Calculation of Production Prices Using the Full Costing Method and Cost of Sale Using the Cost Plus Pricing Method on D'atabajo Coffee

ABSTRACT


INTRODUCTION
Business development in Indonesia is expanding, covering a wide range of business scales from micro to large industries, spread across rural and urban areas.This growth is driven by product innovation and uniqueness, allowing local products to compete with foreign products in an increasingly competitive market.The level of competition continues to increase regardless of which companies have been able to survive or are just starting their business [1].Companies that produce a product in the production process need facts about how much cost is used in issuing these products and at the same time are expected to calculate and determine the right cost of goods sold and the products produced.In addition to satisfying human needs, namely to get reasonable profits and be able to meet consumer needs [2].
In the context of sales, setting the selling price is critical because the price must cover all production costs and provide the desired profit for the company.Determining the right selling price affects the sustainability of the company, and the cost of production is a key aspect in this process.In addition, in determining the selling price of products, one of the most commonly used approaches is Cost Plus Pricing.Cost plus pricing is a simple method that is most commonly used to determine the selling price of a product by adding the total cost of production to its margin value [3].The cost plus pricing method is a method of calculating the selling price by using a total cost formula consisting of production and non-production costs plus the desired markup or profit percentage.By using this approach, we have a greater chance of achieving cost efficiency, because the profit we want is directly proportional to the total costs incurred by the company [4].
Before determining the cost of goods sold, the first thing to do is determine the cost of goods produced.The cost of goods manufactured is a list of costs incurred by the company in a certain period, and the correct calculation of the cost of goods can reduce uncertainty in setting the selling price.This study pays attention to cost elements, such as raw material costs, direct labor costs, and factory overhead costs.The process of determining the cost of goods also includes selecting the appropriate method, one of which is the full costing method.Full costing is a production cost method that takes into account the determination of costs such as raw material costs, direct labor costs and factory overhead costs, both fixed and variable behavior [5].
In general, the calculation of cost of goods sold and cost of production in micro businesses is still done manually or still uses simple calculations and is not in accordance with accounting principles [6].This was also found in the D'atabajo Coffee microbusiness.D'atabajo Coffee is a business that sells various types of coffee, which was established in 2021, located in Gorontalo Village, Labuan Bajo, Komodo District, West Manggarai Regency.During management until now, a problem has occurred, namely that the correct value of the cost of goods produced is not yet known.For 2 (two) years this business has been running, the calculation of the cost of goods produced by coffee still uses simple calculations and is not in accordance with accounting principles [6].
So the problem of calculating the value of the cost of goods produced, which can affect the determination of the selling price and the resulting profit, is the main focus of this research.Price competition in the coffee product market demands accuracy in the calculation of the cost of goods produced and the cost of goods sold.Small errors in these calculations can have a significant impact on the profit earned by the company.Therefore, this study aims to calculate the cost of production using the full costing method and the cost of goods sold using the cost plus pricing method at d'atabajo coffee and evaluate the impact on sales profit.

LITERATURE REVIEW
Based on the research title taken about the application of the full costing method in calculating the cost of production to sales profit, the theoretical study is as follows:

Cost Accounting
Cost accounting consists of two words, namely accounting and cost.Accounting is the art of collecting, identifying, recording transactions, and events related to finance, so as to produce financial information or a financial report that can be used by interested parties, [5].And cost is a sacrifice of economic resources that can be measured in units of money that has occurred potentially to achieve certain goals [7].
According to [8], cost accounting is a special part of accounting that results in determining and controlling costs, which is the definition of cost accounting.Therefore, cost accounting is a science that emphasizes how an organization or company determines and controls expenses, or costs as they are called in accounting language.Cost accounting is a branch of accounting and a management tool that systematically monitors and records cost transactions and presents cost information in the form of cost reports.
Based on some of these definitions, it can be concluded that cost accounting is an integral part of financial and management accounting.Its main focus is on presenting details about the costs associated with the production of goods or services.Through cost accounting, management can obtain indepth information about the cost elements involved in a production process.This information is not only the basis for calculating the cost of production, but also an effective tool for controlling the company's operations.By understanding the cost structure in detail, management can make more informed decisions and plan appropriate strategic steps to optimize company performance in the future.

Cost Of Goods Manufactured
According to [9], cost of goods is an allocation of costs that supports certain management objectives.This means that determining the cost of goods depends on certain management goals or desires to be achieved.As well as [8], production costs include production costs using raw materials, direct production costs, direct employee wage costs, and indirect production costs, as well as a collection of all costs used to produce an item.The above costs are directly related to the production process.
This statement indicates that the purpose of a company is to be able to accurately calculate the cost of production, so that the company can evaluate the selling price decisions that have been taken previously.By reanalyzing the selling price that has been decided, the company can assess whether the decision can have the desired result or impact in accordance with the company's financial objectives.This is important to ensure that the selling price not only covers production costs, but also provides the expected profit and avoids negative impacts on the company's financial situation.
The process of determining the cost of goods also includes choosing the appropriate method, one of which is the full costing method.The Full Costing Method is a method of determining the cost of production that calculates all elements of production costs into the cost of production, consisting of raw material costs, direct labor costs, and factory overhead costs, both variable and fixed, [10].According to [8], it is simple to use the following formula: There are several types of costs based on the definitions of several accounting scholars, as follows:

Cost of Goods
1) Raw Material Costs, which are costs directly related to the materials used in the production process.For example, raw materials or main materials used to make products.2) Direct Labor Costs, are direct costs associated with labor directly involved in the production process.For example, the direct wages of factory workers involved in making products.3) Factory Overhead Costs, are factory overhead costs that include various fixed and variable costs incurred in the production process, such as machinery depreciation costs, factory electricity costs, and factory maintenance costs.

