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Costing of Apparel Products: Portofino Shirt

The document summarizes the costing process for a Portofino shirt apparel product. It includes direct costs like materials, dyeing, printing, and trims. Indirect costs like transportation, overheads, and banking charges are also considered. The merchandiser and top management decide the final cost of the garment. Specifics of the Portofino shirt like its style, materials, and measurements are provided. Calculations show the annual usage amount, economic order quantity, total production cost, and 15% profit percentage.

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sanyam
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33 views

Costing of Apparel Products: Portofino Shirt

The document summarizes the costing process for a Portofino shirt apparel product. It includes direct costs like materials, dyeing, printing, and trims. Indirect costs like transportation, overheads, and banking charges are also considered. The merchandiser and top management decide the final cost of the garment. Specifics of the Portofino shirt like its style, materials, and measurements are provided. Calculations show the annual usage amount, economic order quantity, total production cost, and 15% profit percentage.

Uploaded by

sanyam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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COSTING OF APPAREL PRODUCTS

Portofino Shirt
APPAREL COSTING
 Apparel costing in the garment making process is
one of the most complex procedures.
 Purchasing of raw materials, cost of dyeing, knitting,
printing, transport cost, packaging, banking charges,
overheads and cost of trims and accessories used
all are included in it.
 The merchandiser and the top management of a
company are actively involved in deciding the cost
of a garment.
COSTS
 A direct cost is a price that can be completely attributed to the production of
specific goods or services.
 Some costs, such as depreciation or administrative expenses, are more difficult
to assign to a specific product and therefore, are considered to be indirect
costs.
Style of Garment
 The garment chosen is
a Slim Fit, Sleeveless,
Portofino Shirt in a
vintage style with a
regular collar and four
hole buttons. It also has
a yoke with a single box
pleat back and a straight
placket.

Front Back
TENDER
BILL OF MATERIAL
PURCHASE ORDER
THE COST SHEET
ANNUAL USAGE

GSM = 114g/m²
Area = 2 X 1
For 1 garment = 2 X 114 = 228g/m²
Total pieces produced per year = 182500
Therefore,
Annual consumption = 182500 X 0.228 = 41610
ECONOMIC ORDER QUANTITY

EOQ = √2AB/CS

A = Annual usage
B = Buying cost per order
C = Cost per order
S = Storage inventory cost per annum
EOQ
Pieces produced per day = 500
Hence, pieces produced per year = 182500
Annual usage = 182500 X 0.228
= 41610
Buying cost per order = 12
Cost per order = 270
Storage and carrying cost = 20%
EOQ = √2AB/CS
= √2 X 41610 X 12 / 270 X 54
= 8 Orders.
PROFIT ANALYSIS
The total cost of the production is 3274.5 $,
the profit value that the company earns is 491.2 $,
hence, the Profit % of the company is 15%.
THANK YOU

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