The Illomata International Journal of Management Ilomata International Journal of Tax & Accounting P-ISSN: 2714-9838; E-ISSN: 2714-9846 Volume 4, Issue 2, April 2023 Page No. 164-180 164 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Profit or Planet? : Impact of Production and Environmental Costs on Sales Ivada Zanetha Darmaputri1, Valentine Siagian2 12Universitas Advent Indonesia, Indonesia Correspondent: 1932107@unai.edu 1 Received : Janaury 13,, 2023 Accepted : April 3, 2023 Published : April 30, 2023 Citation: Darmaputri, I., Siagian, V. (2023). Profit or Planet? : Impact of Production and Environmental Costs on Sales. Ilomata International Journal of Tax and Accounting, 4(2), 164-180. https://doi.org/10.52728/ijtc.v4i1.695 ABSTRACT: Lately, environmental problems such as pollution, poorly managed waste, and even depleting green land, have become issues that require companies to take action. But on the other hand, companies need well-allocated production costs, which of course have the aim of increasing company profits. That’s why, the purpose of this research is to analyze The Effects of Production Costs and Environmental Costs on Sales for primary and chemical industry firms with ISO 14001 certification that are traded on the Indonesia Stock Exchange. Specifically, SPSS version 27 is utilized for conducting multiple regression analyses as part of a quantitatively descriptive methodology. Annual and sustainability reports for 5 years from 2017 to 2021 out of 8 companies that have gone through a purposive sampling process are used as research samples. Based on the multiple regression analysis that has been carried out, the results show that partially, production costs have a significant effect on sales, and environmental costs have no significant effect on sales. Meanwhile, simultaneously both production costs and environmental costs have a significant effect on sales. Meaning that production costs and environmental costs are interconnected with each other, so when sales continue to increase, production costs and environmental costs will also increase. Keywords: Environmental Cost, Production Cost, Sales This is an open access article under the CC-BY 4.0 license. INTRODUCTION To achieve the expected goals, companies today are facing new focus. Initially, a company was only focused on a single bottom line or the value of a company from its financial condition, nowadays the focus became a triple bottom line or according to Elkington, 1944 in (Nababan, L., & Hasyir, 2019) the 3P concept which includes financial (profit), environmental (planet), and social (people) dimensions. The profit dimension is how the company aims to make a profit from activities such as sales carried out by the company. Then the planet dimension shows that the company should be responsible for managing the environment and its resources. Also, the well-being of the company's employees and other stakeholders is a key aspect of the human dimension. This demonstrates that https://www.ilomata.org/index.php/ijtc mailto:1932107@unai.edu https://doi.org/10.52728/ijtc.v4i1.695 The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 165 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc corporations' objectives in conducting operations should include not only financial gain but also care for the local environment and the well-being of the surrounding community. In the manufacturing industry, there are various activities carried out by the company, one of which is production activities. This activity certainly requires an allocation of costs called production costs. According to (Myrelid & Olhager, 2019) it is important for manufacturing firms to allocate costs correctly as a decision to the products that they made. (Harnanto, 2017) defines production costs as costs that are considered related to products which include direct and indirect costs for processing raw materials into finished products. Mulyadi's definition of manufacturing costs, on the other hand, are those that arise while taking raw materials and turning them into finished goods, (Mulyadi., 2015). This production cost can be broken down into the following categories: raw materials, labor, direct costs, and overhead. (Xi Chen & Bertrand M. Koebel, 2017) found that in production cost there are fixed costs and variable costs, and fixed costs represent 20% of the total cost which highlights its importance. According to (Raiborn & Kinney, 2013) there are 3 components in production costs, which are as follows: 1. Direct material which is any part of the product that is available and easy to identify. 