Cost Analysis and Pricing of Pure Distilled Wood Vinegar and Insect Repellent Spray
DOI:
https://doi.org/10.14456/nrru-rdi.2024.39Keywords:
Cost Accounting, Production Cost, Pricing Strategy, Community ProductsAbstract
Background and Objectives: Appropriate accounting and financial principles can be used to further develop and enhance the added value of developed products. The research objectives were to study the community context, the concept of cost analysis and pricing of original products, the production process for calculating costs at every step, and pricing products to cover the production costs of distilled wood vinegar products and insect repellent spray from wood vinegar of the Ban Mai Nong Sai occupational group, Ban Mai Nong Sai sub-district, Aranyaprathet district, Sa Kaeo province.
Methodology: Participatory action research identified 19 specific informants from the Ban Mai Nong Sai occupational group using a semi-structured interview form with a content validity of 0.92-1.00. Data were collected through in-depth interviews, workshops, and participant observation. Data were analyzed using inductive content analysis, cost calculation methods, markup pricing, and price psychology.
Results: 1) Traditional cost analysis, namely “estimating the appropriate amount of product production”, resulted in inappropriate cost calculation and pricing. 2) Direct cost analysis method showed the production cost of pure distilled wood vinegar at 135.73 baht per liter and insect repellent spray from wood vinegar at 49.08 baht per bottle. For the cost pricing method with a profit margin of 15 percent, the price was set at 156.08 baht per liter and 56.44 baht per bottle. 3) Psychological profit-added pricing method set the price at 169 baht per liter, while pure distilled wood vinegar and insect repellent spray were priced at 69 baht per bottle per product.
Discussion: Direct cost analysis method is suitable for margin pricing based on the psychology of discount perception. It is a simple, uncomplicated method that new entrepreneurs can use to practice and facilitate management in operations.
Recommendations: There should be a study on the efficiency of new entrepreneurs who use the cost analysis and pricing methods from this research to manage resources and costs, which is consistent with the objectives of the project to improve the quality of life and income for people in grassroots communities of Valaya Alongkorn Rajabhat University under Royal Patronage, which has truly achieved success.
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