PRODUCTION EXPENSES COLLECTION ACCOUNTING AND CALCULATE THE PRODUCT PRICE AT THE COMPANY 319 MIIEN TRUNG JOINT STOCK COMPANY

CHAPTER 1: GENERAL THEORETICAL BASIS OF COMBINED CONSTRUCTION ACCOUNTING AND PRODUCT PRICE CALCULATION1.1 General theoretical basis on accounting of construction costs and product price

TRƯỜNG ĐẠI HỌC DUY TÂN VIỆN ĐÀO TẠO QUỐC TẾ

UNDERGRADUATE THESIS

TOPIC:

PRODUCTION EXPENSES COLLECTION ACCOUNTING AND CALCULATE THE PRODUCT PRICE AT THE COMPANY 319

MIIEN TRUNG JOINT STOCK COMPANY

GVHD : Th.S HOÀNG ANH THƯ SVTH: : TRẦN THỊ THÙY DUNG

MSSV : 1820253901

Đà Nẵng, tháng 04 năm 2020

CHAPTER 1: GENERAL THEORETICAL BASIS OF COMBINED CONSTRUCTION ACCOUNTING AND PRODUCT PRICE CALCULATION

1.1 General theoretical basis on accounting of construction costs and product price calculation

1.1.1 Construction costs

1.1.1.1 Concept

Cost for Production is the monetary expression of the total waste of living laborand animalification needed to build or renovate, expand or retool the engineering ofthe work that the enterprise has spent in a period certain (quarter, year)

1.1.1.2 Classification of production costs

The cost classification is applied by enterprises depending on production and business characteristics, management and professional qualifications so that they are reasonable Hence, the Production cost classification is an

arrangement of the costs of production into different categories and groups according to certain characteristics.

- Production cost classification according to the content and economic nature of the cost.

According to this classification, the costs are of the same content, are

economical to be included in one factor, no of where the portfolio cost is available or used purpose in the manufacturing process Includes the

following 5 basic cost factors:

 Cost of raw materials and tools: : Including all costs of main materials, auxiliary materials, spare parts, costs of fuel, driving force and production tools that the enterprise has used for production activities in period

 Labor cost: Including salary, wages, shift pay and salary-related allowances

of the production department, including the full deduction of social

insurance, health insurance, unemployment insurance business, business non-union of production workers in the enterprise

 Fixed asset depreciation expense: Reflects the total depreciation of a fixed asset that must be deducted in the period of all fixed assets used for

production

 Cost of services purchased from outside: Is the total amount that the

enterprise pays for services purchased from outside services for production activities

- Cost classification of production costs by target and utility of costs In the enterprise, all production costs incurred in the period are divided into 3

Account costs :

 Direct raw material cost: Is the cost constituting the production or finished product of the enterprise Includes the full value of the primary or secondarymaterial directly used in the manufacture of the product or carried out in the production period

 Direct labor costs: are the costs of wages, wages, salary allowances and salary deductions of workers directly producing products or performing services

 General production costs: are costs for general production activities at the workshop, including the remaining production costs at the workshop such asindirect labor, indirect materials, fuel costs, motivation, depreciation cost, other monetary cost

- Classify costs according to the method of aggregating costs and the

relationship with the cost bearers

Classification by cost subjects:

 Direct costs: Production costs directly related to the production of a given production volume Based on data from accounting vouchers to record directly to each expense subject

 Indirect costs: The production costs associated with the production of

multiple products These costs must be through allocation to the relevant costbearers according to an appropriate criterion

Classification according to the content constituting the cost:

 Unitary cost: Is the cost constituted by a single cost factor such as cost of main materials used in production, depreciation of fixed assets

 General costs: The costs include many different factors but have the same

use as general production costs

- Classify costs according to the relationship between costs and product

objects

For this classification, the entire production cost is divided into 2 categories:

 Variable costs (variable costs): Are the costs with the change in quantity correlated directly with the change of the volume of products produced in the period such as: Cost of raw materials, directlabor costs,

 Fixed costs (fixed charges): Are costs that do not change in total when volume of products produced within a certain extent such as: discounted costs depreciation of fixed assets according to the straight-line method, electricity costs for lighting,

- Sort by time and database to calculate prices

Based on data and time of price calculation, product prices are divided into 3 categories:

 Planned cost: Is the product cost calculated on the basis of planned

production costs and planned output The planning cost calculation is carried out prior to the production and fabrication of products and by the planning department The planned cost is the target of the enterprise to strive as a basisfor comparing, analyzing and evaluating the implementation of the plan to lower the cost of the business

 Fixed cost price: is the product cost which is calculated on the basis of the fixed cost of production costs and calculated for a product unit The norm price calculation is also done before the product is manufactured or

fabricated The norm cost is a tool for managing the enterprise's norms, considered an accurate measure to evaluate the results of using assets,

materials, capital and labor in production in order to improve production efficiency business

 Actual cost: Is the product cost calculated on the basis of data of actual production costs incurred and gathered in the period and the actual output produced in the period

- Price classification according to the range of calculations

Price into products is divided into 2 categories:

 Production cost (factory cost): Including direct raw material and material costs; Direct labor costs; production overheads calculated for products, jobs

or services provided Production cost is used to record the finished products stocked or delivered to customers and is the basis for calculating cost of goods sold

 Total cost of consumed product: Including production cost and selling cost, business management cost calculated for sold product Bases for the

calculation and determination of the pre-tax profit of the enterprise



Total cost = Production cost - Selling cost – Cost

business management

1.1.3 The relationship between production cost and cost calculation

Production cost and product cost calculation are two aspects of the production process that have a relationship with each other and are similar in quality

Different :

 In terms of scope: Production cost includes both the cost of product

production and the cost of business management and product consumption The product cost only includes the production cost of the product

 In terms of quantity: The cost of production is the waste in a period The product cost is related to the cost of the previous period carried over and the amount of the product cost is carried over to the next period The relationshipbetween production cost and product cost is shown in the following formula:

1.1.4 The task of production cost accounting and cost calculation

- Determine the right audience for production costs, production costs, and organize the collection of costs according to the right subjects, in

accordance with the characteristics and requirements of enterprise

management

- Determine the exact cost of work in progress at the end of the period

- Accurately and fully reflect the actual expenses incurred in the production process Therefore, it is necessary to check the cost norms, the cost

estimates in order to reduce the cost of the product

- Accuracy and timeliness of product costs, completed work

- Analyze the situation of costs and costs

- Applying accounting accounts to record production costs and calculate product prices in accordance with production characteristics

Total cost = Production in progress at the beginning of the period + Productioncosts incurred in the period - Production in progress at the end of the period

1.2 SUBJECTS AND METHODS OF COMBINATION OF PRODUCTION EXPENSES

1.2.1 Objects set production costs

1.2.1.1 Object concept sets production costsObject concept sets production costs

The range or limit that production costs must be aggregated in order to meet requirements demand for checking and supervising production costs and serving thework of product costing

Bases for determining the accounting objects for aggregating production costs:

 The characteristics and use of costs in the production process

 The characteristics of the production structure of the business

 Technological process of manufacturing and manufacturing products

 The product's characteristics (technical characteristics, usage

characteristics )

 Requirements on management qualifications and production and business

1.2.1.2 The meaning of production cost aggregation object

The meaning of the object of production cost aggregation is very important in organizing the accounting organization to gather production costs from the initial accounting organization to the collection of data recorded on accounts and books detail It will serve as the basis for calculating the cost of the product It is also a tool to measure the company's performance, determine the correct, sufficient and exact cost of the product

1.2.2 Production cost aggregation method

The production cost aggregation method is a method used to aggregate and

classify the limited ranges of cost objects The accountant can use the appropriate production cost aggregation method There are two methods of aggregating

The allocation for each object:

Ci = Ti * H (i = 1, n)

Inside:

H: Distribution coefficient

Ci: Cost allocated to each object i

Ti: Standards of allocation for each object i

The totalnumber of criteriaused for distribution

1.3 Subjects and method of cost calculation

1.3.1 Accounting for revenue sales and providing services

In terms of organization of production:

- If the organization produces singly, each product, each job is the subject ofcost calculation

- If the organization produces mass production or produces according toorders, the price calculation object is each product series or each order

In terms of process technology and production:

- If the production technology process is simple, the object of the costcalculation is the finished product at the end of the production process

- If the technological process of production is complicated continuously, theobject of the price calculation is a finished product or possibly a semi-finished product from processing

