Analysis Of Cost Of Production Using Variable Costing Method In Msme Fruit Salad Products "Deanova's Salad”.

Abstract

The main aim of establishing a company is to generate profits, and achieving this objective requires careful planning, especially regarding the cost of producing goods. Employing the variable costing method is a strategic approach to boost profits. This method entails adding up raw material costs, direct labor expenses, and factory overhead costs to determine the cost of goods manufactured. Deanova's fruit salad Micro, Small, and Medium Enterprise (MSME) is a culinary business that recently started operating, with less than a year of experience. Historically, this business did not categorize costs by type. Instead, when setting prices, the MSME adjusted them based on prevailing market rates. Previously, in calculating business income, the approach involved summing up costs incurred and then subtracting the cost of revenue. This method left the business unaware of the individual profit margins for each product. This study utilizes qualitative research methods with a descriptive approach, gathering primary data directly from the object of research through direct observation and interviews with the owner of Deanova's Fruit Salad UMKM. According to the variable costing method calculation, the total cost of production is IDR 12,752. There is a variance between the owner-set price and the variable costing method, specifically IDR 15,000 - IDR 12,752, resulting in IDR 2,248. This difference indicates that the selling price aligns with the variable costing method, making the MSME profitable. Moreover, the fruit salad product not only ensures profitability but also positions the MSME to achieve   superior   profits   compared   to   similar businesses in the market. This competitive advantage  enhances the MSME's ability to compete with similar establishments in the market