25 overhead costs 26 general business. Accounting for overhead and general business expenses

The production of products is always associated with certain costs, which later form the value of the cost. General production costs combine the amounts necessary for the maintenance of the shops of the main and auxiliary production. Costs that are not directly related to the manufacture of products are classified as general business expenses and accounted for separately.

Definition

Overhead costs are costs that are directly related to production activities. The main distinguishing feature from direct production costs is that the amounts cannot be attributed to a specific type of product. Overhead costs may include the costs of:

• depreciation deductions;
• equipment maintenance;
• payment for utility services;
• rent of industrial premises;
• wages for workers involved in the service process;
• other expenses.

Although the costs are not directly attributable to any type of product, they must be taken into account when calculating the cost of production.

The concept of general expenses

The activity of any enterprise is necessarily connected with the functioning of its various departments. The production workshop cannot work by itself without management and control staff. In the future, products must be stored and sold, which will involve other personnel and premises. All this leads to the formation of costs that seem to be far from the production process, which are combined into a group of general business expenses.

They may include amounts required for:

• covering administrative and management expenses;
• remuneration of employees employed outside of production;
• depreciation and repair of fixed assets for general business purposes;
• payment of rent for non-production premises;
• cover other expenses of a similar nature.

General business expenses are also written off to the cost of manufactured products in accordance with the rules of the accounting policy of the enterprise.

Overhead characteristic

General production and general business expenses are combined into a group of indirect costs arising in the course of the enterprise's activities. It is difficult to trace the ratio of their amount to the types of products and the time of manufacture, therefore they are written off by the method of distributing costs in proportion to a given indicator.

General production and general business expenses are taken into account, highlighting separate cost items and departments (workshops). This allows you to control the distribution of funds and identify the most expensive objects to maintain and manufacture.

Overhead costs in accounting data

General and general production costs in total terms are reflected in synthetic accounts 25 and 26. Both accounts do not have a balance at the end of the month, since they serve to collect and distribute the costs of the main production. The amounts are debited to account 20, posting Dt 20 Kt 25/26. Some enterprises (for example, those providing intermediary services) record all administrative and general business expenses on account 26, without using account 20.

Accounts 25, 26 also conduct analytical accounting. Sub-accounts are opened for each workshop, as well as for individual items of general business expenses. When filling out, the accountant is based on the data of the primary documentation and other forms of accounting registers developed by the enterprise. Additionally, statements No. 12 and 15 are kept to account for overhead and general business costs.

Typical debit entries for accounts 25, 26

Accounting for overhead costs includes the collection of information on cost items for the maintenance, maintenance and fulfillment of the needs of the main and auxiliary production. The use of account 26 pursues the same goals, only the amounts of administrative and management expenses are recorded. During a certain period, the necessary information is collected in the debit of accounts 25 and 26.

In this case, the following postings Dt 25/26 can be carried out:

• Kt 02, 05 - depreciation of fixed assets and intangible assets was accrued;
• Kt 70 - wages were accrued to general production (administrative) personnel;
• Kt 69 - accrued social. payments to employees engaged in servicing workshops (management employees);
• Kt 76 - general production (general) expenses include payment of utility bills;
• Kt 10 - materials were sent for the maintenance of production (administrative) facilities.

In addition to the considered account assignments, others can be applied. The main thing is not to violate the principle of double entry and follow the active account rule: crediting in debit, writing off in credit.

Loan operations: write-off of overhead costs

The instructions for using a standard chart of accounts say that collective synthetic accounts 25 and 26 must be closed at the end of the month. This requirement means that all debit amounts are charged to account 20 (or 90 for general expenses). The accountant will record entries like:

• Dt “Main production” Kt “General production expenses” - the amounts of general production expenses incurred for the needs of the main production shops were written off;
• Dt “Servicing production” Kt “General production expenses” - the amount of overhead costs for the remuneration of personnel of the servicing production is attributed;

• Dt “Auxiliary production” Kt “General production expenses” - expenses for utility bills of auxiliary production facilities were written off;
• Dt “Main production” Ct “General business expenses” - general business expenses were included in the actual production cost;
• Dt “Cost of products” Ct “General expenses” - the amount of administrative and managerial costs are written off to the cost of production.

Depending on the credit of which account the data of debit turnovers of general business expenses are credited, the full or production cost of products is formed.

Production cost

Costs arising in connection with the maintenance or maintenance of production facilities can be charged to the final result in proportion to the amount specified by the accounting policy. The distribution of overhead costs aims to calculate the unit cost of production at the output of the workshop, taking into account all the costs of the industrial cycle.

The distribution of overhead and general business expenses when using this method occurs in different ways: from the 25th account, the amounts are written off to the 20th account, and from 26 to 90. Thus, administrative and management and other overhead costs in terms of general business are not included in the production cost, but are directly related to the financial result.

