Cost Analysis of Furniture Production: A Case Study at Mebel Barokah 3, Marga Agung Village, Lampung Selatan

Abstract

Analysis of production costs and revenues is important to reduce the risk of financial losses and increase company profits. The results of this analysis can be used as a reference in determining policies that can determine the direction of company development. However, many s mall and medium-sized enterprises (SMEs)  have not done a cost and revenue analysis, which can affect the company's sustainability in the future. The objective of this study was to analyze the total production costs and revenues of an SME in a one-year production period  (August 2018 – July 2019) . The study was conducted by calculating fixed costs and variable costs at Mebel Barokah 3, an SME that produces furniture based on orders. The total revenue, revenue-cost ratio (R/C), and the break even pont (BEP) were also calculated. The results showed that the total production cost was IDR 455.855.730/year and the total revenue was IDR 89.794.270/year. The value R/C reached 1,19 and the value of BEP reached IDR 211.644.908/year. The values indicated that this business was economically profitable and reached BEP at the sales of IDR 211.644.908/year.  The company  should consider the costs incurred, improve work efficiency, and expand the market to achieve business sustainability in the future. Keywords: furniture, income, production costs, revenue, small and medium-sized enterprise