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Section Cost Accounting

ACCOUNTING STRATEGIES FOR ACHIEVING SUSTAINABILITY: RATIONALIZING COSTS UNDER THE CURRENT ECONOMIC CONDITIONS OF IRAQI COMPANIES

STRATEGI AKUNTANSI UNTUK MENCAPAI KEBERLANJUTAN: RASIONALISASI BIAYA DALAM KONDISI EKONOMI SAAT INI DI PERUSAHAAN-PERUSAHAAN IRAK
Vol. 21 No. 2 (2026): May:
DOI : https://doi.org/10.21070/ijler.v21i2.1514
Published : Mar 8, 2026

ALnujaimi Aws saeed mirdan (1), MUSLIM BADR JASIM (2), Mujtaba Ali Hussein (3)

(1) College of Administration and Economics, banking and finance department, University of wasit, Iraq
(2) College of Administration and Economics, Department of Accounting, University of Basra, Iraq
(3) College of Administration and Economics, banking and finance department, University of wasit, Iraq
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Abstract:

General Background: Modern management accounting emphasizes the importance of controlling production costs to sustain organizational competitiveness. Specific Background: Companies increasingly rely on cost–value analysis and cost management models to identify inefficient operational expenses and improve financial performance. Knowledge Gap: Empirical research examining cost optimization strategies in Iraqi manufacturing companies remains limited. Aims: This study aims to identify key cost drivers and develop a cost optimization model using empirical data from Baghdad Soft Drinks Company. Results: The Relative Importance Index and factor analysis reveal that direct labor costs represent the dominant component of total production costs, with a relative importance index of 0.989 and an explanatory contribution of 92.3%. Using the cost–volume–profit model, three strategic scenarios were tested: expansion, market penetration, and operational efficiency. The expansion scenario generated the highest profit growth (+55.9%), the efficiency scenario produced moderate growth (+15%), while the penetration strategy caused a substantial decline in profitability (−67.8%). Novelty: The study integrates cost-driver identification with scenario-based cost modeling in an Iraqi industrial context. Implications: These findings provide a practical basis for managerial decision-making and sustainable financial planning through systematic cost optimization.


Highlights:



  • Direct labor expenditure emerges as the primary component shaping production cost structure

  • capacity investment produces the largest profitability growth.

  •  Operational efficiency strategy yields stable gains with minimal financial risk


   Keywords: Cost Optimization; Cost Volume Profit Model; Cost Value Analysis; Managerial Accounting Strategy; Production Cost Structure

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