Production capacity calculation
| Parameter name | Meaning |
| Article topic: | Production capacity calculation |
| Rubric (thematic category) | Production |
Calculation of the production capacity of an enterprise is the most important stage in justifying the production program. Based on calculations of production capacity, in-production reserves for production growth are identified, production volumes are established, and the need to increase production capacity through technical re-equipment, reconstruction and expansion of existing and construction of new facilities is determined.
The production capacity of an enterprise is usually understood as the maximum possible output of products in the nomenclature and assortment provided for by the sales plan, with full use of production equipment and space, taking into account progressive technology, advanced organization of labor and production.
The concepts of “production capacity” and “production program” in planned calculations are not identical. If the first shows the ability of an enterprise, under certain conditions, to produce the maximum amount of products in physical terms in a certain period of time, then the second characterizes the degree of capacity utilization in the planning period.
When planning, the production program, as well as the capacity of the enterprise, are expressed in the same natural (conditionally natural) and cost units. For example, the capacity of a tractor factory is measured in units of tractors, a textile factory - in square meters of fabric, a canning factory - in thousands of standard cans.
Planning of production capacity is based on taking into account the factors on which its value depends. When calculating capacity, the following factors are taken into account: the structure and size of basic production assets; quality composition of equipment, level of physical and moral wear and tear; advanced technical standards for equipment productivity, use of space, labor intensity of products, yield of suitable products from raw materials; progressiveness of the applied technological processes; degree of specialization; operating mode of the enterprise; level of organization of production and labor; equipment operating time fund; quality of raw materials and rhythm of deliveries.
Production capacity is a variable quantity. Retirement of power occurs for the following reasons: wear and disposal of equipment; increasing the labor intensity of manufacturing products; changes in the nomenclature and range of products; reduction of working hours; expiration of the equipment leasing period. These same factors also work in the opposite direction.
Production capacity planning consists of performing a set of planned calculations to determine: input power; output power; indicators of the degree of power utilization.
Input power determined by the available equipment installed at the beginning of the planning period. Output power is the capacity at the end of the planning period, calculated on the basis of input power, disposal and input of power during the planning period. Product output planning is carried out based on the average annual capacity (M C), calculated by the formula
M s = M n + M y + M r + M un - M in, (3.6)
where Mn is production capacity at the beginning of the planning period (year);
M y - increase in power due to organizational and other measures that do not require capital investments; Ch 1, Ch 2, Ch 3, Ch 4 - respectively, the number of months of power operation;
M p - increase in capacity due to technical re-equipment, expansion and reconstruction of the enterprise;
M un - increase (+), decrease (–) of capacity due to changes in the nomenclature and range of products, receipts of industrial production assets from other enterprises and their transfer to other organizations, including leasing;
M in - reduction in power due to its disposal due to disrepair.
It is necessary to distinguish between actual and design power. Their compliance is characterized by the degree of mastery.
Degree of development of design capacities characterized by the following indicators: duration (term) of development; level of development of design capacity; coefficient (percentage) of utilization of commissioned capacities; volume of production during the development period; achieving project levels of cost, labor productivity and profitability.
Under period (term) of development The design capacity of an enterprise or its part (shop, section, unit) is usually understood as the time from the date of signing the acceptance certificate for operation until the sustainable production of products by the planned facility. The volume of production at facilities that are at the stage of developing design capacities should be determined taking into account this indicator. Moreover, when planning this indicator, the time for preparing production for the release of new products at the facility being commissioned, carrying out commissioning work and comprehensive testing of equipment should not be taken into account.
Mastery level- this is the percentage (coefficient) of development of the design capacity that has been consistently achieved on a certain date. It is calculated as the ratio of product output in a certain period (hour, day, month, year) to the corresponding (hourly, daily, monthly, annual) design capacity.
Let's consider the methodology for calculating the production capacity of an enterprise. For the calculation, it is extremely important to have the following initial data: planned working hours for one machine; number of machines; equipment performance; labor intensity of the production program; achieved percentage of production norm fulfillment.
The production capacity of an enterprise is determined by the capacity of leading workshops, sections, production lines, machines (units), taking into account measures to eliminate bottlenecks and possible cooperation in production.
The calculation of production capacity includes all available equipment, incl. and inactive due to malfunctions, repairs, and modernization. Equipment being installed and in warehouses intended for commissioning in the planned period is taken into account. When calculating capacity, the equipment of auxiliary and service workshops is not considered.
Calculation of the production capacity of an enterprise should be carried out in the following sequence: units and groups of technological equipment - production areas - workshops (buildings, production) - the enterprise as a whole.
To calculate production capacity, two methods are used: based on equipment productivity and based on the labor intensity of manufacturing products. In continuous production, the capacity of units, sections and workshops is calculated, as a rule, by the productivity of the equipment, and in discrete production - by the labor intensity of manufacturing products.
1. Production capacity of the unit.
The production capacity of the unit (Ma) is defined as the product of the annual planned operating time (Fp) and its productivity per unit of time (Ea):
Ma = Php · Ea. (3.7)
For example, the productivity of a furnace for firing castings is 0.2 tons of parts per hour; the planned operating time of the furnace per year is 6900 hours; 0.6 tons of castings are consumed per product. The production capacity of the furnace is 1380 tons of castings per year (6900 · 0.2) or 2300 products (1380: 0.6).
Or another example: it is required to determine the production capacity of a furnace in a steel foundry with a charge volume of 4 tons; melting time 2 hours; steel yield factor 0.6; the weight of a set of steel castings per product is 0.6 tons.
The calculation is carried out according to the formula:
Ma = Фп · Ea = Фп, (3.8)
where Oz is the volume of charge filling per melt, tons; Kg - yield coefficient;
Dp - duration of one melting cycle, hour;
Vk - weight of the casting kit for the product, tons.
Ma = 6900 = 13800 products.
The production capacity of conveyor (production) lines is calculated based on the production line cycle (t):
The power of a CNC machine is determined based on the labor intensity of processing the part (T pcs) and the production rate fulfillment factor (k):
Ma = · k. (3.10)
When calculating production capacity, it is important to correctly calculate the planned operating time of the unit. There are calendar (Fc), routine or nominal (Fr) and planned (Fp) funds of time.
The calendar (FC) time fund of production equipment serves as the basis for calculating other types of time fund in planning. It is determined by multiplying the number of days in a given calendar period (Dk) by the number of hours in a day (T):
Fk = Dk · T.
