Absolutely all organizations deal with overhead costs. At the same time, they are practically not regulated by law. In this article, you will learn what estimated overhead costs are and what they include.

Concept

Overhead costs are additional to the main expenses of the enterprise for the management, organization and maintenance of production. They are not directly related to the main production of goods or provision of services, and are not included in the cost of materials and labor.

Overhead costs thus - without being related to the main production process - ensure the normal functioning of the company or enterprise.

Overhead costs include the cost of goods, the costs of their production and circulation, but not directly, and indirectly - in proportion to the cost of materials and raw materials, the amount of wages, and so on.

As a result, estimated overhead costs can be called associated costs that are not directly transferred to the cost of each unit of production, but are subject to distribution.

Composition of overhead costs

As a general rule, overhead costs include:

1. Current repairs of buildings and structures, equipment.
2. Salaries, training and maintenance of the administrative and managerial apparatus.
3. Expenses for servicing vehicles on the company's balance sheet.
4. Rent for office, product warehouse.
5. Costs incurred due to downtime and defective products.
6. Costs associated with the operation and maintenance of fixed assets.
7. Costs of advertising, consulting services.
8. Maintenance of the office, payment of utilities.
9. Maintenance of main production.
10. Expenses for communication services (telephone, Internet), etc.

Overhead costs can be more broadly grouped into four groups:

1. Costs of production and its organization.
2. Costs of maintaining the administrative apparatus.
3. Staff service.
4. Non-production expenses.

KEEP IN MIND

In the Tax Code of the Russian Federation, overhead costs are not designated as such, their structure is not defined. The same applies to accounting - there is no differentiation of overhead costs here. Overhead costs are fixed by law only in such areas as construction, science, and medicine. Ordinary companies establish their own list of such costs.

For example, in trade organizations such expenses usually include costs associated with packaging, storage, transportation and marketing of products.

Read also Accountant prosecuted for cashing

The amount of overhead costs is indicated in budget plans and estimates, as well as in the own budget plans of structural divisions.

How to calculate overhead costs

The company independently determines the parameters in proportion to which overhead costs will be distributed.

When planning overhead costs, several methods are usually used:

1. Determination of overhead costs in proportion to the wage fund of workers employed in the main production, as part of direct costs.

This method is suitable for organizations that have a significant number of primary production workers (primarily manual labor).

EXAMPLE

The company is engaged in cargo transportation. The wage fund is 10 million rubles. in year. In 2018, overhead costs, according to the plan, had a coefficient of 85% and, accordingly, amounted to 8.5 million rubles. That same year, the company reduced its workforce with the goal of reducing overhead costs by up to 60%.

Consequently, in 2019, while maintaining the payroll for workers in the main production, overhead costs will amount to 6 million rubles.

2. If a company's production process is largely automated, it makes more sense to distribute costs in proportion to sales volume or machine hours.

Overhead in accounting are divided into 3 groups, formed on different accounts and differently correlated with the cost of production. Let's look at what they are.

Overhead expenses included in cost

The cost of products manufactured by an enterprise includes 2 types of expenses: direct and overhead. Direct ones include those that can be unconditionally linked to a specific type of product being created.

It is either difficult or impossible to relate overhead costs directly to manufactured products. Based on their connection with the production process, they are divided into:

• for production - ensuring the functioning of production units producing products;
• general economic - not directly related to the creation of products, but necessary to ensure the operation of the enterprise as a whole.

Existing rules (Chart of Accounts, approved by order of the Ministry of Finance of the Russian Federation dated October 31, 2000 No. 94n) do not prevent the possibility of forming accounting costs at 2 levels:

• its incomplete value, including, in addition to direct costs, only those overhead costs that are related to production;
• its full size, which combines, in addition to direct costs, overhead costs generated both in production departments and in general business structures.

Collection of direct production costs

For the accumulation of direct expenses in accounting, accounts 20, 23, 29 are intended, selected depending on the purpose of the production corresponding to these accounts:

• basic,
• auxiliary
• serving.

On the same accounts, the final cost of the created products will be formed by adding the required share of overhead costs to the direct costs.

Analytics on accounts 20, 23, 29 is organized by:

• by department;
• types of products created;
• cost items, among which, in addition to those directly related to direct ones, there will also be corresponding types of overhead costs included in the cost.

The list of items of direct production costs is, as a rule, very limited and most often involves a breakdown:

• for materials,
• workers' salaries,
• salary accruals.

Manufacturing overhead

The collection of overhead costs for production purposes is carried out on account 25, opened for each of the accounts intended for the formation of direct costs. Accordingly, the organization of cost analytics on it will be determined by classifying them:

• to a specific department
• certain type of expenses.

The list of items of production costs is made significantly wider than the list of direct costs, and can have a fairly high degree of detail, due to the enterprise’s requests for depth of cost analytics, breaking down into several levels. Articles highlighted in this list can be divided into the following groups, for example:

• current support of activities - this group will include expenses for remuneration of personnel, accruals for it, materials necessary for current work, depreciation of equipment used, costs of rent, insurance, information support, and travel of personnel;
• maintenance and operation of the property - will include the costs of maintenance, repairs, materials and energy resources necessary to support the normal functioning of the property and carry out its repairs;
• ensuring the quality of the products being created - there may be costs for obtaining the necessary permits, certification, experimental research, warranty service, and personnel training;
• labor protection - in this group we can highlight the costs of certification of workplaces, work clothes, special protective equipment, special food, sanitation of premises and work clothes, sanitary examinations.

Read more about the composition of costs in production costs in the article .

Account 25 at the end of each month is subject to closure with the distribution of the amounts collected on it to the types of products created in the corresponding division. This distribution is done in proportion to the base chosen by the enterprise. Most often, such a base becomes either one of the main types of direct costs (materials or wages), or the total amount of direct costs. In the direct cost accounts, the share of overhead production costs included there will not be broken down into its component parts, but will be included in the costs with a single analytics “general production costs”.

General overhead expenses

Account 26 is intended for collecting general business expenses. Analytics on it is organized according to the same principles as on account 25: by department and by type of expense. The list of general business expenses is basically similar to that created for account 25, but can be expanded by adding to it, for example, expenses:

• to ensure communication with counterparties (telephone, Internet, mail);
• legal and consulting services;
• entertainment events;
• conducting medical examinations of employees;
• selection and training of personnel;
• protection of the enterprise territory;
• taxes attributed to expenses.

Just like account 25, account 26 is subject to monthly closure. However, depending on the level at which it is decided to form the cost, the costs collected at it will be taken into account as follows:

• for partial cost - written off to the account for recording the financial result from sales without inclusion in the cost formed on accounts 20, 23, 29;
• for the full cost - distributed among all types of created products in proportion either to the same base in relation to which account 25 was distributed, or to another selected base.

As part of the total cost of a specific product, the share of overhead general expenses included there will also be included without breaking down into components under a single analytics “general expenses.”

Accounting for business expenses

Another type of overhead costs is one that, according to the rules in force in the Russian Federation, is never included in the cost of production. These are expenses associated with the sale of products (goods, works, services): commercial. They are collected on account 44, dividing them in analytics according to the same principles as other overhead costs: by department and by type of expense.

The list of business expenses for a production-type organization will be closer to the list developed for account 25. The difference may lie in the addition of items to this list that reflect expenses:

• on transportation to the buyer;
• loading and unloading operations;
• cargo storage;
• customs clearance;
• marketing research.

