STANDARD COSTING AND VARIANCE ANALYSIS AS A TOOL FOR RESOURCE-EFFICIENT PRODUCTION IN A FOOD MSME: EVIDENCE FROM DOYAN JAGUNG MOZARELLA, PADANG

Abstract

Food micro-enterprises rely on a handful of perishable and often costly ingredients, so small gaps between planned and actual ingredient use quickly become financial losses and avoidable food waste. This study examines how standard costing and variance analysis can show where such a business over- or under-plans its costs. It uses 2023 production cost data from Doyan Jagung Mozarella, a corn-based culinary business in Padang, Indonesia, taken from an open-access case study and fully recalculated. Price, quantity, wage-rate, efficiency and overhead variances were computed for direct materials, direct labor and manufacturing overhead. Actual cost was Rp150,294,612 against a standard of Rp162,366,758, a favorable variance of Rp12,072,146 (7.4%). Materials explain 43.3% of the gap, overhead 38.8% and labor 17.9%. Quantity, not price, drives the material variance (68.7%), and butter and mozzarella alone account for 63.5% of it. Overhead deviates from standard by 19.0%, including fixed items that should hardly move. Because all 16 cost lines finished below standard, the results point to cushioned standards as much as to genuine efficiency. When sales, social media and courier wages are treated as selling costs, production labor deviates by only 3.1%. The study concludes that small food businesses should rebuild standards from recipe cards and measured hours, separate production costs from selling costs, and track ingredient quantity per batch as a simple indicator of resource efficiency.