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Manufacturing enterprises nowadays are operating in a more competitive environment due to various factors, such as fast-changing markets, more competitors, and more regulators. To remain competitive, they must find ways to increase their production efficiency. Decisions regarding process improvement must be made with sufficient supporting information. Material flow cost accounting (MFCA) has gained more attention due to the growing concern about the effects of the business's activities on environment. MFCA provides detailed information regarding production waste, which conventional management accounting fails to do. The MFCA helps to improve decision-making skills regarding waste-reduction activities to be more focused and accurate. The MFCA is relatively new since its first international standard (ISO14025) was published in 2011. Most of the research in MFCA has so far focused on the technical side of MFCA or on investigating cost structure; the use of MFCA to solve practical problems is very rare. This paper, therefore, presents a more complete picture of the implementation of MFCA, starting from data collection and MFCA calculation to waste-reduction activities. A case study of ceramics production was used to demonstrate the application of MFCA. The result of the case study confirms that MFCA is a practical tool that helps decision makers to make better decisions, which would lead to sustainable cost reduction in actual business environment. [ABSTRACT FROM AUTHOR]