2. Direct labor is the effort of individuals who produce products and provide services. 3. Overhead is a cost that is indirectly included in the production of a product or service provided. With the existence of production costs, it is hoped that companies can calculate the cost of making finished products and selling them to consumers to make a profit. However, over time, companies need to think about how the products that have been produced could have sustainable properties. (Soytas et al., 2019) define sustainability as processes that are created and modified to improve a company's social and environmental impact. According to (Hong et al., 2019) sustainability is not just for long-term survival of a company, but also preserve social ecosystems at large. (Loorbach et al., 2016) found out that ecological degradation is one of the factors that a company needs to be concerned about. In other words, companies need to think about the impact of their production activities and the effects on the environment and community welfare so that both natural and human resources can be used sustainably and passed on to the next generations. Reported from (Surjaya, 2022) in September 2022, PT. Saranagriya Lestari Keramik, which produces floor ceramics and roof tiles, was proven to have polluted the environment so the Bekasi Regency government together with the West Java Environment Agency sanctioned the company. It is known that PT. Saranagriya Lestari Keramik has been proven to have committed 13 violations in waste management, especially liquid and air waste. The company was found not fulfilling waste treatment procedures because there were hazardous and toxic materials (B3) in the disposal of waste. https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 166 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc The neighborhood first noticed this issue three months ago, and after an investigation by the Bekasi District Environmental Agency, they confirmed that pollution had occurred, classifying it as moderate to severe. Article 100 of Law 32 of 2009, Concerning Environmental Protection and Management, was therefore broken. The increasing of various environmental problems such as pollution and environmental damage made companies have to find solutions to prevent this problem. (Bai et al., 2019) found out that if companies invest in green technologies and made carbon regulation, it will able to reduce carbon emission. In other words, one of many solutions that can be done is to allocate environmental costs. Businesses invest environmental costs into projects with the goal of bettering their environmental impact. Environmental costs according to (Ikhsan, 2009) are cost that include internal costs and external costs that relate to all costs associated with environmental damage and protection. (Hansen D.R. & Mowen M.M., 2018) classify environmental costs into 4 categories: internal costs associated with preventing environmental damage, external costs associated with repairing environmental damage, and internal costs associated with detecting environmental damage. Investment in preventive and detection operations, or the costs of preventing and detecting environmental damage, is one way for businesses to achieve effective environmental cost allocation. Such as the costs of waste treatment, reclamation, measuring waste levels, and others. According to (Waltho et al., 2019) research, it’s found that to make substantial reductions in emissions companies have to increase their cost. Conversely, if the company is unable to allocate its environmental costs properly, it can lead to additional costs that will affect the company’s financial performance. Therefore, it is expected that the allocation of environmental costs will make people put more of their trust to create a good and sustainable relationship with the company. Not only that, if the company can allocate production costs and environmental costs properly, it is expected that the company’s sales volume and profits will also increase. (Kwon & Lee, 2019) research backs this up, finding that a company can boost its returns by improving both its sustainability practices and the quality of its operations. Over time, companies are competing to fulfill the 3P concept as evidenced by the existence of CSR (Corporate