1.3.2 Cost calculation method

1.3.2.1 Direct method

The simple costing method is suitable for manufacturing enterprises with simple production technology processes, with a small quantity of products, and relatively suitable objects for aggregating production costs

According to this method, the product cost is calculated on the basis of the total production costs in the period, the cost of work in progress at the beginning and the end of the period

Formula for calculation:

1.3.2.2 Total cost method

Applicable to enterprises in which the product manufacturing process is carried out

in many production departments, multiple technology stages, the object of which the production cost is the product detail parts or the technology stage or production.Formula for calculation:

1.3.2.3 Coefficient method

It is applied in enterprises where in the same production process, using the same material and the same amount of labor, many different products are obtained at the same time and the cost is not separately aggregated for each type of product but to focus on the whole production process

Formula for calculation:

Total cost = Cost of products in work in progress at the beginning of the period + Cost ofproduction in the period - Cost of production in progress at the end of the period

Total cost of production = Total cost of production

of products gathered during the period

Price into real units = Price to units * Coefficient of converting production product

each original product each type

1.3.2.4 Proportional method

This method is applied in enterprises where in the same production process, using the same raw material, the product group of the same type with different sizes and production is obtained Cost aggregation object is the combination of each product group of the entire technological process, the object of price calculation is each type

of product in that process

Determine the cost ratio:

Rate of cost = Rate of cost Actual total cost of all products∗100

Total cost as planned (norm)

Determine the price according to each specification and size

1.3.2.5 The method of eliminating the value of by products

This method applies to enterprises that look at the same production process, and besides the main products obtained can also obtain by-products To calculate the cost of the main product, the accountant must exclude the value of the byproduct from the total cost of manufacturing the product

Total cost of main product = Value of SPDD at the beginning of the period + CPSXPS value

in the period + Value of SPDD at the end of the period - Value of supplementary products

Proportion of CPSX of byproducts= Cost of productionof byproducts

Actual total cost of production

Where the subproduction value can be determined by the usable price, estimated price, planned price, initial raw material price

1.3.2.6 Combination method

Is the method applied in businesses that have production organization, calculation the nature of technological processes and the nature of products made require a price calculation many different methods must be combined such as shipbuilding and textile enterprises sewing, In fact, accountants can combine direct methods with sum add cost, total cost with ratio

Total cost = Cost of products in work in progress at the beginning of the period + Cost ofproduction in the period - Cost of production in progress at the end of the period

Actual cost = Planning cost * Cost cost ratio

1.4 Production expense accounting

1.4.1 Direct material accounting

1.4.1.1 Content

Direct raw material costs are those for primary raw materials and supplies

auxiliary materials used directly for the production and manufacture of products These costs, often set cost norms and organize management according to norms Actual direct raw material cost in the period is determined by the formula recipe :

Actual direct material costs in the period = Value of direct raw materials at thebeginning of the period + Value of direct raw materials in the period - Value of direct

raw materials at the end of the period - Value of scrap recovered (if any)

Debit 621

Collection of actually direct raw

material costs incurred in

connection with the manufacture,

manufacture of products, and

performance of services

Credit

- Transfer value of raw materials and materials actual materials used for production and business business in the period in account 154 "expenses

production, business in progress "or TK

631 "production cost" and detailsfor objects to calculate production costproducts and services

- Transferring the cost of raw materialsdirectly above the normal level

Account 632 "cost of goods sold"

- Value of raw materials, materials directly

If not used up, it is allowed to re-enter the warehouse

- Account 621 does not have a closing balance

period

1.4.1.4.2 Accounting method

During the period, when transactions arise from warehouse or purchase of

materials outside directly used for the production of products, the debit note shall becredited to account 621 At the end of the period, transfer to account 154 "costs of production and business unfinished "

Accounting chart:

Trình tự hạch toán

1.4.2 Direct labor accounting

1.4.2.1 Content

The direct labor cost is the total salary and allowances that the enterprise must pay

to the employees directly engaged in producing products and performing services

In addition, direct labor costs include deductions from social insurance, health insurance, and local inspection production workers' wages that businesses have to pay

621

At the end of the period, transferring raw materials to the cost of products and services (at normal capacity)

