Efficiency Analysis of the Use of Cost Indicators for Decision-Making Processes in Swine Slaughtering Activities: Multicase Study

Abstract: This study aimed to compare the structure of costs between two pig finishing units which work in an integration mode and verify the effectiveness of the use of contribution margin (CM), break-even point (BEP) (q) and safety margin (SM) (%) indicators in speeding up the decision-making process to optimize said structure and maximize results. The studied farms are located in the West of Santa Catarina, and the research took place in 2015. Costs indicators for contribution margin, break-even point and safety margin were evidenced by assessing the costs of production for which the producer was responsible and by creating the income statement. It was then possible to notice the differences between composition and control of cost structure reflecting on the profitability of each farm; Farm A did not use any resources of rural accounting or cost control to manage its activity, which resulted in financial losses and lower production cost efficiency. Meanwhile, farm B, which makes use of these resources, displayed higher efficiency in controlling production costs and obtained positive results in comparison to farm A. It was then possible to conclude that the use of rural accounting resources and an accurate analysis of cost indicators allow managers to make agile and specific decisions within the cost structure, and that these indicators can help guide planning and budgeting of the activity and be used as reference for decision making.

Key words: production costs; indicators; decision making

JEL: Q14