Costing

Costing

Direct Cost: 

A price that can be completely attributed to the production of specific goods or services is called direct cost. Direct costs refer to materials, labor and expenses related to the production of a product. 

Example

• Project staff
• Consultants
• Project supplies
• Labor
• Material
• Directors Salary

Indirect Cost: 

Indirect costs are costs that are not directly accountable to a cost of an object. These are those costs which are not directly related to production 

Example:

• Utilities
• Rent
• Audit and legal
• Administrative staff
• Equipment rental
• Fuel
• Maintenance
• Generator
• Security
• Telephone
• Business travel expenditure

Consumption 

 Size: L

 Here,

 Body length=75.3cm

Chest           =51.5cm

Sleeve length=24cm

Sleeve width=50cm

Neck rib length=41cm

Neck rib width=2.2cm

 

So,

Body part: {(length + allowance) * (width + allowance)} *2*12*GSM

                = {(75.3+ 3.5) * (51.5+ 2)} *2*12*190/10000000 kg/dz

                =1.922 kg/dz

 Sleeve part: {(sleeve length + allowance) * (sleeve width + allowance)} *2*12*GSM

                  = {(24+3) * (50+1)} *2*12*190/10000000 kg/dz

                  =0.628 kg/dz

Neck binding: {(neck length + allowance) * (neck width + allowance)} *12*GSM

                     = {(41+ 1) * (4.4+ 1)} *12*190 kg/dz

                     = 0.103 kg/dz

 Total weight: (body weight+ sleeve weight+ neck weight)

                   = (1.922+0.628+0.103) kg/dz

                   = 2.653 kg/dz

Wastage 10%

Total weight (with wastage): 2.653 + 10% = 2.919 kg/dz

Let, Order quantity 10000pcs,Consumption per dozen 2.919kg

1.1 Fabric costing

      100% cotton, single jersey, 190 GSM, combed yarn.

Yarn price (22’s)…………………………………………………………....$3.90/ kg

Landed cost………………………………………………………………...$0.08 /kg

Knitting charge…………………………………………………………… $0.25/ kg

   Total                                                                                                              $4.23/ kg

Process loss in knitting is 2%................................................. (4.23X 2%}=$0.085/kg

Total                                                                                                              $4.315/ kg

Dyeing charge…………………………………………………………..…..$1.5 / kg

Total                                                                                                              $5.82/ kg

Process loss in dyeing 12%……………………………………………..…..$0.70 /kg

Total                                                                                                              $6.52/ kg

Per dozen cost (6.52* 2.919)= $19.03

Garments quantity 10,000 pcs

Overall fabric cost= (19.03  X 10,000)/12

= $15858.33

 1.2 Accessories Cost

 

 

 Printing cost

         All over print cost $1.50/kg

         Total print cost= 1.50*2.919*10,000/12

                                 = $3648.33

1.4 Sample making cost= $100

       1.5 Testing cost= $100 

1.6 Courier cost= $300

1.7 Cost of making/manufacturing (CM)

            Per day line cost 45,000 Taka

            Per hour production 120 pcs

           1 dollar= 110 taka

            CM= (45,000*10,000)/ (120*10*110)

                  =$ 3409.09

           Total cost (1.1-1.7) = $28871.72

 1.8 Documentation cost (1%) = $288.72

             Total cost (1.1-1.8) = $29160.43

1.9 Buying house commission (5%) = $1458.02

          Total cost (1.1-1.9) = $30618.45

        1.10 Transportation to Ctg (FOB-Ctg) port = $ 300

                        Total Cost – FOB Ctg (1.1-1.10) = $ 30918.45

Direct cost: $ 30918.45

Indirect Cost (15%): $ 30918.45 X 15% = $ 4637.77

Total Cost = $ 30918.45 +$ 4637.77= $ 35556.22

Profit

Profit at 10% = $ 35556.22 X 10%=$3555.62

Total Price     =$ 35556.22+%=$3555.62=$39111.84

Unit Price      =$39111.84/10000=$3.91

Price/Dozen  =$3.91 X 12=$46.93