For a trading organization that does not need to use production cost accounts and collects all its overhead costs on account 44, the list of cost items for this account will be similar to the one that is developed in production for account 26, taking into account the addition of its items, paragraph above indicated as being added to the account 25.

You also need to close account 44 on a monthly basis, writing off the numbers collected on it to the account for accounting for financial results from sales. However, there may be a balance due to the presence of packaging and transportation costs included in the costs, which are subject to distribution between sold and unsold products (goods).

Read about the method of cost accounting, in which commercial expenses can be included in the cost price. .

Results

To collect overhead costs in accounting There are special accounts from which accumulated amounts are written off monthly. Manufacturing costs are always included in the cost of production. General business expenses can either be taken into account in the cost price or not be included in it, but be attributed to the accounting of financial results from sales. Selling expenses are not taken into account in the cost of production, they are always immediately attributed to the financial result and may have amounts remaining at the end of the month.

Absolutely all organizations deal with overhead costs. At the same time, they are practically not regulated by law. In this article, you will learn what estimated overhead costs are and what they include.

Concept

Overhead costs are additional to the main expenses of the enterprise for the management, organization and maintenance of production. They are not directly related to the main production of goods or provision of services, and are not included in the cost of materials and labor.

Overhead costs thus - without being related to the main production process - ensure the normal functioning of the company or enterprise.

Overhead costs include the cost of goods, the costs of their production and circulation, but not directly, and indirectly - in proportion to the cost of materials and raw materials, the amount of wages, and so on.

As a result, estimated overhead costs can be called associated costs that are not directly transferred to the cost of each unit of production, but are subject to distribution.

Composition of overhead costs

As a general rule, overhead costs include:

1. Current repairs of buildings and structures, equipment.
2. Salaries, training and maintenance of the administrative and managerial apparatus.
3. Expenses for servicing vehicles on the company's balance sheet.
4. Rent for office, product warehouse.
5. Costs incurred due to downtime and defective products.
6. Costs associated with the operation and maintenance of fixed assets.
7. Costs of advertising, consulting services.
8. Maintenance of the office, payment of utilities.
9. Maintenance of main production.
10. Expenses for communication services (telephone, Internet), etc.

Overhead costs can be more broadly grouped into four groups:

1. Costs of production and its organization.
2. Costs of maintaining the administrative apparatus.
3. Staff service.
4. Non-production expenses.

KEEP IN MIND

In the Tax Code of the Russian Federation, overhead costs are not designated as such, their structure is not defined. The same applies to accounting - there is no differentiation of overhead costs here. Overhead costs are fixed by law only in such areas as construction, science, and medicine. Ordinary companies establish their own list of such costs.

For example, in trade organizations such expenses usually include costs associated with packaging, storage, transportation and marketing of products.

Read also Accountant prosecuted for cashing

The amount of overhead costs is indicated in budget plans and estimates, as well as in the own budget plans of structural divisions.

How to calculate overhead costs

The company independently determines the parameters in proportion to which overhead costs will be distributed.

When planning overhead costs, several methods are usually used:

1. Determination of overhead costs in proportion to the wage fund of workers employed in the main production, as part of direct costs.

This method is suitable for organizations that have a significant number of primary production workers (primarily manual labor).

EXAMPLE

The company is engaged in cargo transportation. The wage fund is 10 million rubles. in year. In 2018, overhead costs, according to the plan, had a coefficient of 85% and, accordingly, amounted to 8.5 million rubles. That same year, the company reduced its workforce with the goal of reducing overhead costs by up to 60%.

Consequently, in 2019, while maintaining the payroll for workers in the main production, overhead costs will amount to 6 million rubles.

2. If a company's production process is largely automated, it makes more sense to distribute costs in proportion to sales volume or machine hours.

In market economic conditions, it became obvious that the most manageable from the standpoint of searching for reserves for saving profit growth and profitability at an enterprise that has determined the production and sales program are gradually becoming not the main but overhead expenses. The results of research by domestic and foreign experts indicate that overhead costs in most industries are constantly increasing, both in absolute amount and relative to the total cost of an economic entity. The most important for...

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Introduction

1.1. The concept and essence of production overhead costs in the management accounting system.................................................... ........................................................ ...................

1.2. Classification of expenses................................................................ ...................................................

2.1. Brief description of the enterprise using the example of LLC "BEKPR"………………..

2.2. Accounting and distribution of production overheads…………………….

2.3. Ways to improve the efficiency of an enterprise……………………….

Conclusion

List of used literature

Introduction

Relevance of the topic.In market economic conditions, it became obvious that the most manageable from the standpoint of searching for reserves of savings, profit growth and profitability at the enterprise that has determined the production and sales program are gradually becoming not the main ones, but overhead expenses.

A direction for improving the activities of management accounting can be the creation of unified accounting, budgeting and analysis of overhead costs.

Methods of accounting and analysis of overhead costs that are insufficiently adapted to market conditions negatively affect not only the current work of the enterprise, but also lead to the adoption of incorrect strategic management decisions.

The results of research by domestic and foreign experts indicate that overhead costs in most industries are constantly increasing, both in absolute amount and relative to the total cost of an economic entity. This is due to scientific and technological progress, the increasing complexity of management tasks and the corresponding increase in the number of management personnel, their qualification level, the widespread use of computers and modern means of communication in management, increasing requirements for the representativeness of offices, their equipment, etc. In the new conditions, there is a perceived need for flexible administrative systems, a change in the methodological principles of management and its components (including approaches to the use of accounting information), tightening control over the expenditure of funds at the level of organization management, and conducting analytical studies to optimize costs in this area.

This is the relevance of the course work, because management accounting of overhead costs is necessary for effective cost management, determining the areas of responsibility of managers, solving problems with identifying the most accurate indicators of the cost of manufactured products. And the more attention is paid to creating an optimal management accounting system for overhead costs, the more mobile the enterprise will become in market conditions and the more efficient the activities of the administrative apparatus.

Target The work consists of considering the features of accounting and distribution of production overhead costs.

In accordance with the goal, the following are decided tasks :

• Consider the concept and essence of production overhead costs in the management accounting system;
• Define a brief description of the enterprise LLC " BEKPR";
• Provide accounting and distribution of production overhead costs;
• Identify ways to improve the efficiency of the enterprise.

Object Research coursework is the enterprise LLC "BEKPR".

Subject course work accounting for production overhead costs.

Work structure.The course work consists of an introduction, four questions, a conclusion and a list of references.

The course work is written using such regulatory documents as the Law “On Accounting”, as well as articles by domestic and foreign economists, textbooks and teaching aids, as well as periodicals.

Chapter 1: Theoretical Aspects of Manufacturing Overhead

1.1. The concept and essence of production overhead costs in the management accounting system

An organization's expenses are recognized as a decrease in economic benefits as a result of the disposal of assets (cash, other property) and (or) the emergence of liabilities, leading to a decrease in the capital of this organization, with the exception of a decrease in contributions by decision of participants (owners of property) 1 .

To calculate the cost of manufactured products and determine the amount of profit received, costs are classified into: incoming and expired; direct and indirect; main and invoices; current and one-time, etc. The most important for management accounting are overhead costs, because they are caused by management functions, which in their nature, purpose and role differ from production functions. These expenses, as a rule, are associated with the organization of the enterprise’s activities and its management. In accordance with the method of allocating costs to a medium (costing object), overhead costs are indirect.

