UNIT COST AND BREAK-EVEN ANALYSIS OF DATA COMMUNICATION PROVIDER COMPANY CASE STUDY: PT XYZ

• Main Author: Arif, Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/78577
• Institution: Institut Teknologi Bandung

Information and communication technology (ICT) has played an important role in the economic transformation of countries including Indonesia. For the year 2013, the International Data Corporation (IDC) predicts the technology will play an integral role in traditional sectors. Along with that, there will be significant impact in data communication network market industry, which eventually leads to market competition. One of major challenges of data communication network providers is maintaining the profitability of the company. There are two indicators to maintain the profitability of the company: unit cost and the break-even point. This research conducted cost analysis at PT XYZ to find the unit cost and break-even point. PT XYZ is one of major data communication network provider specialist for business enterprises since 1988. There are three kinds of products: terrestrial (leased line, metro ethernet, leased circuit, packet switched, frame relay, IPVPN), VSAT, and internet (dedicated internet and broadband internet). They are offered in same unit: bandwidth –transmission capacity of a computer network or other telecommunication system stated in MB/s. The methodology framework starts with cost classification, which divides the cost incurred into production cost and nonproduction cost. Second, cost allocation distributes the classified cost into each product to find total cost of each product. Third, the unit cost is calculated. Along with that, this research determined the cost behavior whether fixed cost or variable cost using account analysis. Finally, the break-even point is calculated using weighted-average contribution margin approach. Based on the framework, this research discovered the unit cost product. The highest unit cost was packet switched (IDR 337,419,354 / MB/s), followed by VSAT (IDR 43,812,106 / MB/s) and frame relay (IDR 19,921,313 / MB/s). The highest unit profit was also packet switched (IDR 135,377,765 / MB/s), followed by frame relay (IDR 12,003,682 / MB/s) and VSAT (IDR 11,551,289 / MB/s). In conclusion, all products were profitable at 4.0%-50.6%. Last, the PT XYZ break-even point is 143,267 MB/s and the break-even point of each product is also determined.