Small farm cost accounting method

Cost accounting is an important way for pig farms to continuously improve economic efficiency and market competitiveness. With the current low-income pigs, cost accounting is even more important for small-scale pig farms that have just invested in the pig industry.

Production cost accounting method

The first step is to determine the cost accounting objects, indicators, and calculation period units. The terminal products produced by pig farms are piglets, breeding pigs and lean-type commercial pigs. The cost accounting indicator is the total cost of funds per kilogram or product per head. The calculation period includes months, quarters, half-years and years.

The second step is to determine the items that make up the cost of the pig farm product. Under normal circumstances, the cost items that constitute the cost calculation of the farm products are divided into two categories, namely fixed-cost items and variable-cost items. Variable cost items refer to those cost items whose cost changes significantly as the amount of production on the farm increases, such as feed costs for pig farms; fixed cost items refer to those that have little or no relation to the amount of production on the farm. The cost item is characterized by a certain scale of pig farms. With the increase of production volume, the cost caused by fixed costs is significantly reduced, thereby reducing the total production cost. This is the scale effect, and reducing the fixed cost is an important way for pig farms to increase economic efficiency. one.

1 variable cost items: feed, medicine, coal, gasoline, electricity and low-value and easy-to-consume items. The feed includes the purchase price of feed, transportation fees and feed processing fees. 2 Fixed-cost expenses items: wages, bonuses, welfare expenses of the farmer, direct farmer management fees, depreciation of fixed assets, and maintenance fees.

The third step is the cost accounting process.

The various types of costs incurred are as follows:

Accounting for raw material purchase costs in variable costs:

Procurement expense distribution ratio = total purchase cost / total purchase price of raw materials × 100%.

Raw material procurement costs: The product of the purchase price and the purchase cost allocation ratio.

The distribution of feed product processing fees = total processing fees / total processing volume.

The cost price of the consumed feed product: raw material composition price, loss rate + processing fee allocation.

Loss rate = (raw material consumption - feed product volume) / raw material consumption × 100%.

In the feed processing process, the feed price of the feed product should be calculated based on the composition of the feed formulation.

Accounting of total feeding costs: The sum of feed change costs, other variable costs, and fixed costs.

Through the above calculations, we quantified the proportion of various costs in the total cost of the product, and at the same time obtained the total cost of the live pig products and the cost of the unit product.

The Significance of Cost Accounting in Small Pig Farms

1 Through product cost accounting, the product cost components are clearly defined and financial management is strengthened. From the process and results of the above product accounting, we can clearly see the product cost components. If there are unreasonable expenditure items, it will be exposed in the process of accounting. The number and size of such projects directly affect the company's production costs, but also reflects the status of corporate financial management.

2 Through product cost accounting, the total cost and unit cost of the product are clarified. The results of product accounting tell us how much money each unit of product needs to use, then we can understand the profit and loss status of the company at any time based on the market price of the product. For example, if the selling price of a commodity pig is 8 yuan/kg, it will be in a profitable state; and if it is at 6.82 yuan/kg, it will be at the break-even point. This will help decision-makers to adjust the production process at any time based on market prices so as to improve economic efficiency.

3 Through product cost accounting, understand the proportion of each cost in the total cost of the product. Understanding this ratio will help decision makers to make a correct assessment of the cost structure of reality and find opportunities while discovering problems. For example, as a large state-owned pig farm with a high degree of mechanization, the ratio of variable costs to fixed costs is generally 7.5:2.5, while the scale of rural pig-raising enterprises is generally 9:1. This proportion reflects the different systems profoundly. Why do similar companies run under different costs differ greatly? Increasing the utilization rate of fixed assets and reducing the proportion of fixed costs is always one of the effective ways to pursue the economic benefits of enterprises.

4 Conducting comprehensive costing is conducive to the implementation of a comprehensive plan management for the enterprise. When we obtain the profitability of a company's unit product in its specific environment through cost accounting, we can determine the point of profit and loss based on the average fixed cost of the company. For example, if the selling price of each commodity pig is 800 yuan and the actual total cost is 650 yuan, then each pig can earn 150 yuan. Taking a farm as an example, when the total annual fixed cost is 231,000 yuan, the pig farm can only reach the break-even point when the slaughter reaches 1,540; if the company's fixed asset investment is large and it is indebted to credit funds, it will inevitably increase the company’s The total fixed costs and their proportions in the total cost will inevitably increase the number of products at the break-even point, that is, the number of pigs of commodity pigs. As a result, the company's business risks are increased and the company's profits are relatively reduced. For example, when the fixed cost of the farm is 450,000 yuan, it is necessary to bring the number of slaughter heads to 3,000 before reaching the break-even point. This point must be carefully considered when conducting business investment or when formulating annual plans.

5 Improve production efficiency, reduce fixed costs and variable costs. Through costing, we see that the cost structure of a product consists of two major components: fixed costs and variable costs. Increasing production efficiency can reduce the total amount of these two items at the same time.

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