WELCOME TO ALL OF YOU

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