Organization of cost management accounting in Vietnamese confectionery manufacturing enterprises

The general production cost level has not been carried out yet. The work of building a system of norms is carried out as follows:

+ Direct material cost standards: In confectionery production, direct material costs account for a relatively large proportion of the product's cost structure. Currently, to serve the work of making estimates, businesses have built norm reports for each type of material.

The construction of direct material cost norms is carried out by the production department of the enterprise. Periodically, based on the type of product produced, the production department will create norm tables associated with the quantity of consumed materials and transfer them to the accountant to survey market prices to include appropriate price norms.

Table 2.1: Direct material cost norms table

Product name: Baked egg cake

Unit: 1,000 boxes

Name of raw material

Unit of measure	Standard		Depreciation rate shortfall (%)	References
Unit of measure	Quantity	Price	Depreciation rate shortfall (%)	References
1. Wheat flour	Kg	100	2,500	5	House price quote provide
2. Powdered milk	Kg	50	70,000	1	nt
3. Chicken eggs	Fruit	200	2,000	0	nt
4. Sugar	Kg	50	7,000	3	nt
5. Butter	Kg	50	10,000	1	nt
6. Vegetable oil	Kg	50	15,000	3	nt
7. Color and substances other additives	Gram	1,000	8,000	0.5	nt

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(Data reference source: Friendship Confectionery Joint Stock Company)

The implementation of the norm table, in terms of quantity, is mainly based on the consumption of raw materials based on the technical design for each type of product without

There is research considering practical factors. Therefore, the new standard table is only for reference when making estimates.

+ Direct labor cost standards: Direct labor cost standards are expressed through the price standards of one hour of direct labor and the standard amount of direct labor time to produce a unit of product. With the characteristic of relatively short product production time, it is not difficult to set labor costs for each unit of product produced. Currently, confectionery companies mainly set labor costs according to output and labor time. The way to build labor cost standards of enterprises is mainly based on statistics of labor time combined with technical standards of machinery and equipment to build cost standards for each type of product.

Through the organization of the construction of the production cost norm system of confectionery companies, there is a common point that it is mainly based on past statistics combined with reference to the standards of machinery and equipment as a basis for building the norm system.

* Current status of business cost estimation

Estimating production and business costs is one of the contents of management accounting, which plays a role as a scientific and effective management tool to promptly process and provide information on costs, meeting the information needs of managers to serve their functions. A good production and business cost estimation system will help managers make the right decisions.

Through a survey of actual businesses, the author found that there are some characteristics of the work of making estimates to serve cost control of the accounting department as follows:

+ The work of making estimates and building the company's standard system does not exist systematically, partly because the basis of the estimate is the standard system which only stops at technical standards, there is not enough information about cost standards so accountants do not have a database to make estimates, in addition, the work of making estimates is not really of interest to businesses.

+ Among the surveyed companies, only two companies, BIBICA confectionery company and Kinh Do confectionery company, have initially implemented the construction of a cost norm system and made production cost estimates. However, because they have only built cost norms for raw materials and labor costs, the budgeting system in these companies has only provided static estimates for some factors such as: Raw material estimates, direct production labor estimates. Meanwhile, other cost estimates such as: General production cost estimates, Sales costs, and Business management costs have not been implemented.

Thus, in general, large enterprises with enough funds to deploy ERP software systems have begun to pay attention to organizing and building production budgeting systems, while the remaining enterprises have only stopped at the level of interest and are researching for implementation. This is an advantage for enterprises when implementing more deeply the organization of management accounting. However, the current accounting apparatus also has a little perspective on management accounting, which is still better than having to start from the stage of understanding what management accounting is combined with the available tools of the software, which will help enterprises to more easily orient themselves when implementing cost management accounting. Thus, with the current system of norms and estimates of confectionery enterprises, there are still many incomplete issues, so it cannot be a means of cost control for administrators.

2.2.2.2.3. Current status of organization determining costs for cost-bearing objects

According to actual surveys, currently 100% of enterprises apply the method of determining cost price according to actual cost of product production (traditional method). Based on the characteristics of the production process of confectionery products through many stages, the calculation of the cost of finished products of confectionery enterprises today is a combination of cost accounting methods by work and cost accounting by production process, unfinished products at the end of the period are determined by the method of estimating equivalent finished products. Currently, the application of the traditional method is no longer suitable for market changes, although, basically, it fully meets the requirements of financial accounting.

main, but with management accounting, this method does not fully and accurately reflect the occurrence of costs at each stage as well as the level of activity. In fact, the collection of production costs and calculation of product cost of the confectionery company is carried out as follows:

* Regarding the cost aggregation object: Based on the specific characteristics of confectionery products, the production process is complicated but the time is short, the product is unique, the product value is not large but it is necessary to determine the cost for each product. Therefore, the cost aggregation object of confectionery products is for each product and product package.

Regarding cost accounting methods: During the survey at the unit, the author observed and studied the process of collecting production costs of the enterprise and the unit's accounting processes, obtaining the following results:

+ Collection of direct material costs: Monitoring, management and accounting of material costs at the factory are carried out throughout the production process according to each type of product produced. The reason why businesses can account in detail by product is because confectionery products have different production processes and at a certain time on a certain production line, only different types of products can be produced. According to the author's survey, direct material costs at businesses are accounted for in account 621 "Direct material costs". This account is declared in detail for each cost-bearing object. When costs arise, accountants base on related documents to account for the accounting software, from which the software will synthesize data and create detailed reports and summarize materials for accounting purposes. (Appendix 12)

At the end of the period, based on the situation of raw materials for production during the period, the accountant prepares a summary report of direct material costs by cost object. This report helps managers evaluate the overall situation of the company's raw material usage.