Social Responsibility), which according to (Sultoni, 2020) represent a pledge on the part of businesses to act in an ethical manner and contribute to long-term economic growth. Research by (Jo et al., 2015) indicated that environmental cost was a factor in corporate social responsibility (CSR). Companies have implemented a wide range of programs aimed at achieving environmental management and community welfare. In order to gauge how well a company is doing in terms of environmental management, ISO 14001 certification is often employed. ISO 14001 is an EMS standard created by the International Organization for Standardization, as stated by (Deepak et al., https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 167 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc 2015). According to studies conducted by (Feng & Wang, 2014), a corporation can increase customer happiness and loyalty by creating an EMS. (ISO Central Secretariat, 2015) describes ISO 14001 as an internationally recognized standard that indicates the criteria in the environmental management system. To obtain an edge in the market and the confidence of their stockholders, businesses can use this certification to improve their environmental performance by conserving resources and cutting down on waste. (de Jong et al., 2014) in their research found that if companies have ISO 14001certification, it can help them to develop their capabilities and give impact to the profitability. Beyond the corporate legitimacy gains, (Treacy et al., 2019) discovered that the ISO 14001 standard has benefited the organization in other ways as well. To obtain this certification, (Sadiq, N., & Khan, 2019) in their book write that companies must pay attention to clause 6.12 of ISO 14001 where companies and organizations are required to define and implement a procedure that describes how the company identifies and applies matters such as identifying all environmental laws; permits; and licenses that apply to products, processes, waste management whether solid, liquid, or gas; and periodic evaluation of environmental policies, along with the company’s compliance with environmental laws and other requirements. Based on the problems described, this research was conducted to examine the effect of production costs and environmental costs on sales. Sales are affected by production costs Manufacturing expenses may have an effect on a company's sales. (Albdullah, 2017) in his book defines sales as complementary activities to purchases made so that a transaction occurs. So it can be said that sales are a transaction made by consumers when they buy a product. While according to (Panjaitan, 2018) sales is a concept that focuses on existing products, using promotion as an attraction with the ultimate goal of making a profit. The factors that influence sales according to (Hidalyah , Al., & Sulakson, 2021) include the price set, the company’s strategy for promotion, and the quality of the products produced. (McGuian et al., 2016) argue if production costs increase, then companies must increase selling prices to maintain margin standards. This can affect market demand and reduce sales. However, on the other hand, if the company can reduce production costs, its market demand, and sales will increase. However, studies conducted by (Rupaida & Bernardin, 2016) reveal a positive and statistically significant relationship between production costs and revenue. This shows that when production cost increase, sales will also increase. The first hypothesis may be derived from the above description, and it is as follows: H1 = Production costs have a positive effect on sales partially. Sales affected by environmental costs https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 168 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc In some cases, environmental costs can have a significant impact on a company’s sales volume. According to (Callan, S. J., & Thomas, 2013), every resource used for economic activities ends up as a residue that has the potential to cause environmental damage. Although this process can be delayed through environmental restoration, it cannot be stopped. Therefore, companies need to make policies regarding environmental management. Taking active steps to meet environmental regulations and demonstrating a commitment to environmental sustainability, can have a positive effect on sales volume. In a study conducted by (Suki, 2016), it was found that