This is one of the methods that can be applied in the enterprise. Indicators of production costs allow you to analyze the profitability of a particular shop and adjust the amount of costs for the production of certain types of products.

Cost and taxation

In order not to create additional registers for tax accounting purposes, it is better to record overhead costs at full production cost. The method involves writing off to the debit of account 20 both general production and general business expenses. The choice by the accountant of the method of attributing indirect costs to the cost of products should be based primarily on the provisions of the accounting policy of the enterprise.

General production expenses (account 25) and expenses for general business needs, together with account 20 data, make up the bulk of the cost of manufactured products. The data is used both for accounting and analysis of the financial activities of the enterprise, and for tax service data.

Account 25 "General production costs" is used to form costs included in the cost of manufactured products / services not directly, but indirectly. What expenses are reflected in this account? How is account 25 closed? Let's analyze the wiring on typical examples.

Account characteristic 25

Account 25 "General production costs" is intended for accumulation and subsequent write-off of costs for servicing the main and auxiliary production of the enterprise. Generalization of data is carried out for the reporting period with distribution to the output of products at the end date. What expenses can be attributed to the 25th account of accounting? The list of costs is determined in each organization independently, depending on the specifics of economic activity.

On the account 25, the following types of costs can be taken into account:

• Salaries of support staff.
• Depreciation charges and expenses for the repair of fixed assets and other objects used in the production process.
• Operation and maintenance of working equipment and machines.
• Production equipment insurance.
• Utility costs for heating, electricity and other types of costs for the maintenance of industrial premises.
• Insurance contributions from the salary of auxiliary production workers.
• Transport service costs.
• Other similar expenses.

Analytical accounting is possible by divisions (departments, workshops) of the organization, types and items of expenditure. The costs collected on account 25 are not written off to the cost of products directly, but only through account 20 or, as well as 29.

25 account in accounting is ...

Collective-distributive 25 account of accounting should be used in those manufacturing enterprises whose activities are associated with the release of a large range of products. In such organizations, the distribution of account 25 is carried out in proportion to the value of the base indicator for the reporting period. At the same time, the selected write-off method must be approved in the accounting policy of the enterprise, taking into account the requirements established in the guidelines for various industries - construction, petrochemical, chemical complex, etc.

If the volume of production is small and, accordingly, there are few calculation objects, it is allowed not to apply the account. 25, and immediately write off the costs to account 20 or 23. However, this method is not always reliable for determining the exact cost of production and controlling cost estimates. Therefore, it is recommended to perform the traditionally accepted closing of the 25th account - the postings are given below.

Sub-accounts to account 25:

• 25.1 “Maintenance and operation of machinery / equipment” - is intended to summarize data on the costs of maintaining the operability of production equipment.
• 25.2 "General shop expenses" - is used to generate information about the maintenance and management of the main and auxiliary production units.

The accounting account in question is classified as active, since the debit of account 25 increases by the actual costs incurred from correspondence from -, 05, 04, , 21, 19, 16, 23, , 29, 69, 70, , 71, 79, 76, , , 96 accounts. And the write-off is carried out on a loan account. 25 in correspondence with expense accounts - 20, 28, 29, 23, 79, 76, 99, 97.

How to close account 25

Closing account 25 (posting in our example) is most often done in proportion to the direct cost of wages of workers employed in the main production. In addition, it is possible to use the amount of revenue or direct material costs as a base indicator. The choice of the optimal method is carried out by the enterprise independently, it is necessary to fix the methodology in the accounting policy.

Postings on account 25: example

Suppose that for May the accountant of the organization attributed the following types of costs to account 25:

• D 25 K 70 - 200,000 rubles. for staff salaries.
• D 25 K 69 - 61,600 rubles. for insurance premiums.
• D 25 K 02 - 50,000 rubles. for OS depreciation.
• D 25 K 60 - 70,000 rubles. for utility costs.

Total: 381,600 rubles.

At the same time, the organization has 2 production workshops. How to close 25 account? The salary of the main workers in the amount of 700,000 rubles is taken as the basis, where

• Shop 1 - 330,000 rubles.
• Shop 2 - 370,000 rubles.

Account distribution 25 done like this:

• Shop 1 - 179,897 rubles. \u003d 381,600 / 700,000 x 330,000 rubles.
• Workshop 2 - 201,703 rubles. \u003d 381,600 / 700,000 x 370,000 rubles.

Conclusion - in this article we got acquainted with how the 25th account is closed and whether it is possible to keep accounting without its use. When choosing a base indicator, remember that in general you should focus on the industry specifics of Russian enterprises and the accounting policy of each company separately.

