Oksana Nuzhna
Lutsk National Technical University, Ukraine
E-mail: o_nuzhna@ukr.net
Nataliia Tluchkevych
Lutsk National Technical University, Ukraine
E-mail: tluchkevich@rambler.ru
Nataliia Semenyshena
State Agrarian and Engineering University in Podilya, Ukraine
E-mail: natviksem@gmail.com
Kateryna Nahirska
Lutsk National Technical University, Ukraine
E-mail: katya_nagirska@ukr.net
Irina Sadovska
Lesya Ukrainka Eastern European National University, Ukraine
E-mail: irina_sadovska@ukr.net
Submission: 21/11/2018
Revision: 08/02/2019
Accept: 28/02/2019
ABSTRACT
The
current paper is focused on material resources as a controlling factor in crop production.
It has been found that according to the analysis of crop production
expenditures in agricultural enterprises of Ukraine an expense structure
consists of approximately 70% of material costs. In this regard, the
ABC-analysis is utilized with the aim to determine the items of material
expenses that significantly affect the cost and consequently the process of
operational management for making decisions. The findings of the ABC-analysis
of material expenditures for crop production in terms of elements at Ukrainian
agricultural enterprises made it possible to determine the types of control
(systematic, periodic, selective) that should be applied for different cost
groups focusing on the most significant items of the material expenses.
Expenditures are classified according to the stages of the technological
process and types of the technology for crop cultivation, allowing to control
the scope of production costs at each stage of crops growing. These stages can
be the basis for the application in the system of cost management of Activity
Based Costing model. It is proposed to apply the operational control of
material costs through the budgeting system in the agrarian management. It
plays a leading role in the management system providing the process of managerial
decisions making with the operative information about the actual indicators of
material costs and their deviations. A form fragment of a flexible budget on
material expenditures for winter wheat production has been elaborated. The
enterprise managers can make operational, current and strategic management
decisions and, consequently, influence the change of material resources,
adjusting them to the technological processes stages in production and sales of
goods, works and services based on the proposed form of a budget.
Keywords: ABC-analysis;
Activity Based Costing; agriculture; budgeting; costs; Cost Management;
control; crop production and management solutions
1. INTRODUCTION
Agriculture
plays an important role in the development of Ukraine's economy and, above all,
in providing food to the population. The peculiarities of agricultural
production, primarily related to the technology of crops and livestock
biological assets growing, are the basis of this particular branch of economy,
affecting the process of making managerial decisions, in particular,
operational ones.
Branch
specifics defines the expenditures structure and content. Within one farm they
are engaged in the production of various types of agricultural products (works,
services), their cost forming methodology has its own characteristics. At the
same time, the value of prime costs depends primarily on material costs, which
are the basis of agricultural products (works, services). The use of various
types of raw stuff and materials in agricultural production affects the cost
amount, and hence the price and financial results.
Therefore,
special attention is paid to relevant production expenses in the process of
cost management and making managerial decisions on the use of various kinds of
material resources, which play a key role in the adoption of an alternative
management decision. At the same time, in the system of agrarian management,
the control of production expenses is carried out in parallel, allowing to
determine those industry key costs items, which enable to provide the
substantial savings.
According
to calculations based on the State Statistics Committee of Ukraine data
(Statistical bulletin for 2014, 2015) plant production expenditures make up a
significant share: 74.8% in 2014, 68.4% in 2015 and 67.6% in 2016, in the
production costs structure of Ukrainian agricultural enterprises. That is why
we think that the analysis of expenditures and certain types of expenses
control expediency substantiation are actual precisely for crop production.
2. REVIEW OF EMPIRICAL LITERATURE
General
theoretical approaches to cost management and control were considered by such
scientists as Upchurch (2003); Bhimani, et al. (2008); Drury (2008); Hansen and
Mowen (2006); Merchant (1998) et al.
In
particular, Hansen and Mowen (2006) researched functionally oriented costs and
control, Activity-Based Cost Systems and allocated a new section from problem
accounting and orientation on technological tools that positively influence the
practice of Cost Accounting.
Bhimani,
et al. (2008), Upchurch (2003) provided a clear coverage of existing and
current issues in the management and Cost Accounting, paying attention to the
various methods of Cost Accounting and determining the production cost.
