;
The amount of general production expenses is recorded on the debit of account 25 “General production expenses” from the credit of the accounting accounts inventories, settlements with employees for wages, etc. - Dt 25 Kt 02, 05, 10, 21, 60, 76, 70, 69…
Expenses accumulated on account 25, at the end of the month, are subject to write-off to the debit of accounts 20 “Main production”, 23 “Auxiliary production” and 29 “Service production and facilities”. The procedure for their distribution among these accounts is established by each organization individually, for example, based on direct production costs or the amount of employee salaries.
After establishing the procedure for allocating costs, it should be fixed in accounting policy organizations.
Postings for writing off general production expenses:
- Dt 20 Kt 25 - write-off of general production expenses related to the activities of the main production;
- Dt 23 Kt 25 - write-off of general production expenses related to the activities of auxiliary production;
- Dt 29 Kt 25 - write-off of general production expenses related to the activities of service production;
Analytical accounting for these costs is carried out for each workshop in the relevant cost accounting sheets of the workshops according to form No. 12. The basis for filling out these sheets is primary documents and developed material distribution tables, wages, auxiliary production services, etc.
General running costs - These are costs that are not associated with the production process. These expenses include:
- Administrative and managerial;
- For the maintenance of general business personnel;
- Depreciation;
- Funds spent on OS repairs for administrative and general purposes;
- Expenses for renting general purpose premises;
- Expenses for auditing, information, consulting and other services;
- Other expenses similar in purpose.
The amount of general business expenses is accounted for on the debit of account 26 “General business expenses” from the credit of accounts for accounting for inventories, settlements with employees for wages, settlements with other organizations (individuals), etc. - Dt 26 Kt 02, 05, 10, 21, 60, 76, 70, 69…
Analytical accounting for these expenses is carried out in the appropriate statements of accounting for general business expenses, as well as deferred expenses and expenses not related to the production process in Form No. 15. The basis for filling out these statements is primary documentation and developed tables.
Write-off of general business expenses depends on method of cost formation:
1. In the case of accounting for finished products at full production cost, expenses previously accepted for accounting on account 26 are subject to debit to accounts 20 “Main production”, 23 “Auxiliary production” and 29 “Service production and facilities” (if these productions provided services to third parties ). The procedure for allocating expenses for these productions is established by each organization individually and is enshrined in its accounting policies.
Profitability of any subject economic activity depends on the correctness of reflection and accounting of costs. Their optimization, control, distribution affect the cost of goods (services) and reduce the risks of sanctions tax authorities. At the initial stage of activity, each company plans and forms a list of costs necessary to implement production processes. An important aspect reflected in the accounting policies are the methods of distribution of general production and
Cost classification
The pricing policy of an enterprise takes into account the market situation regarding a certain type of goods, services or work, while the cost is regulated due to the amount of invested profit or the redistribution of business expenses. Production costs are a constant value that is the sum of actual cost indicators. The selling price (of work, services, goods) includes cost, commercial expenses and the amount of profit.
Each organization creates provisions in its accounting policies that regulate the accounting of expenses, methods of their distribution and write-off. Accounting regulations (tax code, PBU) recommends a list and classification of costs included in the cost price. The consumption rate of each item is established by the internal documents of the enterprise. Costs are systematized according to various criteria: by economic content, by time of occurrence, by composition, by the method of inclusion in the cost, etc. To formulate calculations, all costs are divided into indirect and direct. The principle of inclusion in the cost depends on the number of types of products manufactured by the company or services provided. Methods for distributing direct costs (wages, raw materials, depreciation of capital equipment) and indirect (OPR and OHR) are determined in accordance with regulatory documents and internal regulations of the company. It is necessary to dwell in more detail on general and general production expenses, which are included in the cost by the distribution method.
ODA: composition, definition
With a branched production structure aimed at producing several units of products (services, works), the enterprise faces additional costs, not directly related to the main type of activity. At the same time, accounting for expenses of this type must be kept and included in the cost price. The structure of the ODA is as follows:
Depreciation, repair, operation of equipment, machinery, intangible assets for production purposes;
Contributions to funds (FSS, Pension Fund) and wages of personnel servicing the production process;
Utility costs (electricity, heat, water, gas);
Other expenses related directly to the production process and its management (write-off of used inventory, MBP, travel expenses, rental of space, services of third-party organizations, provision of safe working conditions, maintenance of auxiliary units: laboratories, services, departments, leasing payments). Production costs are costs associated with the process of managing the main, service and auxiliary departments; they are included in the cost price as general production costs.