Overhead costs are the costs of maintaining and managing production and the enterprise: general production and general economic costs caused by preparation and organization, maintenance and management.

General (manufacturing) overhead costs are the costs of organizing, maintaining and managing production. They arise in production departments, sections, workshops, and factories. The purpose, nature and functional role of these costs directly related to production. Production overhead costs include the costs of maintaining and operating equipment, and general shop management costs.

The costs of maintaining and operating equipment include: depreciation of equipment and vehicles; routine maintenance and repair of equipment; energy costs for equipment; auxiliary production services for maintenance of equipment and workplaces; wages and social contributions for workers servicing equipment; expenses for in-plant transportation of materials, semi-finished products, finished products; other expenses associated with the use of equipment 2 .

General shop management costs consist of the following expenses: production management costs; costs associated with the preparation and organization of production; maintenance of the production department management apparatus; depreciation of buildings, structures, production equipment, maintenance and repair of buildings, structures, equipment; costs of ensuring normal working conditions; costs of career guidance and training.

What both groups have in common is that they: consist of complex articles; arise in production units; are planned and taken into account at the places where they occur; controlled by the budget-estimate method.

General (non-production) overhead costs are caused by management functions, which in their nature, purpose and role differ from production functions and production organization functions. These costs arise within the enterprise, i.e. this is administrative management costs; technical management costs; production management costs; expenses for managing supply and procurement activities; to manage financial and sales activities; labor costs: recruitment, selection, training of managers, training, retraining and advanced training; payment for services provided by external organizations; maintenance and repair of buildings, structures, equipment; mandatory fees, taxes, payments and deductions in accordance with the procedure established by law.

Thus, overhead costs are costs, the composition of which is limited by the following criteria:

1) expenses are complex in nature (each overhead item includes expenses of different economic content: material costs, labor costs, depreciation of buildings, structures and equipment, etc.);

2) expenses do not create the physical or material basis of the product;

3) expenses are associated with the maintenance of production and sales processes or with the management of the organization as a whole or its divisions.

1.2. Classification of expenses

The classification of expenses must fully reflect all the characteristic features by which some cost items differ from others, and delimit their functional role, according to which each cost component performs a specific function. This approach allows us to more thoroughly determine the feasibility and effectiveness of the formation of cost items and their targeting 3 .

Let's consider the main classification characteristics of overhead costs:

1. by belonging to the production cycle: production and non-production overhead costs, this division is due to the methodology for determining the cost of production. A distinctive feature of production costs is their connection with the development and creation of a production program. Manufacturing overhead costs can be classified on an item-by-item basis to provide more detailed cost information.
2. according to the level of control: controlled and uncontrollable overhead costs, the need to use such a grouping is determined by the fact that it regulates the relationship between managers of various levels of management and makes it possible to identify the culprit of cost overruns.

Overhead costs are the responsibility of a specific manager at one or another level of management. Examples include cost items such as the cost of running a business unit or maintenance costs associated with a particular stage of the production process.

1. by the method of inclusion in the cost center cost: primary and secondary overhead costs. Primary expenses are considered to be those that arise directly in the cost center (for the maintenance of the managerial personnel of the workshop). Secondary expenses are expenses that are allocated to the cost center as a result of the procedure for redistributing overhead costs or the procedure for calculating transfer prices (for transport services, for vehicle repairs). 4
2. by the method of reflecting costs in management accounting: actual, budget and distributed overhead costs. Actual expenses expenses that were incurred in the reporting period and reflected in management reports. Budget expenses expenses that accountants plan for the upcoming budget period. Actual and budgeted overhead costs can be calculated for: the enterprise as a whole; subdivision; Kind of activity; type of equipment; unit of product; operation. Allocated (absorbed, written off) overhead costs are overhead costs allocated to manufactured products during the costing process.

Since overhead costs serve as the object of forecasting, it is possible to distinguish predicted and projected overhead costs (non-productive payments, the share of overhead costs in the costs of defects, etc.).

In the standard-costing cost accounting system: under-allocated and over-allocated overhead costs. If the actual overhead costs are greater than the allocated ones, then under-allocated overhead costs arise. If the allocated overhead costs are greater than the actual ones, then reallocated overhead costs arise 5 .

1. It is important to subdivide overhead costs depending on the influence of factors such as seasonality. Seasonal overhead costs: heating costs, part of operating costs, etc.
2. depending on the influence of the volume of activity (direct costing cost accounting system): variable and constant. Variables include expenses, the value of which changes as the volume of activity and the degree of intensity of work changes. Constant costs are costs, the amount of which remains relatively constant regardless of changes in the volume of activity.

The above classification can be supplemented with various groupings of fixed overhead costs.

In particular, it is possible to distinguish fixed overhead costs covered and not covered by marginal profit. Covered is the fixed overhead costs that have been covered by all levels of contribution margin. This grouping is used in those systems that use the concept of marginal profit. Unabsorbed overhead costs are fixed overhead costs that have not been absorbed by all levels of contribution margin. The use of this grouping has important practical significance. If fixed costs are covered, the organization makes a profit; losses are not covered.

Discrete overheads are of practical interest. Discrete overhead costs are costs that are constant for a specific volume of production, but have the ability to increase by a certain amount at a critical point in time. This should be used for both budgeting and overhead analysis purposes.

Among variable and fixed overhead costs, periodic and permanent overhead costs can be distinguished.

Periodic ones are characterized by the fact that the moment of their occurrence is not constant. It is impossible to conduct correlation analysis or any other statistical method on them that makes it possible to distinguish between variable and fixed costs in their environment. An example would be travel expenses, entertainment expenses, expenses for workwear, renovation of an office building, etc.

Permanent overhead costs are represented by costs incurred invariably from month to month, i.e. these are electricity costs, internal transportation costs, etc.

Variable and fixed overhead costs can be rational or irrational. The portion of costs attributable to unused production capacity will be considered wasteful overhead. Rational ones are expenses that bring economic benefit to the organization: operating costs, costs of maintaining design departments, control departments, etc. This grouping is used in practice to implement measures to reduce overhead costs 6 .

1. within the framework of applying the functional cost accounting method (ABC method), i.e. overhead costs are grouped by activity (function), cost carriers are determined for each activity, and then functional overhead costs are written off to products through a cost driver system. The purpose of this method is to achieve accurate product costing results and cost management. In this case, short-term variable costs are distinguished (cost carriers are machine-hours, man-hours, direct materials, etc.), long-term variables (they do not change with the volume of production, but fluctuate under the influence of other factors in the long term) and fixed costs (do not depend on performance indicators for the period of time under review). In addition, there are costs that are traceable to specific types of products (for example, operating costs, which, using cost objects such as machine hours, are allocated to specific types of products) and costs that are not traceable to specific types of products (administrative expenses, insurance payments). .

The application of the considered grouping of overhead costs in practice will allow us to determine with the greatest accuracy the cost of production and reduce costs in the enterprise 7 .

1. depending on the method of writing off costs in accounting (direct costing cost accounting system and full cost accounting system): period expenses costs that are not taken into account when valuing inventories and are considered as expenses for the period for which they were incurred (general business expenses and selling expenses); product costs costs that are taken into account when valuing inventory (for example, costs attributable to the cost of work in progress).

In world practice, all non-production overhead expenses (general business expenses and selling expenses) are considered to be period expenses.