Excess NVL is not used

up in storageP

The part of NVL exceedsabove normal level

thường P

The direct labor costs are monitored separately by the organization for each

production cost accounting object or cost calculation object

Where the direct labor cost is related to many objects but cannot be accounted

directly, it can be aggregated Then, choose the appropriate criteria to allocate to the

related costs The allocation criteria could be fixed wages, production hours

Direct labor cost for each subject =( Total direct labor costs∈the period

Total criteria allocated¿ the subjects¿)∗Total criteria allocated¿the subjects

1.4.2.2 License

- Timesheets

- Table pay wages

- Salary and social insurance allocation table

1.4.2.3 Detail accountant

- Detail book

 Production and business expense book, open Account 622 "direct labor cost"

- Accounting method

The direct labor cost detailed accounting method is similar to direct material cost

detailed accounting, which opens production and business detailed books for each

- Gather direct labor costs

participate in the production of

products

- Service performance includes:

Salary, wages and deductions

on salary, wages according to

regulations arising during the

period

- Transfer or allocate direct labor

cost to calculate product cost

- Carrying over labor costs in

excess of the normal rate

1.4.2.4.2 Accounting method :

During the period, when direct labor costs are incurred, the collective accountant

to the debtor of Account 622, at the end of the term, change to Account 154 Accounting chart:

154 622

334

TK 141 (3)

335

Settlement of advance expenses

Completed construction and

Direct labor costs

Worker salary

on leave

Transfer direct labor cost

Exceeded normal level

632

1.4.3 Cost accounting of construction machines

1.4.3.1 Content

The cost of the use of constructional machines is the total cost of materials, labor cost for using the machine, depreciation of machinery and equipment and other costs related to the use of constructional machines of works, grade, work item The process of cost accounting for the use of construction machines must be compatible with the management and use of construction machines of the

enterprise The cost of the use of constructional machines must be recorded in detailfor each type of constructional machine or group of constructional machines, and in detail according to each prescribed item Construction machines in service of any project must be directly accounted for for that project In case of common use for many works, it is allowed to gather together for the end of the period to allocate to each project on the basis of machine hours, construction machine shifts or fuel costsused for each project

1.4.3.2 License

- Construction machine detailed books and cards

- Ledger

- The spreadsheet and depreciation distribution of fixed assets

- Construction motorcycle shift tracking slip

Debit 623 Credit

Costs for the use of constructional machines Transfer the cost of using construction

machines Transfer the cost of usingconstructional machines in excess ofthe normal level

At the end of the period, transfer the cost of using constructional machines to the cost of products and services (according to normal capacity)338

Buying materials, tools and

supplies right away without

storing,

152,153,242

Cost of materials, production tools214

Construction machine

depreciation expense

111,112

Use of constructional machines in excess of normal rate is recognized at cost

thường P

133

Expenses in other

money

1.4.4 Production cost accounting

1.4.4.1 Content

Production overheads are production management and servicing costs incurred in

workshops and production teams

To conduct the allocation can use the following criteria: wage rate production

workers, ratio to direct raw material costs

- If the actual output is less than the normal capacity the general production cost

allocation must be distributed according to the normal capacity

- If the actual output is greater than or equal to the normal capacity, it will be

allocated to all cost objects The difference in the overhead of production costs

between reality and normal capacity is not amortized, but it is included in the cost

of goods consumed

Additional production

costs for each subject ¿Total productioncosts¿be allocated ¿

Total allocation criteria *

Allocation criteria of the object i

Production cost Norms are attributable to actual products

=

Total productioncost¿be allocated ¿

Total distributiom criteria of the product according¿the nomal capacity¿

* Allocation criteria of the object i

1.4.4.2 License

- Documents reflecting the cost of materials: Distribution of materials, tools, supplies, invoice list, vouchers of purchase of materials not in stock but put into use immediately in production

- Documents reflecting depreciation of fixed assets: Depreciation spreadsheetsand amortization

- Documents reflecting the cost of services purchased from outside: VAT invoices, documents cash payment such as: check, electricity bill, water usedfor production

- Documents reflecting the taxes and fees payable and paid by the enterprise

- Documents that reflect other insurance costs

1.4.4.4 General Accounting

- User account

Account 627 "production overheads"

- Gather all production overheads - General production decreases

actually incurred in the period - Transferring or distributinggeneral production costs to sum up costs

and calculate the cost of construction and installation products in the period

1.4.4.4.1 Accounting method

During the period, when the transactions arise, the accountant will gather the debtor of Account 627

