Costs that do not depend on the volume of output. Influence of the volume of production on the amount of expenses of the enterprise and the unit cost of production

Firms, as a rule, constantly improve their production to better meet the needs of the market. During this process, they change the amount of factors of production used. Some factors they manage to change relatively quickly. For example, if there are reserve jobs, a firm can recruit new employees in a short period of time; in the presence of reserve production areas - promptly purchase an additional amount of mass-produced equipment. But in many cases, increasing the number of factors takes a long time. This happens if, in order to increase the volume of output, it is necessary to build new plant or order a unique production complex. It was said above that, depending on how many factors a firm manages to change, short-term and long-term periods. In the short term, not all factors can be changed. Those factors that can be changed are called variables, and those that cannot be changed are called constants. In accordance with this division, the costs of acquiring variable factors are called variable, and the costs associated with the use of fixed factors are called fixed or fixed. In economics, production costs are called costs.

An example of a fixed cost would be a land tax on the lease of a particular piece of land. Examples of variable costs are labor costs, acquisition costs raw materials and components, for electricity, etc.

Fixed costs do not depend on the volume of production: they will be the same for the release of one unit of goods per week and thousands of units. Variable costs, on the other hand, change as output changes. As the volume of production increases, their amount increases.

The amount of fixed costs is called total fixed cost and denote TFC (total fixed, cost), and the sum of variable costs for a given volume of output - total variable cost and denote TVC (total variable cost). The total cost of production of the vehicle ( total cost) equal to the sum of the total fixed and total variable costs:

Consider, as an example, the costs of a hypothetical firm producing product X. Imagine that labor is the only variable factor. Recall that with a fixed amount of capital, the firm will eventually experience the law of diminishing returns, and labor productivity will begin to fall. We will assume that the company purchases its factors of production in a market where their prices remain constant no matter how many factors the company buys. This means that a decrease in the average productivity of labor should cause an increase in the average variable costs of production.

Table 2.4 shows the production costs of the firm in question. The fifth column is titled “Average Fixed Costs” (A.F.C. - average fixed cost). This value is obtained by dividing the total fixed costs on the volume of output (Q):

It's obvious that A.F.C. should decrease with an increase in output, since the cost of the same equipment is distributed among a large number of manufactured products. An example is the cost of running a car assembly line: the more cars that are assembled, the less of the cost of that line is each car.

The sixth column shows the average variable costs (AVC - average variable cost). The data placed in it are obtained by dividing the total variable costs by the quantity of goods produced:

Initially, as output increases, this value decreases. This is explained by the fact that more workers are involved in the production of a larger volume and their work can be better organized. When output reaches 5 units, the

Table 2.4

Cost of production of a hypothetical firm in the short run

	General fixed costs, rub.	General variable costs, rub.	costs,	permanent costs,	variables costs,	Average total costs, rub.	Limit costs,

nie stops. With this volume, maximum labor productivity is achieved and the ratio between variable and constant factors turns out to be optimal. A further increase in output is accompanied by an increase in the average variable cost, which is associated with a growing deficit of the constant factor. Figure 2.9 shows a graph of the change A.F.C. and AVC depending on the output.

Output volume (units)

Rice. 2.9. Graphical presentation of the data in Table. 2.4

The seventh column contains the values ​​of the average total cost ( ATS - average total cost). This value can be calculated in two ways: divide the total cost by the volume of output ( ATC = TC/Q) or sum the average fixed cost and the average variable cost (ATS = AFC + AVC).

In table 2.4, the value ATS decreases until the volume of output reaches 6 units, i.e., until the average fixed costs decrease significantly with the increase in the volume of production and the gain from this turns out to be higher than the increase in the average costs for the variable factor. After reaching 7 units. ATS

increases as the distribution effect fixed costs for a greater number of manufactured products becomes less than the growth of the parameter AVC.

The eighth column contains marginal cost values. This parameter is referred to as MS (marginal cost). In this case, it shows how much the total cost changes when the volume of output changes by one unit:

Marginal cost is a very important parameter, its value must be known to determine the optimal volume of output. We will return to this issue later, but for now let's look at how marginal cost is calculated. The fourth column shows that the total cost of producing 3 units. goods is equal to 15 rubles. 80 kopecks, and for the production of 4 units. - 18 rubles. 80 kop. The marginal cost of increasing output from 3 units. equal to one unit

The MC line (see Fig. 2.9) crosses the lines AVC and ATS where they reach their minimum. In the table there is no equality of the values ​​of MC and ATS at a minimum ATS due to the discrete nature of the data. The same applies to the values ​​of MC and AVC at a minimum AVC.

If we were dealing with a continuous change in the volume of production, then the lines would be smooth and the cost graphs would look like the one shown in Figure 2.10.

Fixed costs include costs that do not depend on changes in the volume of production or change abruptly, while variable costs change in a certain way depending on the volume of production. Graphically fixed and variable costs are presented in Figure 1-4. Fixed costs are divided into three groups:

- fully fixed costs (costs of inaction), which are possible even when there is no activity. These include, for example, depreciation of fixed assets;

- fixed costs for the operation of the enterprise, which are produced only in the course of their activities.

For example, the cost of wages of general plant personnel, electricity, including lighting of premises;

Figure 1 - The dependence of the volume of fixed costs on the volume of production

Figure 2 - Dependence of fixed costs per unit of production on the volume of production

- semi-fixed costs, do not change until a certain level of production is reached.

With a subsequent increase in the volume of production, these costs change abruptly. This happens when the maximum level of capacity utilization is reached, in the conditions of the demand from the market to increase production volumes.

Then the company buys new equipment, builds additional buildings. This, in turn, increases the cost of fixed assets and abruptly increases the cost per unit of output, increasing the amount of depreciation (Fig. 3). When the maximum possible volume N1 is reached, new capacities are introduced and the unit cost of the product increases from C1 to C1 ", etc.

Figure 3 - Dependence of the volume of semi-fixed costs on the volume of production

Figure 4 - Dependence of semi-fixed costs per unit of output on the volume of production

Variable costs are classified as (Figures 6 and 7):

- proportional-variables, which change in direct accordance with the increase or decrease in the volume of production;

- regression variables, which grow more slowly than the volume of production;

- progressive variables that increase faster than output expands.

The total costs of the enterprise are made up of the sum of variable and fixed costs, which is graphically presented in Fig. 7.

Total Total Costs for the production of products (Z) can be represented as the following formula:

where A is the amount of fixed costs;

B is the rate of variable costs per unit of output;

VBP - the volume of production.

