# Advice 1: How to calculate variable costs

Variables costs are defined as costs the amount of which varies depending on production volume. Variable costs include costs for raw materials, materials and components, wages of production personnel, travel expenses, awards, costs for fuel, water and electricity. The purpose of variable cost savings. The sum of the variable costs, which falls per unit of the product is almost constant at different volumes of production.
You will need
• - Data on volume of output in natural units
• - Accounting data about the costs of materials and components, tooling wages, fuel and energy resources for the period.
Instruction
1
Based on the documents on the write-off of raw materials, acts of performance of work or services performed by auxiliary units or outside organizations, determine the amount of material expenses for production of products or services over the period. Of material costs exclude the amount of the return of waste.
2
Determine the amount of labor costs, which consists of piecework and hourly wage of production workers and service staff, bonuses, allowances and bonuses, contributions to social insurance funds.
3
Determine the cost of electricity, water and fuel used for technological needs, on the basis of actual consumption and purchase price.
4
Determine the amount of transportation and procurement costs and costs for packaging.
5
Add all the above amounts, you determine the total variable costs for all manufactured products for the period. Knowing the amount of manufactured products by dividing the sum of variable costs per unit of output. The critical level of variable costs per unit of product calculate according to the formula C–PZ/V, where C – the price of the product, PZ – fixed costs, V is the volume of output in natural units.
Note
In terms of taxes, fees and other obligatory payments, the amount of which depends on the volume of production, reducing variable costs is only possible with changes in legislation.
The decrease in variable costs will cause the growth of labor productivity, reducing the number of employees the main and auxiliary production, a decrease in the supply of raw materials and finished products, economical use of materials, use of energy saving technological processes, implementation of advanced control schemes.

# Advice 2 : How to calculate costs

What is the minimum capital you need to open up my own business depends on what you want to open. But there are costs typical for almost all types of businesses. Consider these costs in more detail.
Instruction
1
Currently, it is realistic to open a business with the minimum investment, or almost without them. For example, a business on the Internet. But if you are still inclined to the "traditional" form of business, it is already possible to identify at least three mandatory cost items: registration of company or entrepreneur, renting of premises and procurement of goods (equipment).
2
If you will be engaged in registration of a company or entrepreneur yourself, then all your costs are the state fee and notary costs. The state fee for registration of a legal entity currently is 4,000 rubles. A person may register as an individual entrepreneur, by paying 800 rubles. To 1500 rubles goes to the notary. However, doing the registration yourself, you will save money, but will spend a lot of time, so it's time to hire for the registration of their business specialist firm. The firm will register you for 5000-10000 rubles.
3
The cost of rent depends on the location of your office or store. Accordingly, the closer to the center of Moscow or to elite areas, the higher the rent. The average annual per square meter of the leased premises you will pay from 400\$. It will be the cost of the office class (very low class) to CAO. The cost of renting class A office can go up to 1500\$ per square meter per year, depending on location. Room for a shop size of 200 sqm in the city center will cost you an average of around 500,000 per month.
4
The cost of equipment or goods (if you decide to open a shop) certainly depends on the type of your business. In any case, you'll need to equip the office with at least one computer (if you have employees), telephone and other office equipment, as well as "stuff" - paper, stationery. Store owners should take care of the cash register.
5
Sooner or later your business will grow and you'll need employees. Any office needs a Secretary. His salary now starts at an average of 20,000 rubles per month. Student part time you can hire for 15,000. Accordingly, the more qualified the employee, the more he will have to pay. The salary of sellers and cashiers are now start from 10000-15000 rubles, but this is the minimum which will work low-skilled employees.

# Advice 3 : How to calculate variable costs

Variables are recognized as coststhat depend directly on the amount of the calculated production. Variables costs will depend on the cost of raw materials, and the cost of electrical energy, and the amount of wages paid.
You will need
• calculator
• a complete list of expenses of the enterprise with the specified amount of the cost
Instruction
1
Add up all the costs of enterprises that directly depend on the production volume. For example, variable costs of trade organization that implements a consumer products include:
PP – the volume of products purchased from suppliers. Expressed in rubles. Let trade organization has purchased goods from suppliers in the amount of 158 thousand rubles.
EE – the cost of electrical energy. Let trade organization 3 monthly pay 500 rubles for electricity.
Z – the salary of sellers, which depend on the quantity sold of their product. Let to retailers, the average payroll amounted to 160 thousand rubles.Hence, the variable costs of trade organization will be:
VC = PP + EE + S = 158+3,5+160 = 321,5 thousand rubles.
2
Divide the resulting sum of the variable costs on the volume of products sold. This figure can be found in the balance of trade organization. The amount of goods sold in the above example will be expressed in a quantitative dimension, that is the piece. Let a sales organization able to realize 10 500 pieces of goods. The variables costs based on the number of goods sold equal to:
VC = 321,5 / 10,5 = 30 rubles per unit of the product sold.Thus, the calculation of variable costs is made not only by adding up the expenditures for the purchase and sale of goods, but also by dividing the amount received per unit of product. Variables costs with the increase of the sold quantity of goods decrease, which may indicate the effectiveness of the organization. Depending on the type of activity of the company variables costs and their types can change, be added to the above example (the costs of raw materials, water, one-time transportation of products and other costs of the organization).