In the process of manufacturing products at the enterprise, costs arise that are not directly attributed to a specific cost object. They are included in general production costs. In addition to the costs of managing workshops (divisions, sections) of the main and auxiliary industries, they include those for the operation and maintenance of machines and equipment for general production purposes.

General production costs include:

1. Costs intended for production management:

The salary of the management apparatus of sections, shops,;

Deductions for health insurance, social events;

To pay for business trips of employees of sections and shops.

2. Depreciation of fixed assets and intangible assets of district and workshop purposes.

3. Costs for servicing general production assets:

Repair and operation;

operating lease;

Insurance.

4. Costs for organizing production and improving production technology:

Employee wages;

Contributions to social funds;

Expenses intended to improve products, increase their reliability and other performance characteristics;

Payment for services and works of third parties.

5. Costs intended for the maintenance of production premises (lighting, heating, drainage and water supply, other utility costs) and the production process (wages of general production personnel, deductions for medical insurance and social events).

6. Costs for safety precautions, technological control, environmental and labor protection.

7. Other costs:

Shortage from damage and loss of material assets;

The cost of moving materials, raw materials within the enterprise;

Downtime payments.

The distribution of overhead costs has some features. Since these costs are classified as indirect costs, it is economically expedient to distribute them and be tied to such a concept as normal power. This concept refers to the expected average volume of production activity achieved under the condition of normal activity for several or years. At the same time, the planned volume of production maintenance is also taken into account. Normal power is determined by the organization itself. Overhead costs are calculated based on the standard capacity. They are divided into variables and constants. The composition and list of these indicators are established by the enterprise independently.

Variable costs are the costs of operating and maintaining production, which change in proportion to adjustments in production volumes. They are distributed to all cost objects using the selected distribution base (production volumes, wages, hours of work) based on the received actual capacity of the enterprise in Thus, they are fully included in the cost of production.

Fixed costs are the costs of operating and maintaining production, which are fairly stable (despite changes in production volumes). They are allocated to cost objects using a special base (production volumes, wages, hours of work), based on the calculated normal capacity of the enterprise. Unallocated fixed costs are included in the cost of goods manufactured in the period in which they arise. The realized includes the difference between the actual fixed costs and their amount calculated according to the normal. If there are several workshops or divisions in the enterprise, overhead costs are distributed in their context.

Accounting for overhead costs is based on:

The selected cost allocation base;

Calculated normal power;

The total planned value of overhead costs, broken down into fixed and variable.

Accounting for them is carried out on the account 25 "General production costs".

What is account 25 for?

Account 25 - General production expenses - is intended for registration of business transactions that reflect the expenses incurred by the organization that are associated with the maintenance of various production assets - both basic and auxiliary. Such expenses include:

• those related to maintaining the health of the equipment;
• depreciation;
• payment for utilities used in production;
• wages of those workers who are employed in service industries;
• remuneration of labor of contractors involved in maintenance of production.

It should be fundamentally distinguished between the general production costs recorded on the account in question and those expenses that relate to general business expenses that are recorded on account 26. The fact is that general business expenses mainly include those costs that are associated with ensuring the functioning of the enterprise management system. Examples of such expenses:

• salaries of managers and their subordinates (for example, secretaries);
• expenses for software installed on computers of management and subordinates;
• office rent;
• services of external lawyers, appraisers, auditors.

General business expenses, therefore, are not directly related to production. But their implementation will affect the efficiency of production, as in the case of expenses recorded on account 25. But since production and management are two different components of the business process, this leads to separate accounting for business transactions that correspond to them.

Is the account active or passive?

A very common question: is the count of 25 active or passive? What is the main criterion for its attribution to one or another type of accounts?

Account 25 is a classic active account. It records assets, in this case represented by overhead costs.

It may seem unusual that expenses are assets. But the main feature of an asset is the focus on making a profit. Making an expense related to the provision of production satisfies this criterion. By investing in something in production, the firm seeks to make a profit due to this (even if there is no guarantee that the committed expenditure will bring income, as is the case, for example, with investing in a bank deposit, the return on which is guaranteed in most cases).

Active accounting accounts, which include account 25, may reflect:

• debit transactions showing an increase in an asset (in this case, an increase in production costs);
• credit transactions showing a decrease in the asset.

You can learn more about the nature of debit and credit transactions and get acquainted with other nuances of compiling accounting entries in an enterprise from the article.

Don't know your rights?

In the meantime, let's get acquainted with examples of debiting and crediting business transactions using account 25 in practice.

Account 25 in practice: postings on turnover (and account closure)

The general algorithm for using account 25 looks like this:

1. During the settlement period adopted in the accounting policy (for example, a month), debit business transactions are recorded on account 25, reflecting the costs associated with production. The following lines can be used for this:

• Dt 25 Kt 02 - to reflect depreciation;
• Dt 25 Kt 10 - to reflect the cost of materials;
• Dt 25 Kt 69, 70 - to reflect labor costs.

