Have you ever squirming in problem formula product price calculator not yet? You haven't truly understand the process and perform and don't know how to choose how to calculate the price of any suitable when there are too many methods. This article AccNet will guide you through the steps perform the calculation of the price in each specific case. Track articles offline.
1. Learn about the price of the product is what?
To learn the method product price calculator first the summary of the basic content about the price of the product, okay.
1.1 product Price is what?
Product price expression is the monetary value of all the costs that companies are willing to spend to produce a number of products for certain.
One thing to note, the product price only includes the cost to produce that product, in addition to other expenses such as marketing costs, cost of sales,...then not be included in the product price.
1.2 the meaning of the product price
Product price is important factor reflects the cost of inputs, business base on which to determine the selling price and profitability as well as economic efficiency in the production process of business.
In addition, the price of products is the basis for the business performance of the obligations of taxation and finance for the state.
1.3 The factors that determine product price
Typically, to apply the formula product price calculator should be based on the following factors:
- Characteristics of the production processes (simple or complex).
- Technology is used to manufacture products.
- Use properties of finished products, semi-finished products.
- Capacity and level of accounting.
- The information for making business decisions.
2. The steps for calculating the price of products made how?
Recipe product price calculator is a business quite important in accounting, it determines the selling price and profits and losses of the finished product. Implementation process costing consists of 7 basic steps:
Step 1: perform aggregate the cost of production
To calculate the price of products must first aggregate the entire cost of producing a full and accurate, then the classification of costs on each item respectively. Often, cost of production is divided into 3 items key:
- The cost of raw materials directly
- Costs directly
- The cost of production in common
Step 2: allocate the cost
In the case of an expense, but used for many kind of products, so accountants must perform cost allocation to be able to calculate the price for each product type.
Step 3: choose the method product price calculator fit
The price of product is the key factor to decide the selling price and profit of the business. So businesses need to weigh the options pricing methods the most suitable depends on the type of business and the structure of production. A number of methods of calculating the cost of common is many businesses apply:
- Direct method (simple)
- The method according to the orders
- Method of exclusion-products
- Method rate
- Method coefficients
- Method step stool
Step 4: Determine the number of products and number of products unfinished end of the period
Accounting proceed to determine the number of products and number of products unfinished, due to the end of the accounting period are unfinished products, so accountants must record the amount as well as the level of completion of the unfinished products. To retrieve data, unfinished products accounting can statistical or contact the production department to be provided.
Step 5: evaluate and determine the value of products unfinished end of the period
After you have identified the number of products unfinished end of the period in the step above, the accounting work done determine the value of the product unfinished end to product price calculator. There are 3 methods of assessment unfinished products for business options:
- Determined according to the cost of raw materials directly
- Determined according to the finished product respectively
- Determined according to the cost of production norms
Step 6: Calculate the value of the finished product
Accounting calculate the value of the finished products according to the following formula:
Value of product = Value 154 the beginning of the period + Value 154 phat in the period – Value 154 end of the period – Scrap recovery – - products – Waste product.
In which: 154 is the “Cost of production, unfinished business”
Step 7: Calculate the price and end process costing
Accounting table setting product price calculator for each product type, and end service price calculator.
3. The method of calculating the cost of products for each specific case
Product prices to businesses to determine the selling price as well as profit of the product. Therefore, to achieve high economical profit, managers need to calculate and choose the method of calculating the price match the type and structure of business.
3.1 How to calculate price according to the direct method
Method product price calculator directly, or also called the method of simple bonus is applied by the business scale production simple.
Characteristics of business:
- The company has production technology, the closed technique.
- The business less items, bulk production.
- Business has short production cycle (power plants, water plants, mining companies,...).
Formula:
The total cost of production = Total production costs of uncompleted states + Total manufacturing costs for the period – Total cost of production the unfinished end of the period.
3.2 How to calculate the price of products according to norm
Method product price calculator according to the norms commonly used for businesses that have production processes stable. When applying this method, the business needs to set up and manage the level of product, as well as the level of organization. Accounting staff regularly monitor and audit the digital economy to limit the additional cost beyond the norm.
Formula:
The price of the actual product = Price plan (norm) for each type of product x cost ratio (%).
Expense ratio (%) = (Total cost of the actual production of the product type / Total production cost product planning (norm)) x 100.
3.3 price Calculation by the method of exclusion-products
Price calculation method of removing by-products are often used by businesses in the same production process has just obtained products, the newly obtained products. Such as industry: oil production, wood production,...
When product price calculator by the method of exclusion-product accounting need to exclude the value of the product in the total cost of producing the product to the value of the main product.
Product value can be determined by: Price estimates, the price of the original plan, the price of raw materials.
Formula:
Total price of main product = products unfinished beginning of the period + Total price the first period – value product recovery estimates – value products, the unfinished end of the period.
3.4 case under orders
Method orders are usually applied by the business to undertake the production process single or batch production according to orders. A special feature of this method is precisely the business will decide and product price calculator for each order, thereby accounting for expenses must be calculated in detail for each order.
Formula:
The price for each single order = Cost of direct material + Cost of direct labour + manufacturing Costs generally incurred for orders.
3.5 Calculate the price according to the method of coefficients
This is a method that is many businesses use to product price calculator. This method is often used for the business using the same raw materials and labor during the production process, however, they produce many different types of products. The cost is general in the entire production process. For example, a number of manufacturing sectors such as clothing, mechanical, electrical, chemical, breeding,...
Formula:
Product price standard = the Total price of all the product type / Total number of products
In which:
The total number of products = the Number of products each category of x coefficient of conversion of each type.
(The coefficient of conversion for different types of products, the coefficient of conversion standard is 1)
The total price of producing all kinds of products = the Number of standard product x product Price standard.
3.6 Method step stool
The method of calculating the price of step stool is often used for businesses that offer semi-finished products out or the business that needs accounting internal high between the phase technology.
To apply the method the business must have a process composed of many complex parts and undergo multiple stages technology.
Formula:
Price of finished products in the states = product Price stage 1 + Price of the product phase 2 + ... + Price of the product stage n.
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AccNet just share to you the information related to the steps product price calculator. Hopefully with this article you will know how to choose methodology for calculating the price in accordance with your business. Business should refer, learn and use integrated accounting software to support the accounting profession quickly, the most accurate.
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