When the Cuban Revolution triumphed in 1959, one of the great concerns of the Revolutionary State was the fight for economic efficiency, which can be seen in interventions made by our main leaders:
The che expressed in 1962: “Now, we had also spoken that in the construction of socialism it was necessary to increase productivity continuously, we all know, more or less, that productivity is in physical terms, let us say is to increase the volume of production per unit of hour, or per unit hours of machines in financial terms is to produce more specific items with the minimum or the least cost. "(1)
The elevation of efficiency and social production constitutes the cornerstone of the economic policy of the communist party, thus In Theses and Resolutions to the PCC congress in 1966 it is exposed: The System of Direction and planning of the economy must try to: “achieve maximum economic efficiency through the most rational use of productive resources (Materials and Human) and produce the maximum result with the minimum expense. "
techniques-for-calculating-analysis-and-variations-involved-in-costIn the central report to the third congress to the PCC in 1986, Fidel Castro states: “All efforts must lead to the satisfactory increase in labor productivity, while ensuring full employment of labor resources, reducing costs. and to the increase of the profitability of the companies; in addition to efficiency ”(2).
The increase in labor productivity produces a decrease in the amount of expenditure used to produce material goods and services, and this is reflected through their monetary expressions, in a reduction in the cost of production.
The systematic reduction of the cost of production constitutes the objective of the directives, when the production costs decrease, the profit of the companies increases as a result of the efficiency and productivity of work.
The present work is framed in the proposal of a procedure to analyze the production cost showing the factors that influence the variations of each one of the elements that intervene in the calculation of the cost of each product.
For its development, the UBE “Empacadora Roberto Quesada Ramírez from the Meat Company of Sancti Spiritus was selected, since in the diagnosis made to the company it was found that the factors that influence the variations of the elements that intervene in the calculation of the cost.
Approach to the Scientific Problem.
"The non-application of the analysis of variations may constitute premises that prior to the use of technical, economic and productive roads and reserves based on the search for alternatives to reduce costs and increase business efficiency."
Research objectives
General objective
- Design techniques for the calculation, analysis and recording of variations in the elements that intervene in the cost of each product considering the standards.
Specific objectives
- Review specialized literature that enables the theoretical and practical foundation of the subject under study. Design the techniques for the calculation, analysis and recording of variations considering the established standards. Reasoning the factors that affect the variations of the elements that intervene in the cost of each product, which constitutes decision-making. Propose cost sheets for the selected products, which constitute bases for analysis in the organization.
Research hypothesis.
- If techniques are designed that allow the calculation, analysis and recording of the variations originated in the three elements that intervene in the calculation of the cost of each product, decisions can be taken that contribute to the use of roads and reserves to reduce the cost. of production.
The scope of the investigation.
It is the UBE “Roberto Quesada Ramírez from the Cárnica company of Sancti Spiritus, for the development of the work, the cost sheets of the selected products, the budgets of expenses and established standards, as well as the data offered by the report of production and the accounting books corresponding to the month of January 2006, the sample for the development of this work represents 50% of the products produced that month in the center.
The work consists of three chapters:
In Chapter I - A bibliographic review of the Cost Conceptualization is made.
Chapter II - Contains the characteristics of the company and the main indicators of the cost of production.
Chapter III - Presents the techniques for the calculation, analysis and recording of the variations of the elements that intervene in the calculation of the cost, according to the established standards.
Among the methods used in this work, the logical history was used in the analysis of documentation, with the purpose of determining the essence and development of cost accounting.
The analysis-synthesis, induction-reduction and the systemic approach that allowed the study of the proposed techniques for the analysis of the variations of the elements that intervene in the calculation of the cost of each product according to the established standards.
For the processing and evaluation of information, computing was used.
The methodology and theory of knowledge of dialectical materialism served as a theoretical basis for the work.
The work has a theoretical significance because it deepens in cost accounting, as well as emphasizes in the standard cost its importance for decision making.
We also consider that the work has practical significance, since it proposes techniques for the calculation, analysis and recording of variations, which makes it possible to know the factors that influence these for decision-making that contribute to increased efficiency and effectiveness. in the rational use of resources.
Meat Union Cost System.
For the design of the cost system, the regulations contained in the general guidelines for the planning and determination of the cost of production in the MINAL are considered, as well as the determination and analysis of the cost of production in the companies of the Food industry and the Meat Union, It considers the patterns that for the sector define the indications of the Ministry to which the organization is subordinated.
The cost plan constitutes a vital instrument in terms of defining the quantities to be considered in correspondence with the committed production volumes for an economic period, with its subsequent control, work is carried out to guarantee the goals contracted by the entity, avoiding unwanted variations in the that if it proceeds, it requires the adoption of actions that facilitate its correction, this derives the application of cost as an important management instrument, since through it it is feasible to combine the recognized functions in the field of management, playing an active and mobilizing role in search of productive reserves and in the evaluation of production alternatives that allow knowing the operation of the company.
The planning category in the company goes through different moments grouped in its Technical Economic Plan, within this the cost plan occupies a special place. In our conditions, the labor collective is an active factor in its conception.
The business planning system is delimited in two types of processes:
- Towards the inside of the company. Conformed with the elements that depend on the organizational capacities of the businessmen, as well as on the participation of the workers in the analysis of the proposed plan, which is mainly related to the strategic projection of the company, and the economic and technical conditions of the organization..Linking the company with national planning and the regulatory environment. Necessary adaptations of the company plan based on economic objectives, directives, guidelines or regulations of the Central Government, the body to which it is subordinate, the branch to which it belongs and the territory, having its main expression in the annual business plan, which they present to the entity their commitments to society and the national economy.
The interpellation of these two processes guarantees the continuity over time of the planning process as shown below, thus complying with one of the planning principles.
Continuity in time of the Business Planning process.
- Therefore, the strategy defines the strategic objectives in the medium term. The annual plan is the objectives for each year based on the goals in the medium term. Control is the comparison of what is executed with what is planned, looking for variations in it.. Execution is the fulfillment of the plan in a medium term for each year.
The guiding documents for preparing the Company's plan are:
- The Economic Resolution of the V Congress of the Communist Party of Cuba. The Directives for the elaboration of the Plan and the State Budget of the year in question, approved by the Government. General Instructions for the elaboration of the Plan emitted by the MEP. The specific Directives and complementary instructions issued by the MFP for the elaboration of the State Budget. Specific indications for the elaboration of the Plan and the State Budget issued by its superior organism. The Plan for the current year, the results of the control of its execution and the estimates of Compliance. Strategic projections and others in the medium term and more immediate perspectives, expressed in business plans. Strategic Economic Development Programs in which the business organization is inserted.The approaches of the workers in the Assemblies for Economic Efficiency.
