Transcript Document

WELCOME TO ALL OF YOU
Cost sheet
-RAHUL JAIN
(Striving for excellence)
BCOM (H), MBA, FCS
Cost
z Any amount incurred during the operations for
providing the good or service to get the output
into the hands of the customer
z Controlling costs is essential to
business success
z A sacrifice of resources.
Apparel Products Value Chain
By Lyn Fernando
Buyer (Retailer) 100%
-Lack
of
Direct
contacts/
Access to
Retailer.
-Long lead time
Selling & Distribution
(Agents)
Outbound logistics
Manufacturing (cut, sew &
finishing)FOB 10-25% of
Retail
Raw materials /Accessories
–40-70% of FOB
Sourcing
Product Development
Design
Need to develop
strong networks &
lobby groups. Free
Trade Agreements,
concessionary tariffs
- Cost of Agents
Proximity to market,
regular sailings -sea &
Air. Electronic Data
Interchange for
documentation
Lack of Advanced
Manufacturing
Technology
Dependency on
imported raw material,
long lead times,delays
at customs,
documentation, EDI
• High Cost Structure
(
Labour,
Utility)
Wastage
use
of
CAD/CAM
• Labor Laws, Invest
in Human Resources
• Lack
of
Management
Skilled
•Low productivity,
• Proximity
Suppliers
to
•High energy cost
Lack of Specialty
fabrics & Accessories
Non availability of advanced
product development facilities
Lack of design capabilities
Basic elements
of Cost
z Material
z Labor
z Expense
Prime Cost
z Direct Material Consumed
+ Direct Labor
+ Direct Expense
COST SHEET
• PRIME COST
• + TOTAL
DEPRECIATION
• + FACTORY
OVERHEADS
• COP
• + OPENING STOCK
• - CLOSING STOCK
COST OF
PRODUCTI
ON
Total cost &
SALES
COST OF
GOODS
SOLD
COST OF
SALES
• COST OF
SALES
• + Other
Overheads
• =Total cost
• +Profit
• =Sales
• COGS
• + OFFICE
EXPENSES
• + S & D EXPENSES
Manufacturing costs
• Manufacturing: Activities and processes
that convert raw materials into finished
goods.
• Manufacturing Costs include:
–
–
–
–
Direct materials
Direct labor
Direct Expense
Manufacturing overhead
MANUFACTURING
OVERHEAD
•Consists of costs that are indirectly associated
with manufacturing the finished product.
•Includes:
z
z
z
z
• Indirect materials
• Indirect labor
• Indirect expenses such as
Depreciation on factory buildings and machines
• Insurance, taxes, maintenance on
factory facilities
Manufacturing
Overhead
FACTORY OVERHEADS- Examples
z
z
z
z
z
z
z
z
z
z
z
z
z
z
z
z
z
z
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
OFFICE AND ADMINISTRATION
OVERHEADS: Examples
Salary paid to:
z chairman
z MD
z GM
z Receptionists
z HR persons
z Accountants
z Purchases Dept. Persons
z Office Boys
Telephone Expenses
Stationary Expenses
Electricity Expenses of office
Rent/Depreciation on Office Assets
SELLING AND DISTRIBUTION
OVERHEADS- Examples
z
z
z
z
z
z
z
z
z
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
Other Overheads
z
z
z
z
Financial Overheads
Miscellaneous Expenses
Non Operating overheads
Taxes
Assignment
Individual Assignment
Questions of Costsheetassignment.xls (Excel file)
Write Key learnings/Reflections of the class
Some important points
Academic Honesty
Reference Any Source
When Confused Ask Instructor
Contact me: Rahul Jain (9811228852,
[email protected],
Yahooid:rahulkjain16)
www.learningcosting.pbworks.com