The routine or nominal (Fr) fund of operating time of a machine (unit) depends on the number of calendar days (Dk) and the number of non-working days (Dn) in a year, as well as on the daily shift regime adopted at the enterprise:
Фр = (Dk – Dn) t, (3.11)
where t is the average number of machine operating hours per day on weekdays according to the adopted shift schedule, taking into account the reduced shift duration on pre-holiday days.
Фр = [(Dk – Dp) tс – D SP · t SP ] n С, (3.12)
where Dp is the number of weekends and holidays in the planned period; tс - duration of the work shift, hour;
D SP - the number of pre-weekend (pre-holiday) days with a reduced work shift;
t SP - time, the duration of the work shift on pre-weekends and holidays is reduced by ĸᴏᴛᴏᴩᴏᴇ, hour;
n C - shift mode of the enterprise (1, 2, 3 shifts).
The planned (effective, actual) (Fp) operating time fund of the equipment is equal to the difference between the operating (nominal) fund (Fr) and the amount of time spent on repairs, adjustment, reconfiguration of this equipment during the planned period (t P):
Фп = Фр – t П = Фр , (3.13)
where t P is the time spent on repairing this equipment as a percentage of the operating fund; t P - time spent on setup, readjustment, transfer of equipment as a percentage of the regime fund.
2. Production capacity of the site, workshop
The production capacity of a site (shop) (My), equipped with the same type of equipment, is determined by multiplying the standard annual productivity of one machine, unit (Ma), taking into account the average coefficient of exceeding the production norm (k) by the average annual fleet of this type of equipment (n):
M U = Ma · k · n, (3.14)
M U = , (3.15)
where T SHT is the standard time for producing a unit of product, hour.
The production capacity of a site (shop) equipped not with the same type of equipment, but with a variety of equipment, is determined by the throughput of the fleet of leading groups of equipment. The leading groups include equipment that performs the main volume of work in terms of complexity and labor intensity when processing profile products.
If the equipment produces parts for only one product, then calculating production capacity does not cause difficulties. If the same equipment processes parts used in several types of products, then the calculation of the production capacity of the site (shop) is made on the basis of the labor intensity of the so-called set of products. It includes products in the quantitative ratio provided for in the program. In this case, for each group of equipment, a progressive rate of labor intensity for processing one set is calculated. It is determined by multiplying the labor intensity of processing a set of product parts by its specific value in the total output, followed by summing the product for all products. The production capacity of a group of equipment is determined by dividing the operating time of each group by the labor intensity of one set.
For example, in the gear section of the machine shop there are 5 lathes installed, on which parts of products A, B and C are processed in a ratio of 48, 36 and 16 percent. This percentage is calculated based on the number of products and the applicability of parts in the products. The complexity of processing a set of parts for product A is 10 machine hours; B -20 and B -15. The planned operating time of the equipment is 23,500 hours. We calculate the complexity of the set of the given product.
Product A = = 4.8 hours.
Product B = = 7.2 hours.
Product B = = 2.4 hours.
To determine production capacity in physical products, it is extremely important to distribute the amount of production capacity in typesetting kits in proportion to the quantitative ratio of products in the program:
Product A = 48 = 783 pcs.
Product B = 36 = 588 pcs.
Product B = 16 = 261 pcs.
Total 1632 pcs.
In the conditions of individual and small-scale production, when parts of a large number of product types are processed in one workshop on the same equipment, the calculation of production capacity is carried out using an enlarged nomenclature. Consolidation is carried out by combining (bringing) individual parts into groups based on the similarity of their labor intensity structure. As a representative product, one stands out that has the greatest significance in the overall output of the workshop. The reduction of individual products of a group to a representative product is carried out based on the ratio of their labor intensity using reduction coefficients.
EXAMPLE
Posted on ref.rf
It is required to bring product B and C to representative product A. The total labor intensity of products is: A - 28 hours, B - 32 hours; At – 16 o’clock. The annual production of product A is 1200 pieces; B - 400; B - 840. The reduction coefficients are respectively equal to: 1.0; 1.14; 0.57. The program in terms of product A will be: 1200 + (400 · 1.14) + (840 · 0.57) = 2135 pcs.
3. Production capacity of the enterprise.
The production capacity of the enterprise is calculated based on the leading workshop. To do this, the production capacity of all workshops is calculated and a diagram of the enterprise’s capacity is constructed.
Most often, in mechanical engineering and metalworking enterprises, the assembly shop is taken as the leading workshop. If, in our case, the leading workshop is taken to be the assembly workshop with an available capacity of 65 thousand products, then in the procurement workshop there is a capacity reserve equal to 5 thousand products; in the forge shop - 15 thousand products; in the machining shop - 5 thousand products. The foundry will, on the contrary, be a “bottleneck”: it has a lack of production capacity of 5 thousand products per year. A “bottleneck” is usually understood as a discrepancy between the power of individual sections and workshops and the capabilities of the leading equipment. However, when planning a production program, it is extremely important to provide for measures aimed, on the one hand, at “debottlenecking” (increasing capacity), and on the other, at loading existing capacity reserves.
Calculation of production capacity - concept and types. Classification and features of the category "Calculation of production capacity" 2017, 2018.
- Kitchen production capacity
- Determine the annual production capacity of the workshop
- Determine the production capacity of the workshop and the annual output of commercial products
- Determine the annual production capacity of the enterprise
- Determine the average annual production capacity of the enterprise
- Determine production capacity utilization factor
Task. Kitchen production capacity
Boiler capacity 120 l. The boiler filling factor is 0.9. The average volume of one dish is 0.5 liters.The average cooking time for one production turn of the boilers is 120 minutes.
Organizational and technological downtime of equipment per shift is 50 minutes.
The average time for preparatory and final operations per cooking is 20 minutes. Kitchen operating hours per day are 10 hours. The canteen is open 305 days a year.
Calculate the daily production capacity of the kitchen and the annual production program of the canteen for the production of first courses.
Comment.
If you think about the essence of the problem... well, okay, let’s say that there is a kind of “McDonald’s soup”, when the same product is endlessly consumed, in the same recipe, all year round. The author is not concerned with market and seasonal fluctuations in demand. Let's leave the semantic content (what nonsense, after all...) to the conscience of the author.
This problem is presented solely because the methodology for solving it is useful for industrial enterprises with mass production. It is also worth paying attention to the fact that for some reason the author does not take into account the working hours of the staff. In practice, be sure to pay attention to this. Related to this fact is the question of how to interpret the phrase “on shift.” If the kitchen hours are 10 hours, do we have one 10-hour shift or two five-hour shifts? Assuming a 40-hour work week, it turns out that there is one shift with a staggered staff work schedule. That is, one person can work no more than four days a week.
