Program cost rate of the material cost difference analysis

[Abstract] many large and medium manufacturing enterprises in China, planned cost of materials used in daily accounting method. Based on the actual situation of enterprise material accounting for differences in the rate of material cost calculation methods in the Application of several important issues arise to study and discuss and suggest improvements.

[Keywords:] material cost of the project method; current material cost difference ratio method; opening material cost difference ratio method; moving weighted average cost of materials different rate method

First, the Accounting Standards of the material provisions of the cost difference ratio method

<"Enterprise Accounting Standards - Application Guide>> in the Appendix:" accounting treatment of accounts and key "in" 1404 material cost differences "under the following statement:" given material should bear the cost difference should be scheduled (monthly) sharing may not be calculated at the end of the quarter or the end of time. issued material should bear the cost difference, in addition to commission an external processing of materials can be sent between the opening rate of the cost, the difference should be the actual current rate of use; opening rate and the current cost difference between the cost of little difference between rates, the cost difference can also be the beginning rate. calculation method is confirmed, shall not be changed. "guide gives the following formula:
Current rate of material cost difference = (difference between the opening balance of the cost of materials + cost of current differences in acceptance of storage material) / (beginning balance + current cost of the project materials, storage of materials cost of the project acceptance) × 100%
Beginning material cost difference ratio = beginning balance between the cost of materials / material cost of the project beginning balances × 100%
Issued shall bear the cost of materials issued material difference between the planned cost = material cost difference rate ×

Second, the current material cost difference method in practical Application

(A) of the material cost in the accounts according to plan
Material cost of the project method, the certificate is scheduled to receive the material cost pricing, materials, general ledger and a breakdown of the cost of registration according to plan, through the addition of "material cost variance" account to account for the cost of materials and planning the actual cost difference between the amount and cost accounting period to adjust the plan, according to the material cost difference between the cost of the total rate of the material and final material in the issue of apportionment between the stock material to determine the actual cost of ending stocks of materials and the issue of the difference should be borne by the amount of material and to determine the issue of materials the actual cost.

(B) For example in the discussion guide provided for the cost difference between the two materials advantages and disadvantages of rate method
Example 1, A planned cost business inventory accounting method, the CPI program is priced raw materials 20 000 yuan / piece, the beginning of "raw material" - a detailed account of the balance of materials, number 500, the amount of 10 million yuan, " material cost differences "account debit the amount of 300,000 yuan," material procurement "account value is zero. this month of the following business: 1. This month the purchase of materials: ① A material of this month to buy No. 3 2 000 pieces, 21 500 yuan / piece , The shipping a total of 30 000 million; ② 10 号 purchase a material 500, 23 000 yuan / piece, this shipping a total of 10 000 million; ③ 23 号 purchase a material 1 000, 19 500 yuan / piece, this freight were 18 000 million; (in this case does not consider tax issues, are already shipping amount after the deductible VAT) .2. this month by the material: ④ 5, issued this month, 500 for material 1 production; ⑤ 14 号issue of material 200 for the general consumption of the workshop; ⑥ 24 号 issued material 1 200 for production; ⑦ requirements: current respectively, at the beginning rate of material cost difference between the end of material cost rates and the issue of differences in material costs should be borne by .

The cases are as follows:
The actual cost of the business ① 43,030,000 yuan, 40 million cost of the project element, differences in material costs overruns 3,030,000 yuan; business ② the actual cost of 11.51 million yuan, plans cost 10 million yuan, material cost overruns 1.51 million difference yuan; the actual cost of the business ③ 19,518,000 yuan, plans cost 20 000 000 yuan, saving 482,000 difference in cost of materials yuan.

Differences in material costs this month, rate = (+1 300 000 +3 030 000 510 000
+ -482 000) / (10 000 000 +40 000 000 +10 000 000 +20 000 000) × 100% = 5.45%
The burden of this month by the difference in the amount of material should be = (1 500 200 +200 +1)
× 20 000 × 5.45% = 58 000 000 × 5.45% = 3 161 000 元
Issued this month, the actual cost of materials + 3 = 58 000 000 161 000
= 61 161 000 yuan
Differences in rates of early material cost = 300 000/10 000 000 × 100% = 3%
The burden of this month by the difference in the amount of material should be = (1 500 +200 +1200) × 20 000
× 3% = 1 740 000 元
Issued this month, the actual cost of materials = 58000000 +1 = 59 740 740 000 000 yuan
We can see from the above calculation: The difference in rates this month, costs of materials sent out this month, the actual cost of materials, cost of materials than with differences in rates early this month's issue of material calculated from the actual cost of more than 1,421,000 yuan, compared with differences between the two results large; due this month, the actual costs of raw materials purchased by a larger burden of this month by the material should be more differences in the amount of material cost overruns, so this month, cost of materials used to account for differences in rates this month by the actual cost of materials will be more realistic situation.