The coordination and control of the plan of the Company and the UBE that it groups, using the economic area in accordance with the characteristics of the activity, will be approved by the governing body, which in this case is the direction of the company.
- The work schedule and the tasks to be executed by each area of the entity are defined for the preparation, execution and control of the annual business plan and the budget, guaranteeing that all the internal coordination and reconciliations that are required for the correct foundation of the plan.The information flow to be received from the UEBs that it groups together is defined, as appropriate, provided that it satisfies the information requirements of the upper levels of management and the Government and complies with the methodological instructions established for this purpose.
Among the categories that I know, the cost plan is manifested, among the phases to be considered.
Phases to be considered for planning production costs
- In the elaboration of the plan two stages can be seen
- The proposed number The aggregation of the same.
The stage of the proposed figure must be followed in the following order:
- The levels of activity to be considered in next year's Plan will be disaggregated, without waiting to receive the directive figures.
At this stage we have to determine the assortments and production levels of each of them in the different establishments of the company, considering the offers of the most fundamental raw materials (coordinated with MINAGRI, cattle and pigs), in addition to consumption rates. as finished production of each planned assortment.
- The cost sheets will be drawn up, in relation to the directive items, for which the following aspects will be taken into consideration: The determination of the production assortments in each of the company's establishments. consume in each of the assortments to be produced. The prices of the raw materials to be consumed. The planned consumption norms and indices of the product, for each cost center. The consumption thus determined must coincide with that contemplated for the supply plan, here we must take into account the determination of the assortments that correspond to each cost center, in addition to the needs of raw materials according to the consumption rules of each product to elaborate and lastly the cost prices of raw materials.
The planned work rules:
- The expense budgets of the production areas will be elaborated by multiplying the unit costs from the costs by the production levels and also determining the indirect expenses that originated in these areas. The expense budget of the support areas will be prepared, services and management, here the indirect production expenses of the above mentioned areas of the previous year are analyzed to determine the possible increases and / or reductions of these expenses in the planned period, in order to determine the spending budgets in each area or center of cost.
Considering the aforementioned process, the distribution of the expenses of support, services and management areas will be made, all of which will be carried out in accordance with the bases established for this purpose, it is shown in annex no. 1 where the cost plan of the UBA Empacadora Roberto Quesada Ramírez is broken down, where we will carry out this work.
2.1.1 Characterization of the Company
The Meat Company of Sancti- Spiritus, was created in 1976 by the administrative political division, it was created with resolution # 385 subordinated to the Ministry of the Food Industry, belonging to the Meat Union, it has 4 UBE, and the direction of the Company, which has 481 workers.
To fulfill this objective, it has a beef cattle slaughterhouse, a combined one with a bean, the Empacadora Cárnica, the UBA that has the transport base, the centralized kitchen, and the central warehouse, in addition to the address of the company.
This entity is in business improvement, the following steps have been taken.
- Initial Preparation of all the workers: seminars were given by the members of the Cárnica union, to the leaders and workers, these are done with a view to informing them about the objectives and scope of Business improvement.
- Initial Diagnosis: The deficiencies of each Sub were identified. System and its causes.
- Diagnosis approval by the executive group.
- Preparation of the File.
The transformations that are foreseen as development prospects for the future are eloquent, being analyzed the market trend and taking into account investments that support the increasing demand that is calculated to be in the coming years, all the company's productions will have a market safe for its high quality since it maintains a well-conceived quality management program.
The Meat Company has as its mission:
- Guarantee the production of meat and meat products with the required quality, are established by state regulations for the population through the province's retail trade.
- Guarantee the production of meat and meat products with the required quality that are assigned to the organizations and companies in the province through assignments of directive figures.
- Processing of raw materials for the production of animal feed, based on animal dependency.
- Preparation, transportation of meat products with the qualities established for the sale of MLC tourism, low production cost.
In order for the Company to achieve these objectives, it is necessary to have a cost system that allows it to create sufficient information to control production, productivity, and cost and results (profit or loss) returns, in order to optimize the Business management.
One of the Sub. Systems of business improvement, constitutes the costs, basis for the rest of the Sub. Systems because he provides great information for the proper functioning of them.
The entity's economic indicators have the following behavior, which we describe below
Summary of the main Economic Indicators
| Indicators | U / M | Year
2004 |
YEAR 2005 | % | % Rel. | |
| Plan | Real | Comply. | A.Ant. | |||
| Gross Production | MP | 27,943.0 | 30450.0 | 32,674.0 | 107.3 | 116.9 |
| Mercantile value | MP | 27,930.8 | 30450.0 | 32647.3 | 107.2 | 116.9 |
| Prod. Merc. | MP | 18 130.9 | 22351.9 | 23895.3 | 106.9 | 131.8 |
| Cost P / Peso Mercantile Value | Pesos | 0.6491 | 0.7341 | 0.7319 | 99.7 | 112.8 |
| Value added | MP | 10920 | 9,375.8 | 10125 | 108.0 | 92.7 |
| Monetary Income | MP | 1,737.3 | 1990.5 | 2,040.5 | 102.5 | 117.5 |
| Ing.Monet erario / Peso V.Agreg. | Pesos | 0.1591 | 0.2123 | 0.2015 | 94.9 | 126.7 |
| Average Workers | One | 434 | 434 | 463 | 106.7 | 106.7 |
| Productivity by Mercantile Value | Pesos | 64357 | 70161 | 70513 | 100.5 | 109.6 |
- Mercantile Production runs at 107.2%, which represents an over-fulfillment of 2197.3 MP. In production, mainly located in the elaboration of Pork in Bands and Canned Meats. The Cost by weight of Mercantile Production is only 99.7 %, which represents a consumption of 67.1 MP less than planned, the satisfactory behavior of the Costs is possible due to the fact that the Material Expenditure is executed satisfactorily, when not buying Raw Materials that are higher than planned. 8.6%, which represents 575.8 MP more than planned, which was possible thanks to the fact that Material Expenditure and Costs had a favorable manifestation. Productivity in Mercantile Production and Added Value exceeds 0.5% and 1.2% respectively;It should be noted that the average number of workers was exceeded in 29 workers, which affected this index, due to the need to increase 7 custodial positions and to hire 22 workers for construction work. In general sense, at the end of 2005 a Mercantile Production growth when compared with the Year 2001 of 4569.5 MP, the Salary has increased by 428.5 MP and the Number of Workers by 41; Productivity by Mercantile Production and by Added Value is superior; the profit on surplus is met at 94.7%, which represents an increase of 3,518.0 MP; as well as the Costs by Weight of the production present an ascending efficiency.Due to the need to increase 7 custodial positions and to hire 22 workers for construction work. In general sense, at the end of 2005, a growth in Mercantile Production is observed when compared to 2001 in 4569.5 MP, the Salary has increased by 428.5 MP and the Number of Workers at 41; Productivity by Mercantile Production and by Added Value is superior; the profit on surplus is met at 94.7%, which represents an increase of 3,518.0 MP; as well as the Costs by Weight of the production present an ascending efficiency.Due to the need to increase 7 custodial positions and to hire 22 workers for construction work. In general sense, at the end of 2005, a growth in Mercantile Production is observed when compared to 2001 in 4569.5 MP, the Salary has increased by 428.5 MP and the Number of Workers at 41; Productivity by Mercantile Production and by Added Value is superior; the profit on surplus is met at 94.7%, which represents an increase of 3,518.0 MP; as well as the Costs by Weight of the production present an ascending efficiency.the profit on surplus is met at 94.7%, which represents an increase of 3,518.0 MP; as well as the Costs by Weight of the production present an ascending efficiency.the profit on surplus is met at 94.7%, which represents an increase of 3,518.0 MP; as well as the Costs by Weight of the production present an ascending efficiency.
