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WELCOME TO ALL OF YOU

WELCOME TO ALL OF YOU . Cost sheet -RAHUL JAIN (Striving for excellence) BCOM (H), MBA, FCS. Cost. Any amount incurred during the operations for providing the good or service to get the output into the hands of the customer Controlling costs is essential to business success

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WELCOME TO ALL OF YOU

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  1. WELCOME TO ALL OF YOU Cost sheet -RAHUL JAIN (Striving for excellence) BCOM (H), MBA, FCS

  2. Cost • Any amount incurred during the operations for providing the good or service to get the output into the hands of the customer • Controlling costs is essential to business success • A sacrifice of resources.

  3. Apparel Products Value ChainBy Lyn Fernando -Lack of Direct contacts/ Access to Retailer. -Long lead time - Cost of Agents Need to develop strong networks & lobby groups. Free Trade Agreements, concessionary tariffs Buyer (Retailer) 100% Selling & Distribution (Agents) • High Cost Structure ( Labour, Utility) Wastage use of CAD/CAM • Labor Laws, Invest in Human Resources • Lack of Skilled Management • Low productivity, • Proximity to Suppliers • High energy cost Proximity to market, regular sailings -sea & Air. Electronic Data Interchange for documentation Outbound logistics Manufacturing (cut, sew & finishing)FOB 10-25% of Retail Lack of Advanced Manufacturing Technology Dependency on imported raw material, long lead times,delays at customs, documentation, EDI Raw materials /Accessories –40-70% of FOB Lack of Specialty fabrics & Accessories Sourcing Product Development Non availability of advanced product development facilities Lack of design capabilities Design

  4. Basic elements of Cost • Material • Labor • Expense

  5. Prime Cost • Direct Material Consumed + Direct Labor + Direct Expense

  6. COST SHEET

  7. Manufacturing costs • Manufacturing: Activities and processes that convert raw materials into finished goods. • Manufacturing Costs include: • Direct materials • Direct labor • Direct Expense • Manufacturing overhead

  8. Manufacturing Overhead MANUFACTURING OVERHEAD • Consists of costs that are indirectly associated with manufacturing the finished product. • Includes: • Indirect materials • • Indirect labor • • Indirect expenses such as • Depreciation on factory buildings and machines • • Insurance, taxes, maintenance on factory facilities

  9. FACTORY OVERHEADS- Examples • Salary paid to merchandiser • Salary paid to production manager • Floor incharge salary • Q.A. + Q.C. • Plotting boy • CAD operator • Salary paid to fabric head • Salary paid for line supervisor • Salary paid to machinery maintenance • House keeping • Guard • Medical care taker • Fuel • Electricity • Water consumption • Oil and Consumables • Needles • Rent/Depreciation on Factory Assets

  10. OFFICE AND ADMINISTRATION OVERHEADS: Examples Salary paid to: • chairman • MD • GM • Receptionists • HR persons • Accountants • Purchases Dept. Persons • Office Boys Telephone Expenses Stationary Expenses Electricity Expenses of office Rent/Depreciation on Office Assets

  11. SELLING AND DISTRIBUTION OVERHEADS- Examples • Salary paid to selling and marketing staff • Advertisement cost • Sample distribution • Export documentation • Testing expense • Buying agent commission • Conveyance • Trade Fair and other Promotional expenses • Website and ecommerce expenses

  12. Other Overheads • Financial Overheads • Miscellaneous Expenses • Non Operating overheads • Taxes

  13. Assignment Individual Assignment • Questions of Costsheetassignment.xls (Excel file) • Write Key learnings/Reflections of the class

  14. Some important points • Academic Honesty • Reference Any Source • When Confused Ask Instructor Contact me: Rahul Jain (9811228852, rahulkjain16@yahoo.co.in, Yahooid:rahulkjain16) • www.learningcosting.pbworks.com

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