Accounting
Methods for distributing general production and general business expenses are based on the total value of these indicators accumulated during the reporting period. To summarize information on ODA, the chart of accounts provides for a cumulative register No. 25. Its characteristics: active, collectively distributive, has no balance at the beginning of the month and the end (unless otherwise provided by the accounting policy), analytical accounting is maintained by divisions (shops, departments) or types of products. During a certain period, information on actual expenses incurred is accumulated in the debit of account 25. Typical correspondence includes the following operations.
- Dt 25 Kt 02, 05 - the accrued amount of depreciation of fixed assets and intangible assets is allocated to OPR.
- Dt 25 Kt 21, 10, 41 - goods of own production, materials, inventory are written off as production expenses.
- Dt 25 Kt 70, 69 - salary accrued to the personnel of the operational development department, deductions were made to extra-budgetary funds.
- Dt 25 Kt 76, 84, 60 - invoices issued by counterparties for services rendered, work performed are included in general production expenses, the amount of shortfalls identified based on the results of the inventory is written off.
- Debit turnover of account 25 equal to the sum actual expenses, which at the end of each reporting period are written off to calculation accounts (23, 29, 20). In this case, the following accounting entry is made: Dt 29, 23, 20 Kt 25 - accumulated expenses are written off for auxiliary, main or servicing production.
Distribution
The amount of overhead costs can significantly increase the cost of manufactured products, work performed, and services provided. On large industrial enterprises ODA is planned and the concept of “consumption rate” and deviations are introduced this indicator are carefully studied by the analytical department. In organizations engaged in the creation of one type of product, methods for distributing general production and general business expenses are not developed; the sum of all costs is fully included in the cost price. The presence of several production processes implies the need to include all types of costs in the calculation of each of them. The distribution of general production costs can occur in several ways:
- Proportional to the selected basic indicator, which optimally corresponds to the combination of ODA and the volume of output (volume of goods produced, wage funds, consumption of raw materials or supplies).
- Maintaining separate accounting of ODA for each type of product (costs are reflected in analytical sub-accounts opened to register No. 25).
In any option, methods for distributing indirect costs must be enshrined in the enterprise’s accounting policies and not contradict regulations(PBU 10/99).
OCR, composition, definition
Administrative and economic costs are a significant factor in the cost of goods, work, products, and services. General business expenses are a total reflection of management costs, they include:
Deductions to social funds and remuneration of management personnel;
Communication and Internet services, security, postal, consulting, audit expenses;
Depreciation charges for non-production facilities;
Office, utility bills, information services;
Expenses for personnel training and compliance with industrial safety rules;
Other similar costs.
The maintenance of the administrative apparatus is necessary for the implementation of production processes and further sales of products, but high specific gravity This type of expense requires constant accounting and control. For large organizations, the use of the standard method of calculating operational and technical expenses is unacceptable, since many types of administrative expenses are variable in nature or, in case of a one-time payment, are transferred to the cost of production in stages, over a certain period.
Accounting
Account No. 26 is intended to collect information about the company. Its characteristics: active, synthetic, collecting and distributing. Closes monthly at 46.23, 29, 90, 97, depending on what methods of distribution of general production and general business expenses are adopted by the internal regulatory documents of the enterprise. Analytical accounting can be carried out in the context of divisions (departments) or types of products (work performed, services provided). Typical Operations by account:
- Dt 26 Kt 41, 21, 10 - the cost of materials, goods and semi-finished products is written off for maintenance.
- Dt 26 Kt 69, 70 - reflects the calculation of wages for administrative and economic personnel.
- Dt 26 Kt 60, 76, 71 - general business expenses include services of third-party organizations paid to suppliers or through accountable persons.
- Dt 26 Kt 02, 05 - depreciation of non-production objects, intangible assets and fixed assets was accrued.
