Production processes and costing systems: a case of study in communitarian micro-enterprises of popular and social economy in Cañar Canton

Abstract

This research work aims to show the results obtained through a case study. In order to analyze the production cost within the community enterprise framework. The study began from the diagnosis of the microenterprises, as well as from the particularities that differences them from formal organizations. The research process was developed under the parameters of an inter institutional cooperation agreement between the Business Administration faculty at the Catholic University of Cuenca, Cañar Extension and the Autonomous Decentralized Government of the Cañar Canton. Both entities provide advice on issues related to business management to 20 organizations of Popular and Solidarity Economy. The research followed a descriptive, non-experimental design of field scope. An interview to managers and a direct observation to the productive process, in three micro-enterprises were applied. The study also describes the diagnostic scenarios, and their costs under the production methodology. Results show a high unit cost, due to an inadequate use of installed capacity, as well as the lack of assessment and control of the production processes, that directly affects the profitability and optimization of the limited resources that these kinds of organizations possess. It is concluded, contrasting the empirically managed environment by the entrepreneurs, in relation to the accounting record and the production process, as opposed to the method used.

Keywords: Community micro-enterprises, costs, production, profitability