Example 2, the conditions of Example 1 in early "raw material" - a detailed account of the balance amount of material to 3 000 in the amount of 60 million yuan, "material cost variance" account debit the amount of 300,000 yuan, the month the purchase of materials to: ① A material of this month to buy No. 3 500, 21 000 yuan / piece, this 10 000 million freight; ② 23 号 materials purchased a 700, 19 500 yuan / piece, shipping a total of 12 of this 000 million; other conditions remain unchanged. Requirements: Current respectively, at the beginning rate of material cost difference between the end of material cost rates and the issue of cost should be borne by different materials.

The cases are as follows:
① the actual cost of 10.51 million yuan business plan costs 10 million yuan, material cost overruns between 510 000 million; business ② the actual cost of 13.662 million yuan, plans cost 14 million yuan, saving material cost difference between 338 000 dollars.

Differences in material costs this month, rate = (300 000 +510 000 + -338 000)
/ (60 000 000 +10 000 000 +14 000 000) × 100% = 0.56%
The burden of this month by the difference in the amount of material should be = (1 500 +200 +1 200) × 20 000
× 0.56% = 324 800 元
Issued this month, the actual cost of materials 58 000 000 +324 = 800 = 58 324 800
Differences in rates of early material cost = 300 000/60 000 000 × 100% = 0.5%
The burden of this month by the difference in the amount of material should be = (1 500 +200 +1200) × 20 000
× 0.5% = 290 000 元
Issued this month, the actual cost of materials 58 000 000 +290 = 000 = 58 290 000 yuan
We can see from the above calculation: The difference in rates this month, costs of materials sent out this month, the actual cost of materials, cost of materials than with differences in rates early this month's issue of material calculated from the actual cost of more than 34 800 yuan, two calculations were not large. Therefore, select the material cost difference in rates this month or early material costs to account for differences in rates this month, the actual cost of materials can be issued.

(C) the scope of the two calculation methods and their advantages and disadvantages
The results from the above two cases can explore the Application of these two methods and their advantages and disadvantages. First, differences in rates of current material cost method is generally applicable to most of this month by the materials purchased this month, beginning of year than month less the cost difference and the adjacent large difference in rate cases. Under this method, the cost difference between the adjacent rate of the month difference between the larger, can partially offset the cost difference in rates last month on month, the amount assessed the impact of cost differences, the results more accurate comparison. peacetime material cost difference is generally not assessed until the end of the month, the cost of all materials issued by a carry-over difference, difference in material costs, simplify the procedures for carry-over, and the rate at month cost difference between the cost-sharing is also more realistic situation. but using this method, the end to be collected "raw material" subject and "material cost variance" account opening balance and increase the amount of current, the only difference in material costs to calculate the rates, the more complicated procedures, but this approach After the issue of the materials can not usually determine the cost difference should be borne by the amount, can not reflect its actual cost. Second, the cost difference between the opening rate of material law, generally only for most of this month by the material balance and the beginning of this month purchased The small amount of material into the cost difference and the adjacent month rate relatively stable. this method, each issued a material issue of material can carry the burden of the cost difference, and reflects the actual cost of materials issued. In the month of the cost differences in the relative stability of the rates, both to simplify the calculation of the cost difference in rates of procedures for the month, but also timely reflect the actual cost of materials issued. However, this method, the adjacent rate of the month difference between the large cost difference, according to the cost of last month differences in rates this month by the difference between the cost of materials will affect the issue of the authenticity of the actual cost of materials.