Each posting corresponds to a specific supporting document. In the case of the specified postings, the following will be applied accordingly:

• statement for depreciation;
• overhead, limit-fence cards;
• accounting references on wages, timesheets.

1. At the end of the billing period, account 25 is closed.

The accumulated turnover is written off as part of credit operations to an account corresponding to the characteristics of the production, to which general production expenses are directed. In the general case, this is account 20. The posting is applied: Dt 20 Kt 25. The main supporting document is a statement of registration and distribution of general production.

The use of postings on account 25 has a number of nuances that are worth considering.

Applying the account 25: nuances

When compiling transactions with an account of 25, it should be borne in mind that:

1. The use of the account may be subject to industry regulations.

For example, in agriculture, the governing normative act that regulates accounting for account 25 is Order No. 654 of the Ministry of Agriculture of Russia dated June 13, 2001. This order contains recommended sub-accounts that are applied depending on the specific type of activity of an agricultural organization.

1. If the expenses on account 25 relate to two types of production at the same time, the main one (account 20) and auxiliary (account 23), which is possible if, for example, we are talking about a common power supply line, then at the end of the month two postings can be made, allow you to write off the costs of both types of production at the same time.

The amount of expenses recorded in each credit entry on account 25, in this case, can be calculated, for example, based on the ratio of the wages of workers in each of the industries.

The chosen method of dividing costs into different types of production should be fixed in the accounting policy.

General production costs are directly related to the technological processes within which the production of products at the enterprise is carried out. These costs are reflected in the active account 25, and then written off to the account of the main production.

General production expenses are reflected on account 25 “General production expenses” from the credit of accounts for accounting for inventories, settlements with employees for wages, etc. The expenses recorded on account 25 “General production expenses” are written off to the debit of accounts 20 “Main production”, 23 “Auxiliary production”, 29 “Service industries and farms”.

Analytical accounting on account 25 "General production costs" is carried out for individual divisions of the organization and expense items.

Account 25 “General production costs” appeared due to the fact that not only one, but several types of products can be produced in the workshop, so the problem arises of how to include such general (indirect) costs in the cost of finished products. During the reporting period, these costs are collected on a temporary transit account 25 "General production costs", and at the end of the reporting period, when calculating the full cost of finished products, the problem arises of including these costs in specific types of products, therefore this account belongs to the group of collection and distribution accounts . And from how the accountant distributes these costs among the types of manufactured products for arbitrarily chosen bases, he will receive the corresponding cost value.

An important addition to the characteristics of account 25 "General production expenses" is that it can reflect the cost of repairing not only fixed assets, but also "other property", in particular tools and household equipment, regardless of which account will be taken into account last.

Account 25 “Overall production costs” reflects indirect costs for servicing the main and auxiliary industries when two or more items are produced. These include costs for the maintenance and operation of machinery and equipment, for the management and maintenance of production, etc.

The amount of these costs in most cases depends on the volume of production. So, all the above expenses during the month are collected on the debit of account 25 "General production costs", and at the end of the month their total amount is distributed between the types of products produced and debited, depending on the type of production, either to account 20 "Main production" or to account 23 “Auxiliary industries”, or to account 29 “Serving industries and farms”. Thus, on the first day of each month, account 25 “General production expenses” does not have a balance.

Overhead costs can be allocated between product types in different ways. If the calculation is carried out not by the names of manufactured products, but by responsibility centers, then there is no need to distribute overhead costs by types of finished products.

When calculating the shop cost, it is advisable to include overhead costs in the composition of the costs reflected on account 20 “Main production”.

The distribution of overhead costs by types (names) of products or by responsibility centers involves determining the distribution base. Most often, the distribution is carried out in proportion to the wages of workers in the main production. This decision is motivated by theoretical and practical reasons.

In the first case, we are talking about the labor theory of value, according to which value is created only by the abstract labor of direct producers, i.e. workers. Orthodox Marxist A.A. Bogdanov believed that all the work of those employed in production should be taken into account. In the second, they proceed from the fact that such a solution is technically very simple to implement. However, here a paradox is revealed, which K. Marx encountered more than a hundred years ago: the higher the level of mechanization and automation, the smaller the share of indirect costs falls on such a “responsibility center”. Indeed, the more machines, the higher the share of depreciation costs, but most of them are written off to production sites in which depreciation is either absent or almost

No. This suited some managers, as it allowed them to prove the high efficiency of the use of machinery and equipment and note that the lack of mechanization makes production unprofitable. However, this is just an accounting trick. The difficulty lies in the fact that the distribution of costs across any base will always be a trick.