1. You can group overhead costs depending on the chosen management decision option. In this case, the costs described are divided into relevant and irrelevant. Relevant are overhead costs, which are influenced by the chosen alternative solution (most often they are taxes, expenses for intra-factory movement of goods). Irrelevant overhead costs remain unchanged for any of the selected management decisions (costs for maintaining buildings, structures, depreciation). It is not possible to provide a list of relevant and irrelevant costs for each specific case, so some costs may be relevant in one case and irrelevant in another.
2. depending on the stages of inclusion in the cost of production: overhead costs in production, overhead costs in commodity output and overhead costs in work in progress. Overhead in manufacturing refers to the portion of the gross costs allocated to the production of a product in the reporting period. Overhead costs in commodity output are part of the cost of finished products. Work-in-process (WIP) overhead represents the portion of costs written off to work-in-process cost as a result of the allocation of overhead costs between finished goods and (WIP).

Determining the directions for the practical use of cost groupings, including classifications of overhead costs, is an important task in management accounting. This helps determine the significance of each cost group in the cost management system.

Management accounting is a system that provides the generation of information for assessing and measuring costs and results, as well as for decision-making by managers at all levels of intra-company management 8 .

A modern management accounting system includes the following elements: production accounting, operational accounting, cost budgeting and cost analysis.

Production accounting is an integral part of management accounting. In essence, production accounting is a system of consolidated cost accounting and calculation of product costs. At enterprises, production accounting functions are assigned to the cost accounting department in the accounting department. To maintain full-fledged management accounting, at least one more department is required, which can be called the department of management control and analysis. Within its framework, it is necessary to generate and summarize information for the purpose of making management decisions, conduct budgeting and conduct cost analysis.

The main tasks of accounting for overhead costs within the framework of management accounting include:

• generation of timely, complete and reliable information about actual overhead costs occurring in the enterprise;
• budgeting and monitoring the implementation of overhead cost estimates;
• identifying reserves for reducing overhead costs;
• identification of factors influencing changes in individual elements of overhead costs;
• cost management and management decision-making (allocation of overhead costs in order to determine the cost of production, analysis of overhead costs, pricing, etc.).

Management accounting is distinguished, first of all, by the ability to quickly make decisions. Using accounting, budgeting and analysis data, accountant-analysts identify alternative courses of action, collect and summarize information on them, and prepare recommendations to management. Ineffective decisions can lead to an unstable financial position of the organization, i.e. cause loss of product market, rising costs, unjustified increase in inventories, etc. An important criterion when making management decisions is unit costs. Overhead costs play a special role here.

In management accounting, the constant part of overhead costs is of particular importance, since it is the most effective way to reduce the cost of products. The main directions of action in this area include reducing the size of the administrative apparatus, reducing the cost of its maintenance; improving the qualifications of personnel involved in servicing production processes and strengthening control over the use of funds in this area; implementation of a system of norms and standards for overhead costs and a deviation management system, the main goal of which is to prevent the irrational consumption of these resources.

Chapter 2. Accounting for production overheads and costs in an enterprise using the example of BEKPR LLC

2.1. Brief description of the enterprise using the example of BEKPR LLC

The object of research in the course work is a Limited Liability Company, hereinafter referred to as BEKPR LLC.

LLC "BEKPR" is registered in the Alamudun State Tax Inspectorate, INN 02403200010154, OKPO 22447629. LLC "BEKPR" is a payer of land tax, income tax from employee salaries, insurance contributions to the Social Fund, and enjoys benefits in paying income tax, VAT and sales tax as a producer and processor of agricultural products (Articles 212, 239, 315 of the Tax Code of the Kyrgyz Republic).

Limited Liability Company "BEKPR" was founded as a legal entity on May 24, 2001 at the address: Lebedinovka village, Alamudun district, Beregovaya street 1 "a". BEKPR LLC carries out its activities in accordance with the requirements of the Civil Code of the Kyrgyz Republic, the Law of the Kyrgyz Republic “On Business Partnerships and Societies”, the Labor Code, the Tax Code, as well as other norms of current legislation, international law, the Charter and the Founding Agreement.

The size of the authorized capital is 500 soms.

The name of the company arose from the initial letter of the names of the founders:

B - Bektursyn,

E - Erzhan,

K - Kadyrkul,

P - Pavel,

R - Rahman.

Bazhanov Rakhmankul Salmanovich and Bazhanov Kadyrkul Salmanovich are siblings. Rakhmankul is the founder of Riha LLC, Kadyrkul founded BEKPR LLC. The brothers began their working career in 1992 as meat processors in the Kyrgyzpotrebsoyuz (trade and purchasing base). Then they supervised the TZB animal farm, which was engaged in the preparation of mink, arctic fox, and astrakhan fur. Having gained sufficient experience in this field of activity, Bazhanov Rakhmankul decided in 1996 to create his own sausage production company with the support of Kadyrkul’s brother, and in 2001 Kadyrkul founded BEKPR LLC. On the territory of the village of Lebedinovka, land was purchased for the construction of a mill and a bakery, then cowsheds were purchased for raising pigs and cattle for the production of pork and beef.

At this time, the enterprise is equipped with specific equipment for the production of various types of bakery and sausage products, milk processing, auxiliary equipment, computer equipment and modern means of data processing and transmission.

Currently, LLC "BEKPR" has fields with a total area of ​​350 hectares, leased in Logvinensky, Syntashsky, Buraninsky, Lebedinovsky and Frunzensky ail-okmotu, on which it grows wheat and alfalfa, as well as 118 hectares of its own land in Novo-Pavlovka. Alfalfa is used to feed pigs and young cattle, which are raised for the production of sausages. Wheat is used for baking bread and also for feeding livestock.

The management of the Company is carried out directly by the founder. Erzhan Amanovich Bazhanov was appointed General Director, exercising management in accordance with the Charter and Founding Agreement of BEKPR LLC.

Very important functions in production management at BEKPR LLC are performed by the accounting service. Accounting serves as the most important tool for management and control of business activities, contributes to the generation of profit, and the proper use of monetary, material and labor resources.

The accounting department at BEKPR LLC is an integral part of the management apparatus, is closely connected with all services, departments and production units of the enterprise, receives from them the documentation necessary for accounting and control and supplies them with economic information about the results of work. Thus, it has a direct impact on the progress of production, supply and sales of products, relationships with debtors and creditors, timely calculation and payment of taxes and insurance premiums, profitability and other economic indicators.

With the increase in information and the transition of BEKPR LLC to IFRS in 2009, the need arose to create information technologies. To manage the enterprise, a special program “1C Enterprise” was developed, which continues to be developed and improved. The accounting department of BEKPR LLC consists of a chief accountant and his assistant, who, if necessary, performs the functions of a chief accountant. Both employees have higher economic education with a degree in Accounting, Analysis and Audit. The chief accountant and his assistant perform their duties in accordance with the developed job descriptions.

BEKPR LLC has an archive for storing accounting documents and reporting.

In BEKPR LLC, in accordance with the Resolution of the Kyrgyz Republic “On introducing additional amendments to the Government Decree of the Kyrgyz Republic dated September 28, 2001 No. 593 “On IFRS”, starting from 2009, business accounting is carried out according to the 2002 chart of accounts recommended for enterprises that have switched to IFRS. Until 2009, financial statements were compiled according to the 1995 chart of accounts.

