Determining Production Cost Using The Job Order Costing Method at A Wood Furniture MSME

Abstract

This study aims to analyze the determination of production costs using the Job Order Costing method at Pak Soleh's wooden furniture MSME in Lubuk Soting Village. The study is motivated by the fact that the existing production cost calculation system remains simple and does not yet account for all elements of production cost, particularly factory overhead cost, a condition that potentially leads to inaccurate selling price determination and affects business profitability. This study employed a qualitative descriptive approach, with data obtained through observation, interviews, and documentation, analyzed using the interactive analysis model of data reduction, data display, and conclusion drawing, followed by production cost calculation using the Job Order Costing method. The results show that the production cost according to the Job Order Costing method is Rp331,667 for a table, Rp241,667 for a chair, and Rp1,461,667 for a two-door wardrobe, while the production cost calculated by the MSME itself was Rp260,000, Rp160,000, and Rp1,500,000, respectively. Discrepancies of Rp71,667 for the table, Rp81,667 for the chair, and Rp38,333 for the two-door wardrobe indicate that the MSME's own calculation has not fully allocated factory overhead cost, so its production cost figures do not yet reflect actual production cost. It is concluded that the Job Order Costing method produces a more accurate production cost calculation because it systematically accounts for all production cost components, and is therefore suitable for implementation at Pak Soleh's wooden furniture MSME as a basis for determining selling price, controlling production cost, and improving business profit.