consumer attitudes towards environmentally friendly products. So it can be concluded that if consumers have a strong preference for environmentally friendly products, then the allocation of higher environmental costs can positively affect sales volume. Naturally deriving from the first, the second hypothesis is as follows: H2 = Environmental costs have a positive effect on sales volume partially Based on the two hypotheses above, the researcher also formulates a third hypothesis, namely: H3 = Production costs and environmental costs have a positive influence on sales simultaneously. According to the theoretical basis and previous research that has been discussed, the renewal in this study is how the existence of production costs and environmental costs put together can influence sales. Whether the company pays attention to the allocation of production costs and environmental costs can make the company's product sales increase or vice versa. This study also hopes to answer whether companies are better off relying on profits or taking responsibility by managing environmental policies. Figure 1. Framework Theory METHOD Thei obje icts that will bei eixamineid arei production costs, einvironme intal costs, and saleis. The i reiseiarch useis numeirical me ithods to analyzei information culle id from primary source is (IDX-listeid firms' annual reiports and sustainability re iports) and che imical industry seictors that havei ISO 14001 ceirtification. Population and Sample Companieis from thei primary and cheimical industrieis listeid on thei Indoneisia Stock Eixchangei and holding ISO 14001 ce irtification that providei sustainability reiports and annual reiports for 2017- 2021 constitutei thei study's population. For samplei deiteirmination, this study will usei thei purposivei sampling meithod. This me ithod was chosein be icause i of thei reiseiarch limitations that reiquirei thei Environmental Cost Sales Production Cost H2 H3 H1 https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 169 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc seileicteid samplei to be i following thei eixisting objeictive is. Thei following factors weirei consideireid whein se ileicting thei samplei for this study: Table 1. Purposive i Sampling No. Criteria Total 1. Primary and cheimical industry seictor companieis that arei ISO 14001 ceirtifieid 73 2. Companieis that did not publish sustainability reiport and annual reiport in 2017-2021 (65) Numbeir of sample i companieis: 8 Thei amount of data use id during 2017-2021 40 Tablei 1 shows that 73 firms in the i basic and che imical industry arei accreiditeid to ISO 14001 standards. Approximateily 65 busineisseis do not qualify. This proce iss of e ilimination yieilds 8 busineisseis and 40 sampleis worth of data that may be i analyzeid in furthe ir deipth. Thei 8 busineisseis that meieit thei criteiria arei as follows: Indoceimeint Tunggal Prakasa Tbk.; Waskita Beiton Preicast Tbk, Surya Toto Indone isia Tbk.; Krakatau Steieil (Pe irse iro) Tbk.; Impack Pratama Industri Tbk.; Japfa Comfe ieid Indoneisia Tbk.; and Toba Pulp Le istari Tbk. Variable Measurement Independent Variable (X1,2) Variableis outsidei of the i deipeindeint variablei can be i consideireid indeipeindeint. Production and eicological eixpeinseis are i thei study's indeipeinde int variableis. Dependent Variable (Y) An indeipeindeint variablei acts as a driving forcei on a de ipeindeint variablei. This re iseiarch is ceinteireid on saleis as thei deipeinde int variablei. Table 2. Summary of Re iseiarch Variableis Variables Dimensions Disclosure Indicator Measurement Production Cost (X1) Total production cost of thei company Production Cost = Direict Raw Mate irial Cost + Direict Labor Cost + Variablei Factory Ove irheiad Cost + Fixeid Factory Ove irheiad Cost Nominal E invironmeintal Costs (X2) Total einvironmeintal cost of thei company Total einvironmeintal costs in the i company's sustainability re iport for thei peiriod 2017-2021 Nominal https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 170 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Saleis (Y) Total reiveinuei geineirateid from saleis Total reiveinuei geineirateid from saleis in the i company's annual re iport for thei peiriod 2017-2021. Nominal Research Model Thei following meithods weirei eimployeid to analyzei thei data for this study: (1) Quantitative i Deiscriptions; (2) Thei Teist of Classical Assumptions; (3) Corre