Industrial Production and Efficiency Indicators
| 2005 | % | % Real | ||||
| Assorted | Um | 2004 | Plan | Real | Compliance | Last year. |
| Beef | TM | 1,191.3 | 1,283.4 | 1,390.8 | 108.4 | 116.7 |
| Beef Viscera | TM | 346.3 | 362.6 | 410 | 113.1 | 118.4 |
| Pig in Bands | TM | 778.5 | 825.3 | 1101.6 | 133.5 | 141.5 |
| Canned meat | TM | 3,653.5 | 3400 | 4052 | 119.2 | 110.9 |
| Salty | TM | 122.1 | 86 | 100.9 | 117.3 | 82.6 |
| Smoked | TM | 77.3 | 72 | 75.4 | 104.7 | 97.5 |
| Sausages | TM | 1709.1 | 1,780.1 | 1954.1 | 109.8 | 114.3 |
| Hermetic | TM | 89.9 | 33.8 | 29.3 | 86.7 | 32.6 |
| Other C. Preserves | TM | 1655.1 | 1423.1 | 1,392.3 | 97.8 | 84.1 |
| Hash | TM | 1,081.5 | 879 | 1097.9 | 124.9 | 101.5 |
| burgers | TM | 199.6 | 195 | 227.5 | 116.7 | 114.0 |
| Masses | TM | 374.0 | 349.1 | 66.9 | 19.2 | 17.9 |
| Croquettes dough | TM | 221.2 | 234.2 | 231.7 | 98.9 | 104.7 |
| Total Mercantile Value | MP | 27930 | 28300 | 32647 | 115.4 | 116.9 |
The Total Physical Production of the Year is exceeded by 17.7%, which represents a growth of 1025.2 MT, that is, the Social consumption and the Population received this quantity of products above the planned; they stand out within the assortments produced the overfulfillment of Pork in Bands and Canned Meat; Only the Hermetics are met at 86.7% due to lack of packaging.
2.1. 2- Characterization of the Research Object:
3 years ago, the UBE Empacadora Roberto Quesada Ramírez, whose capacity is to produce 3,280 TN of meat products, was launched. In 2005, it managed to produce 3449.4 TN, a figure never reached with a market value of 17768.3 Mp, it has 92 workers. 46 of them are workers, 3 leaders, 23 technicians, 15 service 1 administrative and 5 technicians in training.
Next we make an analysis of the Economic indicators of the year 2005 in relation to the previous year to show the results obtained.
|
INDICATORS |
U / M |
Year 2004 |
Year 2005 |
VARIAC |
||||
| PLAN | REAL | % | PLAN | REAL | % | |||
| Canned meat | Tn | 3008.8 | 3052 | 101 | 2987 | 3449 | 115 | 397 |
|
Tn | 1208.1 | 1397 | 115 | 1515 | 1553 | 102 | 156 |
|
Tn | 1800.7 | 1656 | 91 | 1448 | 1889 | 130 | 232 |
| Croquettes | Tn | 215.5 | 221.2 | 102 | 234.2 | 194 | 83 | 26 |
| Mercantile value | Mp | 15881 | 16286 | 102 | 17059 | 17768 | 104 | 1482 |
| Productivity | Mp | 20896 | 20106 | 96 | 18934 | 18902 | 103 | 1204 |
| Average wage | Mp | 4417 | 4032 | 91 | 4146 | 4210 | 101 | 178 |
| Profit or Loss | Mp | 7420 | 8858 | 119 | 10096 | 10753 | 106 | 1895 |
| Monetary income | Mp | 335.7 | 326.6 | 99 | 383 | 394 | 103 | 68 |
| Average work | Mp | 76 | 81 | 106 | 93 | 94 | 101 | 13 |
| Rel Expenses / Income | Mp | 0.58 | 0.53 | 91.3 | 0.50 | 0.48 | 96 | 0.05 |
The results obtained by the Empacadora are favorable, although the productivity indicator decreased compared to 2004 due to the increase in the productive force without being planned, this is due to the incorporation of the security and protection group at the center, In productive economic management, it is required that the cost analysis act in an active way and that it provide information that allows the analysis of the causes that cause the variations, aspect to which the business improvement that is applied in the entity calls us.
2.2- Determination of the standard rate for direct production materials.
To determine the cost of direct materials, it is necessary to take the production report as a base, where it reflects the total raw materials and materials used in production, since it is the same as the basis for preparing the cost sheet for each area. of responsibility, in order to determine the unit cost of each product, in this analysis I intend to determine the variations that exist with respect to the use of established consumption standards and the materials used.
2.3 -Determination of the standard direct labor rate.
To determine the salary cost per unit, we start from the potential of manufacturing approximately 6 TN of Mortadella Novel, 5.3 TN of Spicy Minced Meat and 1.5 TN of Pork Burger Masses daily, also calculating the hourly rate for direct workers, taking into account that this factory has an hourly payment system and not for performance and they work 8 hours a day, 45 direct production workers work there.
The Hourly Rate is obtained by dividing the basic salary by 190.6, which are the standard hours for a month.