During the study, it was found that the order on the accounting policy and the developed accounting policy in written form, as such, are not available in BEKPR LLC. However, upon reviewing the organization of the accounting process, it was found that BEKPR LLC follows international accounting standards. There is a working chart of accounts developed on the basis of the Chart of Accounts for accounting of financial and economic activities of entities and methodological recommendations for its application, recommended by Resolution of the State Commission under the Government of the Kyrgyz Republic on Financial Reporting and Auditing Standards dated November 18, 2002 No. 28.

The reporting period for the preparation of financial statements begins on January 1 and ends on December 31 inclusive.

All balance sheet items are measured in national currency som. The journal-order form of accounting and the principle of double entry are used. The correspondence of accounts complies with the recommendations for using the chart of accounts. When assessing balance sheet items, compliance with the following requirements is ensured:

Mutual offsets between Asset and Liability items are not allowed

Balance sheet items are not collapsed

Numerical indicators are included in the Net assessment

Balance sheet items are confirmed by inventory results.

To document the facts of economic life, standard form primary documents are used.

Inventories are accounted for using a continuous accounting system, i.e. The receipt and expenditure of inventory items is reflected directly in the accounts of inventory items of group 1600.

Fixed assets are accounted for according to the classification groups provided for in the chart of accounts at their original cost and the amount of accumulated depreciation.

Depreciation on fixed assets is calculated using the following methods:

For buildings - using the uniform method;

For other fixed assets: using the decreasing balance method, delivery is 15% of the book value at the end of the previous year.

Depreciation is not charged on land, unfinished construction, or fixed assets transferred to conservation.

For tax purposes, depreciation is not recalculated, since BEKPR LLC has income tax benefits as a manufacturer and processor of agricultural products.

Income at BEKPR LLC is recognized on the basis of invoices upon shipment of products to the retail chain.

The cost of bakery and sausage products is determined by the order method.

The cost of grain production and raising livestock for meat is determined by the actual costs incurred during the growing season and harvesting or the period of raising livestock before slaughter.

The study revealed that when accounting for receivables on accounts receivable, the method of reserving bad debts is not used, which is provided for by the international principles of prudence (foresight) and comparability. It was also found that the explanatory note is drawn up in a very condensed version and does not disclose all aspects of the accounting policy applied.

The financial statements include the following reports:

Form No. 1 Balance sheet;

Form No. 2 Profit and loss statement;

Form No. 3 - Cash Flow Statement;

Form No. 4 - Statement of changes in capital.

The property of BEKPR LLC consists of current (current) and non-current assets. The working chart of accounts for accounting of current assets includes the following accounts:

1110 Cash in the cash register of the enterprise;

1210 Cash in a bank account;

1410 Accounts receivable;

1500 Accounts receivable for other transactions, including:

1520 accounts receivable from employees and directors,

1530 accounts receivable for taxes paid in advance.

1600 Inventory inventories;

1700 Inventory of auxiliary materials;

1800 Advances issued.

2.2. Accounting and distribution of production overhead costs

Cost allocation is a problem that is inevitable for almost every organization; it is the direct attribution of collected costs to a specific object and the distribution of costs between various objects.

The main goals of cost distribution are: providing information for making management decisions, calculating the organization's profits and assets when providing financial reports to external contractors, motivating managers and employees of the organization, the need to justify costs or calculate compensation. Different ways of allocating costs serve different purposes of an organization.

Most decisions regarding cost allocation are made taking into account cause-and-effect relationships and benefit criteria. There are also other criteria, which include fairness and the ability to bear costs.

There are three methods of cost redistribution in management accounting:: direct cost allocation method, sequential and system of linear equations method 9 .

Direct cost allocation methodis the most common, its essence lies in the distribution of costs of each auxiliary division of the enterprise only to the based consumers of services. The advantage is that there is no need for a preliminary assessment of the volume of counter services. The disadvantage of this method is the inability to assess the volume of services provided to each other by auxiliary units.

Redistribution methodtakes into account counter services provided by some auxiliary departments of the enterprise to others. However, this method is also not without its drawbacks, namely the difficulty in choosing a service unit from which it is more correct to begin the cost allocation procedure.

Method of system of linear equationsmethod of distribution of counter services based on solving a system of linear equations. This method is the most convenient to use.

The basis for allocating costs remains unchanged over a long period and represents an element of the enterprise's accounting policy.

Let's consider the staged distribution of overhead costs.

At the first stage, the resulting overhead costs are posted to the following accounts:

• on account 7170 " Other production costs» production costs are formed;
• on account 1700 “Auxiliary production” auxiliary expenses;
• on the “General business expenses” account, general business expenses, which are subsequently distributed according to revenue for production and trade separately;
• In the “Sales Expenses” account, trading costs are formed.

At the second stage, an analysis of general business expenses is compiled and the results are summed up.

On the third, it is necessary to sum up the revenue received as a result of the operation of the mill, trade and auxiliary production, i.e. we find the total revenue from the activities of the entire enterprise.

At the final, fourth stage, the received amount is distributed among the accounts.

Write-off liquidated fixed assets

The fixed asset value accounts (2130-2190) and accumulated depreciation accounts (2193-2199) are closed, and the residual value (if any) is written off to account 9590 “Other non-operating expenses”:

2. Expenses for the liquidation of a fixed asset are reflected in the debit of account 9590 “Other non-operating expenses” in correspondence with the accounts “Other short-term liabilities”, “Accounts payable”, etc., for example:

3. The cost of materials received from liquidation is debited to account 1700 “Auxiliary materials” in correspondence with account 9590 “Other non-operating expenses”

Write-off of costsold fixed assetsis done as follows:

1. Proceeds from the sale of fixed assets are reflected in the debit of account 1100 “Cash in hand”, 1200 “Cash in bank”, 1590 “Other accounts receivable” in correspondence with account 9190 “Other non-operating income” and account 3430 “VAT payable”:

2. Accounts for recording the cost of fixed assets (2130-2190) and accumulated depreciation accounts (2193-2199) are closed, and the book value is written off to account 9590 “Other non-operating expenses”

3. Expenses incurred during the sale of a fixed asset (delivery to the buyer, dismantling, etc.) are reflected in the debit of account 9590 “Other non-operating expenses” in correspondence with the accounts “Other short-term liabilities”, “Accounts payable”, etc.

4. If profit arises as a result of disposal, it is reflected in account 9190 “Other non-operating income”; if a loss arises as a result of disposal, it is reflected in account 9590 “Other non-operating expenses”

When using complex accounting entries, the number of entries is significantly reduced:

Dt 1100 “Cash in hand” or 1200 “Cash in bank”

D-t 1590 “Other receivables”

Dt 2193-2199 “Accumulated depreciation”

Dt 9590 “Other non-operating expenses” (if the result of disposal is a loss)

Kit 3430 “VAT payable”

Kit 2110-2190 “Fixed assets”

Kit 9190 “Other non-operating income” (if the result of disposal is profit)

The asset is considered liquidated and written off from the balance sheet in the reporting period in which fixed assets are physically liquidated or declared unfit for further use and can be sold at the price of scrap and other waste. The residual value and costs of liquidation of assets are reflected in the financial statements as losses from the liquidation of fixed assets. The cost of possible sale of materials received from liquidation is taken into accountlike other materials.

In accordance with IFRS, expenses of an organization are recognized as a decrease in economic benefits as a result of the disposal of assets and (or) the occurrence of liabilities leading to a decrease in the capital of this organization, with the exception of a decrease in contributions by decision of participants (owners of property).

Costs associated with capital and financial investments and non-production costs are not considered expenses of the organization. 11 .