Then unit cost (Zed) should be written in the form

1 - progressively variable costs;

2 - proportionally variable costs;

3 - regressive variable costs

Figure 5 - The dependence of the volume of total costs on the volume of production

Fixed Costs (FC) These are costs that do not change with the volume of production.

These are the previous obligations of the enterprise (interest on loans, etc.), taxes, depreciation, insurance premiums, rent, equipment maintenance costs, salaries of management personnel and specialists of the company, etc. Fixed costs exist even if the firm does not produce anything, i.e. with zero production.

Average fixed costs (AFC) are fixed costs per unit of output.

AFC=FC/Q,

where Q is the volume of output

It follows that with the growth of output, AFC will decrease. Variable Costs (VC) These are costs that change with the volume of production.

Variable costs can quickly and without much difficulty change within an enterprise as output changes. Raw materials, materials, energy, hourly payment labor are examples of the variable costs of most firms. It depends on the specific situation which costs are fixed and which are variable.

Average Variable Cost (AVC)- are determined by dividing variable costs by the volume of output.

AVC=VC/Q

Therefore, AVCs reach a minimum when technologically optimal size enterprises. Average variable costs are needed to determine the effectiveness of the company and determine the prospects for development.

The total amount of variable costs varies in direct proportion to the volume of production. But the increase in the amount of variable costs associated with an increase in output per unit of output is not constant. As optimal production volumes are reached, relative savings in variable costs occur. But further expansion of production leads to a new increase in variable costs. This behavior of variable costs is due to the law of diminishing returns.

The sum of fixed and variable costs at any volume of production forms total cost (TC)- the amount of cash costs for the production of a certain type of product.

TC = FC + VC

With zero production total costs are equal to the firm's fixed costs.

TS =f(Q)

TC is a function of the volume of output.

The difference between fixed and variable costs is great value for an entrepreneur. He can manage variable costs, change their value over a short period by changing the volume of production. Fixed costs are inevitable, not subject to the current control of the entrepreneur and must be paid regardless of the volume of production.

Average variable cost (AVC) contract due to increasing marginal returns, but then begin to rise due to diminishing marginal returns.

With small production volumes manufacturing process expensive and inefficient, since not enough variable resources are connected to the firm's equipment, and variable costs per unit of output are low. A more complete use of capital equipment, a high level of skills of workers will provide the company with an increase in production efficiency.

Average total cost (ATC) - are determined by dividing total costs on the volume of production

ATC=TC/Q,

or by summing average fixed and average variable costs

ATC \u003d AFC + AVC \u003d (FC + VC) / Q.

The concept of "average costs" is important for the analysis of the company's activities. Comparison of average costs with the level of the market price (P) allows you to determine the place of the company in the market and the profitability of its work.

To achieve maximum profit, you need to determine the required amount of output. Consider another category of costs - marginal costs (Table 5.2).

Marginal Cost (MC)- an increase in the cost of producing an additional unit of product; equal to the change in total costs divided by the change in output.

They are equal to the change in total costs caused by the production of each additional unit.

MS= TS/ Q

Where Q=1 unit

Therefore, MTC = TC/ Q = VC/ Q

The mirror image of changes in marginal costs is the dynamics of marginal productivity.

Marginal productivity is the change in total output resulting from the sale of an additional unit of output.

2. Planning and costing.

The grouping of costs by economic elements and costing items is reflected in the enterprise, respectively, in the cost estimate and product costing.

The production cost estimate (production estimate) is used to calculate the cost of gross, commodity and products sold. It is the basis for developing a balance of income and expenses of the enterprise, the formation of an operational financial plan(payment calendar), planning the sale of products and profits.

According to the sequence of formation of the cost of a unit of production, there are technological, workshop, production and full cost.

For economic evaluation options new technology and choosing the most efficient of these options is calculated technological (operational) cost.

1. Technological - includes all costs directly related to production specific type products

2. Workshop - includes technological cost and workshop costs

3. Production - this is the workshop plus the costs associated with the management and maintenance of the enterprise

4. Total - reflects all costs associated with the manufacture and sale of products, i.e. production cost plus non-manufacturing (commercial) expenses.

5. Individual - reflects the costs of one enterprise for production and sale.

As you know, the price is the monetary expression of the value of the goods (products, works, services). The price is determined by the market based on supply and demand.

It is believed that the main factors affecting the price level in market economy are supply and demand.

Production costs affect competitive prices only to the extent that they affect the supply curve. In a market economy, when prices are limited, supply and demand are not equal, since a “black market” appears and a non-price mechanism for rationing production and consumption is formed.

Under market conditions, economic justice is established through the tax system, and efficiency through the market.

In a market economy, the price formation process includes a number of stages (Fig. 1).

Rice. 1. Price formation

Stage 1. Statement of the problem of pricing. An enterprise economist must answer the question: what is desirable to achieve with the help of a price policy for goods (works, services)? For example, an enterprise would like to use the price to: increase sales volumes; capture the market; achieve stability in the range of products; reduce production costs; improve product quality; get the maximum profit, and this is typical for prestigious goods, etc.

Stage 2. Determination of demand for products (goods, works, services). It is not the market capacity that is determined, but the sales volumes of goods at various price levels. Graphically, the dependence of sales on the price level is shown in fig. 2.

is. 2. Dependence of sales on the price level

The price elasticity graph shows how much the volume of goods sold decreases with an increase in their prices, and how much it can increase with their decrease. It follows from this: the maximum sales volume at the minimum price is not always good, as well as the maximum price at the minimum sales volume.

Elasticity of supply and demand (or price elasticity) is the quantitative change in supply and demand in response to a change in price. It is determined using the coefficient of elasticity:

where is the coefficient of elasticity;

Coefficient of supply and demand.

Classical options for the development of elasticity of demand are possible:

elastic demand - an increase in demand with a decrease in prices leads to a general increase in the income of the producer;

· unit elastic demand - a decrease in prices leads to an increase in demand and output while maintaining income;

· inelastic demand - the rate of growth of output and income is less than the rate of price decline.

The elasticity of demand is determined by individual goods, which are divided into goods with inelastic and elastic demand.

For goods of the first group, sales volumes almost do not change with an increase in prices. This group includes:

Essential goods (bread, salt, etc.);

Goods for which there is no replacement or which are produced by a monopolist (cars, etc.);

goods that consumers are used to and find it difficult to change their habits;

Goods for which price increases are justified by quality growth or inflation.

Goods with elastic demand are characterized by a strong dependence of sales volume on the price level: with an increase in prices, sales volume decreases sharply (examples include luxury goods, jewelry, etc.).

Graphically, this dependence is shown in fig. 3.

