Simulation Depending Profitability of Sales Variable Costs on Forming Functions Marginal Profit Enterprise in Reengineering

Abstract

The article defines the concept of "variable costs", describes the value of variable costs in the formation of marginal income of the enterprise and proposes a model of costing products with allowance for variable costs investigated in terms of re-engineering internal business processes. It is established that when classifying costs by product types or cost carriers, cost grouping is carried out according to production volume. The American and French models of variable and fixed income financial statements are presented. There are some controversial issues when using margin calculations. The article deals with Bernoulli differential equation, which describes the economic process of formation of sales. Functional dependence of sales on variable sales costs is considered. The dependence of the marginal income of the enterprise on variable costs is also mathematically substantiated. The maximum value of the marginal income of the enterprise is found with the optimal value of the level of sales, which depends on the variable costs. It is shown that the rate of change in marginal revenue is inversely proportional to the difference between the average price of the nomenclature of products produced and its average cost. A differential equation system is considered, the solution of which is the optimal value of the sales function, which is related to the maximum value of the marginal revenue, depending on the variable costs of the sales function. The formula of profitability of the sales function from variable costs is deduced. It is shown that the optimal value of the sales function, which is achieved with the maximum value of the marginal revenue of the enterprise, can be obtained through a statistical study of the level of consumer demand, which determines the level of sales that the company could obtain in the case of approaching at additional variable costs, calculating the value of the maximum possible level sales of the enterprise, which depends on the market share in the field of market relations, as well as on the volume of production.