Direct costs Money(50, 52,51) are usually not taken into account as part of OCR. An exception may be the accrual of interest on loans and borrowings, and this accrual method must be specified in the accounting policy of the enterprise.
Write-off
All general business expenses are collected in monetary terms as a debit turnover of account 26. When closing a period, they are written off to the main, servicing or auxiliary production, may be included in the cost of goods to be sold, charged to future expenses, or partially allocated to the enterprise's loss. In accounting, this process is reflected by the following entries:
- Dt 20, 29, 23 Kt 26 - OCR included in the cost of production of the main, service and auxiliary production.
- Dt 44, 90/2 Kt 26 - general business expenses are written off in trading enterprises, at financial results.
Distribution
General business expenses in most cases are written off similarly to general production expenses, i.e., in proportion to the selected base. If this is of a long-term nature, then it is more appropriate to attribute them to future periods. Write-offs will occur in certain parts attributable to cost. Conditionally variable general business expenses can be attributed to or included in the price of goods produced (in trading enterprises or those providing services). The method of distribution is regulated by internal documents.
1C
Currently, accounting for general production and general economic costs is carried out in accounting databases and programs of the 1C group. Distribution methods are regulated by special settings. When calculating the cost of experimental work and industrial maintenance, it is necessary to check the boxes opposite the approved base in the “production” tab. When writing off as deferred expenses, it is necessary to establish the period and amount. To include costs in the financial result, fill in the appropriate tab. When the “period closing” function is launched, general production and general business expenses accumulated in registers 25 and 26 are automatically written off to the debit of the specified accounts. This process forms the cost of the finished product.
General production expenses – these are the costs of maintaining and operating machinery and equipment; depreciation deductions and costs for repairs of fixed assets and other property used in production; expenses for insurance of the specified property; costs for heating, lighting and maintenance of premises; rent for premises, machines, equipment, etc., used in production; remuneration of workers engaged in production maintenance; other expenses similar in purpose.
General production expenses are reflected in account 25 "Overall production expenses" from the credit of accounts for inventory, settlements with employees for wages, etc. Expenses recorded in account 25 "Overhead production expenses" are written off to the debit of accounts 20 "Main production", 23 "Auxiliary production", 29 "Servicing industries and farms".
Analytical accounting for account 25 “General production expenses” is carried out for individual divisions of the organization and expense items.
General running costs - These are administrative and management expenses; maintenance of general business personnel not related to the production process; depreciation charges and expenses for repairs of fixed assets for management and general economic purposes; rent for general business premises; expenses for payment of information, auditing, consulting, etc. services; other administrative expenses similar in purpose.
General business expenses are reflected in account 26 “General business expenses” from the credit of inventories accounts, settlements with employees for wages, settlements with other organizations (individuals), etc.
Expenses recorded on account 26 "General business expenses" are written off, in particular, to the debit of accounts 20 "Main production", 23 "Auxiliary production" (if auxiliary production produced products and work and provided services to the outside), 29 "Service production and farms" (if servicing industries and farms performed work and services outsourced).
These expenses can be written off as semi-fixed expenses to the debit of account 90 “Sales”.
Organizations whose activities are not related to the production process (commission agents, agents, brokers, dealers, etc., except for organizations engaged in trading activities), use account 26 “General business expenses” to summarize information on the costs of conducting this activity. These organizations write off the amounts accumulated on account 26 “General business expenses” to the debit of account 90 “Sales”.
Analytical accounting for account 26 “General business expenses” is carried out for each item of the relevant estimates, place of origin of costs, etc.
Defect in production. Manufacturing defects are products that do not meet established quality standards. Depending on where the defect was discovered, a distinction is made between internal defects (discovered in the organization before shipment to the buyer) and external defects (discovered by the buyer). The cost of external defects consists of production costs, transportation costs and selling costs.
Depending on the nature of the defects, defects can be correctable (products are recognized as unsuitable, but can be brought to a given level of quality at additional costs) and irreparable. Losses from defects are taken into account as part of other expenses when calculating the cost. If an external defect is detected, an “Act on the established discrepancy in quantity and quality upon acceptance of the goods” (Form N TORG-2) and a “Report on the established discrepancy in quantity and quality” are drawn up. Unified form There is no primary accounting document for establishing a marriage within the organization, so the organization must develop it independently and it must contain the following details:
Name of the rejected product;
Nomenclature, technical number of the product;
What is marriage and its reasons;
Number of rejected products;
Correctable marriage or/not;
Who allowed the marriage;
Cost of defects by cost items.
