Application of Activity-Based Costing in Rice Mills to Enhance Efficiency and Competitiveness in Pinrang Regency

Abstract

This study aims to analyze production cost structures and the application of Activity-Based Costing (ABC) as a basis for determining the cost of goods manufactured in rice milling businesses in Pinrang Regency. A descriptive approach was employed, utilizing primary data obtained through observation, interviews, documentation, and production cost reconstruction. The data covered 65 production batches across three research subjects—PB Aura, UD Ras Tani, and CV Cahaya 277—during March 2026. Analysis involved activity identification, cost pool grouping, cost driver determination, and the calculation of production costs and initial cost of goods manufactured. Results indicate that raw unhusked rice constitutes the largest cost component, accounting for 97.62% at PB Aura, 97.54% at UD Ras Tani, and 96.82% at CV Cahaya 277. The cost of goods manufactured (after accounting for by-product credits) was Rp10,479/kg, Rp10,222/kg, and Rp10,347/kg, respectively. Activity mapping revealed differences in resource consumption, notably the polishing activity at PB Aura, which was absent in the other two mills. Drying, milling, sorting, polishing, and packaging activities served as the basis for establishing cost pools and cost drivers. Preliminary findings suggest that ABC has the potential to yield more accurate cost allocations and support cost control and pricing decisions. Final ABC calculations and the analysis of differences compared to conventional methods are currently being finalized.