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To Know IOC to Calculate Smallholders’ FFB Price

Doc. InfoSAWIT
To Know IOC to Calculate Smallholders’ FFB Price

InfoSAWIT, BANDA ACEH – In palm oil industry, efficient operational would be successful key. One crucial concept to this understanding is indirect operational cost (IOC). It refers to indirect spent that had something to do with main process in a company but it is significant to know the good financial and business sustainability.

Management Advisor in Palm Oil Mill, Prof. Ponten Marulitua Naibaho said in the 4th Andalas Forum in Banda Aceh, IOC is the costs that were spent by the partners of a company which had nothing to do with palm oil production. They include administration, overhead, and other operational costs that indirectly influenced palm oil production.

Prof. Naibaho told IOC would be burdened to FFB that partners of a company produced. In performance index (index P), IOC is put together with other direct costs. These reflected that it is important to know and calculate every cost, including indirect ones to get the accurate description about efficiency and profitability in a company.

Prior IOC was often thought as overhead/plasma administration costs. The concept of IOC has been integral part of palm oil industries, just it is regulated in the Regulation of Minister of Agriculture (RMA) Number 21/PERMENTAN/KB.410/6/2017 about the substitution of RMA 98/PERMENTAN/OT.140/9/2013 about Plantation Business Permit Guidelines to become the legal concept in IOC. (T2)