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(A) of the two calculation methods in problems in the Application
I believe, "" Enterprise Accounting Standards - Application Guide>> difference in the rate of cost method requirement is not reasonable, practical work is not fully take into account the various situations. In practice application, the method according to the application guidelines provided calculated results may not reflect the actual cost of materials issued by different large deviation may also occur. The above discussion of the application guide provides the shortcomings of the two methods shows that: The two methods are sometimes not accurately reflect the issue the actual cost of material differences in business practice differences in cost of materials purchased by each rate is likely to vary, sometimes very different, if the difference in cost of materials used at the beginning or the current rate method differences in cost of materials issued rate method to calculate the material the actual cost, calculated results may not accurately reflect the actual situation, resulting in distortion of the actual cost of materials, companies can not correctly calculated the cost of products. Therefore, the two methods is sometimes not easy enterprise cost management, control, use of current material costs difference in rates can only be the end of the calculation method given the amount of the material cost difference and can not reflect the actual cost of the batch material is not easy to cost management and control.

(B) of the proposed improvements
Differences in the rate of material cost accounting, the application guide should be increased difference in the rate of material cost accounting method that allows companies to choose according to their actual differences in the rate of cost accounting methods should not be mandatory for companies which accounting methods must be used, as long as The company chose to issue accounting methods accurately reflect the actual situation of different material costs, facilitate enterprises to cost management and cost control. Thus, the guide can be provided in the application of the opening rate of material cost difference between law and the current cost of materials rate method based on the increased rate of movement between the weighted average cost accounting method and other methods.

Material differences between the weighted average cost of moving rate method, that is, each time after purchase materials storage inventory calculations there are differences in the material moving weighted average rate, and after a recent material storage calculated by the difference in rate to calculate the cost of purchase in the next issued prior to the time difference between the amount of the cost of materials. The formula is:
After a particular material storage material moving weighted average cost difference ratio = (The inventory of materials before storage cost difference + The difference between the cost of storage materials)
/ (The inventory of materials before storage scheme cost + The planned cost of storage material) × 100%
A particular issue of material should be the burden of this cost difference = planned cost of materials issued × the latest move after the storage material cost difference between the weighted average rate.

Example 1 using this method in the month, the actual cost of materials issued
61.4112 million yuan, with the difference in rates this month, costs of materials sent out this month, more than the actual cost of materials, 250 200, compared with the early material costs calculated by the difference in rates this month by more than the actual cost of materials 1 671 200 ; the actual cost of raw materials purchased this month rose a larger burden of this month by the material should be more differences in the amount of material cost overruns, so we choose the moving weighted average rate to account for differences in cost of materials issued this month, the actual cost of materials is more realistic . use this method in example 2 this month, the actual cost of materials issued 58,430,400 yuan, with the difference in rates this month, cost of materials out of the actual cost of materials issued this month, more than 105,600 yuan, with the difference in material costs in early rate this month by the material out of the actual cost of more than 140,400 yuan, the three results were similar. Therefore, the weighted average cost of materials used between mobile rate method, differences in rates this month or early material costs material costs to account for differences in rates this month, the actual cost of materials can be issued.

The weighted average cost of moving material between rate method can cost advantages of using program cost management, but also reflect the issue of any material difference in material costs should be borne by the amount, it will not cause the amount calculated by the cost and the actual cost difference between the amount of a too much bias, and this method is basically applicable to various situations in practice, especially for large cost differential rate of change, requiring different materials costs at any time the situation reflecting the business. While companies exist in the daily operations of each receive materials on variety, batch number, quantity, etc., using this method the computational workload of the large accounting and other business issues, but now companies have been widely used computer financial software, so that the method in the enterprise applications has become possible .

In short, the enterprise regardless of choice of which method share the cost of materials issued by differences in the amount of deviation from the actual cost of the program cost is higher, the cost of the plan should be revised in a timely manner.


[References]
[1] Ministry of Finance. Enterprise Accounting Guidelines - Application Guide 2006 [M]. Beijing: China Financial and Economic Publishing House, 2006.

[2] Chen Guohui, Chen Wenming, Sun Guoguang. Basic Accounting (2nd edition) [M]. Beijing: Tsinghua University Press ,2007.100-101.

[3] Dai Deming, LSC, Zhao Xi Bo. Financial Accounting (4th edition) [M]. Beijing: China Renmin University Press, 2006. 121-122.

[4] Dai Huajiang. On the material cost accounting methods to determine differences in rates [J]. Accounting Monthly (Accounting), 2008 (7) :20-21.

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