Direct Costing of formal shirt

Style Code

Supplier Season
Supplier Code Color

Daily Production 10000 pcs

Spreading 10200
Cutting 10200
Sewing 10100
Finishing 10050
final 10000
Items Per Garment Reqt (in mtr) Rate/Unit(Rs)
Main Fabric(cotton) 1.5 80

CMT

Activities Manhours Manpower

Spreading 8 15
Cutting 8 15
Sewing 8 875
8 150
Finishing 8 300
Packaging 8 40

sam of garment=25 min

efficiency=60%

Items Per Garment Reqt Rate/Unit(Rs)

Packing Label 1 1.25
Tags 1 2
Polybags 1 2
Stickers 1 0.5
Hard paper 1 5
Clips 2 0.25
Iron pins 2 0.05
Butter Paper 1 0.5
Collar Plastic Trim 1 1.75
Collar Hard paper trim 1 0.9
butterfly 1 0.75
 Trims Per Garment Reqt Rate/Unit(Rs)
Main Button 12 0.3
Small Button 1 0.25
thread (a cone of thread of 5000m) 0.025 50
Brand label 1 1
Wash Care Labels 1 0.3
fit label 1 0.75
fabric label 1 0.5
size label 1 0.25
collar bone 2 1
fusing material ( in mtr) 0.25 20

Total Cost of a Garment 199.94 Profit=15% of 199.9= 29.985

Wastage: 2 %
For calculation of sewing room workforce, operators & helpers both are taken on consideration. The SAM of the ga
is assumed as 60%.
Operators required 876.7361
Helpers 150
ct Costing of formal shirt

Fall Winter
light blue

Cost/pcs Total fabric(in mts) Total cost

120 15300 1224000
TOTAL 1224000
Cost/garment(Rs) 122.4

Type of Labor Rate/hour(Rs) Total(Rs) Margin % Cost/garment(Rs)

Unskilled 35 4200 2 0.4284
Skilled 50 6000 3 0.618
Skilled 42 294000 4 30.576
Unskilled 30 36000 4 3.744
Semi-skilled 40 96000 3 9.888
Semi skilled 40 12800 2 1.3056

TOTAL 46.56

Cost/garment Ordered Quantity Total cost

1.25 10050 12562.5
2 10050 20100
2 10050 20100
0.5 10050 5025
5 10050 50250
0.5 20100 10050
0.1 20100 2010
0.5 10050 5025
1.75 10050 17587.5
0.9 10050 9045
0.75 10050 7537.5
 TOTAL 159292.5
Cost/garment 15.92925

Cost/garment Ordered Quantity Total cost

3.6 121200 10000 36360
0.25 10100 10000 2525
1.25 252.5 10000 12625
1 10100 10000 10100
0.3 10100 10000 3030
0.75 10100 10000 7575
0.5 10100 10000 5050
0.25 10100 10000 2525
2 20200 10000 20200
5 2525 10000 50500
TOTAL 150490
Cost/garment
(in Rs) 15.049

% of 199.9= 29.985 final cost = 229.85

n on consideration. The SAM of the garment is taken as 25 minutes and efficiency of sewing room
 Absorption Costing
Components of absorption costing:
Material Manpower
Direct Indirect DirectIndirect

Prime Cost = Direct Materials+Direct Labour+Direct Expenses

Overheads = All indirect costs

Sno Materials
Direct Quantity Cost Indirect Quantity Cost/pcs Target
1 Fabric 1.50m 120 Needles 150 2 10000

2 Thread 125m 1.25 Bobbin 30 20 10000

3 main button 12 3.6 Bobbin case 30 40 10000

small button 1 0.25
4 Brand Label 1 1 Machine Oil (in ml) 10 10 10000

5 Size Label 1 0.25

6 Wash Care Label 1 0.3 Feeds 10 100 10000

7 fit label 1 0.75 Folders 30 25 10000

8 fabric label 1 0.5

9 collar bone 2 2 Steam (in ml) 1000 5 10000

10 Butter paper 1 0.5 Spot wash (in ml) 100 30 10000

11 Pins, clips 4 0.6 Pins(pin tables) 20 1 10000

12 fusing material 0.25m 5 Band Knife Blades 10 80 10000

13 tag 1 2 St Knife Blades 10 50 10000

14 polybag 1 2 Trimmer 10 20 10000

15 stickers 1 0.5 Tickets 150 0.25 10000

16 collar trims 3 3.4 Marker paper 75 2 10000

17 packing label 1 1.25

18 hard paper 1 5 Marking chalk 20 2 10000

Total 150 Total
Direct material is incurring a watage of 2% in the production process, hence
Direct material cost = 150.15 + 2% of 150.15 = 153.153
Prime Cost Direct Material+Direct Manpower+ Direct Expenses
Overheads Indirect Material+Indirect Manpower+Indirect Expenses