Drury
(2008) researched the use of such Cost Accounting methods as: Process Costing,
Regulatory Cost Accounting, Life Cycle Costing, Target Calculation, Activity
Based Costing and argued that for more effective Cost Management, organizations
that use Functional Based Cost Accounting create cost estimates on
the Activity-Based Budgeting (ABB).
Merchant
(1998) evaluated various cases using a Cost Management System and applied a
case study method for training management systems.
The
Cost Management System, including Activity Based Costing and its use in the
process of planning, monitoring and making management decisions were considered
in studies of such scientists as: Arena and Azzone (2005), Vasilievoi and
Riabenkova (2011), Drury (2008), Hundal (1997), Khromey (2015), Nachtmann and
Needy (2003), Park and Simpson (2008) and Zheng, Chen, Wang and Li (2018).
The
Park and Simpson (2008) presented a Cost estimation model. These authors
researched practical improvements to the Cost estimation by developing
Activity-based costing (ABC).
According
to Nachtmann and Needy (2003), Activity-Based Costing (ABC) are introduced to
obtain accurate information about the cost of a product and process. Due to
high data requirements, ABC input data is often evaluated, resulting in
inherent inaccuracy and uncertainty in these systems. These authors researched
the development and comparison of methods for processing this discrepancy of
data and uncertainty in ABC systems.
Arena
and Azzone (2005) covered the results of a Management Accounting survey of 289
Italian organizations. The study examined the adoption of three specific
methods: ABC / ABM, Balanced Scorecard and EVA, analyzing the key success
factors of companies applying for their adoption, their goals and the impact on
management system performance.
Zheng,
et al. (2018) investigated the necessity and feasibility of using the ABC
method in hospitals based on current cost accounting in small and medium-sized
public hospitals using cost management theory and cost theory on the basis of
activities. The authors proposed some proposals concerning the management of
medical center expenses based on the results of accounting according to the ABC
method.
In
general, the methods of Cost Management, Internal Control of Production Costs
in agriculture, budgeting considered by Ackoff (1981; 2002), Carli and Canavari
(2013), Deriy (2013), Dolishnya (2011), Gonzalez-Gуmez and Morini (2009),
Kostiakova (2015), Koutouzidou, et al. (2015), Pockeviciute (2008) and Shevchuk
and Ovcharuk (2012).
For
example, the works of such famous scientists as: Koutouzidou, et al. (2015)
examines recent advances in cost accounting methods with special reference to
the application of Activity Based Costing methodology in primary sector.
Carli
and Canavari (2013) presented the model of a new information system for
agribusiness management that supports Direct Costing and Activity Based Costing
methodologies and conducted interviews with key-informants to evaluate their
needs and identify the information requirements for the introduction of
structured cost management approaches in a Farm Management Information System.
ABC
analysis were considered by such scholars as: Bodryakov (2005), Hrek (2007),
Marchenko and Bashylova (2017) and Fisher (2008). The methodology and feasibility
of using ABC analysis, its advantages, disadvantages and limitations of the
application were described by the following scientists as: Gusev and Marosin
(2015), Tatarinova and Grishanova (2012) and Tyukaev (2012).
However,
despite the theoretical and practical developments, the authors of this article
believe that further research requires approaches to operational control of
costs in agrarian management using the method of ABC analysis, which will
reveal those items of expenditure that have the greatest impact on the cost of
production of crop production and, accordingly, require intensified control over their magnitude.
3. RESULTS
In
general, the processes of making managerial decisions, and hence the formation
of the agricultural production cost are influenced by the following factors
that are due to the peculiarities of the technology of biological assets and
agricultural products (works, services) growing: the natural and climatic
conditions; the soil; duration of the operational cycle; biological assets;
variety of goods and production; technology and seasonality of production; production sales markets; labor force;
material resources.
Features
of agricultural production determine the costs classification, Cost Accounting
methods, elements of analysis, planning, and, thus, affect the adoption of Cost
Management System and current and strategic management decisions in
agriculture. At the same time, they also influence the structure of production
expenditures, methods of operational economic analysis and control, requiring
special measures to improve the quality performance of agricultural
enterprises, strict control over all production sites and levels of the enterprise.
Therefore, there should be
well-organized and managerial accounting in the agricultural enterprises
practice, which first of all should provide managers of agricultural
enterprises with timely and reliable information as for planning, analysis,
control and making reasonable management decisions.