ilation Teist; (4) Hypothe isis Teist; (5) Coeifficie int of de iteirmination using multiple i reigreission te ichnique is. Data analysis and proce issing will bei carrie id out with the i IBM SPSS Statistics 27 application. RESULT AND DISCUSSION Descriptive Statistics Table 3. Deiscriptive i Statistics N Minimum Maximum Meian Std. Deiviation Production Costs 40 163512400 6153867715706 802373990044.42 1556507837236.47 6 E invironmeintal Costs 40 744000000 391000000000 18671215416.98 60777650183.773 Saleis 40 183195700 0 8000149423527 1276575993475.75 2000485709143.09 3 Valid N (listwisei) 40 Source i: SPSS veirsion 27 proce isseid data Baseid on tablei 3 abovei, it is found that production costs as one i of the i indeipeindeint variableis in this study havei a minimum valuei of IDR 163,512,400. From the i calculation of production costs, thei maximum valuei obtaine id IDR 6,153,867,715,706. Whilei thei aveirage i value i obtaineid is IDR 802,373,990,044.42 and a standard deiviation of IDR 1,556,507,837,236.476. Anotheir indeipeindeint variablei that useis deiscriptivei statistical calculations is e invironmeintal costs which havei a minimum re isult of IDR 744,000,000. Through thei reisults of the i calculation of einvironmeintal costs, the i maximum valuei obtaine id is IDR 391,000,000,000. Whilei thei ave iragei obtaineid is IDR 18,671,215,416.98 and a standard de iviation of IDR 60,777,650,183.773. If wei usei reiveinuei as thei deipeindant variablei, thein we i geit a minimum valuei of IDR 1,831,957,000. As a reisult, thei higheist possiblei amount re iache id through total saleis is IDR 8,000,149,423,527. With an aveirage i of 1,276,575,993,475.75 and a standard de iviation of 2,000,485,709,143.093 Indoneisian Rupiah (IDR). Classical Assumption Test Seiveiral assumptions must be i meit be iforei a re iseiarcheir can draw valid re isults from a multiple i reigreission analysis, theireiforei theiy should be i che ickeid off be iforei conducting any hypothe isis teisting. https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 171 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Thei normality teist, the i heiteirosce idasticity teist, thei autocorre ilation teist, and the i multicollineiarity teist arei among thosei peirformeid. Normality Test Table 4. Classical Assumption Te isting Re isults One-Sample Kolmogorov-Smirnov Test Unstandardizeid Re isidual N 39 Normal Parame iteirsa,b Meian -.0000814 Std. Deiviation 606559599776.14980000 Most Eixtreimei Diffe ireince is Absolutei .307 Positivei .307 Neigativei -.235 Teist Statistic .307 Asymp. Sig. (2-taileid)c .000 Montei Carlo Sig. (2- taileid)d Sig. .000 99% Confideince i Inteirval Lowe ir Bound .000 Uppe ir Bound .000 a. Teist distribution is Normal. b. Calculateid from data. c. Lillieifors Significancei Correiction. d. Lillieifors' me ithod baseid on 10000 Monte i Carlo sampleis with starting seieid 2000000. Source i: SPSS veirsion 27 proce isseid data Thei proceisseid data has a normal distribution if the i significancei valuei of thei reisultant Teist Statistic is largeir than 0.05, as reiquireid by thei Kolmogorov-Smirnov teist (seie i tablei 4 above i). Heteroscedasticity Test Figure 2. Heiteirosceidasticity Scatteirplot Graph Source i: SPSS veirsion 27 proce isseid data https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 172 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Baseid on Figure i 2 above i, it is known that thei points arei scatteireid irre igularly or randomly, so it is concludeid that thei data doe is not occur heiteirosceidastic probleims. Autocorrelation Test Thei reiseiarcheir doeis an autocorre ilation teist on the i timei seirieis data to seiei if theirei is any association beitweiein thei diffeireint me iasureimeints. Thei Durbin-Watson (DW) valuei is useid in this analysis. Table 5. Autocorreilation Assumption Te ist Re isults Model Summaryb Modeil R R Squarei Adjusteid R Squarei Std. E irror of thei E istimate i Durbin-Watson 1 .977a .954 .951 339594003084.29640 1.707 a. Pre idictors: (Constant), E invironmeintal Costs, Production Costs b. Deipeindeint Variablei: Sale is Source i: SPSS veirsion 27 proce isseid data Baseid on tablei 5 abovei, thei Durbin-Watson valuei that has beiein obtaineid is beitweiein thei valueis of du and 4- du (1.600<1.707<2.400). Theireiforei, it may be i infeirreid that the i conditions for thei proposeid reigreission modeil havei beiein satisfieid thei reigre ission be