SYNERGY OF ACTIVITY-BASED COSTING AND TARGET COSTING AS A STRATEGIC PILLAR OF COST EFFICIENCY IN OPTIMIZING PROFITABILITY: A CASE STUDY ON PT MOMENTUM VELO INOVASI (2020–2024)
Main Article Content
Anggianto Nugroho
Nofryanti
Holiawati
PT Momentum Velo Inovasi is a clothing manufacturing company that faces the challenge of continuously improving cost efficiency in order to remain competitive and earn optimal profits. However, the company still uses traditional cost calculation methods that are less accurate in charging costs to products. This causes cost information to be inaccurate and affects pricing decisions as well as profit levels. This problem shows that there is a gap between the company's need for more accurate cost information and the methods that have been used. In fact, the Activity Based Costing and Target Costing methods have been proven to be able to provide more accurate cost information and drive efficiency from the early stages of production. Research on the synergy of these two methods in improving cost efficiency and profitability in medium-sized companies is still rare, especially in the convection industry. This research uses a qualitative approach with a case study at PT Momentum Velo Inovasi during 2020 2024. Data was collected through interviews, observations, and documentation. The data analysis technique was carried out by comparing the results of cost calculations using traditional methods, Activity Based Costing, and Target Costing, then analyzed to see the effect on cost efficiency and company profits. The results of the study show that the combined application of Activity Based Costing and Target Costing is able to provide more precise cost information, encourage efficiency in production, and help companies increase profits sustainably.
Abdullah, Firdaus Ahmad Dunia dan Wasilah, 2012, Cost Accounting, Jakarta: Salemba Empat.
Adnan (2013), An Agglomerated Footwear Company. Department of Economics. Bogor Agricultural University.
Affiqah, C., & Fuadi, R. (2019). The application of the target costing method in production cost planning for profit optimization in Acehnese beef jerky MSMEs in Banda Aceh. Student Scientific Journal of Accounting Economics, 4(2), 317-324.
Agus Purwaji et al. 2016. Cost Accounting. Edition 2. Jakarta: Salemba Empat
Ahmad, Firdaus and Wasilah Abdullah. (2009). Cost Accounting. Edition 2. Jakarta: Salemba Four.
Ahmad, K. (2013). Management Accounting Fundamentals: Cost Concepts and Decision Making. Jakarta: Raja Grafindo Persada .
Ahmad, Kamaruddin. 2015. Management Accounting. Jakarta: Rajawali Press.
Ahmadi & Amri Sofyan. 2014. Development of Teaching Materials and Integrative Thematic Learning Models. Jakarta: PT. Library Achievements.
Anthony, Robert N., Govindarajan, Vijay. 2012. Management Control System. Edition 11. McGraw-Hill
Apriliany, S. (2021). Analysis of the Application of Activity Based Costing and Target Costing in Increasing Profit with Just In Time as a Moderating Variable (Case Study on PT. Primarindo Asia Infrastructure, Tbk Year 2017-2019) (Doctoral dissertation, Siliwangi University).
Armanto Witjaksono. 2013. Cost Accounting. Yogyakarta: Graha Ilmu
Astri Wijayanti, 2011." Legal Writing Strategies", Bandung: Lubuk Agung.
Atkinson, A. A., and Robert S. Kaplan. (1998). Issue 4. Advanced Management Accounting. New Jersey: Prentice-Hall, Inc.
Bambang Hermanto. 2016. Calculation of the cost of order (Job Order Costing) of the product "BRKT Number Plate K56" at PT. Rachmat Perdana Adhimetal". WIGA Journal of Economic Research, Vol.6 No. 1. Pp. 55- 56.
Bambang, Sugeng. 2017. Fundamental Financial Management. Yogyakarta: Deepublish
Blocher, Edward J., Stout, David E. and Cokins, Gary, 2012. Cost Management: Strategic Emphasis Edition 5 Book 2. Jakarta: Salemba Four.
Blocher, S. J. (2019). Cost Management A Strategic Emphasis. New York: McGraw-Hill Education.
