DEVELOPING A MATERIAL FLOW COST ACCOUNTING (MFCA) SYSTEM UNDER BLOCKCHAIN TECHNOLOGY TO RATIONALIZE THE COSTS OF UNDESIRABLE OUTPUTS: AN APPLIED STUDY OF THE STATE COMPANY FOR ELECTRICAL INDUSTRIES

Farah Nadhim Shamkhi (University of Wasit)

Jurnal Ekonomi, Bisnis dan Pendidikan (JEBP)
Vol. 6 No. 9 (2026)

This study aims to measure and analyze the impact of integrating Material Flow Cost Accounting (MFCA) and Blockchain Technology on the Cost Rationalization of Undesirable Outputs, with Information Quality and Resource-Flow Traceability serving as a mediating variable. To achieve the study objectives and test its hypotheses, Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied using SmartPLS software on a hypothetical exploratory sample of 120 questionnaires. The measurement model evaluation results demonstrated that all validity and reliability requirements were met. Outer loadings for all items exceeded the acceptable threshold (0.801–0.881), and statistical indicators recorded high levels of internal consistency and convergent validity (Cronbach’s Alpha between 0.887 and 0.921, Composite Reliability between 0.911 and 0.934, and AVE above 0.62). Furthermore, HTMT matrix results (0.742–0.827) and VIF values (2.184–2.527) confirmed the absence of discriminant validity or multicollinearity issues among variables. Regarding the structural model and hypothesis testing via the Bootstrapping procedure, the findings revealed a statistically significant positive effect (P<0.001) across all hypothesized paths. Implementing MFCA improved the measurement of waste costs (β=0.463,T=6.214), while Blockchain technology enhanced resource-flow traceability (β=0.512,T=7.083). The integration of both approaches significantly increased information quality and traceability (β=0.821,T=10.476,R^2=0.638), which directly and strongly supported managerial decisions aimed at rationalizing undesirable output costs (β=0.581,T=8.137,f^2=0.356). The overall coefficient of determination (R^2=0.711) and predictive relevance (Q^2=0.486) confirmed the high explanatory power of the proposed model. The study concludes that utilizing Blockchain technology as a secure digital infrastructure to log and trace MFCA data enhances the transparency of environmental and financial outputs, providing management with accurate insights to effectively control and rationalize waste costs and environmentally unfavorable activities.