Solution.
Let's start with the daily "production capacity".
The nominal time fund will be:
10 hours x 60 minutes = 600 minutes
Effective time fund
600 - 50 = 550 minutes
Production cycle time
120 + 20 = 140 minutes
The number of operating cycles per day will be
550 / 140 ≈ 3,93 = 3
Here is the first "surprise". If we had mass production, then we would pay the missing 10 minutes (140x4 - 550) as overtime and receive an additional volume of products to the warehouse (!). But... we have perishable products that must be also sold and consumed. Opening hours are limited by the institution's operating hours. That is, we cannot put anything “into the warehouse”! That's why we take the number of production cycles to be three.
Now we determine the volume of production in portions.
120 * 0.9 / 0.5 = 216 servings
Thus, release per day will be 216 * 3 = 648 servings
Again, if we were talking about production, due to processing we would have 4 production cycles. (216x4)
Annual issue will be
648 * 305 = 65,880 servings
Task 2. Determine the annual production capacity of the workshop
In the workshop of the machine-building plant there are three groups of machines: grinding - 5 units, planing - 11 units, turret - 15 units. The standard time for processing a unit of product in each group of machines is 0.5 hours, 1.1 hours and 1.5 hours, respectively.
Determine the annual production capacity of the workshop, if it is known that the operating mode is two-shift, the shift duration is 8 hours; regulated equipment downtime makes up 7% of the operating time fund, the number of working days per year is 255.
Solution.
In order to find the annual production capacity of the workshop, we need to find the actual annual working hours. It is found by the formula:
F n
n
N rev
F nd– nominal working time in days. Measured in days of the year.
WITH - number of shifts in a working day.
t
Let's find the nominal working time fund. Let's substitute the values into the formula.
F n = 255*2*8=4080 h.
F d =4080*(1-7/100)*(5+11+15)=4080*0.93*31=117626.4 hours.
N h – standard time for product processing. Measured in standard hours per piece.
F d
Let's substitute the values into the formula:
VP=37944/(0.5+1.1+1.5)= 117626.4/3.1=37944 pieces of products
Answer: The production capacity of the workshop is VP = 37944 units of standard products per year
Task 3. Determine the production capacity of the workshop and the annual output of marketable products
Determine the annual production capacity of the workshop and its annual output of marketable products, if the production capacity utilization factor is 0.95. The calculation data is given in the table below.
Solution.
Let's find the nominal working time fund. To do this, we use the formula:
WITH– number of shifts in a working day.
t– duration of the shift. Measured in hours.
Let's substitute the values into the formula.
F n =230*2*8=3680 h.
Let's find the actual annual working time fund. To do this, we use the formula:
F n– nominal working time fund, measured in hours.
n– regulated equipment downtime, measured as a percentage.
N rev– the amount of equipment in the workshop, measured in pieces.
Let's substitute the values into the formula.
F d =3680*(1-4/100)*25=3680*0.96*25=88320 h.
Let's find the annual production capacity of the workshop. Let's use the formula:
N h- standard time for processing the product. Measured in standard hours per piece.
F d– actual annual working time fund.
Let's substitute the values into the formula.
VP=88320/0.5=176640 pcs.
Now we can find the annual output of commercial products. To do this, we use the formula:
VP– annual production capacity of the workshop.
TP=176640*0.95=167808 pcs.
Answer: The theoretical possible output of commercial products is TP = 167,808 pcs., the theoretical production capacity of the VP workshop = 176,640 pcs.
Task 4. Determine the annual production capacity of the enterprise
Determine the annual production capacity of the enterprise and the level of its use using the following data.
|
No. |
Indicators |
Values |
|
Production capacity of the enterprise at the beginning of the year (input), million UAH. | ||
|
Production capacity, which is increasing as a result of modernization and improvement of technology, million UAH. | ||
|
Number of months of use of this power | ||
|
Production capacity introduced as a result of new construction and reconstruction, million UAH. | ||
|
Month of introduction | ||
|
Production capacity withdrawn from production, million UAH. | ||
|
Month of discontinuation | ||
|
Production program of the enterprise, million UAH. |
Based on the initial data given in the table above, determine the output, average annual production capacity of the enterprise and the utilization rate of production capacity.
Solution.
Mout = Mn + Mm + Mr - Ml
M p
Mm
M r
M l
Let's substitute the values into the formula.
M out = 10+0.4+0.5-0.3=10.6 million UAH.
n1,n2– number of months of use of the introduced capacity.
n3– the number of months during which the capacity withdrawn from production is not used. Let's substitute the values into the formula.
M s =10+0.4*4/12+0.5*3/12+0.3*9/12=10+0.13+0.125+0.675=10.93 million UAH.
OP– production volume.
PM– production capacity.
Let's substitute the values into the formula.
K IPM =9.4/10.93=0.86
Answer: Production capacity utilization factor K ipm = 0.86, Estimated annual production capacity M out = 10.6, M s = 10.93
Task 5. Determine the average annual production capacity of the enterprise
The enterprise's capacity at the beginning of the year amounted to 35,800 tons of final products. During the year, the following capacities were introduced: in June - 3500 tons, in August - 5420 tons, in October - 2750 tons. Capacities were withdrawn: in April - 2250 tons, in November 8280 tons. It is necessary to determine: the average annual production capacity and enterprise capacity at the end of the year.
Solution.
Let's find the average annual capacity of the enterprise. Average annual production capacity can also be determined using the following formula:
Mm.– production capacity at the beginning of the year.
M r.– power that is put into operation.
M l.– power that has been taken out of service.
n 1– the number of months of operation of the i-th capacity that was put into operation during the year.
n 2– the number of months after the decommissioning of the i-th capacity during the year, month.
Let's substitute the values into the formula.
M s.= 35 800 + (3500*7+5420*5+2750*3)/12 – (2250*9+8280*2)/12= 35 800 +
+ (24 500+27 100+8250)/12 – (20 250+16 560)/12=35 800 + 59 850/12 –
– 36,810/12 =35,800 + 4985.7 – 3067.5=37,720 t.
Let's find the production capacity at the end of the year. To do this, we add the added capacity to the production capacity at the beginning of the year and subtract the removed capacity.
Let's substitute the values into the formula.
M k.g.= 35,800+3500+5420+2750-2250-8280 = 36,940t.