In
addition, factors that affect the production process, and therefore the process
of making decisions, can be divided into two groups:
·
controlled
– which can be influenced by the relevant decision or actions of managers;
·
uncontrolled
– which operate independently of the human factor.
The latter are unpredictable in the
process of enterprise economic activity and require considerable attention when
organizing agricultural enterprises production and management system in
general.
American
economist K. A. Merchand (1998) identifies three types of uncontrolled factors:
·
economic
and competitive (changes in prices, interest rates, regulations, amount of
taxes, actions of competitors, tastes of consumers, etc.);
·
state
of nature (natural and climatic conditions);
·
interdependence.
From the factors listed above labor
resources, product assortment, product sales are controlled by the material
that is, those that can be influenced by the Head in the production process;
and land, natural conditions, duration of the operating cycle, biological
transformations, biological assets and seasonality of production are
uncontrolled, which does not change depending on a someone’s decision.
At the same time, the degree of
factors influences the process of managerial making decisions and hence the
cost of biological assets and agricultural products (works, services), can be
traced and analyzed through planning (budgeting), the final result of which
depends on each component of the information base and the elements of analysis
and statistics.
It was found that material costs
take up more than 50% in the expenditures structure (66.95% in 2014, 70.05% in
2015, 68.04% in 2016 and
52.74% in 2017)
(table 1) in the result of expenditures structure research as for the crop production
in Ukrainian agricultural enterprises based on State Statistics Committee of
Ukraine data.
So, we consider it appropriate to
conduct an elements-based ABC-analysis of material costs for the crop production
in agricultural enterprises of Ukraine.
Table 1: Structure of expenditures for crop production in agricultural
enterprises of Ukraine
Elements of operational expenditures |
2014 |
2015 |
2016 |
2017 |
||||
Million hrn. |
% |
Million hrn. |
% |
Million hrn. |
% |
Million hrn. |
% |
|
Labor costs |
7777,7 |
6,74 |
7963,1 |
5,10 |
9972,4 |
5,11 |
13246,7 |
4,92 |
Deductions on the social purposes |
2956,1 |
2,56 |
2772,0 |
1,77 |
2234,7 |
1,15 |
2848,0 |
1,06 |
Direct material costs |
77282,1 |
66,95 |
109468,0 |
70,05 |
132745,2 |
68,04 |
141904,2 |
52,74 |
Depreciation of fixed assets |
6786,6 |
5,88 |
7527,9 |
4,82 |
10245,7 |
5,25 |
14046,7 |
5,22 |
Other expenses |
20635,4 |
17,88 |
28544,0 |
18,27 |
39909,7 |
20,46 |
97031,2 |
36,06 |
Total costs |
115437,9 |
100 |
156275,0 |
100 |
195107,7 |
100 |
269076,8 |
100 |
Consequently, the attention will be directed
to the controlled factor in this study, such as material resources in crop
production. The ABC-analysis is used in order to determine those items of
material costs, which significantly affect the cost, and therefore, the
relevant indicators in the process of making operational management decisions.
This method is based on the Pareto principle, the essence of which is as
follows: control of a small number of elements allows you to manage the
situation as a whole. This rule formulated by Pareto is often called 80/20
rule, it can be interpreted as: reliable control of 20% of positions allows for
80% control over the subject management system as a whole.
The
general algorithm for conducting an ABC-analysis includes the following steps:
1) definition of the
analysis objects;
2) determination of the
conducted analysis parameter;
3) sorting of research
objects in the parameter values decreasing order;
4) determination of A, B, C groups.
In accordance with the above
algorithm, the objects of our analysis will be elements-based material costs
for the crop production in agricultural enterprises of Ukraine in 2016-2017.
The
amount of mentioned expenditures will be selected as the parameter of conduced
analysis. According to the
methodology, the material costs ABC-analysis essence is in the division of
expenses compounds into three unequal powerful A, B, C subsets on the basis of
the expenses amount as the chosen parameter.
Thus, the purpose of the
elements-based ABC-analysis of material costs of plant production at the
agricultural enterprises of Ukraine for 2016-2017,
using the principle of Wilfredo Pareto, is to identify the most important items
of material expenses, since these items give an opportunity to provide
significant cost savings. The use of the Pareto principle (rule 80/20) allows
us to conclude: it is enough to identify and optimize 20% of expenses to
achieve 80% of the effect. That is, it is necessary to optimize those expenses
that have the largest share in the expenditures structure in order to obtain
significant savings. We propose to choose an empirical method for the
implementation of the elements-based ABC-analysis method for the crop
production in agricultural enterprises of Ukraine, which is to divide the
objects into groups based on the average results of previous studies. The most
commonly used option is the following: A - 80% and B - 95%.