Production defects are accounted for on account 23 “Production defects”. In the debit of the account, expenses are collected: for identified internal and external defects (cost of irreparable, final, defects, costs of correction, etc.).
The loan reflects the amounts attributed to the reduction of losses from defects (the cost of rejected products at the price of possible use, amounts to be withheld from those responsible for the defects, amounts to be recovered from suppliers, etc.), as well as amounts written off to production costs like losses from marriage.
At the end of the month the account is closed and there is no balance.
Accounting for an incorrigible internal defect is formalized accounting entries:
1. D 28 K10.70.59 - The costs of correcting the defect are taken into account.
2. D73-2 K26 - The marriage is attributed to the guilty person.
3. D20 K28 - Losses from defects are taken into account.
4. D10,21,41 K28 - Defective products are accepted for accounting at the price of possible use.
5. D76 K28 – Amounts accrued from suppliers of defective materials used in the production of defective products.
The basis for entries in account 28 are notifications or acts that you draw up, a defect, as well as primary documents recording production, an accounting certificate for the amount of deductions from wages, a certificate-calculation from the accounting department about the amount of final losses from the defect.
Analytical accounting is carried out by workshops, types of rejected products and expense items.
Accounting for work in progress. To work in progress in accordance with clause 63 of the Management Regulations accounting and reporting include: products (works) that have not passed all stages of the technological process and incomplete products that have not passed testing and technical acceptance, as well as unfinished work not accepted by the customer. Work in progress also includes fully completed products that have not passed the tests required by the technology. In accounting, work in progress may be reflected:
1. For single production - according to actual costs incurred
2. For mass and serial production:
At actual production cost;
At planned production cost;
By direct cost items;
At the cost of raw materials, materials, semi-finished products.
The volume of work in progress is determined by inventory or documentary method.
Organizations that produce products with a long manufacturing cycle or provide complex services (construction, scientific, design, etc.) can recognize the sale of:
In general, as a completed and delivered work to the customer:
In the individual stages of the work performed.
The first option is traditional; with the second option, accounting is carried out using account 46 “Completed stages for work in progress.” The debit of the account reflects the cost of the completed stages of work paid by the customer in correspondence with account 90 “Sales”. At the end of all stages, the cost paid by the customer is written off from account 46 to the debit of account 62 “Settlements with buyers and customers”.
The assessment of work in progress balances is made on the basis of data from primary accounting documents on the movement and balances of raw materials and materials, finished products in workshops. The presence and size of work in progress balances depend on the nature and duration of the technological process, as well as the characteristics of the manufactured product. The size of work in progress balances is determined by conducting an inventory
Account balances 20 “Main production”, 23 “Auxiliary production”, 29 “Servicing production and farms” at the end of the month show the value of work in progress in the corresponding industries.
Costs that reduce taxable profit include only direct costs related to finished products sold. Direct expenses related to work in progress, as well as to finished but not sold products, do not reduce taxable profit.
Summary of production costs. Determination of cost. Generalization of information is carried out in several stages:
1. Determination of primary costs, their grouping by departments, types of products, cost items. As a result, statements of distribution of material consumption, calculation and distribution of wages, depreciation calculations, etc. are compiled. These statements are the basis for reflecting debit entries in accounting accounts production costs (20,23,25,26,28.29;.
2. Distribution of costs of auxiliary production based on reports on completed work (services).
3. Distribution of costs of service industries
4. Distribution of general production and general economic expenses.
5. Distribution of costs between finished products and work in progress.
6. Drawing up a statement of accounting records for production under account 20 “Basic”
production" and statements of consolidated accounting of production costs (also includes the cost of defects, NEP movement, etc.).
Determination of the actual cost of manufactured products: from the total amount of costs with the balance of work in progress at the beginning of the month, the written-off cost of final defects, shortages and balances of work in progress is subtracted
General production, general business and commercial expenses
Expenses for the maintenance and operation of equipment, workshop, general and commercial expenses are classified as indirect expenses. They are determined as a whole for the workshop (division), and are applied indirectly to the cost of a unit of production.
