The Analysis of Activity Based Management Implementation to Improve Production Cost Efficiency in the Industrial Gases Division of PT Tira Austenite Tbk

This study aims to evaluate the impact of Activity-Based Management (ABM) implementation on production cost efficiency and to identify value-added and nonvalue-added activities. This research is a quantitative descriptive study conducted at PT Tira Austenite Tbk. Data collection methods include interviews, observation, and documentation. The company has been using a conventional method to calculate production costs, relying on a single cost driver—production units—which potentially leads to cost distortion. Through the implementation of ABC and ABM methods, activities were identified, cost drivers analyzed, and classified into value-added and non-value-added activities. The results of the study show that the conventional method causes cost distortion, where Argon was overcosted by Rp 48,036,650.20 and Nitrogen by IDR 19,820,412.35, while Oxygen was undercosted by IDR 27,370,079.20 and Carbon Dioxide by IDR 5,190,101.96. After the implementation of Activity-Based Management (ABM), the company achieved a total cost saving of IDR 422,802,431.79, indicating a significant improvement in the efficiency of production cost control. Based on the results of this research, it is recommended that PT Tira Austenite Tbk consistently implement the Activity Based Management (ABM) method within its production cost control system. Additionally, the company is advised to continuously evaluate its existing activities in order to identify non-value-added activities that can be minimized or eliminated. The company should also consider developing a management accounting information system that supports real-time activity monitoring, allowing for faster, more accurate, and efficient decision-making. Through these efforts, the company can enhance its competitiveness and improve the effectiveness of its cost strategies in the long term. Thus, the application of ABC and ABM methods has proven to provide more relevant information for managerial decision-making related to cost planning and control.