Bonnafous-Boucher, M., & Rendtorff, J. D. (2016). From "The Stakeholder" to Stakeholder Theory (pp. 1–20). https://doi.org/10.1007/978-3-319-44356-0 _1
Budiman, Riadi.2012. Implementation of the Activity-Based Costing System Method in Determining the Amount of Inpatient Service Rates (Case Study at XYZ Hospital), accessed from ELKHA Journal, Vol 4, No 2, October 2012, on October 15, 2013
Bustami, Bastian, & Nurlela. (2013). COST ACCOUNTING. Yogyakarta: Graha Ilmu.
Carter, K. W. (2013). Book Cost Accounting Book 1 Edition 14 (p. 30). Jakarta: Salemba Four.
Carter. 2006. Cost Accounting, 14th Edition. United States of America: Thomson. Carter, William K. 2009. Cost Accounting. Issue 14. Salemba Four. Jakarta
Chankaew, K. (2024). Unlocking Profit Potential: A Study on Target Cost Management Guidelines for Micro, Small, and Medium-Sized Enterprises. Financial Engineering, 2.
Cinthya, L. N., Larasanty, L., Animah, A., & Isnawati, I. (2019). Analysis of Determination of Cost of Production in Small and Medium Enterprises Bamboo Craftsman Center at Wahana Bambu Willis Gunung Sari, West Lombok. JIAI (Indonesian Accounting Scientific Journal), 4(2).
Cooper, Donald R., and Emory, William C.. (1997). Business Research Methods. Erlangga, Jakarta.
Cooper, R., & Kaplan, R. S. (1988). M Costs Right: Make the Right Decision. Harvard Business Review, 66(5), 96–103.
Cooper, R., & Slagmulder, R. (1997). Target Costing and Value Engineering. Portland, OR: Productivity Press.
Daljono. 2009. Cost Accounting, 3rd edition.Semarang: Publishing Agency, Diponegoro University.
Datar, S. M., & Rajan, M. V. (2018). Horngren's Cost Accounting. Harlow: Pearson Education Limited.
David Wijaya (2017). Financial management concept and its application. Publisher: Gramedia
Drury, G. (2008). Opinion piece: Social media: Should marketers engage and how can it be done effectively? Journal of Direct, Data and Digital Marketing Practice. https://doi.org/10.1057/palgrave.dddmp.4350096
Dunia, Firdaus Ahmad, et al. 2018. Cost Accounting. Jakarta: Salemba Empat Publishers.
Eko Aprilawati Wijirahayu, L. (2022). Analysis of the Application of Activity Based Costing and Its Influence on Company Profits at PT Umegaru: Piksi Ganesha Indonesia Polytechnic, Indonesia. MABISEKA JOURNAL (Management, Business, Economics and Accounting), 1(1), 60-72.
Etale, L. M., & Bingilar, P. F. (2016). The effect of inventory cost management on profitability: A study of listed brewery companies in Nigeria. International Journal of Economics, Commerce and Management, 4(6), 446-455.
Etta Mamang Sangadji and Sopiah, Research Methodology of Practical Approaches in Research, Yogyakarta: CV Andi Offset, 2010.
Evianti, D., Rachman, R., Imaningati, S., & Yusuf, M. (2024). The Important Role of Management Accounting in Optimizing Cost Control and Improving Profitability in the Service Sector. Nomico, 1(4), 105-116.
Fahmi, Irham. 2015. Analysis of Financial Statements. Bandung: Alphabet
Fardhani, N. (2016). Evaluation of the application of the Job Order Costing Method in determining the cost of production on CV. Visual Independent Communication. Journal of Scientific Efficiency Periodicals, 16(4).
Faria, A. R., Ferreira, L., & Trigueiros, D. (2018). Analyzing customer profitability in hotels using activity based costing. Tourism & Management Studies, 14(3), 65-74.
Firmansyah. (2020). Marketing Communication. Pasuruan: CV.Publisher Qiara Media
Freeman, R Edward. and D.L.Reed. 1982.Stockholders and Stakeholders: A New Prespective on Corporate Governance. California Management Review 25(88).
Freeman, R. E. (1984). Strategic management: A stakeholder approach. In Strategic Management: A Stakeholder Approach.
