Employment (cost accounting)

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Employment (or capacity utilization , production quantity ; English capacity utilization ) is in the cost accounting of companies a cost influencing variable , the extent of the used capacity indicating in a certain period.


Can an entrepreneur must measure how its factors of production by the actual production to full capacity. This applies in particular to the factors work and the production machines . Employment is an internal company key figure that is usually not published. With the help of the degree of employment one could carry out utilization-related company comparisons. Benchmarks of employment, the number of products produced per unit of time, the output of drinks or the number of hours worked can be.

In 1954 Konrad Mellerowicz made a distinction between the degree of employment and the degree of capacity utilization , because the former is time-related and the latter is performance-related. It follows that fluctuations in the intensity have an effect on the degree of employment, but not on the degree of capacity utilization. In addition, he is of the opinion that the degree of capacity utilization relates only to “productive” departments of a company, while the degree of employment can be determined for the entire company.

According to Mellerowicz, the degree of capacity utilization results from this

The quantitative intensity fluctuations are taken into account in the degree of performance.

level of employment

Today there is no longer any distinction between the degree of employment and the degree of capacity utilization. The degree of employment is the product of the degree of utilization and the degree of load. The degree of efficiency indicates how long production actually took place during the theoretically possible production time:

The load level is the ratio between the actual output per unit of time and the target output per unit of time:

This results in the formula for the degree of employment:

or simplified:

The degree of employment expresses the relative capacity utilization of a company in a certain period of time. For example, the level of employment in general in passenger transport and freight transport can be determined by the fixed number of seats and the transportable amount of freight, and especially in civil aviation for each type of aircraft . The IATA, as the umbrella association of airlines, publishes the occupancy rates of individual airlines and distinguishes between two business indicators for capacity utilization, namely the seat load factor ( passenger aviation ) and the load factor ( air freight ). On this basis, Lufthansa reports in its annual report for 2015 that its seat load factor (seat kilometers, i.e. sales volumes) was 80.4% and that with 66.3% load factor (tonne-kilometers) it is Europe's leading cargo airline . This also shows that Lufthansa still has around 19% or 33% market potential worldwide due to underutilized capacities.

Underemployment, normal employment and full employment

The relative capacity utilization enables a statement to be made as to whether a company is under-utilized, normally utilized or fully utilized. The corresponding terms underemployment or full employment have identical content in economics ( labor market policy ) and are used more often there. Underemployment is a level of employment at which the existing potential employee is not fully employed; this also applies to machines. Short-time work is a typical feature of underemployed companies. An employment rate of 100% is only possible with a completely trouble-free production process; However, it should be borne in mind that operational bottlenecks usually prevent 100% employment. Underutilization is <50% of the capacity, normal utilization is between> 50% and <80%, while full utilization can be said to be> 80% of the capacity.

As normal employment for purposes of the standard cost that employment to look at the existing, taking into account constraints and unavoidable malfunctions can be achieved.

Employment fluctuations and cost history

The operational capacity utilization is not always constant, but is subject to fluctuations due to demand and production. Erich Gutenberg made it clear that there are types of costs that vary with the employment of the company and costs that are indifferent to fluctuations in employment. Employment-dependent costs are accordingly called variable costs ; the costs that remain unchanged in the event of fluctuations in employment are the fixed costs .

Profits are not generated in every phase of company employment ; Underemployment is usually loss-making. If the level of employment continues to rise, the break- even point is reached. This critical level of employment ( break even point ; "critical amount") is the level of employment at which profits are made for the first time. The level of the critical level of employment depends in particular on the type of company, its depth of production and its financing structure. Fixed-cost or capital-intensive companies usually have a high critical level of employment, while stock-intensive or equity-intensive companies have a comparatively lower critical level of employment. The first group always needs high capacity utilization in order to reach the break-even point and therefore has more employment risks than the second group; this is the leverage effect of the "operating leverage". When the breakeven point is exceeded, the fixed costs are distributed over a larger number of items, which means that the unit costs decrease and the profits increase ( fixed cost degression ).

In the case of declining employment, on the other hand, the problem arises that the constant fixed overhead costs are excessive when distributed among the cost units, so that only those parts of the overhead costs corresponding to an average employment may be offset. Associated with this is a behavior of costs that is called cost retentiveness . Remanent costs do not decrease proportionally with a decline in employment.

The overheads incurred in the amount of underemployment are called idle costs in process costing , while the overheads incurred on employment are called utility costs . A company suffering from underemployment will be inclined to offer its services on the market at below price as long as it still generates profit margins for fixed costs.

Degree of responsiveness

The degree of responsiveness indicates the ratio of a percentage change in costs to a percentage change in employment:

The degree of responsiveness determined provides information about the properties of the cost trend. A degree of responsiveness shows a proportional cost trend, because costs and employment change in the same ratio to each other. shows a degressive cost trend, a progressive cost trend.


  • L. Haberstock , V. Breithecker: cost accounting. Part 1: Introduction. 13., rework. Edition. Schmidt, Berlin 2008, ISBN 978-3-503-10699-8 .
  • HJ Hoitsch, V. Lingnau: Cost and revenue accounting. A controlling-oriented introduction. 3., rework. and exp. Edition. Springer, Berlin et al. 1999, ISBN 3-540-66296-0 .
  • G. Kugler among others: Business administration of the company. 11 Cost and performance accounting of the industrial company. 21st edition. Verlag Europa-Lehrmittel, Haan-Gruiten 2005, ISBN 3-8085-9227-3 .
  • K. Olfert: cost accounting. 16th edition. Kiehl, Herne 2010, ISBN 978-3-470-51106-1 .

Individual evidence

  1. Konrad Mellerowicz: General Business Administration. Volume 2, 1954, p. 44 f.
  2. ^ Carl-Christian Freidank, Sven Fischbach: Exercises for cost accounting. 2002, p. 107.
  3. Lufthansa Group: Annual Report 2015, p. 198.
  4. Lufthansa Group: Annual Report 2015. p. 50.
  5. ^ Hans Kasten: Elasticity of work and the course of employment. 1959, p. 62.
  6. ^ Carl-Christian Freidank, Sven Fischbach: Exercises for cost accounting. 2002, p. 108.
  7. Wolfgang Becker / Stefan Lutz, Gabler Compact Lexicon Modern Accounting , 2007, p. 167
  8. Erich Gutenberg: Introduction to Business Administration. 1958, p. 67.
  9. ^ Heinz J. Aubeck: Business Mathematics for School and Training. 2009, p. 224.
  10. ^ Wilhelm Frick: Accounting according to the company law. 2007, p. 80.
  11. ^ Jürgen Kagelmacher: Service contracts and balance of functions in insurance supervisory law. 1989, p. 56.