Rice. 3. Dependence of sales volumes on the price level

With the help of the resulting curve, the enterprise can determine in advance the consequences of various options for its commercial activities and choose the most appropriate one, depending on the saturation of demand (or the presence of competitors), the occurrence of remnants of unsold goods or the need to reduce prices, etc.

Stage 3. Cost assessment, which includes finding ways to reduce the cost of products (works, services) through various organizational, technical and economic measures.

It should be borne in mind that the type of the supply elasticity curve depends on the level of cost, as can be seen from Fig. 4.

Rice. 4. Dependence of sales volumes on the price level with additional investment

The graph confirms that the higher the price of a product, the larger the volume the manufacturer produces this product. At the same time, an increase in the volume requires additional investments of funds, and their source in the enterprise can only be the profit of the enterprise itself. In other words, the lower the cost of production, the greater the profit, the more possibilities to increase the volume of production.

At this stage, one should also analyze the dependence of gross income, cost and production level (Fig. 5).

Rice. 5. Dependence of gross income, cost and production level

As you can see, the cost and gross income curves intersect twice. As a result:

zone 1: the cost curve is higher than the gross income curve, the result is a loss (this is the start of production, the development of new products);

zone 2: the intersection of the curves is the break-even point, the gross revenue curve is above the cost curve.

The data confirms that the break-even point of production is highly dependent on the selling price.

Example 1

Conditionally fixed costs at the enterprise amount to 40 thousand rubles, conditionally variable costs - 60 rubles. per unit of production. It is necessary to calculate how many products are required to be manufactured in order to recover all costs. Calculations show that the volume of production depends on the selling price (Table 1).

Table 1. Dependence of production volume on the selling price

Table data. 1 clearly show the dependence of the break-even point on the selling price. It is logical to manufacture 500 units of products at a price of 140 rubles. per unit, but is it possible to sell the entire volume at this price? To do this, it is necessary to take into account the elasticity of demand and the state of the market (Table 2).

Table 2. Elasticity of demand and market conditions

The data indicate that it is most profitable to produce 800 units of products at a price of 120 rubles, but even this price must be set with extreme caution: if an enterprise is a monopolist on the market, then such a price is acceptable; if there are competitors, then you should analyze the situation and move on to the next stage.

Stage 4. Conducting an analysis of prices and goods of competitors is one of the difficult stages, since pricing issues at an enterprise are a trade secret. This section has a specific goal: to define the so-called price of indifference (the price at which the buyer does not care whose product to buy). Having determined this price, the company starts from it and decides what and how to do so that the buyer overcomes this indifference due to product quality, service expansion, extension of the warranty service period, changes in payment terms, etc.

Stage 5. Choice of pricing method. There are a number of methods for setting prices, that is, methods for setting prices for various goods (works, services). Currently, the following pricing strategies are mainly used:

low production and marketing costs;

the uniqueness of the characteristics of the goods (products);

Mixed (from the two previous approaches);

fixtures;

cost marketing.

The low cost strategy involves cost reduction with an increase in production volume, resource saving, reduction of indirect and irrational costs. The main thing with this strategy is to achieve a low price for a standard product (product). This strategy changes depending on the market situation. Different tactics are used in relation to costs:

If the company's market share is significant and there is an opportunity to get maximum profit, then the main thing is to reduce current costs and effectively improve an already well-mastered product;

if the market share is small, then an intensive innovative activity, the technical and technological capabilities of production are being updated, capital investments are increasing, the range of products is being improved, and the costs of design, advertising, and sales are increasing.

Feature uniqueness strategy product involves giving unique features to products, for which an extra charge is due. The introduction of a markup is most often achieved through quality characteristics product (durability, reliability, etc.), as well as for design, high quality customer service, uninterrupted supply of spare parts, lengthening warranty period and the quality of after-sales service, etc.

A mixed strategy involves the development and implementation of a cost reduction program while introducing and taking into account the uniqueness of product characteristics.

The adaptation strategy involves following the leader: find out the price of the main competitor and follow him. This method is called “stupid following a competitor”. It is typical for small businesses and is the most dangerous, since, following a competitor leader and not knowing its production capabilities, it is easy to find yourself in a difficult situation. financial position. This method assumes that it is necessary to anticipate the possibility of price cuts by competitors, calculate the options for response: maneuver with production capacities, nomenclature and product range; production stocks; the level of employment; a change in the price structure; packaging of finished products, etc.

Cost marketing strategy is one of the most complex methods, but it is the most reliable, because it includes the analysis and implementation of measures to reduce production and distribution costs and pricing based on marketing tactics.

It should be noted that cost reduction is the main focus of any pricing strategy. At all enterprises, they are very demanding in accounting for overhead costs - for the repair, maintenance and operation of equipment, depreciation, for the maintenance of administrative and managerial personnel, advertising, interest to banks, social contributions, etc.

In practice, two methods of direct price calculation are used - average cost and marginal (marginal). Medium-cost - calculation for the totality of all cost elements (materials, labor, operational, administrative and managerial, marketing, depreciation). Marginal is applied on the basis of an assessment of the additional costs for the production of an additional unit of output:

where M s - the value of marginal costs;

ΔЗ - increase in total costs;

ΔOP - increase in production volume.

Changes in the cost structure of firms (changes in the share of spending on labor force and overheads) lead to a preference for a marginal approach.

In accordance with the marginal approach, the price (P) consists of fixed costs (Z post), variable costs (Z ln) and profit (P):

C \u003d Z post + Z lane + P.

Fixed costs calculated per unit of production, with a change in the volume of production, change in the direction of increase or decrease. These include rent, the amount of interest on a loan, depreciation, administrative and management expenses.

Variable costs depend on the volume of production and change in direct proportion to the change in the volume of production. Variable costs calculated per unit of output are a constant value. These include the cost of raw materials, wage production workers, etc.

To determine the price using the margin method, the marginal profit (MP) is calculated:

MP \u003d C - Z lane or MP \u003d Z post + P.

The break-even point (BBU) is determined:

The break-even price (C TBU) is calculated:

where OP is the volume of production in physical units.

The enterprise, having calculated the break-even price, based on its profitability, the customer, the sales region and a number of other factors, sets the required selling price for consumers.

Example 2

Sales volume - 4800 thousand rubles, variable costs - 3200 thousand rubles, fixed costs - 1100 thousand rubles, profit - 500 thousand rubles, production volume - 600 units.

In our example, the marginal profit is 1600 thousand rubles. (4800 - 3200 \u003d 1600 thousand rubles or 1100 + 500 \u003d 1600 thousand rubles).

Coverage ratio - 0.333 (1600 thousand rubles / 4800 thousand rubles).