itweiein thei inde ipeindeint variableis Production costs (X1) and Einvironme intal Costs (X2), against Saleis (Y) has beiein fre iei from autocorre ilation probleims. Multicollinearity Test Table 6. Multicolline iarity Teisting Reisults Coefficientsa Modeil Collineiarity Statistics Toleirancei VIF 1 (Constant) Production Cost 1.000 1.000 Einvironmeintal Costs 1.000 1.000 a. Deipeindeint Variablei: Saleis Sourcei: SPSS veirsion 27 proceisseid data As may bei seiein in tablei 6, thei final toleirancei valuei is 1.000. As this value i is largeir than 0.10 and thei VIF valuei discoveireid was 1,000, which is le iss than 10, wei can safeily infeir that theirei is no multicollineiarity issuei. Results Multiple Linear Regression Analysis In this study, thei reiseiarche ir will form a re igre ission eiquation as follows: Se = α + β1 PrC + β2 EnC https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 173 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Wheirei: Sei (Y) = Saleis α = Constant βi = Coeifficie int of Reigreission PrC (X1) = Production Costs E inC (X2) = Einvironme intal Costs Thei reisults of the i calculation of multiple i line iar reigreission analysis using the i SPSS ve irsion 27 program will bei preiseinteid in thei following tablei: Table 7. Multiplei Lineiar Reigreission Re isults Coefficientsa Modeil Unstandardizeid Coe ifficieints Standardizeid Coeifficie ints t Sig. B Std. E irror Beita 1 (Constant) 296901749098.924 116237650328.533 2.554 .015 Production Costs 1.224 .064 .954 19.060 .000 E invironmeintal Costs -.479 1.642 -.015 -.292 .772 a. Deipeindeint Variablei: Sale is Source i: SPSS veirsion 27 proce isseid data Thei reigreission eiquation useid to e ixplain thei eiffeict of production costs and einvironmeintal costs on saleis is as follows: Sales = 296,901,749,098.924 + 1.224 PrC - 0.479 EnC Baseid on thei reigre ission eiquation abovei, it is known that production costs have i a positive i reigreission coeifficieint, indicating that thei higheir thei production costs, thei morei saleis will increiasei. Conveirse ily, einvironme intal costs arei known to havei a neigativei reigre ission coeifficie int, indicating that thei higheir thei e invironmeintal costs, thei saleis will deicreiasei. T test Thei reiseiarcheir conducte id partial hypothe isis teisting as a teichniquei for ide intifying the i factors that influeincei a targeit variablei. Thei t valuei in this te ist with α = 5% is as follows: ttable = t (α/2; n-c-1) = t (0.025; 37) = 2.021 First, thei reiseiarcheir will te ist H1 https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 174 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Table 8. T Teist Reisults of thei Eiffeict of Production Costs Partially Against Sale is Coefficientsa Modeil Unstandardizeid Coe ifficieints Standardizeid Coeifficie ints t Sig. B Std. E irror Beita 1 (Constant) 287710529387.269 110489515424.607 2.604 .013 Production Cost 1.224 .063 .954 19.304 .000 a. Deipeindeint Variablei: Sale is Source i: SPSS veirsion 27 proce isseid data Calculateid t-valuei is, as shown in Tablei 8: 19.304, which is largeir than thei minimum valuei of t- tablei 2.021. Thus, wei can acceipt H1 with a 95% leiveil of confideincei, which stateis that production costs significantly affeict saleis. Neixt, thei reiseiarcheir will te ist H2 Table 9. T Teist Reisults of thei Eiffeict of Einvironme intal Costs Partially Against Sale is Coefficientsa Modeil Unstandardizeid Coe ifficieints Standardizeid Coeifficie ints t Sig. B Std. E irror Beita 1 (Constant) 1292182465611.010 335481523362.868 3.852 .000 E invironmeintal Costs -.836 5.338 -.025 -.157 .876 a. Deipeindeint Variablei: Sale is Source i: SPSS veirsion 27 proce isseid data Tablei 9 shows that thei calculateid t valuei is -0.157, which is leiss than thei threishold valuei of 2.021 in table i 8. Sincei H2 cannot be i acceipteid with a 95% de igreiei of confide incei, it follows that einvironmeintal eixpe inditure is havei no appreiciablei impact on reiveinue i. F test Heirei, thei reiseiarcheir also put the i third hypothe isis to thei teist, and thei outcomeis weirei as follows: F table = F (c ; n-c) = F (2 ; 40) = 3.23 https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 175 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Table 10. F Teist Re isults of thei Eiffeict of Production Costs and E invironmeintal Costs To Saleis Simultaneiously ANOVAa Modeil Sum of Squareis df Meian Squarei