TO general production expenses include:
expenses for maintenance and operation of equipment:
depreciation of equipment and vehicles;
costs of maintaining and operating equipment;
expenses for insurance of equipment and vehicles;
wages for workers servicing equipment (with deductions for social needs);
costs of all types of energy, water, steam, compressed air, auxiliary production services;
expenses for equipment repairs, technical inspections, maintenance;
other costs associated with the use of equipment;
shop expenses:
remuneration of the workshop management staff (with deductions for social needs);
depreciation costs of buildings, structures, equipment;
rent for premises, machinery, equipment and other objects used in production;
other costs associated with managing production units.
TO general business expenses include:
administrative and management expenses;
depreciation charges and expenses for repairs of fixed assets for management and general economic purposes;
rent for general business premises;
payment for consulting, information and audit services, bank services (including interest on bank loans and interest on supplier loans for purchased inventory);
training and retraining of personnel, recruitment costs;
payments by compulsory insurance enterprise property and individual categories employees, taxes, fees, payments and others mandatory deductions produced in accordance with the procedure established by law.
TO commercial (non-production) expenses expenses include:
other for sales (storage, processing, sorting).
for containers and packaging;
transportation of products;
commission fees and deductions paid to sales enterprises and organizations in accordance with contracts;
11.4. Accounting for general production and general business expenses
In the production process, when recording transactions in accounting, some costs can be directly and directly attributed to a specific type of product or cost object. Such costs are called direct. Other costs cannot be directly attributed to a specific product; they are called indirect or indirect.
The division of costs into direct and indirect largely depends on specific situation. If the organization produces one type of product (product), then all costs can be classified as direct. If the organization produces several types of products, then the consumption of materials is distributed among each type of product. Such distribution can be carried out in proportion to flow material assets according to the standards established per unit of production; established flow coefficient; quantity or weight of manufactured products, etc.
Direct costs typically include material costs and the cost of paying key production personnel. To direct material costs include raw materials and basic materials that become part of the finished product, and their cost is directly and directly transferred to a specific product. Direct labor costs include labor costs that can be directly attributed to a specific type of finished product. This is the wages of workers involved in the production of products.
Indirect costs include general production overhead, which is a collection of various costs associated with production, but which cannot be directly attributed to a specific type of finished product (products). These costs are difficult to track during the manufacture of the product. At the same time, the production cost of a product must, of course, include general production costs. They are included in the cost of production using the cost allocation method (in proportion to the basic wages of production workers, direct costs, etc.).
Overhead costs arise in connection with the organization, maintenance and management of the production process and include production and administrative expenses. General production (shop) expenses are associated with maintenance and production management in the organization’s workshops.
The main groups that make up general production costs include:
auxiliary products and components;
indirect labor costs (wages of workers not directly involved in the production of one product, but associated with the production process within the organization as a whole: foremen, repairmen, support workers, as well as payment for vacations and overtime);
other indirect general production expenses (costs of maintaining workshop buildings, maintenance and current repairs of equipment, property insurance, rent, depreciation of equipment, etc.).
The composition and size of general production expenses are determined by estimates for the maintenance and operation of equipment, administrative and business expenses of the workshop. Estimates are prepared for each workshop separately. The purpose of planning expenses and highlighting independent costing items in the actual cost of production is constant monitoring of compliance with estimates.
Planning and accounting of general production expenses are carried out according to the following nomenclature of items:
depreciation of production equipment and vehicles;
contributions to the repair fund or costs of repairing production equipment and vehicles;
equipment operating costs;
wages and social contributions for workers servicing equipment;
expenses for testing, experiments and research;
labor protection of workshop workers;
losses from defects, from downtime due to internal production reasons, etc.
Synthetic accounting of general production expenses is maintained on the active collection and distribution account 25 “General production expenses”.
Based primary documents, confirming the fact and amount of general production expenses incurred, entries are made in the accounting accounts (Table.
Costs, expenses, cost
At the end of the month, the amount of general production expenses recorded in the debit of account 25 “Overhead production expenses” is written off by distribution to cost individual species products in proportion to the amount of basic wages of production workers (direct costs of materials, etc.).