Grand Total
 Other Expenses
Direct Indirect

+Direct Expenses
s

Absorption Costing Of Product

Manpower
Cost Direct Quantity Cost Indirect Quantity rate/day/personnel
0.03 Guard 8 200

0.06 cutting room 30 1.04 Manager 5 2000

0.12 sewing room 1025 34.3 C E O 1 10000

0.01 finishing room 340 11.2 supervisor 15 233.34

Office Boy 2 200

0.1 Merchandiser 6 1200

0.075 HR 3 1400

CAD Dept 4 600

0.5 Canteen Staff 6 240

0.3 Quality 20 1000

0.002 IE 10 500

0.08 F.I. &Warehsg 7 300

0.05 Maintenance 8 300

0.02

0.00375

0.015

0.004
1.36975 Total 46.5 Total
ct Expenses 209.91 Direct cost 199.683
rect Expenses 13.58376

###
Profit= 15% of 223.49= 33.58

final = 257.07
g Of Product
Other Expenses
target Cost Direct rate/day target Cost
10000 0.16

10000 1

10000 1 internet 100 10000 0.01

10000 0.35001 Electricity (m/c) 40000 10000 4

10000 0.04 Maintenance 16000 10000 1.6

10000 0.72 Loading & Unloading 100 10000 0.01

10000 0.42 Stationary 1000 10000 0.1

10000 0.24 Rent 45000 10000 4.5

10000 0.144

10000 2 Telephone Exp 100 10000 0.01

10000 0.5

10000 0.21

10000 0.24

7.02401 Total 10.23

Other Expenses
Indirect rate/day target Cost
Bank Charges 5000 10000 0.5

Business Promotional Exp 1500 10000 0.15

Medical Expenses 2000 10000 0.2

Delivery Charges 7000 10000 0.7

Xerox 300 10000 0.03

Courier &Postage Exp. 10000 10000 1

Electricty Charges 5000 10000 0.5

Fuel Charges 12000 10000 1.2

Lodging & Boarding Exp 5000 10000 0.5

Pollution Control Fee 100 10000 0.01

Rates &Taxes 4000 10000 0.4

Depreciation 18083 10000 1.8083

Total 5.19
90410.9589041096
18082.1917808219
 ACTIVITY BASED COSTING

CUTTING ROOM

Direct labour Manhours Manpower

Type of Labor
Rate/hour(Rs)Total(Rs)

spreading 8 15 Unskilled 35 4200

cutting 8 7 Skilled 50 2800
tickting & bundling 8 8 Skilled 50 3200
10200

Indirect labour
number rate/day/manpower total cost
supervisor 2 233.3333 466.6667
manager 1 400 400
Quality 2 50 100
IE 1 50 50
Maintenan 1 50 50
Guards 1 25 25
cad staff 4 150 600
1691.667

Indirect Material
Particulars Cost
Tickets 37.5
Band-knife blade 800
Straight knife blade 500
Marker paper 150
Pins 20
Steam 500
Total 2007.5
Other overheads
Particulars Cost
Electricity 2000
M/c Maintenance 1000
canteen 20
Internet Bill 10
Stationary 100
Rent 10000
Telephone 10
Medical 200
Xerox 30
13370
Total Cost of Cutting Room 27533.17
Produciton target 10000

Cost/garment 2.753317

Sewing Room
direct labour
type numbers cost/hr total cost/ total cost/ margin actual
skilled 875 42 36750 294000 4 305760
unskilled 150 30 4500 36000 4 37440
Total 330000 343200
indirect labour
type number cost/day
quality 12 600
IE 7 350
supervisor 9 2100
manager 2 800
maintenanc 5 250
guard 3 75
4175