Structure of material costs for crop
production at the agricultural enterprises of Ukraine in 2016-2017 is presented
in Table 2. The analysis shows
that the expenses on payment of services and job of other organizations
and other direct costs are
the largest (38246.8 million UAH or 28.81% in 2016, 27551.6
million UAH or 19.42% in 2017), as well as the expenses for inorganic fertilizers (36694.8 million UAH or 27.64% in 2016, 43039.4
million UAH or 30.33% in 2017) in crop production agricultural enterprises of
Ukraine.
Table 2: Structure of material costs for
crop production at the agricultural enterprises of Ukraine in 2016-2017
№ |
Direct costs |
2016 |
2017 |
||
mln UAH |
% to the total costs |
mln UAH |
% to the total costs |
||
1 |
Payment of
services and job of other organizations and other direct costs |
38246.8 |
28.81 |
27551,6 |
19.42 |
2 |
Inorganic
fertilizers |
36694.8 |
27.64 |
43 039,4 |
30.33 |
3 |
Seeds and planting
materials |
22009.6 |
16.58 |
26 371,5 |
18.58 |
4 |
Oil
products |
19156.1 |
14.43 |
24 500,8 |
17.27 |
5 |
Spare
parts, repair and construction materials to repair |
13339.3 |
10.05 |
14 278,6 |
10.06 |
6 |
Electric
power |
1483.1 |
1.12 |
1 409,1 |
0.99 |
7 |
Fuel |
1147.1 |
0.86 |
1 963,5 |
1.38 |
8 |
Other
products of agriculture |
668.4 |
0.50 |
2 789,7 |
1.97 |
|
Total |
132745 |
100 |
141904,2 |
100,0 |
Distribution of material costs and
the Laurence curve (ABC-curve) for plant production in agricultural enterprises
of Ukraine in 2016 is shown graphically in Gragh 1, in 2017 is shown
graphically in Graph 2.
Graph 1: Elements-based distribution of material costs and Laurence curve (ABC-curve)
for plant production in agricultural enterprises of Ukraine in 2016
Graph 2: Elements-based distribution of
material costs and Laurence curve (ABC-curve) for plant production in
agricultural enterprises of Ukraine in 2017
The
ABC-analysis of material costs for crop production in agricultural enterprises
of Ukraine in 2016 shows the following expenses sharing:
·
group
A has 3 positions (payment of services and job of other organizations
and other direct costs, inorganic
fertilizers, seeds and
planting materials);
·
group
B has 1 position (oil products);
·
group
С has 4 positions (spare parts, repairs and construction materials to repair, electric power, fuel, other
products of agricultural).
The
summarized results of the analysis of material costs for crop production at the
agricultural enterprises of Ukraine in 2016-2017 are presented in Table 3.
Table 3: Summarized results of the material costs analysis for
crop production at the agricultural enterprises of Ukraine in 2016-2017
Group |
Amount of expenses, mln, UAH. |
Share according to the sum
of expenses |
Number of positions |
Share according to the
number of positions, % |
||
2016 |
2017 |
2016 |
2017 |
|||
А |
96951.2 |
96962.5 |
73.04 |
68.33 |
3 |
37.5 |
В |
19156.1 |
24500.8 |
14.43 |
17.27 |
1 |
12.5 |
С |
16637.9 |
20440.9 |
12.53 |
14.40 |
4 |
50 |
Total |
132745.2 |
141904.2 |
100 |
100 |
8 |
100 |
Thus, the group A has the largest
share according to the sum of expenses (73.04% in 2016, 68.33% in 2017) and the average share
according to the number of positions (37.5%) in the structure of material costs
of plant production in agricultural enterprises of Ukraine. The group B has an
average share in the structure of material costs according to the amount of
expenses (14.43% in 2016, 17.27% in 2017) and the smallest share according to
the number of positions (12.5%). Consequently, the group C expenditures have
the smallest share in the material costs structure by the sum of expenses
(12.53% in 2016, 14.40% in 2017) and the largest share by the number of
positions (50%).
