Transformation of Knitting MSMEs Wukirsari, Yogyakarta: Integration of HPP Calculation and Business Sustainability Strategy

Abstract

This study analyzes the impact of cost of goods sold (COGS) calculation methods on pricing strategies and business sustainability in the case of Rajut Wukirsari MSMEs, Yogyakarta. The research highlights that local knitcraft MSMEs often rely on simple, unstructured cost estimations based on raw material costs and product complexity, without comprehensive COGS calculations. This results in product prices that do not fully reflect actual production costs, potentially reducing competitiveness and long-term profitability. Using a qualitative descriptive case study approach, the research compares traditional artisan calculations with the full costing method. The findings indicate that the full costing method yields more accurate and transparent COGS figures, enabling MSMEs to set more competitive selling prices and optimize profit margins. The study also identifies key challenges such as limited financial management skills and lack of regular training in cost calculation. Recommendations include consistent implementation of full costing, improved financial record-keeping, and digital marketing strategies to enhance market reach and business growth. Accurate COGS calculation is shown to be essential not only for effective pricing and profit optimization but also as a foundation for strategic business decisions in a competitive market environment