Indirect material cost

particulars cost
needle 300
bobbin 600
bobbin case 1200
m/c oil 100
feeds 1000
folders 750
steam 1000
marking chalk 40
trim 200
5190
Other overheads
Particulars Cost
Electricity 32000
M/c Maintenance 12000
canteen 120
Internet Bill 30
Stationary 300
Rent 12000
Telephone 40
Medical 900
Xerox 100
57490
Total Cost of Sewing Room 410055

Produciton target 10000

Cost/garment 41.0055

Finishing
Direct Labour
Type No Rate/hr rate/day Cost/day margin actual
Skilled 340 40 320 108800 3 112064

Indirect Labour
type number cost/day
quality 5 250
IE 2 100
supervisor 3 700
manager 1 400
maintenanc 2 100
guard 2 50
1600
Indirect Material
Particulars Cost
Steam 3500
Spot Wash 3000
6500
Other overheads
Particulars Cost
Electricity 8000
Xerox 60
M/c Maintenance 2500
canteen 80
Internet Bill 20
Stationary 200
Rent 14000
Medical 700
25560
Total Cost of finishing Room 145724

Produciton target 10000

Cost/garment 14.5724

Finished Garment Warehousing

Direct Labour
 Type Number Rate/day/operator Cost/day
Unskilled 3 300 900

Other overhead
Particulars Cost
Electricity 500
Xerox 5
M/c Maintenance 10
canteen 1.5
Internet Bill 5
Stationary 25
Rent 3500
4046.5
Total Cost 4946.5 Cost/garm 0.49465

Storage of raw material and Fabric Inspection

Indirect Labour
Type Number Rate/day/operator Cost/day
Unskilled 4 300 1200
Manager 1 400 400
1600
Direct Material
Particular Per garment req Rate/unit Cost/pc Total Fabric ConsumptTotal cost
Fabric 1.5 80 120 15300 1224000
Product Trims
Per garment req Rate/unit Cost/pc Ordered QtProduction Total Cost
Main Butto 12 0.3 3.6 121200 10000 36360
Small butt 1 0.25 0.25 10100 10000 2525
Thread 0.025 50 1.25 252.5 10000 12625
Brand Labe 1 1 1 10100 10000 10100
Wash care 1 0.3 0.3 10100 10000 3030
Fit label 1 0.75 0.75 10100 10000 7575
Fabric Labe 1 0.5 0.5 10100 10000 5050
Size Label 1 0.25 0.25 10100 10000 2525
Collar bon 2 1 2 20200 10000 20200
Fusing 0.25 20 5 2525 10000 50500
150490
Package Trim
Per garment req Rate/unit Cost/pc Ordered QtProduction Total Cost
Packing Label 1 1.25 1.25 10050 12562.5
Tags 1 2 2 10050 20100
Polybags 1 2 2 10050 20100
Stickers 1 0.5 0.5 10050 5025
Hard paper 1 5 5 10050 50250
Clips 2 0.25 0.5 20100 10050
 Iron pins 2 0.05 0.1 20100 2010
Butter Paper 1 0.5 0.5 10050 5025
Collar Plastic Trim 1 1.75 1.75 10050 17587.5
Collar Hard paper trim1 0.9 0.9 10050 9045
butterfly 1 0.75 0.75 10050 7537.5
Total 159292.5
Total Material Cost 1533783

Other overhead
Particulars Cost
Electricity 500
Xerox 5
M/c Maintenance 10
canteen 1.5
Internet Bill 5
Stationary 25
Rent 3500
4046.5

Total Cost of Raw Material Inventory 1539429

Produciton target 10000

Cost/garment 153.9429

Administrative Cost
Particulars Cost
CEO 10000
Merchandiser 7200
HR 4200
Office boy 200
bank charges 5000
business promotion 1500
delivery charges 7000
xerox 80
medical 180
courier and postage 10000
electricity 2000
fuel charge 12000
lodging & boarding 5000
pollution control 100
rates and taxes 4000
internet 30
rent 2000
 telephone exp 27
stationary 350
canteen 30
Depreciation 18083
88980

Production Target 10000

Cost/Garment 8.898

TOTAL COST / GARMENT 221.6668

Profit= 15% of 221.668= 33.250

total= 254.91
Margin % Actual (rs)

2 4284
3 2884
3 3296
10464