Exploring the product costing methods of micro foodservice businesses in Pagadian city: a case study

This study explores the product costing methods employed by micro foodservice businesses in Pagadian City, focusing on how owners navigate operational challenges, financial constraints, and market competition. Guided by Prospect Theory, the research examines the decision-making processes behind adopting specific costing methods and their implications for business sustainability. Using qualitative methods, data were collected through interviews with micro foodservice owners, revealing a nuanced understanding of their practices and challenges. The findings identified two primary costing strategies: Ingredient-based costing and full costing. These methods highlight the owners’ efforts to ensure accuracy, control costs, and maintain quality despite fluctuating market conditions and limited resources. Key themes emerged, including the prioritization of consistency and quality, the need for flexibility in costing and sourcing, and the impact of external factors such as regulatory requirements and market volatility. Additionally, owners face challenges in tracking costs, ensuring compliance, and optimizing operational efficiency. Based on the findings, practical recommendations were drawn to enhance sustainability and profitability. These include adopting digital tools for cost tracking, implementing staff training programs, promoting supplier partnerships, and leveraging innovative menu strategies. This study contributes to understanding how micro foodservice businesses make strategic decisions under uncertainty and provides actionable insights to support their growth and resilience in competitive markets.