F Sig. 1 Reigreission 141167843470823650000 000000.000 2 7058392173541183000000 0000.000 181.751 .000b Reisiduals 139807528270628440000 00000.000 36 3883542451961901300000 00.000 Total 155148596297886500000 000000.000 38 a. Deipeindeint Variablei: Sale is b. Preidictors: (Constant), E invironmeintal Costs, Production Costs Source i: SPSS veirsion 27 proce isseid data Baseid on table i 10, it is known that the i valuei obtaine id from thei comparison of F and Ftablei is e iqual to (181.75>3.23). So it is concludeid that H3 can be i acceipteid, which me ians that production costs and einvironmeintal costs havei a significant eiffeict on saleis simultaneiously. Coefficient of Determination Thei coe ifficie int of de iteirmination was eixamineid by scieintists to deimonstratei thei eixteint to which thei inde ipeindeint variablei influeinceid thei reisult of the i study's deipeindeint variable i. Thei tablei be ilow deitails thei outcomeis of our e ixpe irimeints: Table 11. Coeifficieint of Deiteirmination Model Summary Modeil R R Squarei Adjusteid R Squarei Std. E irror of the i E istimate i 1 .954a .910 .905 623180748415.891 a. Pre idictors: (Constant), (X2 ) Einvironmeintal Costs, (X1 ) Production Costs Source i: SPSS veirsion 27 proce isseid data In table i 11 abovei, it can be i seiein that thei R Squarei valuei obtaineid is 0.910. Baseid on theisei re isults, it is found that Production Costs, and E invironmeintal Costs contributei 91% of thei influeince i on Saleis, whilei thei reimaining 9% is a largei contribution of influe ince i deiriveid from othe ir factors not eixamineid. Thei reiseiarche ir also teisteid thei coeifficie int of de iteirmination partially by using the i Eiffeictive i Contribution valuei which can bei found through multiplying thei standardize id coeifficieints beita by thei correilation coeifficie int. The i reisults of thei calculation will bei preiseinte id in thei following tablei: Table 12. Partial Deiteirmination Coeifficieint Mode il Standardizeid Coeifficie ints Corre ilations Partial Coeifficie int of Deiteirmination Beita https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 176 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc Production Costs (X )1 0.954 0.954 0.910116 E invironmeintal Costs (X )2 -0.015 -0.025 0.000375 Total Eiffeict 0.910491 Source i: SPSS veirsion 27 proceisseid data Tablei 12 provide is information about the i amount of influe ince i contribution give in by e iach variablei partially. Sincei Production Costs is known to have i an e iffe ict of 0.910116 on Saleis and E invironmeintal Costs is known to have i an impact of 0.000375 on Sale is, it is eivideint that Production Costs is thei variablei that de iliveirs thei most ove irall contribution of influe ince i. The i reisults of thei curreint T te ist corroboratei thosei of the i prior onei, proving the i validity of thei theiory. Discussion Effect of Production Costs on Sales Deipeinding on the i findings of thei teists of hypotheiseis, thei conclusion that can bei drawn is that production costs havei a significant eiffeict on saleis. Wheirei thei highe ir thei production cost, the i impact on increiasing saleis. This stateimeint can bei prove in by thei partial T te ist reisults wheire i thei t valuei obtaine id is 19.304 which is greiateir than ttablei 2.021. This hypotheisis is of coursei also supporteid by thei reisults of thei coe ifficieint of de iteirmination te ist, wheirei production costs contribute i 91.05% of thei influeince i on sale is. All e iight companieis listeid on thei Indoneisia Stock E ixchangei have i high production costs duei to high production volumeis as a contributing factor. With a high production volume i, this meians that consumeir de imand is high. In othe ir words, the i company's saleis will bei high as weill. Theisei findings corroborate i thosei of (Dzakiyyah et al., 2022), who found that raising manufacturing costs had a favorablei and significant impact on saleis. The Effect of Environmental Costs on Sales Using a partial T teist, wei find that e invironmeintal e ixpeinseis do not significantly affe ict reive inuei, sincei thei t valuei of -0.157 is leiss than thei ttablei valuei of 2.021 at a significance i threishold of 0.876> 0.050. This reimark shows how an increiasei in thei company's einvironme intal e ixpeinditureis may not automatically translatei into higheir saleis for the i busine iss. Thei reiason for this to happe in is