Cost Of Goods Sold
According to [11], states that the meaning of cost of goods sold is actually the price of the principal which means the goods sold.However, the principal suddenly changes its function to become an explanatory price so that the cost price arises.According to [12], argues that cost of goods sold is one of the components of the income statement, which is of concern to company management in controlling company operations.In terms of its determination, management sets the sales price based on the cost of production obtained and then adds other costs related to sales.
According to researchers, cost of goods sold describes the amount of expenses incurred either directly or indirectly in the process of producing a product or providing services.In general, cost of goods sold includes raw material costs, direct labor, and production overhead costs.Cost of goods sold is a key factor in determining sales profit, because sales profit is obtained by subtracting cost of goods sold from sales revenue.Therefore, the more efficiently a company manages its cost of goods sold, the higher the potential profit that can be achieved.Effective management of the components of cost of goods sold is an important strategy in increasing the profitability and competitiveness of the company in the market.

Cost Plus Pricing Method
According to [3], Cost Plus Pricing is a simple approach that is most commonly used in setting the selling price of a product by adding the total cost of production to its margin value.Cost Plus Pricing is also a simple and commonly used pricing method, where the selling price of a product is determined by adding the total cost of production to the desired profit margin value.This approach ensures that the entire cost of production, including raw material, labor, and overhead costs, is covered, while the margin provides the desired profit per unit.An additional advantage of this method is its ability to accommodate fluctuations in production costs and provide transparency into the profit margin earned.Although simple, Cost Plus Pricing can provide a stable basis for determining a product's selling price.

METHODS
The research method that can be applied in this research is qualitative research.
Qualitative research method is a research method that is descriptive, refers to data, utilizes existing theory as supporting material, and produces a theory [13].Then the place and time of the research to be carried out is at the D'atabajo Coffee business located in Pasar Baru, Gorontalo Village, Labuan Bajo, Komodo District, West Manggarai Regency.
Furthermore, the types of data used in this study are qualitative data and quantitative data.Qualitative data in the form of business history and accounting policies applied in the business as well as information needed to support this research.Meanwhile, quantitative data is in the form of production cost data and selling price calculations [14].The data source that can be used in this research is primary data.Primary data is data obtained directly from the object of research.The data collection techniques used are: Interview, which is an activity carried out by the author to obtain information directly by asking questions to the source.Also, documents are records of an event, which can be in the form of writings, pictures or monumental works of a person [15].And the necessary data analysis techniques include data collection, data validity testing, data analysis, and drawing conclusions.focus on robusta anggarai coffee, but also expands its reach by including arabica coffee in its offerings.The ultimate goal is to create a coffee product that not only delights the palate of the local community, but also attracts the attention of tourists coming to Labuan Bajo.With coffee quality remaining the main focus, D'atabajo Coffee is a brand that represents dedication to local coffee while delivering a unique experience to its consumers.

Calculation of Cost of Goods Produced
This research focuses on the D'atabajo Coffee business.The calculation of production prices is carried out on 2 (two) types of coffee, namely arabica coffee and robusta coffee, as set out in the following table: Source: Researcher (2024)

Calculation of Cost of Goods Sold
After obtaining the cost of production, D'atabajo Coffee does not calculate the cost of goods sold because they assume that the cost of production can determine the selling price of the product.D'atabajo Coffee sets the selling price for arabica coffee at IDR 60,000 and robusta coffee at IDR 40,000.From the results of this study, researchers tried to compile the cost of goods sold using the cost plus pricing method, with the calculation results as follows: The impact of different cost of production calculations between the traditional method and the full costing method on D'atabajo Coffee directly affects the sales profit per unit of their product.It can be seen that by using the full costing method, the selling price of arabica coffee increased by IDR 2,711 per unit, while for robusta coffee it increased by IDR 4,659 per unit, compared to the previously set price.This indicates that the use of the full costing method can help increase the profit margin per unit of product, which in turn can increase the total sales profit per specific period.
Suggestions from this study are that it is important for D'atabajo Coffee to consider the full costing method in setting their selling prices in order to maximise sales profit and future research can expand the scope of analysis by identifying other factors that may affect cost of production and sales profit, as well as considering appropriate marketing strategies to increase market share and profits.

ACKNOWLEDGEMENTS
With great respect and simplicity, I would like to express my sincere gratitude to all those who have provided support and assistance in the completion of this research.
First of all, I would like to express my deepest gratitude to my parents who have always provided support, motivation, and boundless love in every step of my life.Thank you also to my supervisor who has provided invaluable guidance, direction, and inspiration in completing this research.As well as, to friends who always provide enthusiasm, support, and extraordinary cooperation, without you, this achievement would not be realized.Thank you for all the prayers and efforts you have given.Hopefully the good that has been done can be part of the blessings for all of us.

Table 1 .
Calculation of Cost of Goods Produced for Arabica

Table 2 .
Calculation of Robusta Cost of Goods Produced

Table 3 .
Calculation of Cost of Goods Sold for Arabica Coffee

Table 4 .
Calculation of Cost of Goods Sold for Robusta Coffee