Therefore,
based on the results of the elements-based ABC- analysis method of material
costs for the crop production in agricultural enterprises in Ukraine, it is
necessary to apply:
·
systematic control of the A-group material costs
(payment of services and job of other organizations and other direct costs,
inorganic fertilizers, seeds and planting materials);
·
periodic
control of the B-group material costs (oil
products);
·
selective
control of the C-group material costs (spare parts, repairs and construction
materials to repair,
electric power, fuel, other products of agricultural).
So, production costs, in particular,
material costs, being the basis for determining the cost of production, require
operational control and analysis of the material resources rational use,
management decision-making and planning of the enterprise future activities.
That is why, it is appropriate to divide them into controlled and uncontrolled
in order to manage material costs; and this practice depends on the authority
of the respective manager. At the same time, it is advisable to classify them
according to the stages of the technological process taking into account the
technological features of the crop production process and in order to control
and regulate material
expenses during each stage of production. So, expenditures should be divided
depending on the technology of growing crops in crop production, which will
enable to create and organize the amount of production expenditures at each
stage of growing crops: basic soil cultivation, before seeding tillage, sowing,
care for crops, harvesting. These stages can be the basis for application in
the cost management system Activity Based Costing model.
Activity Based Costing model in crop
and livestock production could be an important tool for planning and accounting
analysis (KOUTOUZIDOU et al., 2015). Gonzalez-Gomez and Morini (2009)
applied Activity Based Costing model for Cost Calculation and management in a multiproduct
agricultural framework, using ornamental plant cultivation as a case in point.
In their approach internal costs are used instead of accounting data.
The proposed classification of expenditures
at the agricultural enterprises provides an opportunity to cost management) in
agrarian management with the aim of ensuring the effective control of material
costs directly in the process of crop production and sale.
We think that, it is necessary to
apply the rationing of material costs to organize the implementation of
production programs and to calculate the normative cost in the agrarian
management and to use elements of planning, control and expenditures analysis
for drafting plans and programs of an enterprise development.
It has been established that the
vast majority of agricultural enterprises in the Volyn, Khmelnytska and
Ternopil region (47,6%) use a simple method, 9,5 % use a normative method and
3.1% use a redistribution method based on the survey results of the
agricultural enterprises in five districts of Volyn region (Horokhiv district,
Kivertsi district, Lutskyi district, Manivtsi district, Ratnivtsi district),
Khmelnytskyi and Ternopilskyi region. At the same time 55.5% of enterprises use
accounting method of the total expenses and identify the total cost for
internal needs only. As we see, rationing of expenditures is applied less than
in 5% of enterprises. In this case, only some components of expenditures
rationing are applied and not at all types of products. At first, it depends on
the influence of natural and climatic conditions on the production processes,
leading to changes in production technology and the establishment, change and
observance of material and labor expenses norms.
The normative method of expenses
accounting should be used when calculating the crop production. It is based on
the normative cost, which most accurately takes into account the changes in the
production process and enables to carry out operational analysis and make
strategic management decisions. According to Upchurch (2003) Calculating
Actual Cost is "posthumous".
We
offer to calculate the standard cost monthly (quarterly, yearly) on the basis
of the developed and approved norms of raw materials and standards of
mechanized works.
Medium-sized industry expenses
standards for the production of major types of agricultural products (works,
services) are being developed in Ukraine. As for the enterprises themselves,
such crop production norms should be developed in technological maps for the
cultivation of each type of crop (in the agricultural enterprises of the Volyn
region such documents are very rare: they are only in few enterprises). Thus,
only 31% of the researched enterprises develop the expenses norms for the crop
production materials.
The study of practical experience in
the development of technological maps in the number of agricultural enterprises
in Volyn, Khmelnytskyi and Ternopil region showed that 17 agricultural
enterprises of 63 respondents keep such maps. This fact indicates a low level
of development of internal norms for production and the lack of application of
the expenses accounting normative method and normative cost calculation.
We propose the use of budgeting to
organize the control of material expenses in the agricultural enterprises
effectively, playing a leading role in the management system, providing the
process of making managerial decisions with operational information about the
actual indicators of material expenses and their deviation from the budget
values.
The budgeting process is closely
connected with the analysis and control processes, since after the end of the
period for which the budgets have been developed, a comparison between the
actual indicators and the budget is made and, hence the analysis of deviations
and identification of their causes and perpetrators. We believe that detection
of deviations and, therefore, the control itself should be conducted monthly.
