Production Cost Analysis of Rod in Industry Using Activity-based Costing System

Abstract

Abstract

This research aims to study the cost of rod production in an industry. In this study, the rod can becategorized into four different types. Each type has its own production process which makes its productioncost varies accordingly. The price of a rod is typically determined by dealers based on their sellingexperiences. However, when the competitions increase, each company needs to adjust its selling price tocapture a market. This results in disadvantage conditions for a company that cannot self-estimate the realcost of rod production. This research therefore brought up an Activity-base Costing principle to calculatethe cost of rod production. The calculation was done by considering the total cost shared by each activityin the manufacturing process. In this study, the costs of the 4 types of rods were calculated to be 27.97,29.30, 11.99 and 13.70 Baht, respectively.

Keyword : Activity Base Costing