Table 11.2 Typical correspondence overhead cost accounts
At the end of the month, the amount of general production expenses recorded in the debit of account 25 “General production expenses” is written off by distributing it to the cost of individual types of products in proportion to the amount of the basic wages of production workers (direct costs of materials, etc.).
General expenses are also classified as overhead expenses. They are related to the management and maintenance of the organization as a whole. The composition and size of these expenses are determined by the estimate.
Synthetic accounting of general business expenses is carried out on the active collection and distribution account 26 “General business expenses”, and analytical accounting - on account 26 “General business expenses” according to budget items in a separate statement.
Planning and accounting of general business expenses is carried out according to the following nomenclature of items:
expenses for business trips control apparatus;
entertainment expenses related to the activities of the organization;
depreciation of fixed assets for general purposes;
deductions to the repair fund or costs for routine repairs of buildings, structures and equipment for general purposes;
expenses for the maintenance of buildings, structures and equipment for general purposes;
costs of testing, experiments, research, maintenance of general economic laboratories;
expenses for labor protection of the organization’s employees;
training and retraining of personnel;
mandatory deductions, taxes and fees;
unproductive general business expenses, etc.
All actual costs are collected and reflected accounting records(Table 11.3):
Table 11.3 Typical correspondence of accounts for accounting for general business expenses
Continuation of the table. 11.3
At the end of each month, general business expenses are written off to the credit of account 26. General business expenses are distributed between finished products and work in progress remaining at the end of the reporting month. Then the costs attributable to finished products are distributed among their individual types in proportion to the selected base or write-off method. These expenses can be written off in two ways:
1) inclusion in the production costs of specific types of products through distribution similar to the distribution of overhead costs;
2) writing off general business expenses as semi-fixed ones to the “Sales” account by distributing them between types of products sold.
When writing off general business expenses to account 90 “Sales”, they are distributed by type of products, works or services sold in proportion to sales revenue, production cost of products or other indicator.
The choice of one or another method of writing off general business expenses should be reflected in the accounting policy of the organization. Of course, the second method greatly simplifies the write-off of general business expenses. However, it is applicable provided that all products to which general business expenses relate are sold or the share of these expenses in the cost of production is insignificant.
The actual data, after accounting and distribution of overhead costs, are entered into the summary accounting sheet for the costs of production of products (works, services).
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Features of accounting for general production and general business expenses of an organization
The costs of maintaining, organizing and managing workshops (other production units) of the main, auxiliary and service industries are classified as general production expenses. General production expenses include:
- the cost of materials, spare parts used for maintenance and repair of production equipment;
- labor costs for employees involved in production maintenance (foremen, shop managers, technologists, workers performing maintenance and repairs technological equipment), with contributions for social needs;
- depreciation charges and costs for repairs of fixed assets and other property used in production;
- costs of dismantling equipment, costs of materials, parts, purchased semi-finished products used in setting up equipment;
- rent for premises, machinery, equipment and other fixed assets used in production;
- expenses associated with the operation of fixed assets directly involved in production (gas, fuel, electricity, etc.);
- depreciation charges for intangible assets used in production;
- the cost of shortages and losses from downtime, damage to valuables in production and warehouses, etc.
During the reporting period, general production expenses are reflected in the debit of account 25 of the same name. At the same time, expenses are recorded on account 25 in the context of each production unit. In accounting, overhead costs are reflected by the following entries:
Dt sch. 25 Set count. 10 - the cost of materials, spare parts used for maintenance and repair of equipment is written off;
Dt sch. 25 Set count. 70 — salaries of general production personnel were accrued;
Dt sch. 25 Set count. 69 - contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases are accrued from the salaries of general production personnel;
Dt sch. 25 Set count. 23 (60, 76) - expenses for maintaining premises are written off (repairs, rent for premises, equipment, payment utilities etc.);
Dt sch. 25 Set count. 02 (05) - depreciation was accrued on fixed assets (intangible assets) used in the main (auxiliary) production. This procedure for accounting for general production expenses follows from the provisions of clause 9 of PBU 10/99, Instructions for the Chart of Accounts, Letter of the Ministry of Finance of Russia dated November 8, 2005 N 07-05-06/294.
