PKM IMPROVING UNDERSTANDING OF CALCULATING PRODUCTION COSTS AND PRODUCT SELLING PRICES

This Community Service Program (PKM) aims to improve the understanding of farmers and small business owners in Nagari Pasie Laweh, Sungai Tarab District, Tanah Datar Regency, regarding the calculation of the cost of goods produced (HPP) and determining product selling prices. To date, most business owners still determine selling prices based on estimates, which poses a risk of inaccurate pricing, either too low or too high. The PKM activities were carried out through socialization, counseling, and direct training on the components that make up the HPP, including raw material costs, direct labor costs, and factory overhead costs. Participants were also introduced to two methods of determining production costs, namely full costing and variable costing, as well as practical ways to calculate selling prices based on the HPP that had been obtained. The results of the activity showed an increase in participants' understanding in identifying production costs and determining selling prices more accurately. Participants were also more motivated to apply these methods in their businesses to be able to increase efficiency, profits, and product competitiveness. Thus, this PKM contributed to equipping the community with basic managerial skills that support the sustainability of businesses based on local potential.