Summary Table No. 1
| # WORKERS | TEMPLATE | BASIC SALARY | HOURLY RATE |
| one | Plant Manager | 975.00 | 5.11 |
| one | Technician B in Analysis of Prod. | 705.00 | 3.69 |
| one | Product Dependent | 575.00 | 3.01 |
| one | Operator A in Processing | 595.00 | 3.12 |
| 18 | Operator B in Processing | 605.00 | 57.18 |
| 4 | Operator C in Elaboration | 555.00 | 11.64 |
| 3 | Technician B in Elaboration | 705.00 | 11.09 |
| one | J from Brigada Hornos | 656.00 | 3.44 |
| 3 | Tec C in supplies | 545.00 | 8.57 |
| one | Technologist for production | 765.00 | 4.01 |
| 4 | Stevedore | 555.00 | 11.64 |
| one | Tec B in Product analysis | 595.00 | 3.12 |
| two | Brigadier J Prod Term. | 555.00 | 5.82 |
| 4 | Stevedores of prod term. | 545.00 | 11.43 |
| Four. Five | 142.87 |
Mortadella Novel:
Therefore if we divide the 6000kg. That can be produced daily between 8 hours of work we obtain the Kg. That can be done by the hour
6000kg / Days: 8 hours = 750 Kg. / Hour.
The hourly rate is 142.87 (Table No 1), so if we divide this rate by the Kg. Produced, which is shown below:
$ 142.87 / hour: 750 Kg / Hour = $ 0.19 / Kg
The salary per Kg. Is multiplied by 9.09% to obtain the provision for vacations and the sum of these is multiplied by 12.5% and 25% to obtain the contribution of social security and labor force tax, this is presented in the following calculations:
Provision for Holidays $ 0.19 x 9.09% = $ 0.017
Salary expense 0.19 + 0.17 = 0.207
Social Security 0.22 x 12.5% = 0.025
Labor force tax 0.221 x 25% = 0.050
Contribution 5% s / basic salary earned 0.207 x 5% = 0.010
Seasoned Mince:
In this product we make the calculation according to the previous logic presented.
The production per hour is obtained:
$ 5300 Kg / days: 8 hours = 662.5 Kg / hour.
$ 142.87 / hour: 662.50 / hour = $ 0.21.
Complementary expenses are shown below:
Provision for Holidays $ 0.21 x 9.09% = $ 0.019
Salary expense 0.21 + 0.019 = 0.22
Social Security 0.22 x 12.5% = 0.02
Labor force tax 0.22 x 25% = 0.05
Contribution 5% s / basic salary accrued 0.22 x 5% = 0.01
Pork Burger Masses:
We will carry out the calculation of this considering the previous applied mechanism.
1500 Kg / days: 8 hours = 187.5 Kg / hour.
Wage expense is obtained by dividing the hourly wage fund by output per hour
$ 142.87 / hour: 187.5 Kg / hour = 0.76
The complementary calculation is obtained:
Provision for Holidays $ 0.76 x 9.09% = $ 0.069
Salary expense 0.76 + 0.069 = 0.82
Social Security 0.82 x 12.5% = 0.10
Labor force tax 0.82 x 25% = 0.20
Contribution 5% s / basic salary earned 0.82 x 5% = 0.04
We present a method, according to our criteria that offers greater accuracy for calculating salary expenditure and its complementary expenses, since the diversity of assortments and the complexes of production processes make this proposed method the most directly applicable.
This allows us to know the salary per unit to be able to make the cost sheets with greater accuracy since at the moment the company must recalculate them since the salary for this year increased and the factory has more production of products since it is They started doing the school snacks.
2.4 Determination of the standard rate of indirect production costs per unit.
In this restructured sheet we include the indirect production costs, bearing in mind that these are part of the unit cost of each product.
The indirect production cost per unit was obtained by dividing the planned indirect cost by the planned production, these data were taken from the budget made by the company for 2006.
Indirect production costs per unit = Indirect costs of Planned Product
Production plan
Indirect production costs per unit
Mortadella Novel = 184940.40 = $ 0.12
1,420,000
Indirect production costs per unit
Seasoned Mince = 169863 = $ 0.13
1,240,000
Indirect production costs per unit
Pork Burger Masses = 28830.60 = $ 0.16
1,780,000
Summary Table No. 2 ANNUAL PLAN 2006.
| DESCRIPTION | U / M | MORTADELLA
NOVEL |
HASH
SPICY |
PORK HAMB MASSES |
| INDIRECT PRODUCTION EXPENSES | $ | 184940.40 | 169863 | 28830.60 |
| PRODUCTION PLAN | KG | 1,420,000 | 1,240,000 | 1,780,000 |
Based on the above calculations, we develop the standard amounts presented below in the summary table No. 3, 4, 5.
SUMMARY TABLE No 3 MORTADELLA NOVEL COST SHEET
| CONCEPTS | CONSUMPTION INDICES | PRICE | COST | COST
TOTAL |
||
| MN | YOU | MN | USD | |||
| Beef Prime | 0.073684 | 7.23 | 0.53 | 0.53 | ||
| Second Beef | 0.084211 | 3.41 | 0.28 | 0.28 | ||
| Fresh blood | 0.021053 | 0.24 | 0.005 | 0.005 | ||
| Lard | 0.063158 | 0.28 | 0.017 | 0.017 | ||
| Wheat flour | 0.126316 | 0.34 | 0.04 | 0.04 | ||
| Pork Meat | 0.084211 | 12.84 | 1.08 | 1.08 | ||
| Garlic Powder | 0.003158 | 1.68 | 3.03 | 0.005 | 0.004 | 0.009 |
| Mortadella Seasoning | 0.002632 | 4.44 | 0.11 | 0.007 | 0.11 | |
| Salde Heal | 0.002632 | 1.86 | 0.004 | 0.004 | ||
| Ice | 0.180632 | 0.17 | 0.03 | 0.03 | ||
| Fine salt | 0.021053 | 0.03 | 0.0006 | 0.006 | ||
| MDM meat | 0.38947 | 0.82 | 0.3193 | 0.3193 | ||
| Liquid smoke | 0.000421 | 5.47 | 4.12 | 0.0023 | 0.0017 | 0.004 |
| Novel casing and staples | 0.0501 | 0.31 | 0.0114 | 0.06 | 0.0714 | |