If there are transactions resulting in a reduction in production costs, the party will

be gathered

Account 627 At the end of the period, transferred to account 154

Accounting chart:

Workshop staff costs

At the end of the period, to convert overheads into product or service costs according to normal capacity

TK 133Cost of hired services

632

111, 112,138Reduced expenses

3331

152, 153, 242

Cost of materials, production toolsP

352 Provision for return on

construction work warranty

Factory overheads that are not amortized to cost of production are recognized

in cost of goods sold

138Reduced expenses

VAT

111, 112, 331

1.5 SUMMARY OF PRODUCTION COSTS AND ASSESSMENT OF BAD PRODUCTS FOLLOWING THE REGULAR DECLARATION METHOD

1.5.1 Synthesize production costs

Manufacturing enterprises have many different types, the way of organizingmanagement as well as products are very diverse However, they all have the sameprocess of aggregating production costs and calculating product prices, which is to

1.5.1.2 General Accounting

1.5.1.2.1 User account

Account 154 "unfinished production and business expenses"

1.5.1.2.2 Accounting method

- The set of cost items that make up

the product cost

1.5.2 Unfinished product evaluation method

- Unfinished products are products that have not finished the final production stage, are in the production process

- To calculate product costs, enterprises need to conduct inventory and value work in progress

- The listing of unfinished products is essentially determining the quantity, type, quality and level of finished products in the production process

- Work in progress is to determine the part of production costs incurred in the work in progress

- Depending on the characteristics of the production organization of the technological process and the nature of the product, the enterprise applies an appropriate method of determining the value of unfinished products

621

152627

811623

632

154 Transferring raw

material costs directly

Transferring direct labor

1.5.2.1 Determine the value of products in progress at the end of the period by the

cost of main raw materials or the direct cost of raw materials.

- Cost of work in progress at the end of the period includes only direct raw

material cost or main raw material cost And processing costs are calculated

for the finished product

Recipe:

- If the cost of main raw materials or raw materials is incurred directly at the

beginning of the production process:

Value of work ∈progress at the end of the period= Unfinished value at thebetginning of the period+Expenses incurred∈the period

number of finished products+ number of work ∈ progress

* amount converted to finished products

1.5.2.2 Work in progress value determined by the number of finished products

equivalent

The cost of work in progress at the end of the period includes cost of main raw

materials and processing cost and is generated in equal proportions

- If main material costs are incurred once at the beginning of the production

process:

- If the cost of main raw materials in the production process:

1.5.2.3 Determine the value of work in progress according to rated production

costs

In manufacturing enterprises that have established a reasonable and stable

production cost norm system, work in progress can be assessed according to the

normed production cost method

First of all, the accountant must base on the inventory of work in progress and the

norm of each cost item at each stage, then sum it up according to each type of

product In this method the cost items per work in progress depend on the degree of

their finished processing

1.6 COSTING

To calculate the cost of a product, the production cost must be aggregated

according to the cost-accounting object Based on production characteristics, nature

of technological processes, product characteristics and the identified

cost-accounting object, appropriate production cost cost-accounting methods shall be applied

1.6.1 License

Summary of production costs

Value of main raw materials is in work in progres

=

Valueof main raw materials is∈work∈ progress at the beginning+Value of main materials generated

number of finished products +work ∈progress

* work in progress

Value of Main Material in work in progress converted to finished product

=

Valueof main raw materials is∈work∈ progress at the beginning+Value of main materials generated

number of finished products+Number of u nifished products converted¿ completed¿

* work in progress

Table of product prices

- Value of finished products in stock - Actual value of the finished product

- Value of the excess product when warehouse

Inventorying - The value of the finished product is

- Carried over to the actual value of finished insufficient when inventory

products in stock at the end of the period - Converts the actual value of citySurplus: inventory at the beginning of the -Actual value of finished goods in stock at period

the end of the period

155The value of

finished products

in stock154

CHAPTER 2: REAL SITUATION OF COMBINED PRODUCTION COSTS AND PRICE CALCULATION AT 319 CENTRAL CORPORATION 2.1 INTRODUCTION OF 319 CENTRAL JOINT STOCK COMPANY

