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Why do we Pay different price
for different styles?





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Why the differences in pricing?

   

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  s 130 per metre s 250 per metre

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 s 80 per metre s 150 per metre

 
s 100 per metre s 200 per metre

u u
 s 70 per metre s 140 per metre

8-10 ounce 8-10 ounce

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?he branch of accounting dealing with the

classification, recording, allocation,
summarization and reporting of current
and prospective costs.

Study of profitability or otherwise for every

line of activity with the objective of cost
control and decision making besides the
most economical and efficient use of
scarce recourses.
Vmportance of Costing 

§ àashion changes are very quick

§ Prices are changing every season
§ àor the same product buyers want better
prices than previous season
§ Expanded sourcing options
§ New types of retail outlets are growing
§ ?oo many variables exist today
§ New element of competitiveness due to
more sourcing options
§ Vncreasing number of new garment
styles and end uses
§ New types of retail outlets,which means
more consumer categories
COS?VNG VS PVCVNG
§ |
  ? E POCESS Oà ES?V
?VNG
? E ?O? ESOUSE VNVES?
EN?
EQUVED ?O
EC NDVSE, PODUCE
ND
E?  PODUC?
§
|  ? E POCESS Oà DE?E
VNVNG
EXC NGE VUE Oà GOODS ? ? E

DE VVE àO SE
OUN? SED
O ECVVED VN EXC NGE Oà PODUC?
 !|
§ Direct material- actual cost of the material
that will make up the finished product
§ Direct abor- Wages cost of those
employees who actually manufacture the
finished product
§ Direct Expenses - incurred without which a
specific product could not be made
§ % % &
|

 !|
§ Vndirect materials-
aterials used in
factory which do not form a part of the
finished product
§ Vndirect abour- Wages of employees who
work in the factory but do not form a part of
the finished product
§ Vndirect Expenses- ll other factory
expenses
§ V
VVE = àC?O OVE EDS
àixed & Variable Costs
§ àC - costs that do not get affected
by output of business
§ VC - costs which vary with output of
business
§ Semi-variable costs - Contain
elements of both fixed and variable.
General Operating Expenses
!''!!:
Vndirect costs,which include the costs of
operating the general offices and
departments that are not directly involved
with the product line but are essential to
the operation of the firm.
E.g.-merchandising, ccounting,
VS,
secretarial, managerial staff.
§ àor a company involved in fashion
merchandise,designing/new product
development becomes important
§ Designing includes costs of- iring designer(s),
Expenditure on travel to international
fairs/exhibitions to understand latest
trends/ideas,cost of experimenting with new
fabrics,prototype development
§ Skilled sample master/operators,sample
yardage and trims.
§ Cost of managing
àinance,accounts,shipping departments
§ Communication charges
§ Can u think of some more«..???
Some Definitions «««.
§
|
  DVEC? COS?S
§
| |
  PV
E COS? 
OVE EDS
§  |
  PODUC?VON COS? 
GENE OPE?VNG EXPENSES
§


|  ?O? COS? 
POàV?
§

|  W OESE PVCE 
SEVNG ND DVS?VU?VON COS? 

UP
Ô