Task 6. Determine the production capacity utilization factor
The company produces electric motors. Based on the data presented in the table, determine the output and average annual production capacity of the enterprise and the utilization rate of production capacity.
Solution.
There are input, output and average annual production capacity. Input power is the power at the beginning of the year. Power output is the power at the end of the year.
Let's find the output production capacity. To do this, we use the formula:
Mout = Mn + Mm + Mr - Ml
M p– production capacity of the enterprise at the beginning of the year. Measured in UAH.
Mm– power that increases as a result of equipment modernization and technology improvement. Measured in UAH.
M r– capacity that is introduced as a result of new construction or reconstruction of an enterprise. Measured in UAH.
M l– capacity that has been withdrawn from production. Measured in UAH.
Let's substitute the values into the formula.
M out = 12+0.8+0.6-0.4= 13 million UAH.
Let's determine the average annual production capacity. Let's use the formula:
n1,n2 – number of months of use of the introduced capacity.
n3 – the number of months during which the capacity withdrawn from production is not used. Let's substitute the values into the formula.
M s= 12+0.8*3/12+0.6*4/12-0.4*10/12=12+0.2+0.2-0.33=12.07 million UAH.
Now let's find the production capacity utilization factor. This can be done using the formula:
OP – production volume.
PM – production capacity.
Let's substitute the values into the formula.
K IPM = 10/12.07 = 0.829
Answer: K inm =0.829, M out =13 million UAH, 12.07 million UAH.
Effective use of an enterprise's production capacity is a multifaceted system of theoretical and practical solutions. In order to apply any methods, methods and strategies for a particular enterprise, it is necessary to clearly understand what the production capacity of the enterprise is, what its components are and what factors have a decisive influence on it.
Production program and production capacity of the enterprise: what is the difference
The task of any manufacturing enterprise is to produce any market product (service, product). The exact extent to which a given organization can put its offer on the market depends in most cases on its production potential.
Companies collect vast amounts of customer data, which ultimately turns out to be useless. The information is scattered, often outdated or distorted - on this basis it is impossible to make a unique selling proposition to the buyer and predict sales. Our article describes tools for collecting and analyzing information, the use of which:
- optimizes the company's marketing expenses;
- will help build a sales strategy;
- will reduce customer churn due to improved service quality.
The production capacity of an enterprise is an exact expression optimal quantity of goods produced.
The optimal quantity of a product/service produced is the volume of the company’s supply that covers all concluded transactions and obligations for the production of a product/service within a specified time frame, produced at the lowest cost and the highest profitability.
If necessary, the production program can be developed both for the company as a whole and for its separate functional divisions. The periods of the implemented program plan may also be different, but in any case, these periods should not diverge from the terms of already concluded contracts.
The data specified in the production program takes into account all facets of the commodity-market manifestation: the range of the product being manufactured, quantity, quality characteristics of the offer, deadlines, etc.
As a result, the main task of drawing up a production program is to standardize the volume of goods or services produced and sold.
In world economic theory, the volume of goods sold is more often found in the form of the term “sales volume”. This is due to a broader scope of understanding, which includes defining the characteristics of both an enterprise specializing in the production of a material product and a company providing services. Nowadays, there are more and more businesses that combine both.
What are the different types of production capacity of an enterprise?
The production capacity of an enterprise or its individual structural element represents the maximum potential for the production, processing and sale of a product or service with given characteristics for a year or any other period of time under conditions that all the company’s resources are used on the most progressive basis.
When drawing up a production program or plan, as well as when conducting analytical work with the performance indicators of a company or its individual division, three main types of the maximum possible production capacity of an enterprise are identified:
- perspective;
- design;
- active
The prospective type of production capacity of an enterprise is the probable change in production indicators expected in the future.
The design type of production capacity of an enterprise is expressed in the volume of output provided for by the construction project, reconstruction of the enterprise, as well as planned after any technical renovation of production units and changes in labor organization. The design production capacity of the enterprise reflects the coordination of the company to achieve a leading position in a given industry segment of the market.
The current type of production capacity of an enterprise represents the production potential of the facility, which is approved in the production program. This type of potential is dynamic, and trends of change depend on organizational and technical production progress. The current design capacity consists of the following indicators:
- the input level of the enterprise's production capacity (the initial stage of the planned period);
- the output level of the enterprise's production capacity (the final phase of the planned period);
- the average value of the enterprise's production capacity for the year.
The division of the enterprise's production capacity into input, output and average annual capacity is based on the following factors:
- the input level of the enterprise's production capacity is the potential production potential of the beginning of the planned period, which is most often a year;
- the output level of the enterprise's production capacity is the maximum use of reserves in the final part of the planned period, which is equal to the result of adding the input capacity at the beginning of the year and the input capacity introduced/removed during the same 12 months;
- the average annual level of production capacity of an enterprise is the average annual value of the production capacity that the facility has in the conditions of the emergence of new opportunities for the part of the company involved in the production of the product and their abolition.
How to determine the production capacity of an enterprise
An integral part of calculating the planned production capacity of an enterprise is the constant recording of the balance of supply and demand for a product/service. Let’s say that if demand prevails over supply, then planning necessarily reflects a corresponding increase in production potential.
Additional factors influencing the production capacity of an enterprise are the company’s internal resources, such as technological and organizational equipment, the degree of personnel qualifications and strategic progressive management aimed at achieving new economic heights.
The production capacity of an enterprise, as a value, is calculated taking into account the following provisions:
1. The unit of measurement for the production capacity of an enterprise is the same quantitative volume of the product produced as in the approved production program (plan and contract).
2. Calculation of the level of potential capabilities of the manufacturing enterprise occurs at all hierarchical levels of the structure of the production part of the company:
- from the production element of the lowest rank to the link at the beginning of the hierarchy;
- from technologically similar units of production equipment to integrated sites;
- from a small production zone - to a workshop, and then - to a manufacturing enterprise.
3. To calculate the value of the production capacity of an enterprise, you need to know:
- volume of fixed production assets;
- operating procedures for machinery and equipment;
- the amount of time required to produce/process the product and the productivity of technical equipment.
The size of the production capabilities of a lower division affects each larger link in the production structure, from the site to the manufacturing plant. The highest rank is assigned to the division in which the main part of the production and technological processes for the production and processing of the company's product is carried out, the largest human resources are concentrated and in which the fixed assets of the enterprise are centralized.
