Formulas and example of calculating the company's costs
Posted: Sun Jan 12, 2025 8:05 am
Profitability is the income that an organization could earn if management made a different decision. It is calculated by multiplying the current rates by the quantity of goods sold at different prices.
The least variable and constant costs of a company are those incurred in producing one unit of output. These are the average costs of the company.
The costs of producing additional goods are called marginal. They reflect how much the volume of production will increase with an increase in the costs of purchasing raw materials and supplies.
Formulas and example of calculating the company's costs
Source: shutterstock.com
Example of structural costs of an organization. An agricultural company specializing in growing grain crops recorded the output of 2,000 tons of products in 2020. During the year, the following was spent:
for the purchase of seeds - 0.22 million rubles;
land rent - 0.1 million rubles;
equipment maintenance - 0.6 million rubles;
payment for the work of workers employed in the field and warehouse - 3.6 million rubles;
payment of salary to the accountant and remuneration to the head of the holding company - 1.6 million rubles;
fulfillment of tax obligations - 0.76 million rubles.
The corporation was given the opportunity to purchase all stocks at 36 rubles per kilogram, but the manager rejected the idea of ​​concluding a contract. Ultimately, grain products were sold at a price of 26 rubles per kilogram. Thus, the enterprise was able to earn 26 million rubles, given the sales volume of 1,000 tons.
The costs of improving seed quality can be divided into direct costs associated with production, accounting, the possibility of capital recovery and achieving efficiency.
Land rental costs remain constant, direct, production-related and controllable.
Formulas and example of calculating the company's costs
Source: shutterstock.com
Equipment maintenance is more france phone data related to the production and financial costs. Paying workers is considered a direct and important cost related to production, accounting, and the possibility of return.
Advance payment of the accountant's salary and incentives for the top manager are included in a number of indirect and non-production expenses.
It is known that companies' offers for a more advantageous contract may lead to lost profits or economic losses. A special formula is used to evaluate them:
UV (ED) = Vd - Fd,
in which:
Vd is the potential profit,
Fd - real profit,
UV (ED) - lost profit or economic damage.
You can calculate the potential income by estimating the profit at the proposed price:
36 rubles per kilogram * 1000 tons = 36 million rubles.
36 million rubles - 26 million rubles = 10 million rubles - lost profit or economic costs.
Increase Profits by 200%: Download 5 Powerful Tools for Free
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you the 5 most valuable documents that we have developed for our clients.
Download for free and implement today:
How to find out the 5 key marketing metrics in your company?
Step-by-step calculation template with fields where you can insert your data
How to make a KPI for a sales manager based on his work results?
Current template for calculating sales manager KPI
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
Cold Lead Processing Script Template
A checklist of ready-made questions for engaging cold clients
7 Profitable Marketing Strategies Examples
Will help increase customer flow by at least 30%
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153274
The least variable and constant costs of a company are those incurred in producing one unit of output. These are the average costs of the company.
The costs of producing additional goods are called marginal. They reflect how much the volume of production will increase with an increase in the costs of purchasing raw materials and supplies.
Formulas and example of calculating the company's costs
Source: shutterstock.com
Example of structural costs of an organization. An agricultural company specializing in growing grain crops recorded the output of 2,000 tons of products in 2020. During the year, the following was spent:
for the purchase of seeds - 0.22 million rubles;
land rent - 0.1 million rubles;
equipment maintenance - 0.6 million rubles;
payment for the work of workers employed in the field and warehouse - 3.6 million rubles;
payment of salary to the accountant and remuneration to the head of the holding company - 1.6 million rubles;
fulfillment of tax obligations - 0.76 million rubles.
The corporation was given the opportunity to purchase all stocks at 36 rubles per kilogram, but the manager rejected the idea of ​​concluding a contract. Ultimately, grain products were sold at a price of 26 rubles per kilogram. Thus, the enterprise was able to earn 26 million rubles, given the sales volume of 1,000 tons.
The costs of improving seed quality can be divided into direct costs associated with production, accounting, the possibility of capital recovery and achieving efficiency.
Land rental costs remain constant, direct, production-related and controllable.
Formulas and example of calculating the company's costs
Source: shutterstock.com
Equipment maintenance is more france phone data related to the production and financial costs. Paying workers is considered a direct and important cost related to production, accounting, and the possibility of return.
Advance payment of the accountant's salary and incentives for the top manager are included in a number of indirect and non-production expenses.
It is known that companies' offers for a more advantageous contract may lead to lost profits or economic losses. A special formula is used to evaluate them:
UV (ED) = Vd - Fd,
in which:
Vd is the potential profit,
Fd - real profit,
UV (ED) - lost profit or economic damage.
You can calculate the potential income by estimating the profit at the proposed price:
36 rubles per kilogram * 1000 tons = 36 million rubles.
36 million rubles - 26 million rubles = 10 million rubles - lost profit or economic costs.
Increase Profits by 200%: Download 5 Powerful Tools for Free
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you the 5 most valuable documents that we have developed for our clients.
Download for free and implement today:
How to find out the 5 key marketing metrics in your company?
Step-by-step calculation template with fields where you can insert your data
How to make a KPI for a sales manager based on his work results?
Current template for calculating sales manager KPI
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
Cold Lead Processing Script Template
A checklist of ready-made questions for engaging cold clients
7 Profitable Marketing Strategies Examples
Will help increase customer flow by at least 30%
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153274