Analysis of the Effect of Cost of Production

Oct 13, 2025 by thesweetdesigns.com 59 views

The Effect of Cost of Production on Determination of the Selling Prices of Arabica Coffee: Case Study in Takengon

In the world of agriculture, especially in coffee cultivation, the cost of production (HPP) plays a very important role in determining the selling price of the product. The cost of production encompasses various factors such as labor costs, plant maintenance, and other agricultural inputs that contribute to the overall cost of producing Arabica coffee. In Takengon, Central Aceh Regency, Arabica coffee farmers face challenges in setting their coffee selling prices to PT Volcopi Indonesia. This study aims to analyze the effect of HPP on the determination of the selling price of Arabica coffee, with a special focus on the role of the cost of external failure (external failure costs) as a moderating variable.

Research Background

This research is associative causal, where researchers use secondary data obtained from coffee farmers in Takengon who sell random coffee to PT Volci Indonesia in the 2015 to 2018 period. Using the census method, all farmers who sell to companies are included in this study. The analysis used is multiple regression, by testing the effect of HPP variables on the selling price, as well as how moderating variables play a role in this analysis. The research aims to provide insights into the factors that affect the selling price of Arabica coffee and to identify opportunities for farmers to improve their pricing strategies.

Analysis of the Effect of Cost of Production

The results of the regression analysis show that the cost of production has a positive and significant influence on the determination of the selling price of Arabica coffee. That is, the higher the HPP issued by farmers, the higher the selling price set for the random coffee. This is very logical, considering that farmers need to cover the production costs incurred in order to get a profit. The cost of production is a critical factor in determining the selling price of Arabica coffee, and farmers need to pay more attention to this factor in order to set a competitive selling price.

However, more attractive results arise when external failure costs are checked as moderating variables. External failure costs refer to costs incurred due to products that do not meet quality standards after being sold. This study found that the cost of external failure was not able to significantly moderate the selling price. This shows that although the cost of failure can affect the quality of the product, the impact is not large enough to affect the selling price directly in this context. The cost of external failure is an important factor in maintaining product quality, but it does not have a significant impact on the selling price of Arabica coffee.

Implications for Farmers and the Coffee Industry

These findings provide important insights for coffee farmers in Takengon and the coffee industry in general. First, farmers need to pay more attention to the factors that affect their HPP, such as labor costs, plant maintenance, and other agricultural inputs. By understanding and managing HPP, they can set a more competitive selling price. Second, although the cost of external failure is not proven to moderate the selling price, it is important for farmers to maintain the quality of their products. High quality of coffee will not only improve product image in the market, but can also encourage consumers to pay higher prices. Therefore, training and improving the quality of production becomes very important for farmers in this area.

Conclusion

In the context of determining the selling price of Arabica coffee, the cost of production shows a significant effect. However, the cost of external failure does not function as a strong moderating variable. This creates opportunities for farmers to improve their pricing strategies with a focus on managing HPP and improving product quality. Thus, farmers can not only survive in market competition, but also achieve better profits from their crops. The findings of this study provide valuable insights for coffee farmers in Takengon and the coffee industry in general, and highlight the importance of managing HPP and maintaining product quality in order to set a competitive selling price.

Recommendations for Future Research

This study provides a foundation for future research on the factors that affect the selling price of Arabica coffee. Future research can build on the findings of this study by exploring other factors that may affect the selling price, such as market demand, competition, and government policies. Additionally, future research can investigate the impact of external failure costs on product quality and the selling price of Arabica coffee in other regions or countries. By exploring these factors, future research can provide a more comprehensive understanding of the factors that affect the selling price of Arabica coffee and identify opportunities for farmers to improve their pricing strategies.

Limitations of the Study

This study has several limitations that should be noted. First, the study uses secondary data obtained from coffee farmers in Takengon who sell random coffee to PT Volci Indonesia in the 2015 to 2018 period. This may limit the generalizability of the findings to other regions or countries. Second, the study uses multiple regression analysis, which may not capture the complex relationships between the variables. Finally, the study does not investigate the impact of external failure costs on product quality and the selling price of Arabica coffee in other regions or countries.

Conclusion

In conclusion, this study provides valuable insights into the factors that affect the selling price of Arabica coffee in Takengon, Central Aceh Regency. The findings of this study highlight the importance of managing HPP and maintaining product quality in order to set a competitive selling price. The study also provides a foundation for future research on the factors that affect the selling price of Arabica coffee and identifies opportunities for farmers to improve their pricing strategies.
Frequently Asked Questions (FAQs) about the Effect of Cost of Production on Determination of the Selling Prices of Arabica Coffee

In our previous article, we discussed the effect of cost of production on the determination of the selling prices of Arabica coffee in Takengon, Central Aceh Regency. In this article, we will answer some frequently asked questions (FAQs) about the topic.

Q: What is the cost of production (HPP) and how does it affect the selling price of Arabica coffee?

A: The cost of production (HPP) refers to the total cost incurred by farmers in producing Arabica coffee, including labor costs, plant maintenance, and other agricultural inputs. The HPP has a significant effect on the selling price of Arabica coffee, as farmers need to cover their production costs in order to get a profit.

Q: What is the role of external failure costs in determining the selling price of Arabica coffee?

A: External failure costs refer to costs incurred due to products that do not meet quality standards after being sold. While external failure costs are an important factor in maintaining product quality, they do not have a significant impact on the selling price of Arabica coffee.

Q: How can farmers in Takengon, Central Aceh Regency improve their pricing strategies?

A: Farmers in Takengon, Central Aceh Regency can improve their pricing strategies by managing their HPP and maintaining product quality. By understanding and managing their HPP, farmers can set a more competitive selling price. Additionally, maintaining high-quality products can improve product image in the market and encourage consumers to pay higher prices.

Q: What are the implications of this study for the coffee industry in general?

A: The findings of this study have implications for the coffee industry in general. By understanding the factors that affect the selling price of Arabica coffee, coffee farmers and industry stakeholders can develop strategies to improve their pricing and product quality.

Q: What are the limitations of this study?

A: This study has several limitations, including the use of secondary data obtained from coffee farmers in Takengon who sell random coffee to PT Volci Indonesia in the 2015 to 2018 period. Additionally, the study uses multiple regression analysis, which may not capture the complex relationships between the variables.

Q: What are the recommendations for future research?

A: Future research can build on the findings of this study by exploring other factors that may affect the selling price of Arabica coffee, such as market demand, competition, and government policies. Additionally, future research can investigate the impact of external failure costs on product quality and the selling price of Arabica coffee in other regions or countries.

Q: What are the benefits of this study for coffee farmers in Takengon, Central Aceh Regency?

A: The findings of this study provide valuable insights for coffee farmers in Takengon, Central Aceh Regency, highlighting the importance of managing HPP and maintaining product quality in order to set a competitive selling price. By understanding and managing their HPP, farmers can improve their pricing strategies and achieve better profits from their crops.

Q: What are the implications of this study for the government and industry stakeholders?

A: The findings of this study have implications for the government and industry stakeholders, highlighting the need to support coffee farmers in managing their HPP and maintaining product quality. By providing training and resources to farmers, the government and industry stakeholders can help improve the competitiveness of Arabica coffee in the market.

Q: What are the future directions for research on the selling price of Arabica coffee?

A: Future research on the selling price of Arabica coffee can explore other factors that may affect the selling price, such as market demand, competition, and government policies. Additionally, future research can investigate the impact of external failure costs on product quality and the selling price of Arabica coffee in other regions or countries.