Economic practice, in addition to estimated calculations of the production capacity of an enterprise, implies the development of a “Balance of Production Capacity”, which reflects:
- quantity of products produced or processed;
- input level of enterprise production capacity;
- design production capacity of the enterprise;
- output level of production capacity of the enterprise;
- average annual production capacity of the enterprise;
- coefficient of realization of production resources.
Factors of enterprise production capacity influencing the value of this value:
- technical equipment of the manufacturer in quantitative terms of machine units;
- technical and economic standards for the operation of machine units;
- compliance of production machines and technologies with current scientific and technological progress;
- temporary funds for the operation of machines and units;
- degree of labor and production coordination;
- used production areas;
- planned volumes of manufactured or processed product, which have a direct impact on the labor intensity of this product with the available technical equipment.
The composition of the technical equipment of the enterprise includes all machine units that are operational, put into operation at the beginning of the year, and those that are planned to be used during the period indicated by the plan. It does not include units of equipment that are in reserve conservation, belong to experimental zones and are used as educational and training installations.
The maximum productivity of technical equipment involved in calculating the production capacity of an enterprise is calculated based on advanced standards for the operation of each machine unit.
The time fund for the operation of technical equipment during a continuous production cycle is defined as the difference between the total calendar time and the hours spent on repair and maintenance.
An important nuance when calculating the production capacity of an enterprise is that idle units do not take part in it, which may be due to the lack of raw materials and material resources, as well as the hours associated with reworking defective products.
How to calculate the production capacity of an enterprise
The total production capacity of each division of the enterprise will be the total production capacity of the enterprise. Calculation within a department is carried out from the lowest level to the highest, for example, from a group of production machines with similar technical characteristics to a production site, from a workshop to a department, from a production department to the entire enterprise.
The calculated production capacity of the leading production unit is the basis for determining the capacity of the unit at the next level. For example, the production capacity of the leading group of machines is the basis for determining the same value for the production site, the power of the leading group is the basis for determining the capacity of the workshop, etc. The leading production unit is the one whose labor intensity is of greatest importance. If a production unit includes several elements of the same type (groups of machines with similar technical characteristics, production workshops, etc.), then its capacity is determined by adding the capacities of all its components.
The principle of calculating the production capacity of both one production element and the entire complex depends on the type of established process. In serial and single production, capacity is calculated from the throughput of machine units and their groups to the capacity of the production unit.
The production capacity of an enterprise is determined not only at the level of the leading units of the plant, but also by its other elements. This is necessary to do in order to timely identify the so-called “bottlenecks”, i.e. groups of machines, sections, workshops, whose throughput does not meet the power requirements of the leading element, based on the indicators of which the total production capacity of the enterprise is determined.
After calculating the production capacity of the leading units of the plant, preliminary load balancing is carried out (bringing the degree of operation of machines in groups to a value that takes into account the optimization of the work of bottlenecks), and only after that they are summed up to obtain the value of the total production capacity of the enterprise.
Indicators of production capacity must be in the same natural or conditionally natural units of measurement in which the production program is planned.
The value of the level of production capacity is differentiated into input, output and average annual. The level of input production capacity is an indicator of capacity at the beginning of the planning period, output - at its end date.
Production output level (MW)- an indicator that depends on the work specified in the plan for the production re-equipment of the enterprise, modernization of the machine fleet, construction or repair of production facilities, etc. This indicator is calculated according to the formula Mv = M1+Mr+Mm-Ml, Where:
- M1 – power value at the beginning of the planning period (input power);
- Мр – the value of the power introduced into the production complex to carry out planned repair, construction, and modernization work;
- Mm is the power value that production units acquired as a result of the implemented transformations;
- Ml – the value of power removed from the production process (for example, the power of obsolete equipment).
Average annual production capacity level (Ms)– the initial indicator, which is the average value of the capacity of a production unit for 12 months, taking into account the capacities introduced and removed from the production process. The same indicator, determined for the entire enterprise, depends on the average annual production capacity of the main division of the plant.
The production capacity of an individual structural unit of production is influenced by various factors: the number of machine units, their technical characteristics, operating time, and their throughput.
The calculation of the level of average annual production capacity is carried out according to the formula Ms = Os FvNp, Where:
- Os – average annual number of machine units with similar technical characteristics;
- Fv – the total volume of the temporary fund of technical units of the enterprise;
- Np is the hourly productivity rate of one machine unit.
Average annual number of machine units with similar technical characteristics is determined by the formula Os = O1 + OvP1/12 – OvP2/12, Where:
- О1 – number of machine units at the beginning of the planning period;
- Ov – the number of machine units introduced into the production complex during the planning period;
- Ol – number of machine units discontinued during the planning period;
- P1 and P2 – the number of full months until the end of the planning period after the installation/removal of equipment.
How should the production capacity of an enterprise be planned?
Without planning the use and increasing the production capacity of the enterprise, all business achievements of the production complex will be short-term in nature. Based on practical observations, we can say for sure that excess production capacity has a more positive effect on production than its deficit.
Therefore, when planning the use and expansion of production capacity, managers should ask questions of the following nature: “Will my production have one global production capacity or will it be a collection of several small resources?”, “Will capacity expansion occur as needed or as part of the planned strategy?” etc. To get answers to such questions, the manager must develop a plan for the development of production and its capacities, and the analysis of its effectiveness must be systematic.
When choosing production capacity, there are three factors to consider.
1. How much production capacity is needed?
The average value of the involvement of production facilities in the production process should not be equal to 100%. If the capacity indicator is close to this figure, this signals that either production capacity requires an early increase, or it is necessary to reduce the volume of output. Those. The plant should always have some reserve of production capacity, which must be reserved in case of an unplanned surge in demand or failure of any production units. A plant's production capacity reserve is the difference between average utilization (or actual production capacity) and 100%.
In practice, it makes sense to have a large reserve of production capacity when:
- the demand for manufactured products is highly dynamic;
- the volume of future demand is unknown and resources are not flexible enough;
- demand changes in the ratio of different types of products;
- there is no clear delivery schedule.
An excessively large reserve of production capacity is often the result of increasing the production capacity of an enterprise in minimal quantities. Therefore, it is better for a company to increase its capacity in large stages at once.
A small amount of reserves of production capacity is justified: a small amount of financial resource that is not involved in the production cycle is “frozen”, and a decrease in efficiency is also visible due to a failure in the supply of raw materials or a decline in the labor activity of workers (these disadvantages often remain invisible with a large reserve of production capacity).