Costs associated with managing a company, organizing it economic activity, its content common property, relate to general business expenses. General business expenses include:
- labor costs for administrative, managerial and general business personnel (with deductions for social needs);
- rent, depreciation, costs for current repairs of buildings, structures and equipment for general corporate and administrative purposes;
- security costs;
- costs of training and recruitment;
- entertainment expenses;
- expenses for payment of communication services;
- Communal expenses;
- office and postal expenses;
- labor protection costs, etc.
During the reporting period, general business expenses are reflected in the debit of the same name account 26:
Dt sch. 26 Set count. 10 (21) - materials (semi-finished products of own production) spent on general economic needs are written off;
Dt sch. 26 Set count. 70 — salaries of administrative, managerial and general business personnel were accrued;
Dt sch. 26 Set count. 69 - contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases are accrued from the salaries of administrative, managerial and general business personnel;
Dt sch. 26 Set count. 60, 76 - the cost of work (services) performed by third parties (for example, auditing, consulting services) is taken into account as part of general business expenses;
Dt sch. 26 Set count. 02 (05) - depreciation was accrued on fixed assets (intangible assets) for general economic and administrative purposes.
General production and administrative expenses are associated with the production different types products (works, services), i.e. they ensure the functioning of the organization as a whole. Therefore, unlike direct (primary) costs, these costs are considered indirect (overhead).
At the end of the reporting period, accounts 25 and 26 are closed. The expenses accumulated on them are written off to the debit of accounts: 20 “Main production”, 23 “Auxiliary production”, 29 “Servicing production and facilities” or 90 “Sales” in proportion to the indicators that must be established in the accounting policy for accounting purposes (clause. 7 PBU 1/2008).
The basis for the distribution of indirect costs between main, auxiliary and service production can be, for example, the following indicators:
- wages of key production workers;
- direct costs with a workshop structure of the organization;
- the number of machine-hours worked for the equipment;
- size of production area;
- material costs;
- volume of production in natural or cost terms.
For example, in industries with a significant share of labor costs, it is advisable to distribute indirect costs in proportion to the salaries of the main production workers. Indirect costs are distributed in proportion to material costs (cost of raw materials, supplies, spare parts, etc.) if they constitute a significant share of the cost of production.
Let's consider an example of the distribution of indirect costs associated with fulfilling a production order. The organization uses the custom costing method. In January 2010, Stroytekhnologiya LLC accepted and completed two production orders (N N 1 and 2) for the manufacture of special equipment. Accounting policy The company stipulates that general production and general business expenses are distributed in proportion to the salaries of production workers involved in fulfilling each order.
In January 2010, the actual amount of expenses was: general production costs - 100,000 rubles. and general business - 125,000 rubles.
Direct costs for order No. 1 were:
- cost of materials used - 82,300 rubles;
- salary of production workers - 68,500 rubles;
- the amount of contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases from the salaries of production workers is 18,427 rubles.
Total for order No. 1 - 169,227 rubles.
Direct costs for order No. 2 were:
- cost of materials used - 151,500 rubles;
- the amount of accrued wages of production workers is 55,000 rubles;
- the amount of contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases from the salaries of production workers is 14,795 rubles.
Total for order No. 2 - 221,295 rubles.
The total salary of production workers for both orders was 123,500 rubles. (RUB 68,500 + RUB 55,000). At the same time, the share of wages of production workers in total amount their salaries for order No. 1 are equal to 55% (68,500 rubles: 123,500 rubles), and for order No. 2 - 45% (55,000 rubles: 123,500 rubles).
Thus, the cost of order No. 1 includes part of the overhead costs in the amount of 55,000 rubles. (RUB 100 thousand x 55%) and part of general business expenses in the amount of RUB 68,750. (RUB 125 thousand x 55%). As a result actual cost order No. 1 amounted to: 169,227 rubles. + 55,000 rub. + 68,750 rub. = 292,977 rub.
In turn, the cost of order No. 2 also included part of the overhead costs in the amount of 45,000 rubles. (100,000 rubles - 55,000 rubles) and part of general business expenses in the amount of 56,250 rubles. (RUB 125,000 - RUB 68,750). As a result, the actual cost of order No. 2 was: 221,295 rubles. + 45,000 rub. + 56,250 rub. = 322,545 rub.
