Abstract
The objective was to apply direct costing (DC) methodology to calculate dairy farms costs located in the semiarid region of Sergipe, Brazil. Productive and financial data were used from 30 dairy farms, in which milk market is the farms primary activity. Costs were segregated as fixed and variable, as profitability index, contribution margin (CM) and net income (NI). Profit before interest, taxes, depreciation and amortization (EBITDA) was adopted as financial index. In rural farms analyzed, CM was negative equivalent to R$ - 0.06 per liter of milk, due to the high production cost setting the sold goods cost (COGS), exceeding the net income by 4.49 percentage points, equivalent to R$ 1.31 per liter of milk, contributing to the result of R$ -0.20 (twenty cents) per liter of milk, equivalent to -16.8% of the raw milk price. The direct costing methodology has applicability to calculate costs in dairy farming, as it provides full data and information from the economic-financial point of view, well segregated.
Highlights
Given the heterogeneous characteristics of dairy farms in Brazil, it is important and necessary to evaluate economic indicators that support cost management of this activity (Santos and Lopes 2014), in addition this information can reinforce possible public policies definitions in the country's dairy sector (Lopes et al, 2016).Determining production costs is not a simple task involving a large volume of calculations (Sabbag & Costa 2015)
From accounting point of view, costs varying with production must be recognized concomitantly with the respective revenues, keeping in stock the values equivalent to the finished and unsold products, such as the remaining milk stocked in tanks and disused or discarded animals, which remained on farm in the change of month, year or production cycle
Considering the detailed items that compose good sold costs (GSC) (Table 2), it is possible to observe that animal nutrition had the greatest monetary participation, accounting R$18,292.00 of the total costs, demonstrating that this item possibly has a great impact on the GSC
Summary
Given the heterogeneous characteristics of dairy farms in Brazil, it is important and necessary to evaluate economic indicators that support cost management of this activity (Santos and Lopes 2014), in addition this information can reinforce possible public policies definitions in the country's dairy sector (Lopes et al, 2016).Determining production costs is not a simple task involving a large volume of calculations (Sabbag & Costa 2015). From accounting point of view, costs varying with production must be recognized concomitantly with the respective revenues, keeping in stock the values equivalent to the finished and unsold products, such as the remaining milk stocked in tanks and disused or discarded animals, which remained on farm in the change of month, year or production cycle In this sense, direct costing method, widely used by the secondary and tertiary sectors, segregates costs into fixed and variable, considering the volume produced (Perez Jr. et al, 2012), which should be the only inventories composing the stocks, that when consumed, they become and remain as progress/finished stocked products until being sold, at which time they are written off from stock and transformed into sold products costs (SPC), preserving the competence principle above mentioned
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