| Total Materials | 2.48 | 0.0628 | 2.53 | |||
| Water | 0.021 | 0.021 | ||||
| Fuels | 0.002 | 0.002 | ||||
| Energies | 0.010 | 0.010 | ||||
| Salary + 9.09% | 0.200 | 0.200 | ||||
| Contribution sec. Social | 0.027 | 0.027 | ||||
| Contribution / Workforce | 0.050 | 0.050 | ||||
| Contribution of 5% S / Sal | 0.010 | 0.010 | ||||
| Production Ind. Expenses | 0.120 | 0.120 | ||||
| Distribution expenses Sale | 0.12 | 0.12 | ||||
| Total expenditures | 2.95 | 0.14 | 3.09 | |||
| Profit / Base Margin | twenty% | 0.62 | ||||
| Company Price | 3.71 |
SUMMARY TABLE No 4 COST OF SPICEED PICADILLO
| CONCEPTS | CONSUMPTION INDICES | PRICE | COST | COST
TOTAL |
||
| MN | YOU | MN | USD | |||
| Beef Prime | 0.143443 | 7.23 | 1.03 | 1.03 | ||
| Second Beef | 0.133197 | 3.41 | 0.53 | 0.53 | ||
| Pork Meat | 0.081967 | 12.84 | 0.42 | 0.42 | ||
| MDM meat | 0.20498 | 0.62 | 0.12 | 0.12 | ||
| Soya flour | 0.015369 | 0.53 | 0.008 | 0.008 | ||
| Soy Textured | 0.13197 | 0.58 | 0.07 | 0.07 | ||
| Prep. Mince Cond. | 0.015369 | 0.22 | 1.28 | 0.004 | 0.019 | 0.023 |
| Common salt | 0.01245 | 0.03 | 0.0003 | 0.0003 | ||
| Ice | 0.286885 | 0.17 | 0.04 | 0.04 | ||
| Staples | 0.44 | 0.0001 | 0.00005 | 0.00005 | ||
| Total Materials | 2,240 | 0.019 | 2.25 | |||
| Water | 0.021 | 0.021 | ||||
| Fuels | 0.0022 | 0.0022 | ||||
| Energies | 0.0022 | 0.0022 | ||||
| Salary + 9.09% | 0.22 | 0.22 | ||||
| Contribution sec. Social | 0.02 | 0.02 | ||||
| Contribution / Workforce | 0.05 | 0.05 | ||||
| Contribution of 5% S / Sal | 0.01 | 0.01 | ||||
| Production Ind. Expenses | 0.13 | 0.13 | ||||
| Distribution expenses Sale | 0.068 | 0.068 | ||||
| Administration costs. | 0.06 | 0.06 | ||||
| Total expenditures | 2.82 | 0.019 | 2.83 | |||
| Profit / Base Margin | twenty% | 0.62 | ||||
| Company Price | 3.39 |
SUMMARY TABLE No. 5 COST SHEET PORK HAMBURGER MASSES
| CONCEPTS | CONSUMPTION INDICES | PRICE | COST | COST
TOTAL |
||
| MN | YOU | MN | USD | |||
| Pork Meat | 0.515996 | 12.84 | 6.62 | 6.62 | ||
| Soy Textured | 0.144479 | 0.58 | 0.083 | 0.083 | ||
| Blood | 0.020640 | 0.40 | 0.0082 | 0.0082 | ||
| Prepared Hamburg | 0.04644 | 0.27 | 0.0125 | 0.0125 | ||
| Oregano | 0.000516 | 0.43 | 0.00022 | 0.00022 | ||
| Ice | 0.303922 | 0.17 | 0.051 | 0.051 | ||
| Total materials | 6.78 | 6.78 | ||||
| Water | 0.0045 | 0.0045 | 0.0045 | |||
| Energy | 0.0022 | 0.0022 | 0.0022 | |||
| Salary + 9.09% | 0.82 | 0.82 | ||||
| Contribution sec. Social | 0.10 | 0.10 | ||||
| Contribution / Workforce | 0.20 | 0.20 | ||||
| Contribution of 5% S / Sal | 0.04 | 0.04 | ||||
| Production Ind. Expenses | 0.16 | 0.16 | ||||
| Distribution expenses Sale | 0.062 | 0.062 | ||||
| Administration costs. | 0.06 | 0.06 | ||||
| Total expenditures | 8.22 | 8.22 | ||||
| Profit / Base Margin | twenty% | 1.64 | ||||
| Company Price | 9.86 |
If we compare the cost sheets prepared by the company, in annex No. 7,8,9, with those proposed according to tables No. 3,4,5 it is detected that there are differences between them, this points out that cost measuring instruments are applied that need to be updated, since the company this year 2006 began the payment of the salary increase that corresponds to business improvement, also this year the price of pork decreased from $ 32.50 to $ 12.84, so we suggest taking the necessary measures to solve said problem.
CHAPTER 111 - APPLICATION OF THE VARIATION ANALYSIS PROCEDURE.
3.1- CALCULATION OF THE VARIATIONS.
The analysis of the variations or deviations of the unit cost is carried out for all the items, both direct and indirect, regardless of whether said production is carried out in a single area or in several areas.
As the quality of the primary information and its registration is higher, the cost analysis may be more effective in detecting situations that negatively affect the production of one or more products.
The presentation of the deviations by items allows to know at a glance how the resources have behaved or have been used at that level of breakdown, which constitutes a disaggregation of the unit cost.
Generally, two factors intervene in the ancestry of each item: one expressed in physical units and the other expressed in monetary terms, either of which may affect the cost of production.
In consequences, it is possible to go deeper into the analysis by determining the influence that each of these factors has on the total deviation of the item.
The items formed by the controllable expenses are those related to the level of activity and on the amount of which the management of the different persons responsible for the rational use of resources can influence.
Frequently, in the face of a certain problem that requires an adequate response, the analysis of controllable expenses constitutes a valuable instrument in decision-making.
3.1.1- Variation of Direct Materials.
The variation of direct materials is given by the price and quantity consumed in the production process.
Variation
Quantity = (Standard Quantity - Actual Quantity Used) Standard Price
The data necessary to determine these variations are shown in annexes No. 2, 3, 4, 5.
