Cost calculation

Cost Direct Cost: A price that can be completely attributed to the production of specific goods or services is called direct cost. Direct costs refer to materials, labor and expenses related to the production of a product. Example -Project staff -Consultants -Project supplies -Labour -Material -Directors Salary Indirect Cost Indirect costs are costs that are not directly accountable to a cost of an object. These are those costs which are not directly related to production Example: – Utilities – Rent – Audit and legal – Administrative staff – Equipment rental – Fuel – Maintenance – Generator – Security – Telephone – Business travel expenditure Intentional COMMERCIAL terms  Ex Works(ExW): Ex means from & Works means factory, mill or warehouse, which is the seller’s premise. ExW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks.  Free On Board(FOB): The delivery of goods on board the vessel at the named port of origin (loading), at seller's expense. Many importers and exporters still use the term FOB in the air freight.  Cost And Freight(CNF): The delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the cargo insurance and other costs and risks.  Cost, Insurance and Freight (CIF):  The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the import customs clearance and other costs and risks.  Cut and Make (CM): Buyer is responsible for outsourcing all types of material required to complete the production. Contractor is only responsible to cut, sew, finish and packing. Consumption Body part: {(length + allowance)* (width + allowance)}*2*12*GSM = {(64.8+ 3.5)* (37+ 2)}*2*12*190/10000000 kg/dz =1.214 kg/dz Sleeve part: {(sleeve length + allowance)* (sleeve width + allowance)}*2*12*GSM = {(8+3)* (21+1)}*2*12*190/10000000 kg/dz =0.11 kg/dz Neck binding: {(neck length + allowance)* (neck width + allowance)}*12*GSM = {(28.5+ 1)* (2+ 1)}*12*190 kg/dz = 0.02 kg/dz Order Quantity: 10000 pieces, Consumption per dozen: 1.478 kg 1.1 Fabric costing 100% cotton, single jersey, 190 GSM, combed yarn. Yarn price (22’s)…………………………………………………………....$3.90/ kg Landed cost………………………………………………………………...$0.08 /kg Knitting charge…………………………………………………………… $0.25/ kg $4.23/ kg Process loss in knitting is 2%................................................. (4.23X 2%}=$0.085/kg $ 4.315/kg Dyeing charge…………………………………………………………..…..$1.5 / kg $5.82 /kg Process loss in dyeing 12%……………………………………………..…..$0.70 /kg $6.52/ kg Per dozen cost (6.52* 1.478)= $9.64 Garments quantity 10,000 pcs Overall fabric cost= (9.64 X 10,000)/12 = $8033.33 Total weight: (body weight+ sleeve weight+ neck weight) = (1.214+0.11+0.02) kg/dz = 1.344 kg/dz Wastage 10% Total weight ( with wastage): 1.344 + 10% = 1.478 kg/dz 1.2 Accessories costing SL Name Qty.(pcs) Wastage Total Qty. (pcs) Unit price Price/dz Total price A Main label 10,000 3% 10,300 $0.017 0.204 $175.1 B Size label 10,000 3% 10,300 $0.01 $0.12 $103 C Care label 10,000 3% 10,300 $0.017 $0.204 $175.1 D Sewing thread 80*1.2*10,000/4000 12% 240 cones $0.95 $0.274 $228 E Back board 10,000 2% 10,200 $0.05 $0.6 $510 F Poly bag 10,000 2% 10,200 $0.042 $0.504 $428.5 G Carton 10,000/20 no 500 carton $1.50 $0.9 $750 H Hang tag/ Price tag 10,000 2% 10,200 $0.02 $0.24 $204 I Tag pin 10,000/4500 no 3 box $1.13 $0.032 $3.39 J Gum tape 500/8 no 63 $0.35 $0.26 $22.05 K Snap button 10,000 * 7 2% 71,400 set $ 0.04 $3.36 $ 2856 Total accessories cost $6.7 $ 5455.96 1.3 Printing cost All over print cost $1.50/kg Total print cost= 1.50*1.474*10,000/12 = $1842.5 1.4 Sample making cost= $100 1.5 Testing cost= $100 1.6 Courier cost= $300 1.7Cost of making/manufacturing (CM) Per day line cost 45,000 Taka Per hour production 120 pcs 1 dollar= 81 taka CM= (45,000*10,000)/ (120*10*81) =$ 4629.63 Total cost (1.1-1.7) = $20361.42 1.8 Documentation cost (1%)= $203.62 Total cost (1.1-1.8) = $20565.04 1.9 Buying house commission (5%) = $1028.26 Total cost (1.1-1.9) = $21593.30 1.10 Transportation to Ctg (FOB-Ctg) port = $ 300 Total Cost – FOB Ctg (1.1-1.10)= $ 21893.30 Direct cost: $ 21893.30 Indirect Cost (15%) : $ 21893.30 X 15% = $ 25177.295 Profit 10% Profit Cost $ 25177.295 Add 10% $2517.73 Total cost $276095.04 Unit price $ 276095.03 /10000 = $2.77 Fabric Cost / dz = $ 2.00x22 = $ 44 Accessories /dz = $ 8.00 Wash/dz = $ 5.00 CM/dz = $ 20.00 BC = $ 1.00 …………………………………………………… Quoted price /dz = $ 78 Quoted price/pc = $ 6.5