When writing off general production expenses (after their distribution), the following entry is made:
Dt sch. 20 (23, 29) Set count. 25 - general production expenses for the reporting month are written off.
General business expenses can be written off in one of two ways:
- to account 20 “Main production” (23 “Auxiliary production”, 29 “Service production and facilities”);
- to account 90-2 “Cost of sales”.
The chosen method of writing off general business expenses must be fixed in the accounting policy for accounting purposes (clause 7 of PBU 1/2008, clause 20 of PBU 10/99).
It should be noted that in the first case, general business expenses form the “full” cost of finished products and are written off at the end of the month.
Composition of general and general production expenses
In this case, the write-off of general business expenses (after distribution) is reflected by the posting:
Dt sch. 20 (23, 29) Set count. 26 - general business expenses associated with the activities of the main (auxiliary, servicing) production are written off.
In the second case, a “reduced” cost of finished products is formed, and general business expenses are completely written off for sales, regardless of how many products were sold in the reporting period.
At the moment of transfer of ownership of the shipped products (results of work or services) to the buyer, the proceeds from its sale are reflected, and the cost of the products (work, services) sold is written off:
Dt sch. 62 Set count. 90-1 - revenue from the sale of products is reflected;
Dt sch. 90-2 Set count. 43 - the actual cost of shipped products (work performed, services rendered) is written off;
Dt sch. 90-3 Set count. 68, subaccount "Calculations for VAT", - VAT is charged on products sold.
At the end of the month the amount of general business expenses is written off:
Dt sch. 90-2 Set count. 26 - general business expenses are included in the cost of sales. Such rules are established by clauses 5 and 12 of PBU 9/99 and the Instructions to the Chart of Accounts (accounts 20, 25, 26).
In practice, the question may arise: how to reflect general business expenses in accounting if the organization does not receive income from its activities?
General business expenses (for example, salaries of management personnel, office rental costs and other expenses associated with the development and development of a business), like other expenses, must be taken into account regardless of whether they lead to income or not (clause 16 - 18 PBU 10/99). Therefore, even if the organization does not receive income from its activities, these expenses must still be fully reflected in the accounting accounts.
General business expenses, which are reflected in account 26 of the same name, are taken into account either in account 20 “Main production”, or immediately in the costs of production, i.e. on account 90 “Sales”, or are taken into account on account 97 “Deferred expenses”.
In the first case, general business expenses will be taken into account as part of the expenses of the main production, i.e. in the debit of account 20, forming the full cost of finished products, in the second - they will directly form the financial result (loss) of the reporting period, i.e. accounted for as the debit of account 90-2.
In the third case, expenses will not be taken into account in the cost price (form a loss) until the organization begins to receive income. As soon as the organization begins to receive income, these costs will need to be transferred to the cost of the products (works, services) with which they were associated. The organization must determine the procedure for transferring future expenses to the cost price independently (clause 65 of the Regulations on Accounting and Reporting). For example, such expenses can be written off evenly over the period approved by order of the head of the organization, or in proportion to the income received from sales, or in other ways. At the same time, the specific procedure for writing off future expenses is fixed in the accounting policy for accounting purposes (clause 4 of PBU 1/2008).
It should be noted that the procedure for recognizing indirect costs of production in accounting and tax accounting may differ. Discrepancies in accounting for indirect costs lead to permanent or temporary differences (clauses 4, 8, 12, 15 and 18 of PBU 18/02).
Bibliography
- Accounting Regulations “Accounting for Income Tax Calculations of Organizations” PBU 18/02: Order of the Ministry of Finance of Russia dated November 19, 2002 N 114n.
- Accounting Regulations “Organization Expenses” PBU 10/99: Order of the Ministry of Finance of Russia dated May 6, 1999 N 33n.
- Accounting Regulations “Income of the Organization” PBU 9/99: Order of the Ministry of Finance of Russia dated 05/06/1999 N 32n.
- Regulations on accounting and financial statements V Russian Federation: Order of the Ministry of Finance of Russia dated July 29, 1998 N 34n.
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M.V.Bespalov
Department of Accounting,
analysis and audit
Tambov State University
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