Costing of Apparel ProductsLadies Denim Jeans
COSTING The technique and process of ascertaining / defining /
determining costs.
It involves the classification , recording and appropriate
allocation of expenditure for the determination of the costs of
products or services; the relation of these costs to sales values;
and the ascertainment of profit ability.- Cost and Financial
Accounting Terminology, published by Chartered Institute of
management Accountants (CIMA) , London.
PRIME COST Direct Costs: Costs which can be directly
identifiable with cost centers, processes or production units are
known as direct costs. Direct Material : Materials which enter into
and form part of the product - woods in furniture, chemical in
drug, leather in shoe. Direct Labor : Employees are employed
directly in making the product and their work can be easily
identified. Direct Expenses : Cost of special design, consultancy
fee for improving productivity, hire charges of machinery.
DIRECT MATERIALDEPARTMENTCUTTING
COST PER GARMENT(Rs.)203.735998
Cutting Department
SEWING
Sewing Department
11.935
Finishing Department FINISHING Total Direct Material
22.13566667
237.8066664
DIRECT LABOURDEPARTMENTCUTTING Cutting Department 1.26716604
COST PER GARMENT(Rs.)
SEWING
Sewing Department
25.50561798
Finishing Department FINISHING
2.559375
Total Direct Labour
29.33215902
DIRECT EXPENSESDEPARTMENTEMBROIDERY Embroidery 8
COST PER GARMENT(Rs.)
WASHING
Washing
68
Total Direct Expenses
76
PRIME COSTELEMENTSMATERIAL Direct Material
COST PER GARMENT(Rs.)237.806
LABOUR
Direct Labour
29.332
Direct Expenses EXPENSES
76
Prime Cost
343.138
FACTORY OVERHEADS Factory overhead = Indirect
(material+labor+expenses) incurred @factory, Commences with the
supply of raw material and ends with the primary packaging of
finished goods. It includes: Indirect Material Indirect Labour
Indirect Expenses
INDIRECT MATERIALDEPARTMENTCUTTING Cutting Department
COST PER GARMENT(Rs.)0.141697878
SEWING
Sewing Department
0.044655719
Finishing Department FINISHING Cad Department CAD Total Indirect
Material
4.718125
0.312109863
5.241932741
INDIRECT LABOURDEPARTMENTCUTTING
COST PER GARMENT(Rs.)0.234
Cutting Department
Sewing Department
2.184
SEWINGFinishing Department 0.364
FINISHING
Cad Department
0.720
Total Indirect Labour
3.504
INDIRECT EXPENSESPOWER CONSUMPTION DEPRECIATION INSURANCE
MAINTENANCE AND REPAIRS
POWER CONSUMPTIONDEPARTMENTCUTTING Cutting Department
COST PER GARMENT(Rs.)0.163
SEWING
Sewing DepartmentFinishing Department
1.9980.474 0.092 0.018 2.747
FINISHINGCad Department CAD Storage Total Power Consumption
STORAGE
DEPRECIATIONDEPARTMENTCutting Department Sewing Department
SEWING Finishing Department 0.905
COST PER GARMENT(Rs.)0.081 1.541
CUTTING
FINISHING
Cad DepartmentStorage Total Depreciation
0.07460.010 2.614
FINISHING CAD
STORAGE
INSURANCEDEPARTMENT COST PER GARMENT(Rs.)0.007 Cutting
Department
Sewing Department
0.226
Finishing Department
0.0236
INSURANCE
Total Insurance
0.258
MAINTENANCE AND REPAIRDEPARTMENT COST PER GARMENT(Rs.)0.014
Cutting Department
Sewing Department
0.408
Finishing Department
0.042
MAINTENANCE
Total Insurance
0.465
TOTAL INDIRECT EXPENSESELEMENTSPower Consumption
COST PER GARMENT(Rs.)2.747
Depreciation
2.614
Insurance
0.258
Maintenance And RepairsTOTAL EXPENSES
0.465
Total Indirect Expenses
6.085
TOTAL FACTORY OVERHEADSELEMENTS COST PER GARMENT(Rs.)5.241
Indirect Material
Indirect Labour
3.504
Indirect Expenses
6.085
TOTAL OVERHEADS
Total Factory Overheads
14.805
ADMINISTRATION OVERHEADS Administrative O/h includes indirect
(material+labor+expenses) incurred @policy formation, control and
administration e.g..Human Resource , Director, VP It includes:
Manpower Power Consumption Depreciation Material Expenses
ADMIN OVERHEADSELEMENTS MANPOWER Manpower MATERIAL POWER
CONSUMED DEPRECIATION Other Expenses OTHER EXPENSES Total Admin
Overheads 3.47 59.733 Material Power Consumption Depreciation
52.248 0.938 2.264 0.813 COST PER GARMENT (Rs.)
DESIGN, SELLING AND DISTRIBUTION OVERHEADS Design O/h :
Designing includes costs of-Hiring designer(s), Expenditure on
travel to international fairs/exhibitions to understand latest
trends/ideas ,cost of experimenting with new fabrics, prototype
development, Fit sample, Sales man sample Selling O/h : Indirect
(material+labor+expenses) incurred @creating and stimulating demand
and securing orders, E.g.advertisement, customer interaction
Distribution O/h : Indirect (material+labor+expenses) incurred
@dispatching them to respective location.eg warehouse expenses,
rates and taxes for finished goods
DESIGN & SELLING & DISTRIBUTION OVERHEADSELEMENTS COST
PER GARMENT(Rs.)
Sampling SAMPLING
1.467
Transportation
1.25
TRANSPORTATION
Total D&S Overheads
2.717
FINAL COSTELEMENTS COST PER GARMENT(Rs.)
Prime Cost
346.81
Production Cost (Prime Cost + Factory Overheads )
361.62
FINAL COST
Final Cost ( Production Cost + Admin Overheads + Design, Selling
And Distribution Overheads)
424.07
DIRECT MATERIALDIRECT MATERIALCUTTING SEWING 9% FINISHING
5%
86%
DIRECT LABOURDIRECT LABOURCUTTING SEWING 4% FINISHING
9%
87%
DIRECT EXPENSESDIRECT EXPENSESEMBROIDERY WASHING
29%
71%
PRIME COSTPRIME COSTDIRECT MATERIAL DIRECT LABOUR DIRECT
EXPENSES
22%
9% 69%
INDIRECT MATERIALINDIRECT MATERIALCUTTING SEWING 6% FINISHING
CAD 3% 1%
90%
INDIRECT LABOURINDIRECT LABOURCUTTING SEWING 7% FINISHING
CAD
21%
10%
62%
TOTAL INDIRECT EXPENSESTOTAL INDIRECT EXPENSESPOWER CONSUMPTION
INSURANCE 4% 8% 45% 43% DEPRECIATION MAINTENANCE AND REPAIRS
FACTORY OVERHEADSFACTORY OVERHEADSINDIRECT MATERIAL INDIRECT
EXPENSES INDIRECT LABOUR
41%
35%
24%
