COST ANALYSIS USING ACTIVITY BASED COSTING OF PT.XYZ A HIJAB MANUFACTURING COMPANY LOCATED IN BANDUNG

• Main Author: Safira Kemala, Melati
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83842
• Institution: Institut Teknologi Bandung

Manufacturing is an industry where production is the crucial part of the business. Cost analysis is crucial to manufacturing business since it is needed to calculate each of their products’ unit cost to determine selling price. Without a thorough unit cost calculation, it may lead to information distortion for the management team to make strategic decision for the company. PT.XYZ is a manufacturing company based in Bandung. All this time, they only implement some aspects of Traditional Cost Accounting (TCA) to calculate their products’ unit cost, the method caused some cost to be cheaper (under costing) or more expensive (over costing) than what it is actually spent. Activity Based Costing (ABC) is used in this research to overcome the lack in TCA method, applying the overhead cost to several cost drivers in order to generate a more focused unit cost per product. The methodology used in this research is quantitative descriptive to describe and calculate unit cost of their products. To conduct the analysis, this research used primary and secondary data. Primary data is gathered through direct interview with business owner. Meanwhile secondary data is from financial data of the past month in the operating year of 2024 that was provided by the company. The result shows that unit cost calculated using TCA of Plain Hijab and Mix Colors and Pattern Hijab are over costed while the unit cost of Full Pattern Hijab is under costed. It also shows that ABC method generates a more accurate calculation result because it considers several cost drivers unlike TCA which only use production volume as the only cost driver. Based on the research, it is recommended for PT.XYZ to consider using ABC as a method to calculate their products’ unit cost with a more accurate result. However they also need to consider several limitations that comes along with the method.