We determine the break-even point or the so-called threshold revenue: 1100 thousand rubles. / 0.333 = 3303.3 thousand rubles

We calculate the break-even price: 3303.3 thousand rubles. / 600 units = 5505.5 rubles.

Using the above indicators, the company can easily determine the selling price and get the desired profit.

Example 3

The company plans to sell 3,000 units of products. The average variable costs for the production and sale of one product are 800 rubles, fixed costs - 1.3 million rubles. The company plans to make a profit of 2 million rubles. At what price to sell the product to ensure the planned profit?

We find marginal profit as the sum of fixed costs and expected profit: 1.3 million rubles. + 2 million rubles. = 3.3 million rubles.

We determine the marginal profit per product (MP units). To do this, we divide the amount of marginal profit by the number of products sold: 3.3 million rubles. / 3000 units = 1100 rubles.

We calculate the price of the product (C ed). To do this, we add the average marginal profit per product to the average variable costs: 800 rubles. + 1100 rub. = 1900 rubles.

We check the performed calculations. We calculate the volume of sales at the set price by multiplying the sales volume by the price of the product: 3000 units. × 1900 rub. = 5.7 million rubles.

We determine the amount of variable costs for the entire volume of sales: 800 rubles. × 3000 units = 2.4 million rubles.

We calculate the marginal profit by subtracting the amount of variable costs from the total sales volume: 5.7 million rubles. - 2.4 million rubles. = 3.3 million rubles.

We calculate the expected profit (P zh), for which we subtract fixed costs from the amount of marginal profit: 3.3 million rubles. - 1.3 million rubles. = 2 million rubles.

As you can see, selling products for 1900 rubles. for the product, the company provides the expected profit.

The performed calculations confirm the feasibility of using the marginal approach method and calculating the break-even point, which is important element management accounting and allows you to create a flexible pricing system of the enterprise.

Currently, there are two main methodological approaches in the practice of pricing:

determination of the base price, that is, the price without discounts, markups, etc.;

determination of the price taking into account the specified elements - discounts, markups, etc.

When determining the base price, the pricing methods given in Table 1 are most often used. 3.

Table 3. Pricing methods, their advantages and disadvantages

Method	Advantages	disadvantages
full cost method	Provides full coverage of variable and fixed costs and obtains the planned profit	Elasticity of demand is not taken into account, cost reduction at the enterprise is not stimulated
Reduced cost pricing method	The choice of the most favorable nomenclature and assortment is provided; formation of additional costs	Difficulty in clearly allocating fixed and variable costs across product lines
ROI method	Payment is taken into account financial resources, interest on credit	High interest rates for loans and their uncertainty, especially in an inflationary environment
Return on assets method	Profitability accounting certain types assets according to the issued nomenclature, which ensures a certain level of return on assets	Difficulty in determining the employment of individual assets by nomenclature
Method marketing estimates	Accounting for market conditions and evaluation of customer reaction	A certain convention of quantitative estimates

In enterprises, the most commonly used method is the full cost method and the method of pricing based on reduced costs.

Example 4

The company produces 10 thousand units of production, the costs of production and sales are given in table. 4.

Table 4. Output indicators

The full cost method assumes that the required rate of return is added to the sum of full costs, that is, all variable and fixed costs, which should cover all production and sales costs and ensure the desired profit. The method is widely used in many industries with a large range of products and the release of new types of goods (products).

The calculation of profitability (P) is defined as the ratio of the desired amount of profit to the total total costs. Profitability is calculated as follows:

For our example, it will be 20% (124,000 / 620,000 × 100%).

Price (P) is calculated using the following formula:

In our example, the price will be 74.4 rubles. (62 + 62 × 20 / 100).

To determine the price for individual products (goods, works, services), the calculation by the full cost method can be carried out using the following formula:

We get the same figure - 74.4 rubles. (62 rubles / (1 - 16.7)).

At the same time, the company can include in the price the profitability that it considers acceptable to itself. If it is impossible to enter the market at this price, then you should first of all reduce your costs and provide for other profits.

The reduced cost pricing method provides that variable costs are added to profitability, which covers all fixed costs and ensures profit. AT last years this method is widely used in many industries at enterprises where the "direct costing" system has been introduced, that is, the costs are divided into fixed and variable.

P \u003d ((P zh + C total + C ka) / C lane) × 100%.

The profitability will be 191.8%: (((124,000 + 190,000 + 175,000) / 255,000) × 100%).

The price is determined by the formula:

C \u003d C floor + C floor ×.

The price is 74.4 rubles. (25.5 + 25.5 × 191.8 / 100).

As you can see, the price set by these methods is the same. Since the same initial data are used, and when using different indicators for calculating (full costs or fixed costs) per unit of production, the difference is offset by a different level of profitability.

The return on investment method assumes that the total cost of production should ensure a profitability not lower than the cost of interest on a loan.

The method of return on assets provides that a percentage is added to the total costs of production and sale of products, corresponding to the return on assets, which is established by the enterprise itself.

The calculation of the price by this method is carried out according to the formula:

where C floor. units - total costs per unit of output, rub. copy;

C act - the value of the company's assets, rubles;

RP exp - the expected sales volume, in physical units.

The method of marketing evaluations provides for setting the price depending on the proposals received at the auction, in the competition. The winner is the one whose bid price provides an acceptable turnaround time, required quality and a reasonable price that ensures profit. This method is used in the selection of executors of the state order, socially significant works.

In practice, other methods of pricing are also widely used (for example, the method of pricing based on the profitability of sales). The price is determined by the full cost method, and profitability is determined by the formula:

The method of pricing based on gross profit provides for the calculation of prices also using the full cost method, and the calculation of profitability is carried out according to the formula:

Separate industries (chemical, light, etc.) widely use the pricing method of relangi, that is, it is planned life cycle products (introduction, growth, maturity, fall), and the price of the product is set according to the terms of its actual development. The need to use this method of setting prices is associated with the requirement to observe and constantly monitor the passage of the product on the market, and for this, the ratio of demand and price is taken into account and, if necessary, changes.

The relang method allows you to:

change the physical characteristics of the product;

Change performance indicators

make a symbolic change in indicators (for example, change the year of manufacture of the product);

change the product at the expense additional services(consulting, expansion after-sales service and etc.);

update the product.

It should also be borne in mind that at present, the life of durable products is being artificially shortened due to design changes. In addition, the product range is expanding and at the same time changing and expanding commercial network goods.

In industries where it is possible to take into account changes in the technical and economic parameters of products, parametric pricing methods are widely used.

essence this method consists in taking into account various product parameters (weight, performance, power, volumes, consumed electricity, maintenance costs, manufacturing costs, etc.) and comparing them with the base case.