2. When and how much to expand production capacity
The question of the volume of expansion of the enterprise's production capacity is not the only one. It is equally important to determine in a timely manner when the plant needs to introduce additional capacity. How much and when to increase a company's production resources is decided by one of two strategies: expansionist or wait-and-see strategy.
The first technique is the expansion of the production capacity of the enterprise in large volumes over long periods of time; the volume increases in advance, without waiting for power reserves to run out.
The second, on the contrary, implies the introduction of additional resources often and in small volumes (“wait-and-see” in translation – “we wait and watch”, “we’ll wait and see”); the introduction of additional resources occurs only when the established critical level of inventory volume is reached.
The time and size of the increase should be directly proportional to each other. Thus, if, against the backdrop of increasing demand, the intervals between the introduction of additional capacity increase, then the volume of increase should also increase. The expansionary method of increasing production capacity stays ahead of changes in demand, minimizing the possible loss of profit from lack of capacity.
The wait-and-see method follows changes in demand, while the lack of resources is compensated for by any urgent measures: overtime hours, hiring temporary labor, renting additional premises, etc.
The business manager can use one of these methods or use any intermediate version, for example, introducing additional capacity in shorter periods of time than with the expansionist method, but following demand, as with wait-and-see.
An option that combines two methods equally is called follow-the-leader (“follow the leader”), i.e. focus on the time and volume of capacity increase of leading companies in their market sector. Obviously, with the middle option there is no question of increasing competitiveness.
3. How does the expansion of production capacity relate to other aspects of the enterprise’s activities?
The introduction of additional production capacity should be part of a unified development strategy for the entire enterprise. Changes in the flexibility of resources and their location must be commensurate with the reserve of production capacity resulting from these changes, because all three of these aspects are factors that influence the increase or decrease of a company's risks. The reserve of production capacity is also interconnected with other aspects of the company’s activities, which include:
- competitive advantages. For example, when a competitive advantage such as high delivery speed emerges, it is necessary to ensure that the reserve of production capacity corresponds to changes in demand, especially if warehouse costs are not economically justified;
- quality management. With higher quality products, it is advisable to reduce the production capacity reserve of the enterprise, because here losses associated with the release of defects and other types of reduction in the final volume of production are minimized;
- capital intensity. Investments in high-tech equipment. To compensate for the balance of finances “frozen” in the production cycle, it is advisable to reduce the reserve of production capacity;
- flexibility of resources. As workforce flexibility decreases, the likelihood of equipment overload increases. Production can be balanced by increasing the production capacity reserve;
- equipment. Unreliability in equipment requires an increase in reserve production capacity, especially during periods of sharp increases in demand for manufactured products;
- planning. A stable business environment increases the level of product/service guarantee, so it is appropriate to have a small reserve of production capacity;
- location. Geographic expansion of production requires an increase in the reserve of production capacity in a new location with a probable decrease in it in the old one.
So, any changes in production capacity must be combined with planning of other company functionality. Financial analysis and assessment of human resources should form the basis both in planning changes in production capacity and in managing the company as a whole, which, in turn, should be carried out against the backdrop of knowledge of the characteristics of a given market segment and forecasting changes in demand and supply.
Experts advise planning the expansion of the enterprise’s production capacity according to the following step-by-step scheme:
Stage 1. Assess the required production capacity
To analyze long-term capacity requirements, it is necessary to calculate likely changes in demand, productivity, competition, and the time over which technological changes will take place. To compare with the value of production capacity, the value of demand must have a numerical expression.
Stage 2. Calculate the difference between the required and available production capacity
The exact measure of productive capacity is not easy to determine when the expansion process involves several types of resources. Thus, the introduction of additional capacity within one operation can increase the value of the total production capacity, or the expansion of the total capacity is impossible without adjusting the capacity of bottlenecks (if any).
Stage 3. We draw up options for plans to close the gap
Potential gaps in production capacity must be taken into account in alternative plans to address them. Company managers can choose “plan 0”, in which no active actions are taken, passing by orders that do not fit into the volume of available production capacity. Another way is to use expansionist and wait-and-see methods, choosing the timing and volume of increasing the production capacity of the enterprise yourself.
Stage 4. Qualitatively and quantitatively evaluate each alternative and make a final decision
In the course of a qualitative assessment, management analyzes likely changes in the enterprise's economic activities that are not affected by the financial analysis, which will be the result of changes in the volume of production capacity. Aspects such as future demand dynamics, competitive responses, changes in production process technology or final cost should be weighed against future expansions of production capacity only through sound judgment and experience.
Quantitative aspects are also compared with future prospects for changes in plant capacity. The most negative of them is the one where demand is of minimal importance, and competition is of greater importance. When making decisions, management must take into account both the most pessimistic outcomes and the most favorable ways of developing the situation.
Financial flows also have a quantitative assessment: from “plan 0” to other options for the chosen strategy. At this stage, only the difference between the company’s income and expenses that is relevant to the project under consideration is assessed.
How to analyze the production capacity of an enterprise
In order to develop a further strategy for the development of production, to optimize the operation of existing technical equipment, it is necessary to carefully study the work of production in the past period.
The production capacity of the enterprise is analyzed based on an assessment of the following characteristics.
Capital productivity and the reasons influencing it
Capital productivity, or the turnover ratio of fixed assets, characterizes the degree of efficiency in the use of basic production equipment, the quality and quantity of which are decisive for the formation of the total production capacity of the enterprise. Capital productivity is the amount of output that falls on 1 or 1000 rubles of the monetary value of production fixed assets.
The value of capital productivity is influenced by the practical use of technical equipment, production area, as well as the dynamics of the cost of machine units and product units. Another characteristic of production that affects the value of capital productivity is the composition of fixed assets of production, defined as the sum of the value of technical equipment, energy and transport resources, the price of real estate involved in production and other parts of the system of fixed assets.
The next step in analyzing the use of the enterprise's production capacity is to evaluate the production indicators affecting it.
Assessment of the structure of technological and technical equipment
When determining the relationship between the quality of a technical process and the level of production power consumption, it becomes clear which part of the advanced methods for producing a product is used at a given plant. Those. the structure of the equipment used is analyzed and the percentage of production equipment that affects the increase in the quality of the production cycle is determined. One of the evaluating factors for the progressiveness of machinery is the time required to install this equipment and obtain the first batch of products.
Study of the process of using machines and units
In parallel with the assessment of the composite nature of production equipment, the degree of its operation is monitored. This takes into account the ratio of all available equipment and that which is directly involved in the production cycle. The numerical discrepancy between these two indicators, multiplied by the value of the average product output, represents the production potential, i.e. the quantity of manufactured products that a given enterprise can provide provided that the full range of equipment is introduced into the work process.