2.1.1 Introduction of the company

- Company name: 319 CENTRAL JOINT STOCK COMPANY

- Address: 150 Duy Tan Street, Hoa Thuan Tay Ward, District Hai Chau, Da

- Legal Representative: Mr Mai Huu Quan

- Main business lines: Construction industry

- Other business lines:

 Production of metal structures

 And wastewater treatment

 Prepare surface

 Installation of electrical systems and construction systems

 Exploitation of stone, sand, gravel and clay

 Installation of machinery and industrial equipment

 Architectural and related technical consultancy

 Real estate business

 Real estate consulting, brokerage, and auction

 Wholesale of construction materials, installation equipment

 Tangible machinery and equipment rental stores

- History and development of 319 Central Joint Stock Company

319 Central Joint Stock Company, formerly Central Branch – Construction

Company 319 - Military Region 3 established on August 24, 2009 under Decision

No 2817 / QD-BQP of the Minister of Defense After a period of consolidation,construction and development, on March 29, 2012, the Minister of Defense signedthe Decision No 959 / QD-BQP to transform the Central Branch into 319 CentralOne Member Limited Company Implementing the policy of equitization of

enterprises of the Party and State, changing the form from SOEs to multi ownership,creating a fundamental change in management methods, step by step investing intechnology innovation and development scale, improve financial capacity, businessproduction capacity and competitiveness of the Company in the market in the context of deep integration On October 1, 2017, 319 Mien Trung Co., Ltd was successfully converted to 319 Central Joint Stock Company

Along with the growth and maturity of the Company, the specialization in the construction process of the Company is increasingly enhanced, the production andbusiness lines develop more diversified, the efficiency of construction works TheCompany's all guarantee is sure, with profit; capacity and competitiveness of theCompany had a strong breakthrough, the market was increasingly strengthened andexpanded; relations with investors, partners and customers are increasingly deep and stable Currently the Company has been constructing many valuable, large-scale, modern works with high technical and artistic requirements such as: House and Office work of Song Thu Corporation; Office building works of Vietnam Helicopter Corporation in Da Nang; Public Service House of the 3rd Navy; MilitaryMedical Hospital 87 / TCHC; the Naval Nursing Center project in Phu Yen;

Upgrading embankment works in Han River estuary - City Danang; Da Nang Children's Cultural Palace project; Museum of Cham sculpture - Da Nang;

Embankment of Ly Son island, Quang Ngai province; Factory leveling X52 / Navy;Nursing Center Infrastructure in Phu Yen; Petroleum construction infrastructure K83; Construction of North - South axis of Phu Quoc island; Road Son Tra H2, Road Son Tra H3, Internal road, factory Factory X52; demining from Division 2 / QK5, clearing bombs and mines of the Military Headquarters of Quang Ngai

province and many construction works under the Military Region 3, Region 4 / Navy Corps, works of Military Region 5, Army Corps 3, Army Air Defense - Air Force strains The constructions by the construction units always affirm the

progress, quality, the aesthetics and ensure good environmental hygiene and labor safety Over nearly 10 years of construction, development and growth, 319 Central

Joint Stock Company has been commended and rewarded for many years, in which:Prime Minister once awarded "Certificate of Merit", Ministry of Defense awarded 3times awarded "Certificate of Merit"; The General Department of Politics of thePeople's Army of Vietnam twice gave "Bang Khen" Ministry of Labor, Invalids and Social Affairs donated, People's Committee of Da Nang City gave 01 gift of

"Certificate of Merit"; Corporation 319, twice awarded "Emulation Flag"; NavyCorps 2 times awarded "Certificate of Merit" With the above achievements and noble rewards, in addition to the continuous efforts of the employees of the

Company, there are also the contributions and supports of the Owners investors, partners, customers, authorities, authorities and people where the unit is stationed and constructed have been with the Company throughout the years All officers, employees and employees of 319 Mien Trung Joint Stock Company vow to

continue promoting the tradition of "Solidarity, Proactive, Creative, Sustainable Development", always accompanying the Owner partners, partners, customers, authorities, authorities and people where the unit is stationed and constructed contribute to the entire Party, the entire people and the entire army to successfully implement economic, social and national goals room, security; promote the

industrialization and modernization of the country for the goal of "Rich people, strong country, democracy, justice and civilization"; to build and firmly protect the Socialist Republic of Vietnam Fatherland.