The realized production is ... Cost and volume of sold production

The result of the activities of any manufacturing enterprise are finished goods intended for sale to the end user. The totality of the sold goods of the manufacturer is called "sold products". This concept implies the quantity of not only manufactured but also sold goods. The result of sales is the sales revenue received on the settlement account of the enterprise.

Types of products

Production of the final product passes through several stages - from the processing stage of raw materials to the storage of the final product. Conditionally the production process is divided into three stages, through which the assortment unit must pass, before becoming a ready product.

• Incomplete production includes the initial stages of manufacturing the final product, starting with the purchase of raw materials and ordering the stage of semi-finished products (semi-finished products).
• Semi-finished products are products, in which the technological production cycle is currently not completed. Further processing will be done by the forces of the enterprise or given to third-party suppliers. Sometimes semi-finished products can be sold to the end user - in this case, the buyer should be aware of the shortcomings of such a product.

• Finished products - an assortment of products that have passed all the stages of the production cycle. The products received must comply with the specifications and current state standards, must be accepted by the quality control department and intended for sale to the end user.

Finished and realized products: similarities and differences

Realized products of the enterprise consists of that ready-made assortment that was shipped to the buyer and for which money was already received. The similarity of these two types is that all operations are conducted with products that have undergone a full cycle of processing. The difference lies in the fact that the sold products are goods for which money was already received, and the finished product is the one that was sold during the reporting period together with the leftovers in the warehouse that are still waiting for the buyer. If the finished product is not sold, then the cost of production will become a cost to the company as a whole.

The formula for calculating the sold products

The volume of products sold is calculated using a formula that takes into account commodity stocks in warehouses. This value should be tied to a certain time interval. The calculation formula is as follows:

- RealPr = He + Product - Ok,

Where He, Oak - remains of unrealized products stored in warehouses, at the beginning and end of the time interval.

Formation of the price of sold products

The selling price of the finished product must correspond to the following parameters:

• Competitiveness;
• profitability;
• Attractiveness for buyers.

These three factors underlie the effectiveness of sales. Let's consider each indicator in more detail.

Competitiveness

The cost price of the output of each commodity unit must lie in the price range represented by the main competitors. To do this, marketers determine the strategy of price positioning, in which the products of the company will fit into the realities of the market. To do this, monitor the prices of competitors and form a range of retail value, in which the final price of the sold products should fit.

IMPORTANT! Price positioning depends on many individual factors: brand reputation, customer activity, intensity of promotion of competitive products.

Profitability

The cost parameter can be determined in two ways: calculate the total cost of production costs for a single unit of goods, or find the final private from dividing the total costs of the company into producing a certain quantity of products, affecting its volume and cost. Realized products in the formation of the final price takes into account two factors:

• Cost of production of a unit of goods or a standard lot;
• Commercial costs that the enterprise bears in order to sell its products.

Method of calculating the cost price

Manufacturing enterprises often can not determine the cost of a unit of finished products, but operate on larger scale statistics. The administration of the firm knows how much money was spent to produce lots of goods and how many units of finished products in one such lot.

By this method it is possible to calculate the cost of goods in a warehouse. To the sum of the purchase of the goods from the manufacturer, it is necessary to add the total costs of the enterprise for storage, accounting of the goods and delivery to the final consumer (or to the retail network). The calculation of profitability gives the minimum price, below which the value of production can not be lowered - its production will become unprofitable (unprofitable).

Attractiveness for buyers

The third stage is to evaluate the attractiveness of the goods from the point of view of buyers. To do this, various surveys are conducted assessing the willingness of buyers to pay a certain price for the goods.

Important! Each buyer expresses their subjective opinion, taking into account the characteristics of this product, but in general such surveys give an objective assessment of the expectations of buyers.

The realized production is the answer of each buyer on a choice of a product, the trade mark or the enterprise-manufacturer.

Range of possibilities

As you can see, the price of sold products must lie in a narrow range of opportunities that provide it with profitability, competitors and buyers. Without observing this principle, it is impossible to forecast sales growth and increase the rate of output of finished products - it is quite possible that because of unattractiveness or high cost, finished products will accumulate in the warehouse, and then - recycled or sold for a pittance.

Results

For any production enterprise, the products sold are a factor directly forming the profitability of the business entity. Without a developed sales structure, the production process quickly stops, the company becomes insolvent. If there is no state support, the firm becomes bankrupt, people lose their jobs, and the owners of the company are waiting for the sad fate of bankrupts.

To avoid a sad scenario, it is necessary to thoroughly study the market opportunities and take into account the prospects of the produced goods. Even an expensive product can find its buyer, if it is desired by most buyers.