This control helps to identify the opportunities for improving the enterprise
financial and production activities and planning directions in general. We can
conclude based on the research results of Volyn, Khmelnytskyi, Ternopil region
agricultural enterprises practice that the expenditures control in agriculture
is currently carried out only by 46% of the investigated enterprises.
Practical use of budget planning
primarily depends on the specifics of the industry itself and the internal
organizational features of each economic entity, and therefore its process will
be of an individual character for each of them.
Application of budgeting in agrarian
management should take into account the features of this sector enterprises
functioning and promote the rational management of cash flows and the adoption
of operational and alternative management decisions.
The enterprise management can accept
and forecast operational, current and strategic decisions with the help of
budgets and, hence influence the change of material resources by making
appropriate adjustments in the technological processes stages of goods (works,
services) production and sale. Unfavorable situations need to be foreseen
before they occur and find ways to prevent and minimize their negative
consequences. At the same time, the ability to respond in a timely manner to
avoid negative consequences and improve overall results depends on the
frequency of budgeting. Thus, Ackoff (2002) expresses the right opinion:
“Wisdom is the ability to anticipate the remote consequences of the actions
being taken, the willingness to sacrifice the temporal benefits for the greater
welfare in future, and the ability to manage what is manageable, but not to be
upset of what is not managed”. Consequently, the future results of the company
depend on the results of the budget planning, that is, the decision affects the
result. Budgeting through the budget system allows us to identify the key
issues of business entities before obtaining actual results and prepare to
receive such results in advance.
Volyn
region agricultural enterprises survey demonstrates that today the process of
budgeting in agriculture is in its initial stage and it is not used by all the
enterprises. So, only 11 enterprises (17.5%) out of 63 respondents use planning
in practice. All at once 6.34% of them comprise revenues and expenses budgets,
and 4.76% keep the budget forms of reporting (Graph 3).
Graph 3: Structure of
investigated agricultural enterprises
on
the basis of drawing up budgets
At the
same time, the features of technological processes of the biological assets
cultivation and agricultural goods (works, services) production, the need to
influence separate stages of the production process, require the introduction of
operational budgeting into agricultural enterprises. Operational and ongoing
managerial decisions on the basis of operational budgets aimed at achieving the
present but not future tasks, are taken. Normative, relevant and irrelevant
expenses are important in this case.
We believe that in
agriculture, operational budgets should also include the budget of material
costs or the provision of material resources in terms of own-made and purchased
stocks (various options: the expenses on seeds, fertilizers at different
prices, types, quantities and depending on the type of plant production). Such
budgets should be based on technological budgets that depend on the technology
of crop production growing: different soil cultivation, different yields, etc.
We have developed a form
fragment of the material expenses flexible budget (for group A - mineral
fertilizers, seeds, plant protection means) (Table 4), to ensure the crop
production, in particular, winter wheat, which involves the use of different
types of material resources for each technological stage and appropriate
technological operation under condition of mechanized soil cultivation.
At the same time, the expenses on seeds, mineral fertilizers and plant
protection means depend on their types and the type of agricultural work and
equipment, given in the note to the budget. The form of the budget is
characterized by several variants of material resources different types of
combination with the choice of their optimal use for the corresponding expenses
amount. The complete form of the budget
should include other types of material resources, including fuel.