# Advice 4 : How to calculate fixed costs

In production there are costs that remain the same and in hundreds, and tens of thousands of dollars in profits. They do not depend on the volume of output. They are called fixed costs. How to calculate fixed costs?
Instruction
1
Determine the formula for calculating fixed costs. It calculated the fixed costs for all organizations. The formula is equal to the ratio of all fixed costs to the entire value of the implemented works and services, multiplied by the base income from the sale of works and services.
2
Count all fixed costs. These include: advertising costs, both internal and external; administrative costs, i.e. salaries of top managers, the maintenance of official vehicles, content departments of accounting, marketing, etc. expenses depreciation of non-current assets, the costs of the use of different databases of information, for example, postal or accounting.
3
Count in non-current assets charges for depreciation of fixed assets such as land, capital expenditure on land improvement, buildings, constructions, transmission devices, machinery and equipment, etc. and don't forget about the library funds, natural resources, objects of rent and capital investment in facilities that are not commissioned.
4
Swipe counting the entire cost of the realized works and services. This will include revenues from basic sales or services provided, for example, a hairdresser and work performed, for example, construction companies.
5
Calculate basic income from realization of works and services. Basic income is a conditional return for the month in terms of value per unit of physical indicator. Please note that services related to "appliances", have a common physical characteristic, and services "non-domestic" character, for example, the delivery of housing and the carriage of passengers, have their own physical characteristics.
6
Substitute the data obtained in the formula and will receive fixed costs.

# Advice 5 : How to determine variable costs

In the course of business CEOs spend cash on certain needs. All these costs can be divided into two groups: variables and constants. The first group includes those costs that depend on the volume produced or sold products, the second is not changed depending on the production volume.
Instruction
1
To determine the variables cost, view on their purpose. For example, you purchased any material that goes into production, that is, he directly participated in the release. Let it be wood, which produce lumber of various sections. From the amount of purchased wood will depend on the volume of produced lumber. Such costs relate to variables.
2
In addition to the wood you use electricity, the amount of which also depends on production volume (the more you produce products, the more you spend kilowatts), for example, when working with the sawmill. All of the expensesthat you will pay the company supplying electricity, also relate to variable costs.
3
To produce products that you use labor, which must pay wages. These costs relate to variables.
4
If you do not have own production, and act as an intermediary, that is, resell previously purchased goods, the total purchase price related to variable costs.
5
To determine the variables costs, analyze the dynamics of increase in all costs. As a rule, they will increase when the volume of production will rise, and conversely, decrease when decrease in performance.
6
To understand what it means to variables costs, consider permanent. For example, the rent of the premises does not affect the volume of production. These expenses and are permanent. Salary management staff is also not always depend on the output, then as an employee of the shop gets is proportional to the volume of products manufactured.
7
In variables expenses include deductions for social needs of the employees production; fuel, water. All of that affects the volume.

# Advice 6 : How to calculate the costs

Any budding entrepreneur interested in how much it will cost the opening of a business, especially if it is associated with the release and production. On how well will be costed in production, will depend on further activity of the enterprise.
Instruction
1
To begin to determine the extent to which you will provide services or produce products. You should clearly know that this month you will produce, for example, 200 pieces of product or provide a service to 200 people.
2
Now calculate the variable cost (costs that change based on the amount of service or output), it is necessary:
To calculate the cost of materials (cost of raw materials, which will be buying for the manufacture of products). The cost of raw materials required for production of unit of product is multiplied by the volume of the planned issue. If you provide a service, in this case, you will not have this costs.
3
The cost of labor. Decide how many people will you have to work to meet the production plan or service plan, and how much salary you pay them.
4
Deductions on social needs. As a rule, contributions to the social security Fund and insurance Fund. The percentage of a probe into the transactions.
5
Now you need to calculate the costs are constant (they are not associated with volume of rendering of services or manufacturing of goods). They consist of General production and General business expenses (include expenses for rent, depreciation of purchased equipment and fixed assets, etc.), commercial expenses (advertising costs and delivery of the goods to the consumer – if it's there).
6
All amounts, variable and fixed costs need to be added. This will be your cost of producing and manufacturing products.
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