that thei eiight companieis listeid on the i Indoneisia Stock Eixchangei allocatei morei of theiir e invironmeintal costs to CSR programs, which are i aimeid more i at incre iasing company valuei and peirformancei. That is why this study has not be iein ablei to provei a significant influeincei beitweiein einvironme intal costs and saleis partially. The Effect of Production Costs and Environmental Costs on Sales Simultaneously Hypothe isis teisting was peirformeid using thei F teist and thei coeifficie int of de iteirmination, thei eiffeict of production costs and einvironmeintal costs on saleis from Ftablei is (181.75> 3.23). Thei significancei leiveil of 0.000 < 0.050 and the i coeifficieint of de iteirmination of 0.9105 show that production costs and einvironmeintal costs consideirably affeict saleis. Thei reimaining 8.9% is attributable i to a factor not inveistigateid in this study. https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 177 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc This happeins beicausei production costs and einvironmeintal costs arei inteirconneicteid with onei anotheir, so that saleis will increiasei, and if saleis continuei to incre iasei, production costs and einvironmeintal costs will also increiasei. Anotheir factor that causeis this to happein is that thei eiight companieis listeid on thei Indoneisia Stock E ixchangei combine i thei allocation of production costs and e invironme intal costs to beineifit from theiir saleis. It can be i seiein in how the i companieis produce i theiir products. If production costs increiasei, thei production volume i increiaseis which can cause i thei numbeir of sale is to incre iasei. Howe iveir, whe in production volumei increiaseis, companieis arei reisponsiblei for carrying out einvironmeintal manageimeint in ordeir to avoid einvironmeintal probleims. This can bei achie iveid by allocating einvironmeintal costs. CONCLUSION This reiseiarch shows that companie is should pay atte intion to thei allocation of the iir production costs and einvironme intal costs. Although in this study theirei was no significant re ilationship found beitweiein e invironmeintal costs and sale is partially, the i simultaneious eiffeict of production costs and einvironmeintal costs shows that production costs and e invironmeintal costs arei two matteirs that arei important in thei company's saleis. Production costs do havei a direict reilationship with saleis beicausei whein production costs increiasei, thei volumei of production will increiasei along with incre iaseid consumeir deimand. But einvironmeintal costs arei no le iss important to pay atteintion to. If companieis do not consideir the i propeir allocation of einvironmeintal costs, einvironmeintal probleims reisulting from thei lack of company manage imeint of e invironmeintal policieis may occur, and this not only hampe irs the i company's products but also reiduceis public trust. Suggestions : a. For thei Company Companieis can increiasei eifforts to preiveint e invironmeintal probleims by seitting policieis and allocating einvironme intal costs. Although this adds to production costs, if it is allocate id in a planneid and eifficieint manne ir, thei sustainability of thei company will bei guaranteieid and thei valuei of thei company with consumeir confide incei will increiasei. b. For Inve istors Inve istors can consideir inve isting in companieis that pay atte intion to e invironmeintal issueis by allocating einvironme intal costs and having ce irtifications that arei einvironmeintally frieindly. Thus, inveistors can avoid the i risk of busine iss continuity disruption. In othe ir words, inve istors can bei freiei from companie is that are i eixposeid to le igal proble ims duei to thei impact of einvironmeintal probleims, pe ioplei who do not trust the i company and proteist, or othe ir things that can harm thei company as weill as inveistors. https://www.ilomata.org/index.php/ijtc The Effects of Production Cost and Environmental Cost on Sales Darmaputri, and Siagian 178 | Ilomata International Journal of Tax & Accounting https://www.ilomata.org/index.php/ijtc c. For thei Goveirnme int (Ministry of E invironmeint and Foreistry) Thei goveirnmeint is eixpe icte id to urgei all companieis to pay atteintion to einvironmeintal issueis and obtain ISO 14001 ceirtification or othe ir einvironmeintally frieindly ceirtifications. d. 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