Strategic Cost Management Prototyping Model Development for Mushroom Farming Business and Production : A Case Study of Mushroom Farming and Production Community Enterprise in Phitsanulok Province

Abstract

Strategic cost management enhances a company's competitive advantage through sales pricing strategies, production optimization, cost reduction, and value-added productions. Most community enterprises face challenges in cost calculation and setting prices competitively. This study aims to analyze and design information systems for cost management, including developing and validating a Strategic Cost Management Prototyping Model. Data were collected from a mushroom farming community enterprise in Phitsanulok Province. This study can be defined as mixed method research using in-depth interview and questionnaires.  An analysis of the production process, including packed mushroom spawn, fresh mushroom cultivation, and mushroom chili paste, revealed that the average cost of mushroom cultures is 5.02 baht per block, with a selling price of 9 baht per block. The break-even point for sales volume is 194 blocks, resulting in a profit margin of 44.22%. Additionally, the average cost of fresh mushrooms is 20.15 baht per kilogram, with a selling price of 50 baht per kilogram. To break even, 542 kilograms must be sold, achieving a profit margin of 59.70%. Similarly, the average cost of mushroom chili paste is 14.75 baht per unit, with a selling price of 25 baht per unit. To break even, 225 units must be sold, resulting in a profit margin of 41%.

The strategic cost management prototype was developed and tested using Microsoft Excel. The software prototype facilitates tasks such as recording additions/deletions, expense items, depreciation tracking, and fixed and variable cost calculations. It also aids in computing the average total cost per unit and determining the necessary sales volume to break even. Data visualization through pie charts assists in decision-making regarding setting selling prices and devising profit planning strategies, enabling entrepreneurs to formulate effective sales pricing strategies and plan for desired profit margins. Additionally, the program allows for immediate calculation and display of results using new or adjusted data, accommodating fluctuations in expenses, raw material prices, labor costs, production expenses, and other factors impacting total costs.

This research assists small entrepreneurs, including community enterprise groups, in effectively applying cost information for strategic purposes such as planning marketing strategies, scheduling production, devising profit plans, and establishing product sales prices that align with dynamic business environments.