Analysis of Activity-Based Costing Application in Determining Cost of Goods Manufactured at PT Siantar Top Tbk

Abstract

Accurate determination of the cost of goods manufactured is an important factor in supporting managerial decision-making in manufacturing companies. The complexity of production activities requires a cost allocation method that accurately reflects resource consumption. This study aims to analyze the application of the Activity Based Costing (ABC) method in determining the cost of goods manufactured at PT Siantar Top Tbk. The study uses a qualitative descriptive approach with a documentation study design. The data used are secondary data obtained from the 2024 Annual Report of PT Siantar Top Tbk, the 2024 Financial Statements, books, scientific journals, and relevant previous research. The results show that PT Siantar Top Tbk has complex operational activities, including raw material procurement, production processes, machine use, quality control, packaging, and product distribution. These characteristics make factory overhead costs an important component in determining the cost of goods manufactured. The Activity Based Costing method is considered more relevant than traditional methods because it uses activities as the basis for cost allocation through various cost drivers that are in accordance with resource consumption. The application of the ABC method has the potential to improve the accuracy of cost information, help identify non-value-added activities, and support cost control and more effective managerial decision-making. The research conclusion shows that the Activity Based Costing method can be an effective alternative in determining the cost of production at PT Siantar Top Tbk because it is able to produce more accurate cost information than traditional methods.