The organization's expenses, depending on their nature, conditions of implementation and direction of the organization's activities, are divided into the following types:

• expenses for ordinary activities;
• other expenses, which, in turn, are divided into:

Operating expenses,

Non-operating expenses,

Extraordinary expenses. 12

Other expenses are not included in production cost accounts. Ultimately, they are reflected in the accounts “Other income and expenses” and “Profits and losses” (for more details, see the chapter “Accounting for profits and losses”).

Expenses for ordinary activities are expenses associated with the manufacture and sale of products, performance of work and provision of services, as well as the purchase and sale of goods:

• costs directly related to the production of products (works, services);
• costs of preparation for production of products;
• costs of servicing the main production process;
• production management costs;
• costs of personnel training and environmental protection measures;
• costs of contributions to state extra-budgetary funds;
• costs for the restoration of fixed assets and intangible assets in the form of depreciation;
• taxes, fees and mandatory deductions made at the expense of production costs in accordance with the law;
• commercial and administrative expenses.

In organizations whose subject of activity is the provision for a fee for temporary use of their assets under a lease agreement and rights arising from patents for inventions, industrial designs and other types of intellectual property, as well as participation in the authorized capital of other organizations, expenses for ordinary activities are considered expenses, the implementation of which is associated with these types of activities. If these types of activities are not the subject of the organization’s activities, then the costs of carrying out these types of activities are classified as operating expenses.

In accordance with the Tax Code of the Kyrgyz Republic, expenses are recognized as justified and documented costs and losses incurred (incurred) by taxpayers (clause 1 of Article 252).

Their classification is of great importance for the correct organization of cost accounting. Expenses for ordinary activities are grouped according to the place of their occurrence, types of products (works, services), types of expenses, economic role in the production process, composition, method of inclusion in the cost of production, frequency, participation in the production process, relation to production volume, composition production cost and efficiency.

According to the place of origin, expenses are grouped by production, workshop, site and other structural divisions of the organization. This grouping of costs is necessary for organizing management accounting and determining the production cost of products.

Expenses are grouped by type of product (work, service) to calculate their cost.

By type of expense, costs are grouped by cost elements and costing items.

In accordance with IFRS (clause 8), an organization’s expenses for ordinary activities are grouped into the following elements:

• material costs (minus the cost of returnable waste);
• labor costs;
• contributions for social needs;
• depreciation;
• other costs (postal and telegraphic, telephone, travel expenses, etc.).

This grouping is uniform and mandatory for all sectors of the national economy. Grouping expenses by economic elements shows what exactly was spent on production, what is the ratio of individual elements of expenses to the total amount of expenses.

The data obtained on the elements of expenses is necessary when developing business plans, the volume of purchases of material resources, determining the wage fund and the amount of depreciation charges, organizing control over expenses, calculating indicators of the efficiency of resource use (material intensity, labor intensity, etc.) and a number of other indicators . 13

It should be noted that when accounting for expenses by their elements, expenses are not distinguished between finished products (works, services) and work in progress.

The Tax Code of the Kyrgyz Republic (Article 253) provides for the allocation of not five, but four elements of expenses:

• material costs;
• labor costs;
• the amount of accrued depreciation;
• other expenses.

Current assets also include inventories, which are considered less liquid assets compared to cash and receivables. Inventories in BEKPR LLC are accounted for in active accounts of group 1600 in accordance with IFRS 2 “Inventories” with subsequent disclosures in the accounts:

1610 products in warehouses,

1620 stocks of raw materials and basic materials,

1630 work in progress,

1640 finished products,

1700 auxiliary materials.

Until 2009, the inventory of BEKPR LLC included animals for growing and fattening, which, due to the transition of accounting to the 2002 chart of accounts, are classified as biological assets and are accounted for as part of non-current assets.

Accounting for inventories in LLC "BEKPR" is maintained on account 1620 "Raw materials and materials" in the context of storage locations for each item separately in quantitative and total terms (see the appendix for the balance sheet for account 1620 for July 2014).

To account for inventories (hereinafter referred to as inventories), the organization uses unified forms of primary documents presented in the table - primary documents used for accounting for inventories in BEKPR LLC (table 2.1.).

Table 2.1

Primary documents for inventory accounting

Forms	Form name	Directions for use
M - 7	Certificate of acceptance of materials	It is used to formalize the acceptance of material assets that have a quantitative and qualitative discrepancy, as well as a discrepancy in assortment with these accompanying documents from the supplier; is also compiled when accepting materials received without documents; is a legal basis for filing a claim with the supplier or sender. The act in two copies is drawn up by members of the selection committee with the obligatory participation of the financially responsible person and a representative of the sender (supplier) or a representative of a disinterested organization.
M - 11	Request-invoice	It is used to account for the movement of material assets within an organization between structural divisions or financially responsible persons. The invoice in two copies is drawn up by the financially responsible person of the structural unit, the delivery warehouse as the basis for writing off the valuables, and the second - to the receiving warehouse for the receipt of the valuables. The same invoices document operations for the delivery of unspent materials from production to a warehouse or storeroom, if they were previously received upon request, as well as the delivery of waste and scrap. The invoice is signed by financially responsible persons, respectively, of the deliverer and is obtained and submitted to the accounting department to record the movement of materials.
M - 15	Invoice for issue of materials to the side	It is used to account for the supply of material assets to the farms of one’s organization located outside its territory, or by parties to organizations on the basis of contracts and other documents. The invoice is issued by the employee of the structural unit in two copies on the basis of contracts, orders and other relevant documents and the presentation by the recipient of a power of attorney to receive valuables, filled out in the prescribed manner. The first copy is transferred to the warehouse as a basis for the release of materials, the second copy is transferred to the recipient of materials.
M - 17	Material accounting card	It is used to record the movement of materials in the warehouse for each grade, type and size; filled in for each item number of the material and maintained by the financially responsible person (storekeeper, warehouse manager). Entries in the card are made on the basis of primary receipt and expenditure documents on the day of the transaction.

The movement of goods and materials is recorded using a continuous system, i.e. income and expenses are recorded directly in inventory accounts.

The release of inventory into production and sales is assessed using the weighted average cost method.

The purchase of materials is reflected in the debit of account 1620, 1790 from the credit of accounts 1110 for purchases in cash and from the credit of account 3110 - for purchases from suppliers with subsequent payment.

On account 1630 in BEKPR LLC, records are kept of agricultural expenses for cultivating agricultural land and growing beets, corn, alfalfa, wheat, reflecting direct and indirect costs (see the appendix for the balance sheet for account 1635 “Agricultural Expenses; Agricultural Land”).

The processing of raw materials is carried out by Rikha LLC, which supplies raw materials for the production of sausages.

BEKPR LLC has a mill and two bakeries for the production of bakery products, a pig farm and a sausage shop. Since 2013, the company has been producing and selling dairy products.

Processing costs include costs directly associated with units produced:

Direct costs of labor and materials,

Fixed production overheads

Variable manufacturing overhead,

Other expenses.

Costs directly related to the production of finished products are:

• Labor costs and social insurance contributions for workers employed in primary production
• Allocation of fixed and variable manufacturing overheads.

The fixed production overhead costs of BEKPR LLC include:

Depreciation of production equipment,

Equipment operating costs,

Labor costs and social insurance contributions for management staff and workers in auxiliary production,

Expenses for utility and communication services.

The company includes the wages of technological workers as variable production overhead costs.