The price by the parametric method (C p) is calculated by the formula:

where Pi n and Pi b - respectively, the value of the i-th parameter of the new and basic product;

C i - unit price of the i-th parameter;

n is the number of parameters taken into account.

At the same time, the unit price of the i-th parameter is determined by various methods:

using expert assessments significance of parameters by scores;

determination of the unit price for the main quality parameter of the product;

Establishing the dependence of the price on changes in several fundamental quality parameters for the product.

In the practice of enterprises when making price decisions, the concepts of minimum and maximum prices are often used.

The minimum price (P min), or the price of the lower limit, is the price that minimally covers the full costs of the enterprise for the production and sale of products (C floor), that is, C min \u003d C floor.

This is a long-term price floor, and if the price covers only the variable part of the cost of production, then this is a short-term price floor that provides the company with zero marginal income.

The maximum price (Pmax), or the price of the upper limit, provides not only full coverage of production and marketing costs, but also the possibility of allocating funds for the development of production and social security of the workforce, as well as the fulfillment of all tax obligations to the state.

Thus, the market price (P p) must be within the minimum and maximum prices, that is, P min< Ц р < Ц max .

Stage 6. Establishment of the final prices and rules for its future changes. This stage of pricing should solve two problems:

· create own system discounts for buyers and learn how to use it;

· determine the mechanism for adjusting prices in the future, taking into account the life stages of the goods and inflationary processes.

When analyzing the cost of production, all costs are usually divided into two groups: conditionally variable (depending on the amount of work) and conditionally constant (independent or little dependent on the amount of work). This division is purely arbitrary. Almost all costs depend to some extent on the volume of work.

As the volume of work increases, costs increase. Conditionally variable (depending) costs, with constant quality indicators and labor productivity, change in proportion to the amount of work.

In general terms, the impact of the volume of work on the cost of production is represented by the following formula:

C=[ R h(1 To)+R nz ]/[ V(1 K)]

where R s, R nz - respectively dependent and independent costs of production;

K - coefficient taking into account the change in the volume of work (increase or decrease (in%) in the volume of production in the planned (reporting) period compared to the base one);

V - volume of work, production.

This formula is correct if the conditionally variable costs change in direct proportion to the amount of work, and the conditionally fixed (independent) costs remain at the same level. Under these conditions, by dividing the costs into dependent and independent, it is possible to determine the cost of production with a change in the amount of work.

If conditionally variable costs change in direct proportion to the volume of production, and conditionally fixed costs remain unchanged, then the cost of a unit of production in terms of conditionally variable costs remains constant when the volume of production changes, and the cost of a unit of production in terms of conditionally fixed costs will either increase, or decrease as output increases or decreases. This statement is demonstrated by the graph of the hyperbolic curve (Fig. 8).

If we accept that:

x is the volume of production;

a - part of the cost of production, conditionally dependent on the volume of production;

b is a conditionally constant value independent of the volume of production costs;

C total, C 3, C nz - the cost of a unit of production, respectively, is total, in terms of dependent costs, in terms of independent costs;

R s, R nz - respectively dependent and independent costs (cost) for the production of products, then

C 3 \u003d P 3 / x \u003d ax / x \u003d a;

C nc = P nc / x = b / x;

C total \u003d C 3 + C nz \u003d a + b / x.

With an increase in production, the share of independent costs in the unit cost of production will decrease along a hyperbolic curve.

The impact of production volume on the actual unit cost of production can be determined by the formula:

C f \u003d C 3 + C nz / (1 ± K).

Using these formulas, it is possible to solve an extremely important task for the enterprise - to determine the volume of production necessary to make a profit, i.e. for the entry of the enterprise into the profitability zone (Fig. 9).

2. The composition of the costs included in the cost of production

Cost of products (works, services) - these are the costs of the enterprise expressed in monetary terms for wages and material and technical means necessary for the production and sale of products.

The cost of production is one of the main indicators of the efficiency of the economic activity of enterprises, as well as one of the fund-forming indicators used in the formation of economic incentive funds. The cost of assessing the work of enterprises and their divisions. It is widely used in analyzing the activities of enterprises, determining the economic efficiency of capital investments and new equipment, measures to improve the quality and reliability of equipment, as well as in addressing issues of introducing rationalization and inventive proposals, and distributing productive forces.

Cost reduction is a reserve for production growth, increase in savings. The level of cost depends on the organization of production and labor, planning and regulation of labor, material and monetary costs per unit of output. Consequently, this indicator characterizes the degree of use of material resources and labor, fixed and working capital, the level of economic management.

The costs that form the cost of products (works, services) are grouped according to their economic content according to the following elements:

–material costs (minus the cost of returnable wastein);

–labor costs;

–deductions for insurance premiums;

–depreciation of fixed assets;

–other expenses.

The cost of material costs includes:

acquired from the side of raw materials and materials that form the basis of manufactured products;

purchased materials used to ensure a normal technological process;

purchased components and semi-finished products;

works and services of an industrial nature performed by third parties;

costs associated with the use of natural raw materials in terms of deductions for geological exploration, payment for standing wood, payment for water;

purchased from the side of fuel of all types;

purchased energy of all kinds;

losses from shortage of materials within the norms of natural loss.

The cost of returnable waste is excluded from the cost of material resources.

The element "Costs of labor" reflects the costs of remuneration of the main production personnel of the enterprise, including bonuses to workers and employees for production results, incentive and compensatory payments, as well as the costs of remuneration of employees who are not on the staff of the enterprise, related to the main activity.

When referring to the cost of labor costs, it must be borne in mind that the cost of production does not include some types of additional payments in cash and in kind, which are made at the expense of profits remaining at the disposal of enterprises and special sources.

In the element "Deductions for insurance premiums» deductions are reflected in accordance with established norms for insurance premiumsfrom labor costs included in the cost of products (works, services) by elementthat “labor costs” (except for those types of wages for whichinsurance premiums are not charged).The rates of insurance premiums in 2012-2013 for individual entrepreneurs and taxpayers are in table 1.

Table 1 - Insurance premium rates in 2012-2013 for individual entrepreneurs and taxpayers (http://www.moedelo.org/stavki-strahovyh-vznosov-2012)

	Pension Fund			FFOMS (compulsory medical insurance fund)	FSS (social insurance fund)	Total Contributions
	For persons born in 1966 and older	For persons born in 1967 and younger
	Fear. part	Fear. part	Accumulate part
General tax regime
Payers on the simplified tax system (simplified taxation system)
Payers on UTII (single tax on imputed income)

The element “Depreciation of fixed assets” reflects the amount of depreciation deductions for full restoration, calculated on the basis of the book value of fixed production assets and norms approved in the established manner, including accelerated depreciation of their active part, made in accordance with the law. At the same time, for machines, equipment and vehicles depreciation is terminated after the expiration of the normative period of their service, provided that their entire cost is transferred to the costs of production and circulation.

