COMPARISON OF COSTING METHODS IN CINNAMON CUTTS PRODUCT CV. ALAM MANIS FOR PRICING DECISION

Abstract

This research is done at CV. Alam Manis for determining which costing method and pricing method would be applied for cinnamon cutts product pricing decision. To achieve goal of the research, it began with 70,000 kg cinnamon sample raw materialfor processing observation from sorting stick until packaging activity. This research calculated the total production of cinnamon cutts by using both traditional method and activity based costing method by using cinnamon cutts grade AA eight centimeters product as example. From traditional costing method,the total amount of production cost of cinnamon cutts grade AA eight centimeters was IDR 1,062,491,596.66 and by activity based costing method has been resulted IDR 991,871,908.00. From the total production cost presented under ABC method, the selling price for cinnamon cuts grade AA eight centimeters per kg with cost plus pricing resulted IDR 48.582,94 per kg, mark up pricing resulted IDR 45.246,04 per kg, and based on market demand based determined by client with amount IDR 47,125 per kg. The recommendation will be provided by delivering explanations which costing method and pricing method should be applied for client’s pricing decision.