Assessment of the production capacity of an enterprise in the field of efficient operation of equipment occurs by determining the proportion of idle machine units.
The number of unused machine hours is determined from current job reports. Lost time is analyzed by comparison with the planned volume of machine hours and reports of similar enterprises. If you subtract the actually used time from the planned time and multiply the result by the average unit productivity per hour, you get the potential that this enterprise has in terms of eliminating downtime that was not taken into account by the plan.
Assessment of the extensiveness of equipment operation
For this study, we first determine the amount of product produced that is the result of the actual operation of a given unit per hour. For multifunctional machines, the average output value for different production segments is taken.
The assessment of the extensive use of technical equipment is carried out by determining the values: the number of products produced per machine-unit, per machine-hour, per 1 sq.m of production area and per monetary unit of the cost of the fixed assets of production.
Assessing the efficiency of using production space
In production areas with predominantly manual labor, the utility of the area occupied in the production process is determined. Public places and those premises that do not relate to the direct production of products are not taken into account. The amount of usable space multiplied by the duration of the shift determines the potential for efficient use of the production capacity of a given area. The resulting figure is measured in square meters-hours.
The ratio of practical workload to those metro hours that are reserved determines the coefficient of utilization of production space.
When analyzing this factor, the following characteristics are also determined: the number of products produced per 1 square meter of production area, the specific indicator of the area involved in the production process in the total territory of the plant.
Determination of reserve potential in conditions of effective use of the enterprise’s production capacity
Assessing the level of impact of the use of fixed assets on the quantity of output is the basis for analyzing the use of the enterprise's production capacity. In this case, the deviation of practical characteristics from the planned ones or from one-time outstanding maximum indicators is determined. The resulting differences when taking into account the output of a unit of equipment or a site take part in the calculation of the reserve potential of production.
When assessing the performance of technical equipment and drawing up an appropriate plan in production with multifunctional units, all equipment is grouped depending on various technical characteristics. The resulting groups are divided into subgroups if necessary. The composition of one group is determined by machines with similar performance indicators and those that are interchangeable during the same production cycle. After such differentiation of equipment, one group acts as a unit that participates in the analysis of workload and determination of potential reserve. The result of the work carried out is the development of measures aimed at increasing the efficiency of using the vehicle fleet.
If the production process involves units of a narrow focus with existing rare characteristics, each of them is differentiated as a separate subgroup for analysis and planning of their operation. On production lines, the entire line acts as a separate subgroup.
The impact of the main series of reasons on the use of the enterprise's production capacity is analyzed by simple formulas. There are also those factors whose influence can be calculated by determining correlation dependencies.
How is it possible to increase the production capacity of an enterprise?
To increase the efficiency of using production equipment, the following measures can be taken:
- reduction of basic time expenditure per product unit;
- reduction of additional time expenditure;
- reduction of the temporary stock of equipment in use;
- reduction of time spent on unjustified and unproductive workload.
The basis for carrying out these activities is the improvement of the main fleet of machines, progressive changes in equipment and technology, increased coordination and labor discipline.
Increasing the efficiency of use of production space occurs through the abolition of auxiliary and service areas, the use of lifting and transport equipment, and the introduction of progressive product manufacturing techniques that increase the value of product output per unit of area.
1. Reducing the main time spent on one product unit.
Progressive changes in equipment and technology, the use of flexible integrated processes, coordination and specification of labor, and increased qualifications of personnel have a direct impact on the production capacity of the enterprise and the level of its practical application with reduced time spent on one unit of product.
The most significant is the introduction of technological innovations that reduce the stages of the production cycle. Examples of methods that intensify production are increasing the power or speed of units, increasing pressure and temperature standards, using chemical catalysts, etc.
An important factor in reducing the work of machine units is the quality of production raw materials.
2. Reducing additional time spent on one product unit.
Additional time spent in production is eliminated by using the following measures: the use of more productive equipment, tools and technological resources, the use of automation at stages of the production cycle.
Based on the practical experience of many manufacturing companies, the production capacity of the enterprise is necessarily analyzed, the definition and study of the structure of which has shown that flow production is the most effective form of organizing the technological process. The location of units and workplaces along the production process, the rhythm and continuity of main and auxiliary operations, the use of special equipment for transferring products between cycle operations - all this significantly reduces additional time spent (waiting for tools to be supplied, downtime, hitches, etc.)
Production capacity directly affects the volume of products that an enterprise can produce, i.e. on the production program, and therefore is a powerful strategic tool in the competitive struggle.
What is "production capacity"?
In general, production capacity can be defined as the maximum possible output of products in the corresponding period of time under certain conditions of use of equipment and production resources (space, energy, raw materials, human labor).
In practice, there are several types production capacity:
- design;
- launcher;
- mastered;
- actual;
- planned;
- input and output;
- input and output;
- balance sheet
Production capacity, as a rule, is measured in the same units in which the production of this product is planned in physical terms (tons, pieces, meters, etc.).
The more fully it is used over time, the more products are produced, the lower its cost, the shorter the time the manufacturer accumulates funds for the reproduction of products and improvement of the production system itself: replacement of equipment and technologies, reconstruction of production and organizational and technical innovations.
What factors influence the amount of production capacity?
Production capacity size determined by the level of production technology, the range and quality of products, as well as the peculiarities of labor organization, the availability of necessary resources, the level of specialization and cooperation, etc. Instability of factors influencing production capacity, gives rise to the multiplicity of this indicator, so they are subject to periodic revision. The leading factor influencing production capacity and determining its value is the equipment.
Production capacity may change during each planning period. The longer the planned period, the higher the likelihood of such changes. The following main reasons for the change are identified: production capacity:
- installation of new units to replace outdated or damaged ones;
- wear and tear of equipment;
- commissioning of new capacities;
- changes in equipment productivity due to intensification of its operating mode or due to changes in the quality of raw materials;
- modernization (replacement of units, blocks, etc.);
- changes in the structure of source materials, composition of raw materials or semi-finished products;
- duration of equipment operation during the planned period, taking into account repairs, maintenance, and technological breaks;
- production specialization;
- equipment operating mode;
- organization of repairs and routine maintenance.
What data do you need to have to calculate production capacity?