+ Collection of direct labor costs: Along with direct material costs, direct labor costs also account for a high proportion of the total cost of confectionery products. Based on the type of production and the characteristics of the management organization of confectionery companies, the calculation of salaries for employees applies two forms of salary calculation: Time-based salary and product-based salary. For salary deductions, currently, businesses deduct at the rate of 16% social insurance, 3% health insurance, 1% unemployment insurance and 2% union funds.

- Time-based salary payment: Applied to indirect labor such as departments and workshop staff.

- Piece rate payment: Applied to workers who directly produce products in workshops.

The accounting for salaries of direct production workers at Huu Nghi High-end Confectionery Factory is done using account 622 "Direct labor costs". Account 622 is opened in detail for each workshop. (Appendix 14)

+ General production cost collection: General production cost items calculated in product cost are the general service costs for the workshop producing that product group. At the end of the accounting period, they are allocated to the products according to appropriate criteria.

At Huu Nghi High-end Confectionery Factory, general production costs include: workshop staff costs, raw material costs, tools and equipment used in production workshops, fixed asset depreciation costs, costs of outsourced services used for workshops and other costs in cash. To account for general production costs, accountants use account 627 "General production costs". This account is opened in detail for each workshop and cost item.

Every month, the accountant calculates the salary and prepares the salary payment table for the factory employees based on the timesheet of the workshop employees. Then, based on the salary payable and the deductions according to the employee's salary.

The accounting department prepares a table of salary allocation and salary deductions as for direct production workers.

For the cost of raw materials used in the workshop, at the end of the month, the accountant will summarize the data and then create a table to allocate raw materials, tools and equipment.

During the production process, the Factory must use a number of tools and equipment to help the production process run smoothly and the management work be convenient. Among those tools and equipment, there are small values that are allocated to one accounting period and there are large values that must be allocated many times to many accounting periods. (Appendix 15)

After collecting the factory's general production costs, the accountant will summarize them in each workshop.

In each workshop, accountants use the completed volume of each product type as a criterion for allocating general production costs to each product type according to the allocation coefficient calculated by the formula.

Allocation coefficient

Total factory overhead costs

Total number of products produced by the workshop

(2.1)

Based on accounting data, in March 2011, the Cracker workshop had the following number of completed products:

Product Volume

Cracker Party 300 gr: 6,500 kg

Cracker Bridal 300 gr: 5,114 kg

Cracker Gift 400 gr: 6.925 kg

Total: 18,539 kg

The total production cost in the Cracker workshop was: 342,007,700. The accountant calculated the allocation coefficient:

Allocation coefficient

342,007,700

18,359

= 18.629

The general manufacturing cost allocated to Cracker Party 300 gr is: 6,500 x 18,629 = 121,088,500

The general manufacturing costs allocated to the 300 gr Bridal Cracker are:

5,114 x 18,629 = 95,268,706

The general manufacturing cost allocated to Cracker Gift 400 gr is: 6,925 x 18,629 = 129,005,825

On that basis, accountants determine the product cost of confectionery products in the company. (Appendix 16)

Thus, through the above cost aggregation process, we can generalize the cost aggregation and product pricing process of confectionery companies. In fact, the survey of the cost aggregation and pricing process of confectionery companies has the following characteristics:

Regarding the costing method, confectionery companies currently use two main methods: costing by job and costing by production process. For orders according to specific customer requirements, accountants will collect costs during the production process into each specific order. For general production costs, after the production period is completed, general costs will be allocated to orders according to the main raw material consumption criteria. The preparation of production cost reports by order is being carried out by the accounting department after each order is completed. (Appendix 17)

For products that are regularly produced, because they have to go through many processing stages, the accounting method of cost aggregation is according to the production process, the products of this stage are raw materials for the next stage. At each stage of the production process, the accountant performs the cost calculation and then transfers it to the raw materials for the next stage. The production process for products that go through many stages is described as follows: (Candy production process of Hai Ha company; Reference source: Technical department )

Input factors:

- Road

- Adhesive

- Labor

- Machines

- Other

Phase 1

Finished product: Malt

Combining factors of production

Phase 2

Hard candy, gummy candy, soft candy

According to the survey results, in terms of the method of collecting production costs and calculating product costs, no enterprise currently determines costs according to the activity-based costing method, and the perfect combination of determining costs based on activities with the Kaizen costing method mentioned in the theory section is also not of interest to enterprises. This shows that the application of management accounting in confectionery manufacturing enterprises has been implemented but the efficiency is not high.

2.2.2.2.4. Current status of organization analyzing the relationship between cost, output and profit After the author conducted a survey of a number of businesses, it was found that 100% of the

The surveyed enterprises have not yet organized the analysis of the cost - output - profit relationship. The reason given is due to two reasons, one is because users do not see the need, this comes from the demand of the administrator also does not exist, two is there is no correct awareness of the importance of CVP analysis.

Conducting an in-depth survey to find out whether CVP analysis has achieved any results, 80% of surveyed enterprises are initially interested in comparing the selling price with the production cost of each product of each month to serve as a basis for explaining to the leadership about any differences that may occur. However, this is only a report that summarizes information and is not a true cost analysis report. Because as mentioned, the cost is built on many types of costs such as raw materials, labor, and distributed general production, and these types of costs are also formed based on norms, so it is necessary to organize an analysis to find the cause of price differences, if any, based on practical grounds, while the explanatory reports are mainly subjective. This is because cost management accounting in enterprises has not been highly appreciated.

One of the important points of CVP analysis is the break-even point analysis, from which the business will determine how much to produce, at what selling price to achieve the expected profit. However, because the current accounting system of the business is simply an accounting system

Organization of cost management accounting in Vietnamese confectionery manufacturing enterprises - 13

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