Table 4: Material costs Budget of (mineral
fertilizers, seeds, plant protection means), UAH
Agricultural Private Enterprise “Druzhba” Product type-winter
wheat The area of planting 100 hectare
№ |
Technological stages of growing |
Seeds*
|
Mineral fertilizers*
|
Means of protection* |
total, UAh. |
Productivity, c/he |
|||||||||
reproductive, UAH |
Superphosphate |
Potassium-magneziun |
nitrate ammonia |
Carbamide |
Ecoleaf |
Lambardor |
Mars |
Vitavaks |
Phalcon |
Granstar |
Danadim |
||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
1 |
Primary tillage |
|
15600 |
14400 |
|
|
|
|
|
|
|
|
|
30000 |
35 |
2 |
Proceeding tillage |
|
|
|
|
|
|
6820 |
|
|
|
|
|
6820 |
|
3 |
Seeding |
121600 |
|
|
|
|
|
|
|
|
|
|
|
121600 |
|
4 |
Care of crops |
|
|
|
39000 |
1900 |
46000 |
|
|
|
12960 |
6976 |
|
106836 |
|
5 |
Harvesting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
121600 |
15600 |
14400 |
39000 |
1900 |
46000 |
6820 |
|
|
12960 |
6976 |
|
265256 |
* Note. Expenses on seeds,
fertilizers and plant protection means
№ № |
Materials |
unit of measurement |
Number |
Cost, UAH |
Amount, UAH |
|
per unit |
per the entire amount |
|||||
1. |
Mineral fertilizers nitrate ammonia (plowing, vegetation) Carbamide (vegetation) Ecoleaf (vegetation) Superphosphate (plowing) Potassium-magneziun (plowing) |
t t l t t |
2 c/he 0,1 c/he 4 l/he 2 c/he 2 c/he |
20 1 400 20 20 |
1950 1900 115 780 720 |
39000 1900 46000 15600 14400 |
2. |
Seeds reproductive Superelite |
t t |
3,2 c/he 3,2 c/he |
32 32 |
3800 8000 |
121600 256000 |
3. |
Plant protection means Lambardor (seeds poison) Mars (seeds poison) Vitavaks (seeds poison) Phalcon (during growth and earing) Granstar (during growth) Danadim (against weeds) Zinc phosphide (against mice rodents) |
l l l l кг л кг |
0,15 l/t 0,2 l/t 2,5 l/t 0,6 l/he 20 g/he 1 l/he 0,3 kg/he |
4,8 6,4 80 60 2 100 30 |
1421 97 110 216 3488 80 105 |
6820 620,8 8800 12960 6976 8000 3150 |
We think that for a rational combination of the short-term and
operational budgeting, the agricultural enterprise should develop a budget for a
month, which in a result becomes a part of the quarterly (annual) budget and
can be the main working document for managing the current activity. At the same
time, the quarterly budget is compiled on a monthly basis, annual (summary
report) - by quarters at the end of the year, budget for the next year should
take into account budget data for the planned year.
Thus,
it is possible to assess and predict the activities of individual liability
centers and the enterprise on the basis of the result of operational budgets
and hence the financial ones as a whole depends on change of any indicator of
operational budget or the choice of the most optimal variant of management
decisions under the most effective conditions of the various influence factors
combining.
Consequently,
the main task of operational budgeting is to ensure a close relationship
between the resource and financial capabilities of agricultural enterprises in
order to optimize the expenditures and increase the efficiency of the means
production use to achieve the best indicators of the financial budgets.
4. CONCLUSIONS
Thus,
the conducted ABC-analysis of material costs for crop production at the
agricultural enterprises of Ukraine in 2016-2017 makes it possible to
distribute expenditures into A, B, C categories by the amount of expenses as
the chosen parameter.
The
conducted distribution is a confirmation of practical application of the Pareto
principle or the “rule 20 to 80”, the essence of which is that 80% of the values
in qualitative criterion is determined by 20% of the values in the number of
total objects selected for the study. Surely, these limits are only approximate
guidelines and may have some deviations for various objects of analysis. In
this case, 73.04% in 2016 and 68.33% in 2017 of the material expenses for crop
production at the agricultural enterprises of Ukraine amounted to 37.5% (or 3
out of 8) items of these expenditures.
The
conducted ABC-analysis of material costs for crop production at the agricultural
enterprises of Ukraine in 2016-2017 makes it possible to develop recommendations for
types of control over A, B and C groups expenditures and to focus on the most
significant positions in the material expenses compounds. In plant growing
these are the payment of services and job of other organizations and other
direct costs, inorganic fertilizers, seeds and planting materials.
The
authors identified the stages of cultivating crops (basic soil cultivation,
before seeding tillage, sowing, care for crops, harvesting) taking into account
the technological features of the crop production process which became the
basis for application in the cost management system of the Activity Based
Costing Model.
According
to the authors the budget form of material costs for crop production should be
directed at the application of such methods that would provide a reliable
warning and timely detection of economic violations facts connected with the
use of material resources various types, in particular the use of costs
budgeting methodology with the aim to adopt the alternative management
decisions while growing crops.
The
developed form of the material costs budget for the plant production gives an
opportunity to choose the most optimal one among several variants of the
material resources different types of combinations, which will allow applying
the operational control of material resources and making adjustments to the
budget directly during the production of goods. It is possible to accept and
forecast decisions for the next period of the agrarian management on the basis
of detected deviations from the budget data of the current year, taking into
account shortcomings and avoiding them in future.
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