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International Journal of Marketing & Financial Management

MATERIAL FLOW COST ACCOUNTING IN JOB ORDER AND PROCESS COSTING SYSTEMS: CASE STUDIES IN POWDER COATING AND SUNFLOWER OIL PRODUCTION

Dr. Lalit Mohan

Dr. Lalit Mohan, Assistant Professor, Department of Accounting, S.P.U. PG College Falna, Pali Rajasthan

DOI : https://doi.org/10.5281/zenodo.19206035 Page No : 46-56

Published Online : 2026-03-24

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ABSTRACT

Aim of the study: This study investigates the application of Material Flow Cost Accounting within companies utilizing distinct traditional cost accounting systems—job order costing and process costing—to ascertain its efficacy in quantifying waste and associated costs. This research addresses a gap in existing literature by comparing MFCA implementation across these divergent costing frameworks, thereby illuminating the nuances and potential challenges inherent in each system.

Methodology: This comparative analysis involved two distinct case studies: one in a powder coating production facility employing a job order costing system, and another in a sunflower oil production company utilizing a process costing system.

Findings: The implementation of MFCA in both companies revealed significant insights into material losses, the monetary impact of waste generation, and the potential for cost savings, even in optimized processes where managers might be reluctant to make changes. MFCA delineates material losses and allocates a proportion of raw material and processing costs to them, thereby exposing environmental costs traditionally embedded within overheads.

Implication: This transparency regarding material and energy flows, coupled with the detailed cost analysis of waste, can significantly enhance management's decision-making processes toward improved sustainability and resource efficiency. Such insights enable organizations to identify critical areas for intervention and optimize production processes, thereby contributing to both economic performance and environmental stewardship.

Originality/Value: This study provides novel insights by empirically comparing MFCA applications in industrial settings characterized by fundamentally different cost accounting methodologies, thereby extending the theoretical understanding of MFCA's adaptability and practical utility across diverse production paradigms. Specifically, it demonstrates how MFCA can be dynamically integrated into both job order and process costing environments to provide a more granular understanding of waste-related costs, which are often obscured in conventional accounting practices.

Keywords: Material flow, cost accounting, Job order costing, Process costing, Material Flow Cost Accounting [MFCA] is a tool of environmental management accounting that anticipates the quantitative and monetary tracking of waste generated in production processes.

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Cite this Article as: Lalit M (2026), “Material Flow Cost Accounting in Job Order and Process Costing Systems: Case Studies in Powder Coating and Sunflower Oil Production”, International Journal of Marketing & Financial Management, Volume 14, Issue1, 2026, pp 46-56 , DOI : https://doi.org/10.5281/zenodo.19206035

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