Production costs are reflected in accounting entries, for example, for peasant bread per 100 kg of output:

Debit account “Work in progress” 1630 1542.96

Credit account “Salaries” 3520 200.00

Credit account “Social insurance contributions” 3530 34.50

Credit account “Basic materials” 1620 308.46

Credit to the "Overhead" account 1639 1000.00

The release of finished products from production is reflected in account 1640 “Finished Products”, for example, bakery products and dairy products for December 2013 (see the appendix for the balance sheet for account 1640 “Finished Products”):

Debit 1640 “Finished products” 2612.1 thousand soms

Loan 1630 “Work in progress” 2612, 1 thousand soms

There is no balance in the work in progress account at the end of the year.

Analytical accounting for account 1640 “Finished products” is carried out by storage locations and individual types of finished products.

The release of products for sale at actual cost is reflected (for example, bakery products):

Debit 7100 “Cost of products sold” 296956.1 thousand soms

Loan 1640 “Finished products” 296956.1 thousand soms

Periodically, and necessarily as of December 31, BEKPR LLC carries out an inventory of inventory balances, which is documented with inventory and matching sheets and a report on the results of the inventory.

In the production of crop products, the main weight is occupied by the production of wheat and alfalfa. This is due to the presence on the farm of a subsidiary farm for raising pigs and cows, as well as for the production of fodder for the farm’s own needs.

BEKPR LLC produces about 35 types of bakery products: “Borodinsky”, “Rye”, “Krestyansky”, loaves, buns with jam, cheesecakes, gingerbreads, etc. And from sausage products there are about 30 types of sausage, liver sausage, raw smoked pork ribs, etc. Since 2013, the company has launched a dairy plant, produces milk of various fat contents, kefir, cream, sour cream and also sells it in various stores in Bishkek.

2.3. Ways to improve the efficiency of an enterprise

In the course of a study based on the balance sheet and profit and loss statement of the property and financial condition of LLC "BEKPR" for 2011 -2013, in the first and third questions of the third chapter of the course work, an analysis of the dynamics and structure of the company's assets and the sources of their formation was carried out, special attention was paid to analysis of the structure of current assets. Also analyzed are assets by the degree of liquidity and liabilities by the urgency of repayment of obligations. An assessment of the company's solvency was carried out based on the enterprise's liquidity indicators. Indicators of the financial stability of the enterprise were calculated based on an analysis of the ratio of equity and borrowed capital. In addition, the profitability indicators of BEKPR LLC for 2011 and 2013 were considered. The analysis data indicates that the company operates profitably, although in 2013 there was a decrease in sales volumes and an increase in the cost of products sold, and, as a consequence, a decrease in all profitability indicators.

Over the years under study, the balance sheet currency increased, which indicates an increase in both assets and the sources of their formation. In particular, non-current assets in the balance sheet increased, while current assets decreased in 2013 compared to 2012. In the balance sheet liabilities in 2013, as a result of the accrual of dividends from retained earnings, short-term liabilities sharply increased and equity in terms of retained earnings decreased. The capital contributed by the owners of the company is only 500 soms, which complies with the law, but is an extremely low amount. There is also no reserve and additional capital in the company. There are no short-term or long-term loans and borrowings. The positive aspects of the company's activities are:

Profitable activity for the period under study;

Increasing production capacity (fixed assets and biological assets);

Development of a new line of activity, namely the production and sale of dairy products in 2013;

No long-term commitments;

Distribution of retained earnings for dividends.

At the same time, it is necessary to note the negative facts that were clarified as a result of the study:

Decrease in cash receipts in 2013 compared to 2012;

Decrease in revenue from product sales during the same period;

Increase in cost of goods sold;

Increase in debt on accounts payable and payment of dividends;

Low level of contributed capital of the founders;

Decrease in profitability and cost recovery indicators;

Decrease in liquidity indicators, and hence the solvency of the company;

Increase in accounts receivable from customers;

The noted facts had an impact on the instability of the financial position in the reporting period, a decrease in the liquidity of the balance sheet and the solvency of the company. Based on the shortcomings identified during the study in the financial and economic activities of the company, in order to improve the indicators of financial condition and solvency, we can recommend:

Strengthen the work of staff in terms of collecting accounts receivable from accounts receivable;

Increase the share of the contributed capital of the founders in the liabilities side of the balance sheet;

Form the reserve capital of the company in accordance with the law.

Distribute profits to pay dividends on a more regular basis and not in full;

Direct efforts to increase sales income (revenue);

Conduct an analysis of the cost of goods sold and operating costs in order to reduce them;

Find new markets for food products, which is especially important now the time of entry of the Kyrgyz Republic into the Customs Union and the EAEU.

Conclusion

The issues considered in the work allow us to formulate a number of general conclusions and provisions.

The main generalizations include the following conclusions:

1. The procedure for maintaining management accounting in terms of overhead costs is regulated by such regulatory and legal acts as the Law “On Accounting”, the Civil Code of the Kyrgyz Republic, the Tax Code of the Kyrgyz Republic, as well as accounting regulations. But the most important and necessary for any type of activity is the Chart of Accounts and Instructions for its use, because on their basis, the organization approves a working chart of accounts containing a complete list of synthetic and analytical accounts necessary for a given enterprise.

2. Overhead costs are generated in connection with the organization, maintenance of production, sales of products and management. Costs are divided into manufacturing overhead, which includes the costs of organizing, maintaining and managing production, and general overhead costs incurred by management functions. The amount of these expenses depends on the management structure of the organization, the business policy of the administration and other factors.

Also, overhead costs are classified according to the following criteria: by belonging to the production cycle; by level of control; by the method of inclusion of the cost center in the cost price; by the method of reflecting costs in management accounting; in the cost accounting system “standard-costing”; depending on the influence of the volume of activity (direct costing cost accounting system); within the framework of applying the functional cost accounting method (ABC method); depending on the method of writing off costs in accounting; depending on the chosen management decision option; depending on the stages of inclusion in the cost of production.

The main overhead costs are: depreciation of equipment and vehicles; routine maintenance and repair of equipment; energy costs; auxiliary production services for maintenance of equipment and workplaces; wages and social contributions for workers servicing equipment; costs of ensuring normal working conditions; costs of career guidance and training.

These expenses are reflected in the following accounts: “Main production”, “Auxiliary production”, “General expenses”, “Sales expenses”.

The account “General business expenses” is considered the most important, because it is a collection and distribution operating account. It summarizes information on expenses for management needs not directly related to the production process (repair costs, rent).

For all businesses, the distribution of overhead costs is very important, because... with the help of distribution, it is possible to assess the performance efficiency of a department for a certain period; distribution is also used to calculate and analyze the profitability of products or customers, etc.

Cost allocation allocation of costs for specific purposes. Thus, management accounting of overhead costs is necessary for effective cost management, determining the areas of responsibility of managers, solving problems with identifying the most accurate indicators of the cost of manufactured products, if the need arises. Analysis of these costs allows you to find out which costs are determined by which decisions, what can be done in relation to them in the future, and also solve a number of issues: choosing cost-effective orders, planning future areas of activity, distributing and minimizing costs, drawing up estimates and analyzing deviations.

