Joint Cost Allocation in Determining the Cost of Production in a Small Concrete Manufacturing Enterprise

Hari Karyadi; Galih Wicaksono; Putri Fatmawati

doi:10.61255/jeemba.v4i3.821

Authors

Hari Karyadi Universitas Jember, Indonesia
Galih Wicaksono Universitas Jember, Indonesia
Putri Fatmawati Universitas Jember, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i3.821

Keywords:

Cost Of Production, Joint Cost Allocation, Manufacturing Accounting, Pricing Decision

Abstract

Purpose: This study examines the role of joint cost allocation in determining the cost of production in a small concrete manufacturing enterprise. Accurate cost calculation is essential because it influences pricing decisions, profitability, and business continuity.

Design/methodology/approach: This study uses a descriptive qualitative approach. Data were collected through interviews, observation, and documentation involving the business owner and production workers. The analysis focuses on raw materials, direct labor, manufacturing overhead, and the allocation of joint costs across products.

Findings/Results: The findings indicate that the company does not fully include several production cost components, particularly mixing labor and overhead costs such as electricity, fuel, and equipment depreciation. As a result, the reported cost of production is lower than the actual cost. Recalculation with proper joint cost allocation provides more accurate production cost information.

Originality/Value: This study shows that proper joint cost allocation is important for improving cost accuracy in small manufacturing enterprises. More accurate production cost information can support better pricing, stronger financial management, and more sustainable business decisions

Abstract views: 0 ,

PDF downloads: 0

Downloads

Download data is not yet available.

References

Ahmed, S., & Rahman, M. (2022). Cost management practices and firm performance in manufacturing industries. Journal of Industrial Economics, 14(2), 45–58. https://doi.org/10.1111/joie.12345

Anggraini, D., & Firmansyah, R. (2023). The role of manufacturing overhead allocation in improving production cost accuracy in small manufacturing industries. Journal of Accounting and Business Research, 8(2), 112–123.

Ardiansyah, M., Putra, R., & Wicaksono, A. (2021). Energy consumption and production cost efficiency in manufacturing industries. International Journal of Industrial Management, 6(1), 45–55.

Chen, L., Wang, Y., & Li, H. (2022). Manufacturing cost efficiency and production sustainability in emerging economies. International Journal of Production Economics, 248, 108452. https://doi.org/10.1016/j.ijpe.2022.108452

Creswell, J. W., & Creswell, J. D. (2022). Research design: Qualitative, quantitative, and mixed methods approaches (6th ed.). SAGE Publications.

Fauzi, A., Rahmawati, N., & Yusuf, M. (2021). Analysis of labor cost allocation in manufacturing companies. Journal of Economic and Business Studies, 10(3), 201–212.

Flick, U. (2022). An introduction to qualitative research (7th ed.). SAGE Publications.

Garcia, M., Torres, R., & Delgado, P. (2024). Cost allocation strategies and pricing accuracy in manufacturing firms. Journal of Accounting and Organizational Change, 20(1), 65–82. https://doi.org/10.1108/JAOC-10-2023-0154

Gunawan, H., Santoso, B., & Nugraha, A. (2024). Labor productivity and cost efficiency in manufacturing SMEs. Asian Journal of Management and Entrepreneurship, 9(1), 55–67.

Halim, R., Suryadi, T., & Permata, S. (2024). Overhead cost management and pricing strategy in manufacturing firms. Journal of Financial and Cost Accounting, 12(1), 35–47.

Handayani, S., Putri, D., & Arifin, M. (2023). Cost allocation practices and financial transparency in manufacturing industries. Indonesian Journal of Accounting Research, 11(2), 144–156.

Herlina, Y., Rahman, F., & Putra, S. (2020). Labor cost analysis in manufacturing productivity improvement. Journal of Business and Management Research, 7(2), 88–99.

Hidayat, T., Prasetyo, D., & Amalia, N. (2021). Raw material cost management in small-scale manufacturing enterprises. International Journal of Accounting and Finance Studies, 5(2), 77–89.

Horngren, C. T., Datar, S. M., & Rajan, M. V. (2021). Cost accounting: A managerial emphasis (17th ed.). Pearson Education.

Kurniawati, L., Prabowo, H., & Sari, M. (2022). Manufacturing overhead and its impact on cost efficiency in industrial companies. Journal of Applied Accounting Research, 9(1), 60–72.

Kusnadi, A., & Permana, Y. (2024). Energy efficiency and cost management in manufacturing operations. International Journal of Production Economics Studies, 10(1), 25–36.

Kusuma, R., & Raharja, S. (2024). Cost accounting implementation in small manufacturing businesses. Journal of Management Accounting Research, 8(1), 50–63.

Kwon, H., Lee, S., & Kim, J. (2021). Production cost control and operational efficiency in manufacturing companies. Journal of Operations Management, 67(3), 210–224. https://doi.org/10.1002/joom.1137

Laksmi, N., & Santika, P. (2023). Labor cost identification and operational efficiency in manufacturing sectors. Journal of Business Economics and Management, 12(2), 91–103.

Lopez, J., Martinez, F., & Cruz, A. (2023). Cost accounting transparency and pricing decisions in manufacturing enterprises. Journal of Management Accounting Research, 35(2), 71–90. https://doi.org/10.2308/JMAR-2022-024

Martins, R., & Costa, P. (2021). Pricing strategies and cost management in competitive manufacturing industries. International Journal of Business Economics, 13(1), 22–35. https://doi.org/10.1504/IJBEC.2021.115432

Maulana, D., & Rachman, A. (2020). Manufacturing overhead allocation and production efficiency. Journal of Industrial Accounting, 6(1), 15–26.