The element “Other expenses” as part of the cost of products (works, services) includes payments for compulsory insurance of the enterprise’s property accounted for as part of production assets, remuneration for rationalization proposals, interest on short-term bank loans, payment for product certification, travel expenses according to established norms, lifting, payment to third parties for non-production services, as well as other costs that are part of the cost of products (works, services), but not related to the previously listed cost elements.

Payments for compulsory property insurance, as well as expenses associated with the sale (realization) of products (works, services) when planning, accounting and calculating the cost of products (works, services) are grouped by cost items.

The list of cost items, their composition and methods of distribution by types of products (works, services) are determined in accordance with industry guidelines on planning, accounting and costing, taking into account the nature and structure of production.

At the same time, the grouping of costs by articles established for the relevant industry (sub-sector) should provide the greatest allocation of costs associated with the production of certain types of products that can be directly and directly included in their cost (the so-called direct income). For example, in the extractive industries, the item “Mining preparation work” is included in the costs; in the engineering industries - the article "Products, semi-finished products and services of cooperative enterprises", etc.

fixed costs do not depend on the volume of production. These are the costs of operating the building, equipment, rent, administrative and management expenses, and some types of taxes.

variable costs change with the volume of production. These are the costs of raw materials, materials, labor, etc.

General costs are the sum of total fixed and total variable costs.

However, the manufacturer is often interested in the value of not so much total costs as average cost. They represent the quotient of the total cost divided by the volume of production.

Since the sum of fixed costs is constant, then average fixed costs decrease as the volume of production increases. But this happens only up to a certain period, starting from which, with the growth of production volumes, the costs per unit of output will increase. In this regard, they talk about marginal cost, which represent the incremental cost of producing each additional unit of output over a given output.

AT economic practice of our country to determine the costs of production, the category is used cost. The cost price reflects in cash the current costs of production and sale of products, includes the cost of consumed means of production, funds for wages, indirect costs of the enterprise and costs of implementation. The composition of the cost does not include one-time expenses, costs not related to the production of products, as well as losses from natural disasters, fines, penalties.

The structure of costs for the production and sale of products by type economic activity

Kind of activity	All costs	material costs	labor costs	unified social tax	depreciation of fixed assets	other costs
Agriculture, hunting and forestry		63,0	19,3	3,0	5,3	9,4
Mining		29,6	9,9	2,0	7,2	51,3
Manufacturing industries		74,0	11,8	2,8	2,5	8,9
Production and distribution of electricity, gas and water		61,0	13,9	3,2	5,7	16,2
Construction		58,7	20,4	4,6	2,5	13,8
wholesale and retail		51,4	9,5	1,8	9,4	27,9
Transport and communications		35,6	20,1	4,5	9,6	30,2
Operations with real estate, rent and provision of services		33,2	31,4	6,4	3,7	25,3
Public administration and military security		16,1	47,3	9,6	2,7	24,3
Provision of other communal, social and other services		26,8	27,6	5,5	5,9	34,2

There are production costs, including the costs of production, and full, which includes the production cost, as well as the costs associated with the sale of products, and some other in-house costs.

In construction, there are estimated, planned and actual costs.

The grouping of costs by elements is cost structure. It includes 4 groups:

1) material costs;

2) wages and various deductions;

3) depreciation of fixed assets;

4) other expenses.

The calculation of unit cost of production is called costing.

The main ways to reduce the cost of production are: the growth of labor productivity, the intensification of the use of production capacities and equipment, the growth of product quality, the reduction of costs for maintenance of production and management, the introduction of the achievements of scientific and technical progress.

2. Profit and profitability of production. Breakeven chart.

Profit is the difference between a business's revenue and costs. Two approaches to the concept of profit should be distinguished:

1. Accounting. Profit is the difference between sales revenue and cash (explicit) costs.

2. Economic. Profit is the difference between sales revenue and explicit plus implicit costs. From the accounting profit it is necessary to deduct the interest on capital, established at the given moment by the capital market, the rent for land and premises, and the management fee. The result is economic profit.

The main indicators of profit are:

Total profit of the reporting period - balance sheet profit;

Profit from the sale of products (works, services);

Profit from financial activities;

Profit from other non-operating transactions;

taxable income;

Net profit;

Super profit and monopoly super profit;

Average profit;

marginal profit.

There are also gross profit and net profit. Gross profit is defined as the difference between the selling price of products and the total cost. After paying interest on the loan, taxes, rent, and other payments from the gross profit, there remains net profit.

Net profit is used for the production and social needs of the enterprise, including savings, ecology, training and retraining of personnel, payment of dividends, etc.

To assess the level of efficiency of the enterprise, the indicator is used profitability of production characterizing the profitability or unprofitability of the enterprise for a certain period of time (usually a year). In economic practice, several indicators of profitability are used: profitability of production (planned and actual, total and calculated), profitability of the product (normative and actual).

Overall profitability production is determined by the ratio of gross profit to the average annual cost of production assets and working capital.

Profit growth factors are both those that are directly related to this enterprise (organization of production, scientific and technical progress), and external conditions(changes in the economic situation, obtaining a profitable state order, etc.). Today, ensuring the profitability of an enterprise should be considered as the most main task for the Russian economy.

3. Essence and functions of the price. The essence of the price was studied by various representatives of economic schools and directions, since. a whole system of economic, political and social relations, and with the help of price it is possible to influence these relations.

Bourgeois classical political economy(A. Smith, D. Ricardo) considered the price as monetary value value, and the price of the goods was under the influence of supply and demand, i.e. could be equal to, more or less than the cost. The law of value operates through the mechanism of prices for the development of productive forces, for bringing individual costs closer to socially necessary ones.

Marxist school(K. Marx) in determining the price proceeded from the theory of labor value. K. Marx believed that the structure of the cost of goods produced at a capitalist enterprise includes the costs of constant capital (depreciation, raw materials, materials, etc.) and variable capital (workers' wages). Marx considered the cost of wages to be variable capital, since the advanced part of the capital in the production process not only returns, but also increases due to the creation of surplus value. As a result, the cost of production and profit were included in the price. On the basis of labor value, Marx moved on to the problem of selling commodities not by value, but by price.

Austrian school(Behm-Bawerk, Wieser, Menger) put forward the theory of marginal utility, according to which the value of a product is determined not by labor costs, but by the marginal utility that the product possesses. That is, the price of a commodity depends on its rarity. The theory of the Austrian school was largely subjective in nature. the degree of determination of marginal utility for each product was different, and this made it difficult to apply the provisions of the Austrian school in practice. However, the right step has been taken in the direction of taking into account the properties of the product when determining the price.