Galic, K. P., Stavlic, K., & Funaric, M. R. (2024). Impact of ABC Method Integration and Target Cost Method on the Reality of Product Profitability Assessment. Montenegrin journal of economics, 20(1), 17-26.
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2018). Managerial Accounting. McGraw-Hill Education.
Hakim, R. D. (2018). The Influence of Tourist Visits and Infrastructure in Improving the Welfare of Coastal Communities. Journal of Economics, 1- 19.
Hansen and Mowen, 2006, Management Accounting, Jakarta, Salemba Empat Publishers.
Hansen, D. R., & Mowen, M. M. (2015). Managerial Accounting (10th ed.). Cengage Learning.
Hansen, D. R., & Mowen, M. M. (2017). Cost Management: Accounting and Control.
Hansen, D.R. and M.M. Mowen. 2000. Cost Management: Accounting and Control. South-Western. Singapore. Translation Team Translation. 2001. Cost Management: Accounting and Control. Book Two. First Edition. Salemba Empat Publisher. Jakarta.
Hansen, Mowen, 2009. Managerial Accounting, Translation by Dewi Fitriasari and Deny Arnor Kwary, 7th ed. Salemba Empat, Jakarta.
Harahap, A. E., Adelina, T., Ali, A., Mucra, D. A., & Ramadani, D. (2021). The physical properties of wafers are made from cabbage vegetable waste silage with different types of packaging and concentrate compositions. Bulletin of Tropical Agriculture, 2(1), 53- 60.
Hariyani, Diyah. 2018. "Management Accounting Theory and Application", Aditya Media Publishing, Malang.
Hartati, N. (2017). Cost Accounting (T. D. P. Setia (ed.); First). CV Pustaka Setia.
Hery. 2016. Analysis of Integrated and Comprehensive Financial Statements. Jakarta: Grasindo.
Hilton, R. W., Maher, M. W., & Selto, F. H. (2014). Cost Management: Strategies for Business Decisions (5th ed.). McGraw-Hill Education.
Horngren, C. T., Datar, S. M., & Rajan, M. (2012). Cost Accounting: A Managerial Emphasis (14th ed.). Pearson Education.
Horngren, Charles T., Datar, Srikant M., & Rajan, Madhav V. (2018). Cost Accounting: A Managerial Emphasis (16th edition). Pearson Education. Inc.
Horngren, Charles T., et al. 2015. Cost Accounting: A Managerial Emphasis, Global Edition 15th Edition. Person.
Horngren, Charles T., Srikant M. Datar., and George Foster. (2006). Cost Accounting. Twelfth Edition. Pearson Education, inc., Upper Saddle River, New Jersey. https://doi.org/10.1017/CBO9781139192675
Idrawahyuni, I., Adil, M., Nasrun, M., & Herianto, D. A. (2020). Analysis of the Application of Target Costing as a Production Cost Control System (Case Study on UD. Winda, Gowa Regency, South Sulawesi Province). Equilibrium: Scientific Journal of Economics, Management and Accounting, 9(2).
Ihyaul Ulum, 2017. Intellectual Capital: Measurement Model, Disclosure Framework & Organizational Performance. 3rd edition. University of Muhammadiyah Malang. Hapless. 65144.
James M. Reeve, Carl S. Warren, Jonathan E. Duchac. Introduction to Indonesian Adaptational Accounting. Jakarta: Salemba Empat, 2009.
Jaradat, Z. A., Taha, R. B., Rosliza Binti Zin, M., & Zakaria, W. Z. W. (2018). The use of Management Accounting Practice In Jordan small and Medium Sized Enterprice. Academy of Accounting and Financial Journal, 22(2), 1– 19.
Kaplan, R. S., & Cooper, R. (1998). Cost and Effect: Using Integrated Cost Systems to Drive Profitability and Performance.
Mowen, M., Hansen, D., & Heitger, L. (2017). The Basics of Managerial Accounting. Salemba Empat.
Priatna, H. (2016). Measurement of Company Performance with Profitability Ratio. Scientific Journal of Accounting, 7(2), 44–53.
Purwaji. (2017). Research Methods. Ghalia Indonesia.
Sunyoto. (2013). Accounting Research Methodology. Bandung: PT Refika Aditama Member of IKAPI.