List of used literature:

1. Law of the Kyrgyz Republic “On Accounting” Bishkek. 04/29/2002, No. 76
2. Tax Code of the Kyrgyz Republic. Bishkek. 17.10. 2008 No. 230 (with amendments and additions)
3. International financial reporting standards. Bishkek 2001.
4. Chart of accounts for accounting of financial and economic activities of entities and methodological recommendations for its application. Bishkek, 2002
5. Regulations “On document flow in accounting” of the Kyrgyz Republic. - B., 2002
6. Regulations on the organization of accounting in budgetary institutions (approved by Decree of the Government of the Kyrgyz Republic dated May 16, 2011 No. 224)
7. Methodological recommendations for the transition to accounting in accordance with the requirements of IFRS 2011.
8. Regulatory and methodological materials on accounting and reporting issues in the Kyrgyz Republic. Bishkek: Ministry of Finance, 1997 - 2003.
9. Management Accounting - Associate Professor Suranaev T.J. for BUAA; KRSU Bishkek, 2008
10. Israilov I.M. Financial accounting.-B., 2012
11. Sulaymanova U.S. Accounting policy for assets. B.: 2010 -172 pages. (textbook) authors: Sulaymanova U.S. and etc.
12. Textbook on Financial Accounting 1. PBA. Bishkek, 2003 G
13. Tutorial : Accounting financial reporting - Associate Professor Zenina E.V. Bishkek, 200 8g
14. Financial Accounting Tutorial Osmonova A. A Bishkek, 2003
15. Financial accounting 1 Textbook. BPEA, Chamber of Accountants and Auditors of the Kyrgyz Republic. Bishkek 2003 G . - 360s.
16. Financial Accounting 1: Study Guide. - B., 2008
17. Financial management. Textbook. Pragma Corporation
18. Sheremet A.D., Saifulin« Methodology of financial analysis" - M, 2003

1 Baysalova Zh.M Financial reporting. - B., 2004 С. 121.

2 Bezrukikh P.S. “Fundamentals of Accounting” Bezrukikh P.S. Moscow 2004. -P.342

3 Berstein L.A. Analysis of financial statements: practice and interpretation: Transl. from English / Scientific Ed. transfer of corresponding member I.I. Eliseeva. Ch. series editor prof. Y.V.Sokolov. M.: Finance and Statistics, 1996. -624 pp.: ill. (Accounting and Auditing Series)

4 Brykova N.V. Accounting in industry. - M., 2006 С. 63.

5 Zonova A.V. Accounting and analysis. - M., 2009. P. 82-83.

6 Needles B. et al. Principles of accounting / B. Needles, H. Anderson, D. Caldwell: Trans. from English / Ed. I'M IN. Sokolova. 2nd ed., stereotype. M.: Finance and Statistics, 1997. 496 p.: ill.- (Series on accounting and auditing). С. 124.

7 Textbook on Financial Accounting 1. PBA. Bishkek, 2003. С. 125.

8 Financial accounting 1 Textbook. BPEA, Chamber of Accountants and Auditors of the Kyrgyz Republic. Bishkek 2003. P. 360.

9 Financial accounting textbook, authors: V.F. Paliy, V.V. Paliy, Moscow I.D. FBK Press, 2001. С. 1122.

10 Baysalova Zh.M Financial reporting. - B., 2004. P. 127.

11 Baysalova Zh.M Financial reporting. - B., 2004 С. 120.

12 Accounting / Practical. accounting manual accounting, finance and taxation: Engineering and Consulting Company "DeKA", 2001 С. 74-75.

13 Zhukov V.N. Accounting for distribution costs: Textbook. M.: Finance and Statistics, 2002. С. 47.

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Overhead costs are additional costs that are not directly related to the main production, and are not included in the remuneration of key personnel and the cost of raw materials. For an enterprise, such costs are no less important than direct expenses, since they help ensure the operation of the entire enterprise. What is included in overhead costs, how they are distributed and normalized, we will tell you in our article.

What is included in overhead costs

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• costs of raw materials, components and materials for production,
• salaries of key production personnel and
• insurance premiums accrued on it,

overhead costs include a wider list of general production and administrative costs:

• depreciation of fixed assets, costs of their maintenance, maintenance and repair (buildings, structures, transport, etc.);
• rental of office and other non-production premises;
• salaries of the administrative and managerial staff and accruals for it;
• stationery, consumables for office equipment, household goods, etc.;
• communication services and Internet;
• expenses for insurance of property and employees;
• entertainment expenses;
• travel expenses;
• ensuring normal working conditions and safety precautions;
• personnel selection;
• training and retraining of employees;
• advertising and information and consulting services,
• security services and fire protection.

The accounting legislation and the Tax Code do not define the specific composition of overhead costs, so each company compiles its own list of such costs.

Overhead distribution

The specificity of overhead costs is such that they cannot be immediately attributed to any specific type of product produced or service provided, but they cannot be ignored, since this can lead to errors in pricing. Therefore, in order to determine the cost per unit of production, overhead costs in costing are subject to distribution:

• in proportion to the salary of the main personnel,
• in proportion to the cost of raw materials and materials,
• in proportion to revenue, sales volumes, etc.

The organization decides for itself how this distribution will take place:

• if the company has a large number of core production personnel, it makes sense to calculate production overhead costs in proportion to the payroll of core production workers;
• with a small number of main workers (for example, in fully automated production), it is better to distribute overhead costs in proportion to sales volumes, or to the operating time of production equipment (machine hours);
• The basis for distribution can also be the ratio of direct expenses incurred per unit of production to the total amount of expenses. This method is convenient for enterprises where direct costs significantly exceed indirect costs;
• methods for calculating overhead costs can be used in combination, which is applicable in large enterprises that produce a very wide range of goods or provide many different services.

Overhead ratio

When determining the selling price and for further planning, it is important to determine the value that allows you to see the ratio of direct and overhead costs, that is, calculate the percentage of overhead costs from direct costs.

To do this, the amount of overhead costs is divided by the amount of direct costs (or the amount of one of the types of direct costs), and the result is multiplied by 100%. The longer the period for which the data is taken for calculation, the more accurate the resulting ratio will be.

Example

The total amount of overhead costs at the enterprise for 2016 amounted to 25,500 thousand rubles, and the salary of the main workers for the same period was 23,100 thousand rubles. The overhead percentage was:

25500 thousand rubles. / 23100 thousand rubles. x 100 = 110.4%

In 2017, it was decided to reduce overhead costs to 70%, for which non-production staff were reduced. As a result, the annual amount of overhead costs of the enterprise, with the same amount of payroll for the main personnel, will be 16,170 thousand rubles. (RUB 23,100 thousand x 70%).

Overhead rates

An organization should determine the method of distributing overhead costs taking into account its specifics and scale of production. For a number of industries, there are certain standards and recommendations that organizations take into account when assessing their costs. For example,

• overhead costs in construction are standardized by Decree of the State Construction Committee of the Russian Federation dated 03/05/2004 No. 15/1, explained by letters of the department, as well as special methodological instructions of the State Construction Committee (MDS);
• overhead costs in the chemical industry - order of the Ministry of Industry and Science of the Russian Federation dated January 4, 2003 No. 2;
• When mining coal or shale, the regulation of overhead costs is guided by the provisions of the instructions of the Ministry of Fuel and Energy of the Russian Federation dated December 25, 1996.

Results

The list and methods of distribution of overhead costs will vary depending on the industry of the organization, the number of its personnel, objects of calculation and other factors. If overhead costs are not taken into account correctly, as a result, their overexpenditure occurs, the cost of products or services is overestimated/underestimated, and the level of profit decreases. Rationing and control of expenses allows for their effective planning, and therefore improves the economic position of the company.