For calculation production capacity You will need the following initial data:
- list and its quantity by type;
- modes of equipment use and;
- progressive standards for equipment productivity and labor intensity of products;
- worker qualifications;
- the intended nomenclature and range of products, which directly affect the labor intensity of products for a given composition of equipment.
What are the basic rules for calculating production capacity?
When calculating production capacity You must adhere to the following rules:
- Take into account all available equipment, regardless of its condition: operating or inactive due to a malfunction, being repaired, in reserve or undergoing reconstruction, idle due to lack of raw materials, energy, as well as equipment being installed. Backup equipment intended to replace equipment being repaired should not be taken into account when calculating power.
- When commissioning new capacities, it is envisaged that their operation will begin in the next quarter after commissioning.
- Consider the effective maximum possible operating time of equipment for a given shift schedule.
- Apply advanced technical standards for equipment productivity, product labor intensity, and standards for product yield from raw materials.
- Focus on the most advanced methods of organizing production and comparable measures of equipment operation and power balance.
- When calculating production capacities for the planned period, proceed from the possibility of ensuring their full utilization.
- Provide the necessary reserve capacity to quickly respond to changes in product market demand.
- When calculating power values do not take into account equipment downtime that may be caused by shortages of labor, raw materials, fuel, electricity or organizational problems, as well as loss of time associated with the elimination of defects.
How to calculate production capacity?
As a basis for calculation production capacity, as we have already said, they accept design or passport standards for equipment performance and technically sound time standards. When the established standards are exceeded by workers, the power calculation is made according to the advanced achieved standards, taking into account sustainable achievements.
In the general case, M is defined as the product of the equipment's rated productivity per unit of time H and the planned (effective) fund of its operating time T ef:
In turn, the effective fund of working time of equipment T ef is defined as the calendar fund of time T cal (year length - 365 days) minus weekends and holidays and the time between shifts T non-working, as well as equipment downtime during scheduled maintenance T ppr and equipment downtime for technological reasons (loading, unloading, cleaning, washing, etc.) T tech:
Defining Specific Values production capacity carried out for each production unit (site, workshop) taking into account the planned activities. Based on the capacity of the leading group of equipment, the production capacity of the site is established; for the leading section - workshop production capacity, at the leading workshop - production capacity of the enterprise. When setting production capacity, you can develop measures to identify bottlenecks in order to achieve the best balance between production capacities of production structures enterprises, incl. using parallel-sequential methods of product processing
How to determine the optimal production capacity?
To determine the most optimal production capacity values You need to justify it. The most common method for economic justification of production capacity is critical point analysis. This method is successfully used in planning production capacity. When using this method, you need to build a graph of the dependence of costs and income on the volume of output based on your production data:
The goal of the analysis is to find the point (in monetary units or units of output) at which costs equal revenue. This point is the critical point (break-even point), from which the profit area lies to the right and the loss area to the left. Critical point analysis is intended to justify capacity by selecting the volume of output that, on the one hand, will be optimal from the point of view of its sale on the market, and, on the other hand, will provide the lowest total costs while achieving the greatest result.
Is it possible for a small enterprise to increase its production capacity without significant financial investments?
Of course, many owners of manufacturing enterprises have rather limited financial resources and simply cannot afford to regularly purchase new, more powerful and modern equipment. However, issues of increasing production capacity needs to be addressed and preferably at minimal cost. Therefore, we recommend that you carefully read the following table, in which we have tried to list various ways to increase production capacity, including those that do not require significant financial investments.
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By increasing the available working time fund: |
By reducing the labor intensity of production: |
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1. Increasing the number of installed equipment. 2. Increasing equipment shifts. 3. Improving the organization of equipment repairs. 4. Reduced production cycles. 5. Improved use of production areas and space. 6. Rational planning of work, elimination of bottlenecks in production. 7. Deepening specialization, developing cooperation between divisions and enterprises. |
1. Improving product manufacturing technology. 2. Increasing serial production. 3. Expansion of unification, normalization, standardization of products and their components. 4. Renewal and modernization of equipment. 5. Increasing the level of technological equipment of production. 6. Constant updating and revision of time standards. 7. Rational organization of labor in the workplace. |
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General production costs are associated with the maintenance of auxiliary, maintenance and main production facilities and are indirectly included in the cost of manufactured products. The classification and estimate of such costs are established by each enterprise independently, depending on the specifics of its activity. In this article you will learn how to determine the amount of overhead costs using the calculation formula.
How to calculate overhead costs
For accounting, account 25 “General production expenses” is used, analytics on which are carried out by workshops/divisions. Costs are collected over the course of a month in a cumulative manner, and at the end they are completely written off according to established standards for the main production. The write-off method is fixed in the accounting policy in accordance with the requirements of clause 7 of PBU 1/2008. The calculation of overhead costs (OPR) is carried out in terms of:
- Costs of inventories for repair maintenance of equipment.
- Earnings of workers engaged in repair work and social contributions.
- Costs for setting up or dismantling equipment.
- Rent payments for production space.
- Depreciation charges for equipment and intangible assets used in production.
- Costs for lighting and heating of production premises.
- Other similar costs.
As part of general production costs, there is a constant part (does not change with an increase/decrease in production volume) and a variable part (changes in proportion to production turnover). Calculating production costs based on variable costs is the preparation of cost estimates for cost elements. For example, for consumed materials, raw materials, spare parts, utilities, depreciation, etc.
Manufacturing overhead - formula
The mathematical formula for calculating overhead costs uses a basic value that maximally reveals the impact of pilot projects on the final cost of the product. Based on the indicator, the total amount of costs is transferred to the cost of products. The basis may be one of the following factors:
- Wages of workers in primary production.
- Volume of production area or cost of fixed assets.
- Material costs.
- Number of production workers.
- Direct costs.
- Production volume.
General formula for calculating the overhead cost ratio:
K = Amount of overhead costs / Base value.
How to calculate overhead costs - example
Suppose that the Kvant enterprise produces 2 types of products: A and B. For December, the total amount of overhead costs amounted to 220,000 rubles. How to calculate overhead costs using the distribution formula - proportional to earnings or direct costs? Two calculation methods are shown in the table.
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Indicator name |
Product A |
Product B |
Total |
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Wages of workers in primary production, in rubles. |
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Distribution of ODA, in rubles. |
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The amount of direct expenses, in rubles. |
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Distribution of ODA, in rubles. |
Pay attention! To reliably formulate the cost of production, it is important to correctly determine the method of distribution of HMO. If the selected indicator is not related to product output, the resulting values will be distorted and costs will not be allocated accurately.