| Variation Quantity = Quantity - Quantity x Standard Price |
| Real Standard Used |
| Prime Beef = (9337.21 - 12957.3) 5.90 = $ 21358.53
Unfavorable |
| Second Beef = (10671.19 - 12682.20) 3.41 = $ 6857.54
Unfavorable Pork Meat = (10671.19 - 0) 12.84 = $ 137018.07 Favorable |
| Beef Liver = (0 - 37) 6.86 = $ 253.82
Unfavorable |
| Fresh Blood = (2667.83 - 2534.40) 0.24 = $ 32.02
Favorable |
| Lard = (8003.36 - 3471.80) 0.28 = $ 1268.83
Favorable |
| Wheat Flour = (16006.73 - 15206.40) 0.34 = $ 272.11
Favorable |
| Garlic Powder = (400.18 - 159.84) 1.68 = $ 403.77
Favorable |
| Clove = (0 - 4.32) 13.25 = $ 57.24
Unfavorable |
| Nutmeg = (0 - 2.88) 8.20 = $ 23.64
Unfavorable |
| Saz. Mortadella = (333.52 - 180.95) 1.86 = $ 31.18
Favorable |
| Ground Coriander = (0 - 4.80) 1.64 = $ 7.87
Unfavorable Salt Cure = (333.52 - 316.79) 1.86 = $ 31.18 Favorable Ice = (22889.64 - 17675.10) 0.17 = $ 886.47 Favorable Fine Salt = (2667.83 - 2304.18) 0.073 = $ 26.54 Favorable Beef Steak = (0- 341.50) 7.99 = $ 2760.54 Unfavorable Butter Imported = (0 - 379.40) 1.29 = $ 489.42 Unfavorable MDM Meat = (49354.04 - 54998) 0.82 = $ 4628.04 Unfavorable Salty Meat = (0 - 2304) 5.11 = $ 11773.44 Unfavorable Liquid Smoke = (53.34 - 50.68) 5.47 = $ 14.55 Favorable Beef hash = (0 - 334) 1.95 = $ 651.30 Unfavorable Empellas = (0 - 349) 0.25 = $ 87.25 Unfavorable Prep Pic. Seasoned = (0 - 108.40) 3.73 = $ 404.33 Unfavorable Novel casing = (28160 - 28170) 0.36 = $ 3.60 Unfavorable Staples = (56340 - 56360) 0.0001 = $ 0.002 Unfavorable Total Variation _______ $ 90628.16 Favorable |
Variations of the Seasoned Mince:
| Variation Quantity = Quantity - Quantity x Standard Price | ||||||||||||||||||||||||
| Real Standard Used | ||||||||||||||||||||||||
| Prime Beef = (14358.65 - 9512) 5.90 = $ 28595.23
Favorable. Pork Meat = (8204.90 - 0) 12.81 = $ 105 104.76 Favorable. |
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| Second Beef = (13333.03 - 14514.50) 3.41 = $ 4028.81
Unfavorable |
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| Soybean meal = (1538.43 - 0) 0.86 = $ 1323.04
Favorable |
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| Soy Textured = (13210.21 - 14514.50) 0.91 = $ 1186.90
Unfavorable |
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| Ice = (28717.21 -26726.80) 0.17 = $ 338.36
Favorable MDM Meat = (20512.31 -25092) 0.82 = $ 3755.34 Unfavorable Prep Pic. Seasoned = (1538.43 -1501.50) 3.73 = $ 137.74 Favorable Nylon Casing = (25666 –25690) 0.04 = $ 0.96 Unfavorable Staples = (51332 - 51380) = 0.0001 = $ 0.0048 Unfavorable Fresh Blood = (0 - 1001) 0.24 = $ 240.24 Unfavorable |
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| Mince Beef = (0 -5666) 1.95 = $ 11048.70
Unfavorable Fine Salt = (1025.22 - 1301.3) 0.073 = $ 20.13 Unfavorable Total Variation ___________ $ 115218.05 Favorable. Variations of pork burger masses Variation quantity = Quantity - Quantity x Standard Price Real Standard Used Pork Meat = (8777.46 - 750) 12.81 = $ 102 831.76 Favorable. Soy Textured = (2457.69 - 2381.50) 0.91 = $ 69.33 Favorable Burger mix = (772.96 - 0) 2.40 = $ 1855.10 Favorable Fresh Blood = (351.10 - 340.20) 0.24 = $ 2.61 Favorable Fine Salt = (370.15 - 307.15) 0.073 = (there is no Variation) Second Beef = (0 - 297) 3.41 = $ 1012.77 Unfavorable Garlic Powder = (0 - 51.48) 1.68 = $ 86.48 Unfavorable Ground Coriander = (0 - 11.62) 1.64 = 19.05 Unfavorable Salt Quarter = (0 - 11.62) 1.86 = 21.61 Unfavorable Seasoned mince prep = (0 - 5.25) 1.95 = 10.23 Unfavorable Onion Powder = (0 - 35.73) 3.03 = $ 108.26 Unfavorable Black Pepper = (0 - 1.44) 4.46 = $ 6.42 Unfavorable Red Pepper = (0 - 0.40) 3.51 = 1.40 Unfavorable Croquettes preparation = (0 - 9.27) 2.01 = $ 18.63 Unfavorable Ground oregano = (8.77 - 8.72) 3.14 = $ 0.15 Unfavorable Ice = (5169.93 - 5341.46 0.17 $ 29.16 Unfavorable Pig Trim = (0 - 7108) 0.17 = $ 1208.36 Unfavorable Total Variation ________________ 102,236.28 Favorable. |
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| 3.1-2- Variation of Indirect Production expenses | ||||||||||||||||||||||||
| There are 3 methods of analysis of Variations in Indirect Production Expenses:
1- Method of analysis of a variation 2- Methods of analysis of two variations 3- Three variation analysis methods |
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| In this work we will take the method of two variations, due to the importance that it has since it is possible to analyze the budget and the volume.
The variation in the budget represents the difference between the budgeted and actual production overhead. Budgeted indirect production costs are made up of fixed and variable costs. |
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| The applied and budgeted production indirect costs only differ in fixed portion because the variables are calculated in the same way
To determine the deviations of the indirect production costs, we calculated the cost equation using the high and low point method, based on the factory's total salary expense in the months of July to December 2006. The planned indirect production expenses and the planned salary were obtained from the budgets made by the company for the year 2005. |
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Summary Table No. 6
|
HIGH POINT LOW POINT DIFFERENCE
Indirect expenses
Production $ 79179.46 $ 65365.09 $ 13814.37
Salary 42732.04 33499.04 9233.00
Variable Spending Rate ____________________________ $ 1.49
COST EQUATION
Y = A + BX
Where
Y = Total Costs
A = Fixed Costs
B = Variable Costs
X = Activity Level
$ 79179.46 = A + 1.49 ($ 42732.04)
79179.46 = A + 63670.73
Y = $ 15508.73 + 1.49 x
The fixed expense rate is calculated by dividing the fixed expense by the calculation base.
$ 15508.73 / $ 42732.04 = $ 0.36
The behavior of real production indirect expenses, shown in the financial statements are found in Table No. 6.
Variable indirect production costs are obtained by multiplying the activity level by the variable cost rate obtained through the cost equation.
Indirect Variable Production Expenses.
Real: 11508.50 (1.49) = $ 17147.66
Variable Production Indirect Expenses
Budgets: 42732.04 (1.49) = $ 63670.73
Variable Production Indirect Expenses
Applied: 42732.04 (1.49) = $ 63670.73
Fixed indirect production costs are determined by multiplying the fixed cost rate by the real wage cost.