A. Marshall set himself the task of reconciling the classics and the Austrian school. He put forward the theory that the value of a commodity depends on supply and demand. Under the influence of competition, an equilibrium price is established in the market, and any deviation in demand or supply dictates a price deviation from the equilibrium price. Marshall, through the category of demand, connected the theory of price with the usefulness of the goods, and supply - with labor costs, i.e. with the theory of labor value. However, he could not answer what underlies the value of a product when demand equals supply.

Price is a category that expresses economic relations between individual industries, regions, classes, individuals. In economics, the essence of price is considered through its features:

1. Accounting. All costs in the enterprise are determined using natural indicators or using prices. With the help of prices, many indicators are determined that cannot be determined through physical meters (production costs, labor productivity growth, national income).

2. Management. With the help of price, you can predict the development of production at an enterprise, in a region or country. With the help of the price, the development of economic, social, scientific and technical programs and intra-company planning is carried out.

3. Distribution and redistribution. The state, through prices, seeks to establish more high prices on elite goods and lower on essential goods to ensure social protection of the population.

4. Stimulating. The price can contribute to the acceleration of scientific and technical progress, the transfer of capital from one industry to another, thereby ensuring the rapid development of certain industries and regions.

5. Limiting. The price can limit the amount of consumption of products and resources that are scarce or harmful to society.

4. Types of prices and methods of pricing. The whole set of prices can be divided into three large blocks:

1. Negotiated prices- These are free market prices established on the basis of an agreement between the buyer and the seller. They, in turn, can be open (specified in accordance with the terms of the contract in the process of production and sale of products) and solid (fixed).

2. State- installed:

For the products of the state enterprises;

For the products of monopoly enterprises;

For products of basic industries (metallurgy, electric power industry);

For products of the military-industrial complex;

For socially important goods (essential goods, medical goods and services, etc.).

State system. price includes fixed prices and adjustable. State. price regulation consists in setting their limit level or the limit of their deviation from the fixed state. prices.

3. World prices- most objectively express the value of the goods and are characterized by the following features:

The price at which big deals under conditions typical of most commodity markets:

Price in transactions where payments are made in a freely convertible currency;

The price used in regular transactions in important markets.

In addition, prices can be:

1) free market prices, monopoly high and monopoly low (see the topic "Competition and monopolies").

2) depending on the volume of sales - wholesale and retail.

3) from the remoteness of the buyer - zonal (FEZ) and zone (natural and climatic zones).

In market conditions, two main pricing systems are used: cost and market.

At cost pricing the company forms the price of goods on the principle of "costs +". Costs are understood as the production costs incurred by the enterprise in the production and sale of products, and under "+" - some profit that the enterprise receives after the sale of products. The formula for determining the price of a product: C=S+P.

Cost pricing is applied if there are a number of factors and conditions:

The firm that sells the product is a monopolist;

In the conditions of an oligopolistic market, the firm enters into an agreement to pursue a single pricing policy;

When the company performs work on individual projects.

Any firm in a market economy seeks to make a profit. Moreover, if the level of profit in one industry is less than in another, then capital will flow into a more profitable one. But on the other hand, so that the prices of goods do not grow and are not economically unjustified, the developed countries regulate the rate of profit with the help of antitrust laws.

In cases where cost pricing cannot be applied, the price is determined by the principle of compliance supply and demand(if supply exceeds demand, then the price falls, and vice versa). Firms operating under competition, cannot build their own pricing policy on a cost basis. Only market conditions can answer that the current price ensures the profitability or unprofitability of the enterprise.

When setting prices, the following strategies:

1) focus on the average market prices of goods of this kind;

2) focus on the price leader;

3) demand orientation.

When choosing a strategy, it is necessary to take into account a number of factors:

Exit to new market;

Introduction of a new product;

Protection of the company's positions;

Consistent conquest of market segments;

Setting prices within the product range;

Setting prices for complementary goods;

Setting prices with discounts and offsets.

The volume of production is an important indicator of business development from an economic point of view. How to calculate it? What is the practical utility of knowing current production volumes? In what cases is it advisable to optimize it and by what methods can this be done?

Definition

What is production volume? This is the total number of pieces (or other units of measurement - liters, tons, etc.) of a certain industrial goods, released over a certain period of time, or the dynamics of the release of products, expressed in labor or cost indicators. This indicator has practical significance in two main aspects.

Accounting expediency

Firstly, this is the provision of statistics to internal corporate structures, for accounting, for investors or, for example, a government customer. In this case, the volume of production is information that is mainly of a reference or analytical nature. Relevant data can be important for making key decisions for the enterprise in the field of management, investment, contracting, etc.

Strategic expediency

Secondly, in economics there is the concept of "optimal production volume". According to a common definition, it is an indicator that provides the enterprise with the conditions for fulfilling contracts and corresponds to the priorities in business development (or the tasks set by the owner - an individual, the state, the municipality, etc.). The key criteria here are compliance with deadlines, minimum costs, as well as the maximum level of product quality.

Production volume analysis

Let's study the first direction practical application information such as production volume. Statistical and analytical study of the relevant performance indicators of enterprises, if we talk about private business, can be aimed at informing about the real state of affairs in the factory of investors, state structures(mainly FTS). What business owners should pay attention to in this direction in the first place is the competent design of relevant information.

In such a matter, one should be especially strict in approaching documents relating specifically to interaction with tax authorities. Thus, the figures relating to the volume of production must be provided according to unified forms. Such as, for example, No. 1-P ("Quarterly reporting on the release of certain types of products"), No. 16 "(Movement finished products") etc.

Units of measurement of production volume

We noted above that the volume of production of an enterprise can be expressed in terms of natural indicators(pieces, tons, etc.), labor or cost meters. If everything is clear with the first parameter, then what are the other two? Consider their features.

Valuation

As for the cost expression of the volume of production, the main criterion here is gross costs. They depend, in turn, on such indicators as labor intensity, resource intensity, as well as the profitability of the goods. Production volumes in this case are expressed in selling prices and are fixed, if required by the financial statements, in the form No. 1-P. VAT is usually not indicated.

Gross costs are a characteristic that implies the inclusion in statistics of both finished goods and those that are at any stage of the conveyor (but at the same time, some resources, labor, material, have already been spent to bring them to a specific stage).

Labor assessment

Concerning labor evaluation, then here the production volumes are expressed, as a rule, in the number of hours spent on the production of goods by certain specialists, as well as in the salary of employees. As a rule, in the relevant area of ​​statistics, as in the case of the cost criterion, finished and unfinished product samples are included.