Merriam, S. B., & Tisdell, E. J. (2021). Qualitative research: A guide to design and implementation (5th ed.). Jossey-Bass.

Ministry of Industry of the Republic of Indonesia. (2020). Manufacturing industry performance report. Jakarta: Kementerian Perindustrian Republik Indonesia. https://kemenperin.go.id

Nugraha, P., Santoso, R., & Wibowo, A. (2022). By-product costing and raw material efficiency in manufacturing industries. Journal of Cost and Management Accounting, 7(2), 109–121.

Prasetyo, A., & Hidayat, T. (2021). Implementation of full costing method in small manufacturing enterprises. Jurnal Akuntansi dan Keuangan Indonesia, 18(2), 120–134. https://doi.org/10.21002/jaki.2021.07

Prasetyo, B., & Wibowo, A. (2021). The influence of overhead cost allocation on product pricing decisions. Journal of Accounting and Finance Innovation, 9(2), 132–144.

Pratama, H., & Lestari, D. (2022). Raw material cost control in manufacturing companies. International Journal of Business and Accounting Studies, 8(1), 73–84.

Pratiwi, R., & Hapsari, D. (2024). Cost accounting systems and financial performance in SMEs. Journal of Business and Economic Development, 11(1), 67–79.

Pratiwi, S., Prahani, B.K., Suryanti, S., & Jatmiko, B. (2019). The effectiveness of PO2E2W learning model on natural science learning to improve problem solving skills of primary school students. Journal of Physics: Conference Series, 1157(3):32017, 123-130.

Primack, H.S. (2024). Method of Stabilizing Polyvalent Metal Solutions, U.S. Patent No. 4,373,104.

Putra, A., & Dewi, K. (2020). Cost structure analysis in small manufacturing enterprises. Journal of Accounting and Economic Studies, 5(2), 92–103.

Rahardjo, T., Suryanto, H., & Nugroho, A. (2022). Energy cost allocation in production cost accounting. Journal of Industrial Economics, 8(3), 175–186.

Rahman, F., & Putri, L. (2021). Production cost calculation and pricing strategy in manufacturing SMEs. Journal of Accounting and Business Management, 9(2), 98–110.

Riley, K., Morgan, T., & Davidson, P. (2024). Industrial competitiveness and manufacturing sector development in emerging economies. Economic Development Review, 29(1), 10–26. https://doi.org/10.1080/13600818.2024.2301156

Santika, P., Wulandari, A., & Prabowo, H. (2023). Cost of production analysis for improving profitability in manufacturing industries. International Journal of Financial Studies, 11(2), 1–12.

Santoso, B., Nugraha, R., & Wijaya, A. (2023). Cost accounting implementation in manufacturing operations. Journal of Management and Accounting Review, 10(1), 66–78.

Saputra, R., & Mahendra, D. (2022). Direct labor cost analysis in manufacturing productivity. Journal of Business and Industrial Management, 7(3), 120–131.

Sari, D., & Nugroho, A. (2023). Cost management practices in manufacturing companies. Journal of Accounting Practice and Theory, 11(1), 33–45.

Saunders, M., Lewis, P., & Thornhill, A. (2023). Research methods for business students (9th ed.). Pearson Education Limited.

Setiawan, B., Kurniawan, D., & Prasetyo, E. (2022). Production cost analysis in manufacturing industries. Journal of Financial Management and Accounting, 8(2), 115–127.

Sihombing, J., Tarigan, P., & Hutapea, R. (2022). Overhead cost allocation and financial performance in manufacturing firms. Journal of Economic and Financial Research, 9(1), 52–63.

Singh, R., & Verma, S. (2023). Resource efficiency and cost optimization in manufacturing systems. International Journal of Production Research, 61(8), 2451–2465. https://doi.org/10.1080/00207543.2022.2081347

Sutanto, A., & Wicaksono, B. (2023). Energy cost management in industrial production systems. Journal of Sustainable Industrial Development, 6(2), 101–113.

Sutrisno, H., Prabowo, T., & Santoso, D. (2023). Workforce cost management in manufacturing productivity. Journal of Human Resource and Industrial Management, 8(2), 74–86.

Thomas, G. (2023). How to do your case study (3rd ed.). SAGE Publications.

Wahyuni, D., Setiawan, A., & Rahmawati, N. (2022). Cost accounting practices in small and medium manufacturing enterprises. Asian Journal of Accounting Research, 7(3), 289–303. https://doi.org/10.1108/AJAR-04-2022-0098

Widjaja, R., Setyawan, H., & Nugroho, A. (2021). Production cost determination and pricing decisions in SMEs. Journal of Applied Accounting and Management, 9(3), 145–156.

Widodo, S., & Kurniawan, H. (2020). Cost accounting practices in small manufacturing enterprises. Journal of Business and Economic Research, 7(1), 34–45.

Yin, R. K. (2023). Case study research and applications: Design and methods (7th ed.). SAGE Publications.

Khoiruman, M. A. (2025, September). Understanding Internal and External Factors Influencing the Decline of English Language Proficiency among Students of the Banyuwangi Maritime Academy. In Proceeding International Conference on Economics, Business and Information Technology (Vol. 6, No. 1, pp. 623-628).

Yuliana, R., & Prabowo, S. (2022). Labor cost efficiency in manufacturing organizations. Journal of Business and Financial Studies, 10(2), 98–110.

Zhang, Y., Liu, X., & Huang, Z. (2023). Manufacturing transformation and industrial competitiveness in developing countries. Journal of Economic Transformation, 18(2), 40–56. https://doi.org/10.1016/j.ject.2023.100212