Indirect Fixed Production Expenses Applied: 11508.40 (0.36) = $ 4143.02
Variation of Indirect Production Expenses:
REAL BUDGETS APPLIED
Variables $ 17,147.66 Variables $ 63670.73 Variables $ 63670.73
Fixed 13191.56 Fixed 15508.73 Fixed 4143.02
_________ __________ _________
Total $ 30,339.22 $ 79,179.46 $ 67,813.75
Favorable $ 48840.24 Unfavorable $ (11365.71)
Total Variation __________ $ 37474.54 Favorable
The distribution of budget variations by product is presented below.
PLAN REAL VARIATION PRODUCTS
Mortadella Novel $ 17471.40 $ 15411.40 $ 2059.70
Seasoned Mince 15242.06 14155.25 1086.81
Pork Burger Dough 3212.14 2402.55 809.59
_________ _________ ________
Totals $ 35,925.60 $ 31,969.50 $ 3,956.10
The distribution of product variations applied is calculated by apportionment using the determined percent of the actual product expense.
To determine the percent by product of actual indirect costs, divide the cost of each product by the total cost.
Mortadella Novel = $ 15411.70 = $ 0.48
31969.50
Seasoned Mince = 14155.25 = $ 0.44
31969.50
Pork Burger Masses = 2402.55 = $ 0.07
31969.50
We multiply the previous hundreds by the total variation of indirect expense applied and obtain the corresponding deviation for each product.
Mortadella Novel = $ 11365.71 x $ 0.48 = $ 5455.54
Seasoned hash = 11365.71 x 0.44 = 5000.91
Pork Burger Masses = 11365.71x 0.07 = 795.59
The total variation is the sum of the variations in the budget and volume.
Mortadella novel = $ 2059.20 + $ 5455.54 = $ 7515.24
Seasoned hash = 1086.81 + 5000.91 = 6087.72
Pork Burger Masses = 809.59 + 795.59 = 1605.18
The total variation in the budget is favorable at $ 48840.24, but there is an under-utilization of capacity at $ 11365.71, so the total variation is $ 37474.53 Favorable.
Variations in Electric Power and Fuel.
We must point out that this expense is within the indirect production expenses, but we want to make an analysis of it to demonstrate a way to calculate by areas and assortments the same for the preparation of cost sheets, since the company it registers the same general because a study of it has never been done.
The fuel is used in the plant in the steam boiler that it is located in La Pastorizadora, only a% of its total cost is paid.
When defining the Total Expense of Electricity with respect to the previous year, a decrease is shown, since a saving plan was made, measures that are periodically checked by means of a curve.
Expenditure occurs in various areas of the production process and they are made up as follows:
Reception of raw materials:
Refrigerator 1-) Consumption Expense in 24 hours 247.68 Kw.
Fridge 2-) Consumption Expense in 24 hours 300.64 Kw.
Fridge 3-) Consumption Expenditure in 24 hours 390.96 Kw.
Production Hall:
- Chinese mill in 8 hours spends 296 KW
- Go Russian in 8 hours spend 336 KW
- Russian stuffer in 8 hours 116 KW
- Maintenance refrigerator 8 hours 130.32 KW
- Nagema Stuffer 8 hours spends 89.6 KW
- Ice maker 8 hours spends 120.8 KW
Furnaces Department
(This is where cooking is given to products that have the same)
- Steam stubs (does not consume electricity).
- Electric Winchs consumes 8 hours 32 KW.
Finished Products Department
- Refrigerator 5-) consumes in 24 hours 300.48 Kw.
- Refrigerator 6-) consumes in 24 hours 1360.8 Kw.
The energy consumption of the manufacturing areas, ovens and finished products is obtained by multiplying the consumption of Kw./hours by the days worked in each of the assortments, according to the sample taken from January of this year.
Below we show a sample of how you can calculate the cost of electricity by products, which we propose in this work so that it is taken into account when preparing the cost sheets for each assortment, which must be done so that the They have the required quality, since at this time the company calculates the same by an estimate provided by the energy company with historical data.
Mortadella Novel
- Processing room = 1088.72 Kw / 4 hours x 20 days worked = 5443.60kw Cooking Area = 32 Kw / 6 hours x20 days worked = 106.6kw Finished Products = 1661.28kw / 8 hours x 20 days worked = 4153.20kw
| 3.2- Analysis of Variations.
After calculating the deviations of the three elements of cost that arose between plans and the actual performance of January 2006, the causes that originated them and those responsible for them must be determined. In our case we will limit ourselves to defining their causes, the attributions of responsibility over them is a task that due to its importance must be assumed by the company, since in the case of the use of direct materials the establishment produces with raw materials that the company plans or buys, in addition to the deviations in the formulas as those responsible for the company's production area clarify that they can be produced without affecting the% of meat that each product carries, which does affect the cost of the products since there are variations in the prices of raw materials, for example imported products are cheaper than domestically produced meat products,In the case of beef, the cost this year rises as wages are higher and the company began to pay with the new method of business improvement, in addition, beef and pork are received at the cost price of slaughterhouse and combined to which are added the real costs of its production in each establishment which generates an increase in it. 3.2.1- Analysis of the Variations of Direct Materials. Variations in quantities of Direct Materials are shown in Annex No. 10. Variations of the Mortadella Novel
The total variation of the Mortadella novel was favorable since more first and second beef was used according to the established formulas because pork was not used and it made the costs of that product more expensive, since it did not exist in the fridge. Variations Pork burger masses
The general variation of this product is favorable of $ 102,236.28 this is due to the fact that pork meat was not used, which is more expensive, so beef and pork trimmings were used, this as explained above does not affect the% meat of the product but if I consider that it affects the quality of the same since the cut of pork presents more fat and more quantity was used. Seasoned Mince Variation In the production of 99,547 kg of seasoned mince, 9,512 kg of raw beef was used, which was not planned, which gives us a favorable variation of $ 28,595.23. 14514.50 kg of second meat were used, and 13333.03 kg should be used, which gives us an unfavorable variation of $ 4028.81. 8204.90 kg of meat and pork ceased to be used, which represents a favorable variation of $ 105 104.76. 1301.30 kg of fine salt was used and 1001.01 kg should be used, which represents an unfavorable $ 20.13. 1538.43 kg of soybean meal were discontinued, yielding a favorable variation of $ 1323.04. In the case of Textured soybeans, 14514.50 kg was used, and 13210.21 should be used, which gave an unfavorable variation of $ 1186.90. The MDM was used for 25092 kg, and 20512.31 kg should be used, showing an unfavorable variation of $ 3755.34. 25666 Nylon casings were used and 25690 should be used, which showed an unfavorable variation of $ 0.96 In the case of the use of staples, it can be shown that 51380 was used, and 51332 should be used, showing a favorable variation of $ 0.0048 1001 kg was used. of blood which was not planned which gives an unfavorable variation of $ 240.24. 5666 kg were consumed in the imported hash. which was not planned, which shows an unfavorable variation of $ 11048.70. 1501.50 of a plan of 1538.43 was used in the seasoned hash preparation, which gave a difference of $ 137.74. 