What is the practical significance of calculating the volume of output of goods in labor indicators? The fact is that working with cost indicators does not always give an objective idea of ​​the state of affairs at the factory. The main reason is the structure of manufactured goods and their prices often change. The first may be due, as some experts believe, to the fact that the enterprise may lack the necessary equipment or other necessary resources, as well as an objective increase in the cost of production of goods. Thus, labor costs can become an indicator that complements the valuation of the cost of production of goods or acts as an alternative to it.

How to determine the volume of production in hours? One of the common formulas is as follows. The total number of each type of goods is multiplied by the normalized time value allotted for the manufacture of one product.

If necessary, the indicators identified for the current year are compared with the figures of previous periods.

Note that measuring the volume of goods output in hours has one significant drawback: using this method, it is quite difficult to take into account the direct content labor functions and the complexity of the work in relation to the qualifications of specialists.

Production and salary

In turn, it is possible to quite effectively measure the volume of production in wages. Using this indicator, it is possible, in turn, to differentiate labor depending on the skill level of the staff and the work functions of specialists. Calculating the volume of output of goods in wages is also quite simple. The total number of products manufactured (in physical terms) is multiplied by the established wage rate per unit of goods.

In some cases, the analysis of the volume of production is supplemented by a different kind of calculation. Such as, for example, a study of the dynamics of the shipment of goods, comparing the identified figures with planned indicators, comparing them with previous periods. Another possible component of analysis is quality. Also, in some cases, it is possible, in the context of studying the volume of output, to study figures reflecting the sale of finished products. Such actions can be useful if, for example, the task is to calculate the percentage of fulfillment of the firm's contractual obligations related to the supply of certain types of goods to consumers or partners.

Methods for studying the volume of production

How exactly can figures be used that reflect indicators of production volume in physical, value or labor terms? Among Russian economists, such a method as comparison is common. So, for example, the indicators of the current year and previous years are compared. Another popular option is to reconcile the identified figures with those contained in the production plan or in the contract signed by the enterprise.

Form No. 1-P, which, as we noted above, is often used in accounting, contains a sufficiently large number of variables to conduct a comprehensive analysis of business performance. By comparing the numbers, one can, in particular, reveal the dynamics of the output of goods, calculate the growth rate of the enterprise.

Methods for calculating the optimal volume

The second direction of the practical use of such an indicator as the volume of goods produced is the optimization of the enterprise in terms of the business model. How to determine the optimal production volume? This can be done in several ways. In the Russian economic school, there are two main ones. The first is based on working with gross indicators.

The second - on the comparison of figures belonging to the category of limiting. In this case, the calculations are carried out, as a rule, for each type of goods produced by the factory. It is also understood that the company seeks to maximize profits in the analyzed period. Another factor in the calculation: the optimal values ​​for two parameters are revealed - the price and the actual volume of production. It is assumed that other elements of the factory operation remain unchanged.

Sales volume factor

One of the methods simultaneously calculates the volume of production and sales. In other cases, the condition is allowed that the total number of goods produced is equal to the number of samples sold. That is, the dynamics of sales does not matter. Whether or not to take into account the relevant criterion depends on the type of enterprise, the specifics of the business. For example, if we are talking about retail in the segment of consumer goods, marketers, as a rule, still take into account such a factor as sales dynamics. If, for example, the company collects to order military equipment under current contracts, the pace of implementation is usually of secondary importance.

The practice of calculating the optimal volume: accounting for implementation

We noted above that the practical usefulness of figures reflecting the volume of output of goods can be expressed in the application of appropriate indicators simultaneously with those related to sales results. When calculating the optimal production volume, we can also pay attention to this criterion. For example, a performance indicator can be identified that will result in zero profit or one that suits the firm's management in terms of profitability. In some cases, it is also possible to determine the maximum amount of profit in relation to the sale of goods and the volume of production. Which in most cases will be optimal.

Let's consider a simple example. The company manufactures tennis balls.

Let's agree that the selling price of each is 50 rubles.

Gross production costs of 1 unit - 150 rubles, 5 units - 200 rubles, 9 units - 300 rubles, 10 units - 380 rubles.

If the company sold 1 ball, then the profitability is negative, minus 100 rubles.

If 5, then positive, plus 50 rubles.

If 9, then there is also profitability, plus 150 rubles.

But if the company sold 10 units, then the profit will be only 120 rubles.

Thus, the optimal production of tennis balls is 9 units. Of course, under given criteria regarding gross costs. The formula for determining them can vary greatly depending on the specifics of production. The cost of producing additional units of goods is usually reduced per unit. However, the dynamics of their reduction is not always proportional to the number of products produced.

Limits

How to determine until what point it is advisable to increase the volume of production? Here we will be helped by the method that we also noted above. It involves the study of marginal indicators. Economists distinguish two main types - these are costs and income.

The basic rule that is recommended for businesses to follow is this: if the marginal value of income (per unit of output) is higher than the maximum cost, then you can continue to increase production. But in practice, in business, the factor of profitability usually plays an important role. That is, the corresponding excess of income over costs should, as an option, ensure the solvency of the company on loans. Zero profit in this case will not suit the company, since it still pays some interest to the bank.

Production growth and new employees

Is it possible to achieve profitable growth in production by attracting more and more employees? Not always. The fact is that the involvement of a new specialist in the work does not necessarily mean that the result of his work will be some specific increase in the volume of output of goods. If, for example, an enterprise begins to hire more people, but does not pay due attention to the modernization of fixed assets, average performance labor is likely to decline. And therefore, the increase in production will not be commensurate with the increase in the number of employees.

At the same time, the imbalance between the dynamics of attracting new employees and the total number of goods produced by the company is not always accompanied by a drop in business profitability. It is quite possible that the profit of the enterprise will still grow due to the increase in the number of employees, while the costs will remain unchanged (or increase slightly). This is real if, for example, the demand in the market increases, and after it, probably, the price of the goods. The company will be able to provide it in the best way by increasing the staff by several people.

A fairly common scenario in business, which reflects the dependence of the optimization of indicators of the volume of output of goods on the number of employees employed at the enterprise, is a gradual decrease in the cost of output of a unit of goods. And after reaching a certain number of manufactured units of the product - an increase in the corresponding indicator.

The cost of output of goods, which precedes the transition (from the moment of an increase or decrease in the number of manufactured units of a product) of dynamics to growth or, conversely, to a decrease, is called marginal. Changing the volume of production up or down, therefore, may be inappropriate, based on achieving the lowest cost indicators with the current dynamics of output.