Application of Job Order Costing and Variance Analysis for Production Cost Control in Printing MSMEs
DOI:
https://doi.org/10.30651/stb.v6i2.34006Keywords:
Job-Order Costing, Cost of Goods Manufactured, Cost Control, Volume Variance Analysis.Abstract
This study aims to analyze the application of the Job-Order Costing method and variance analysis in controlling production costs at Anugrah Photo Printing MSME. This study uses a case study approach with primary data processed based on the components of direct material costs, direct labor costs, factory overhead costs, as well as production targets and actual production. The results show that cost allocation based on the Job-Order Costing method produces a cost of goods manufactured (COGM) of Rp906.00/sheet for 4R photo printing and Rp898.81/sheet for 10R photo printing. Variance analysis shows an unfavorable variance of 17,000 sheets (10 rolls) between the production target (58,800 sheets) and actual realization (41,800 sheets), or a capacity achievement of 71.09%. The application of Job-Order Costing is able to prevent understatement of COGM caused by discrepancies in financial recording. In addition, volume variance analysis reveals a negative (unfavorable) deviation between the planned target and actual production achievement. Reorganizing the classification of Factory Overhead Costs (FOC) and tightening production targets are recommended to improve cost control and business profitability margins. Thus, the Job-Order Costing method can provide information on costs and margins for each order, while variance analysis can be used to evaluate the achievement of production targets.
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