STUDYING OF COST CALCULATION FOR ONE TAMBON ONE PRODUCT OF TRANG PROVINCE

Abstract

The success of Community Enterprises is influenced by the accuracy product cost calculation in order to achieve competitive advantage and to be adaptable to economic changes. The research was aimed to examine the completeness of cost calculation for ‘OTOP’ products in Trang province based on the Cost Accounting’s principles and to investigate the product’s pricing method, in comparison with its intrinsic cost. The data collection was conducted by questionnaires and structured interviews from 10 OTOP’s entrepreneurs of 63 products.

The results revealed that direct labor and manufacturing overhead (utilities) were ignored in product cost calculation based on Absorption costing method. Only 23 products (out of 63 products) were correctly calculated based on the Cost Accounting’s principles, whereas 40 products were not comply with the Cost Accounting’s principles. According to product pricing, the majority of entrepreneurs applied competitors based in pricing decisions, the pricing of 25 products were under intrinsic cost. Moreover, those products displayed gross loss margin.