3.2.2- Analysis of variations in indirect production costs. The variation in total budget is favorable at $ 3956.10, this is due, incurred $ 31969.50 of indirect expenses and $ 35925.60 were budgeted. Mortadella Novel has a favorable variation of $ 2059.70, due to the plan being $ 17471.40 and the actual made $ 15411.40. The seasoned hash has a favorable variation of $ 1086.81 due to the plan being $ 15242.06 and the actual made of $ 14155.25 In the case of the pork burger dough, it was also favorable of $ 809.59 because the plan is $ 3212.14 and the real was 2402.55. Indirect production costs applied compared to those budgeted present an unfavorable variation in volume of $ 11365.31. The Mortadella Novel has a favorable variation in volume of $ 5455.54, in the minced seasoning a favorable variation of $ 5000.91 and the pork burger dough also presents a favorable variation of $ 795.59. 3.3-Adjustment of Variations. There are several methods of direct material variations, the most recommended is to record the variations in efficiencies or quantity at the time of the requisition of the material, so its registration implies a debit to the main production account in process at the standard cost The two variations of direct labor in rate and hour, are recorded when a single journal entry is incurred, the cost of direct labor is charged to the main production in process making use of the standard hours of labor. direct and standard rate, and is credited to salary using daily rates and hours. As for the applied and actual production overhead, as well as any changes made should be recorded in a journal entry, the total change in production overhead represents the difference between the value charged to the production overhead control account and the Value applied to the main production account in process, to explain these differences and to close the control account of indirect production expenses and applied expenses, the variation accounts are opened. For the purposes of the financial statements, inventories and the cost of products sold must be presented at real cost, therefore if they are maintained at standard cost, they must be adjusted to approximate real cost and individual variations must be proportionally distributed between the main production in process, the finished production and the cost of the products sold, since in this case the variations are adjusted only to the main production in process. The adjustment record of the variations in direct materials, as well as the indirect production expenses corresponding to the month of January 2006 is shown in annexes No. 14 for what was previously explained. Consumption of standard direct materials is obtained by multiplying the cost per unit (Annex No. 11, 12.13) by the production of these assortments for the month analyzed. Standard Cost of Raw Materials and Materials Mortadella Novel = $ 2.53 x 126751 Kg = $ 320680.03 Seasoned Mince = $ 2.25 x 99547 Kg = $ 223980.75 Pork Burger Masses = $ 6.78 x 17010.73 kg. = 115332.74 ACCOUNTS AND DETAILS MUST BE -one- Main Production in Process $ 320 680.03 Materials Variation $ 90628.16 Materials Inventory 230051.87 Recording consumption of Raw Materials and Materials with Unfavorable Variation Mortadella Novel efficiency. -two- Main Production in Process $ 223980.75 Materials Variation $ 114295.25 Materials Inventory 109685.50 Recording consumption of Raw Materials and Materials with favorable Variation efficiency of Seasoned Minced Meat. -3- Main Production in Process $ 115332.74 Materials Variation $ 102,236.28 Materials Inventory 13096.46 Registering consumption of raw materials and materials with favorable variation in efficiency of pork burger masses. -4- Main Production in Process $ 67813.75 Indirect Production Expenses Applied $ 67813.75 Recording the indirect production expenses applied. -5- Indirect Production Expenses $ 30339.22 Various Accounts $ 30339.22 Recording the actual indirect production costs at the factory. -6- Indirect Production Expenses Applied $ 67813.75 Variation in Volume 11365.71 Budget variation $ 48840.24 Budget variation $ 30339.22 Recording Variations Favorable in budget and unfavorable in volume of indirect production expenses. -7- Variation in amount $ 90628.16 Main Production in Process $ 90628.16 Closing Unfavorable variation of the Mortadella Novel assortment. -8- Variation in amount $ 115218.05 Main Production in Process $ 115218.05 Closing Favorable variation of the seasoned minced meat assortment. -9- Variation in quantity $ 102,236.28 Main Production in Process $ 102,236.28 Closing Favorable variation of the assortment Pork burger dough. -10 - Variation in Volume $ 11365.71 Main Production in Process $ 11365.71 Closing Unfavorable volume variation in the Baler. -eleven- Variation in Budget $ 48840.24 Main Production in Process $ 48840.24 Closing Variation in favorable budget in the packinghouse. -12- Main Production in process $ 11365.71 Variation in Volume $ 11365.71 Closing Unfavorable factory volume variation. The journal entries previously registered can be summarized in “T” account to check if the variations have been settled Annex No. 1 |
CONCLUSIONS
After this investigation was completed, the following conclusions were reached:
- The cost analysis is not aided in the valuation of each of the expense elements. There are differences between the consumption indices used in the preparation of the cost sheets and those applied technologically by the factory, since they are prepared by the company's economic management, which shows that there is no rigorous analysis in relation to the application of the established consumption indices. The technique used to calculate the unit wage expense is not the most appropriate because they use a proration system based on a fixed index according to branch norms. In the preparation of the cost sheets for each product energy consumption is not taken into account, affecting the cost deterioration. Variations are not analyzed and are not recorded in the accounting,which causes that the real cost of each product for decision making is not known. The proposed technique for the analysis and recording of the variations of the elements that intervene in the cost of each product according to the established standards, can be generalized in the UBE that carry out this activity of producing meat products in MINAL companies.
RECOMMENDATIONS
- The proposed techniques are validated for the analysis and recording of the variations of the elements that intervene in the production cost according to the established standards, which can be systematized. That the direction of economy of the company requires for the implementation of the techniques. Proposals for the calculation, analysis and recording of variations in order to know the real cost of each product. Propose to the company economy management the need to improve the cost sheets of the products analyzed in this work according to The results obtained. That a study of the cost of direct labor required by each product be carried out, considering this in the preparation of cost sheets.That a study by the energy company of the electricity consumption for each product according to the techniques carried out in this work is carried out, to communicate to the economy the real expense for the preparation of the cost sheets. Proposals for the calculation, analysis and registration of the variations of the elements that intervene in the cost for their generalization in the UBE of the meat companies of MINAL:
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