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Bill of Material: Components Consumption

The document provides a bill of materials and cost breakdown for manufacturing 10,000 units of denim jeans. It includes direct material costs of fabrics, threads, and trims totaling Rs. 134.87 per unit. Direct labor for cutting, sewing, and finishing totals Rs. 74 per unit. Indirect costs include labor, expenses for rent, utilities, and maintenance totaling Rs. 11.36 per unit. The total cost per unit is Rs. 223.45. With wastage and margin, the target manufacturing cost is Rs. 264.69 per unit. The manufacturer can negotiate prices in the range of Rs. 333.33 to Rs. 264.69 with retailers. Analysis shows fabric costs are 43% of

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Varun Mehrotra
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488 views

Bill of Material: Components Consumption

The document provides a bill of materials and cost breakdown for manufacturing 10,000 units of denim jeans. It includes direct material costs of fabrics, threads, and trims totaling Rs. 134.87 per unit. Direct labor for cutting, sewing, and finishing totals Rs. 74 per unit. Indirect costs include labor, expenses for rent, utilities, and maintenance totaling Rs. 11.36 per unit. The total cost per unit is Rs. 223.45. With wastage and margin, the target manufacturing cost is Rs. 264.69 per unit. The manufacturer can negotiate prices in the range of Rs. 333.33 to Rs. 264.69 with retailers. Analysis shows fabric costs are 43% of

Uploaded by

Varun Mehrotra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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BILL OF MATERIAL

Components

Consumption

Woven Fabric
(Construction:-2/1RHT,100%
Cotton,64/46,12.5ozs/yd2)
Buttons(Mettalic)
Button(Plastic)
Brand Label(leather)
Inside Wash care lable
(polyester)

1.1mtr
3pc
2pcs
2pc
1pc
1pc
0.6 mtr

Pocket bag material(Poplin


40s,1/1 plain weave)

1pc
3pcs
LDPE
mtrs

Packing material
Sewing thread

TOTAL QUANTITY
(Cut order plan)
30

32

34

36

38

2000

2000

1000

3000

2000

Sizes

Ratio
Quantity

ORDER PLAN FOR EACH COLOUR*


Sizes

30

32

34

36

38

1000

1000

500

1500

1000

Quantity

*Order for two colours indigo and sulphur black.

Direct Material
Material
(mtr)

Consumption
(mtr)

Cost/mtr
(INR)

Cost/gmt
(INR)

Hidden
Cost
(2%
margin)

Cons/10000
(mtr)

Cost/10000
(INR)

Denim
Fabric
Lining

1.1

90

99

1.98

11000

99,0000

0.16

22

3.52

0.44

1600

35,200

400

0.01

0.08

4000000

40,000

106.52

2.5

Sewing
Thread

Total

10,65,200

Trims & Care labels


Material

Consumption
(Pieces)

Cost/pc
(INR)

Cost/gmt
(INR)

Hidden
Cost
(2%
margin)

Cons/10000
(pcs)

Cost/10000
(INR)

Mettalic
Zipper
Mettalic
Button
Rivets

0.16

10,000

80,000

0.75

0.75

0.015

10,000

7,500

0.20

1.20

0.024

60,000

12,000

Brand Label
(leather)
Inside brand
label(Taffeta
)
Care label

0.12

10,000

60,000

0.75

0.75

0.015

10,000

7500

0.02

10,000

10,000

Pocket tag

0.25

0.25

0.005

10,000

2,500

17.95

0.359

Total

179500

Cut Make Trim(Direct Labor)


Sno. Operations

No. of
workers

*Kind Wages/8hrs Time/10000


of
(INR)
(Hrs)
workers

Cost/10000 Cost/gmt
(INR)

(INR)

Inspection

S+SS

280+175

17

966

0.10

Spreading

S+SS

270+190

42

2415

0.24

Cutting

S+S

350+350

133

11666

1.16

Ticketing

S+S

250+250

133

8312

0.83

Bundling

S+SS

250+175

80

4250

0.4250

Cut part

S+S

300+300

133

6000

0.60

S+S

300+300

266

19950

1.90

420000

42

8312

0.83

481871

48.18

Inspection
7

Inspection

Washing

Pressing

Total

16

S+SS

250+250

133

Assumptions:1. Inspection speed-10mpm

5. Bundling-500pc/operator/8hrs

2. Spreading-4mpm(manually)

6.Inspection-150pc/operator/8hrs

3. Cutting-150pc/operator/hr

7. Washing from outside

4. Ticketing-300pc/operator/8hr

8. Pressing-38pc/operator/hr

* S for skilled,SS for semiskilled

Sr.no

operations

No. of
Wage/8hrs/
operator
Operator

Production
Per 8hrs

(INR)

Cost
Cost/gmt
per10000
(INR)
(INR)

Top stiching of
coin pocket

160

200

8000

0.80

Sew coin pocket


to pocket facing

180

190

9400

0.94

Sew pocket
facing to pocket
bag

190

200

9500

0.95

Closing of pocket
bag

170

180

9400

0.94

Sew the pocket


to
front(RH&LH)

220

295

14900

1.49

Back yoke to
right & left back

200

350

11400

1.14

Hip pocket
mouth hem

140

200

7000

0.70

Ornamental
stitch on hip
pocket

130

195

6600

0.66

Hip pocket to
both left & right
back

180

350

10200

1.02

10

Sew both side


seam

250

300

16600

1.66

11

Zipper to left &


right fly

220

320

13750

1.375

Sr.no

operations

No. of
Wage/8hrs/
operator
Operator

Production
Per 8hrs

(INR)

Cost
Cost/gmt
per10000
(INR)
(INR)

12

Sew left & right


fly to both front

240

350

12500

1.25

13

Sew crotch seam

230

300

7600

0.76

14

Sew inseam

250

350

14200

1.42

15

Sew waist band


with back &
front

300

250

12000

1.20

16

Sew waist band


edge

250

180

13800

1.38

17

Sew leather label


& inside label on
waist band

230

330

13900

1.39

18

Belt loop
prepration(5/gmt)

220

1000

22000

2.20

19

Belt loop
stitching

240

900

26000

2.60

20

Sew eyelet
button hole

300

290

10300

1.03

21

Attach metallic
button & rivet

230

500

9200

0.92

Total

32

25.825

258250

Total Cut make trim cost=48.18+25.82=Rs 74


Direct labor cost=Total cut make trim cost= Rs 74

Packing Material
Sr Materials Consumption Cost/pc Hidden cost With Cost/gmt Cons/10000 Cost/10
no.
in pieces
(INR)
2% margin
(INR)
000
(INR)

(INR)

Polybag

0.04

10,000

20,000

Clip

0.75

0.03

1.5

20,000

15,000

Sticker

0.20

0.008

0.40

20,000

4,000

Gripper

0.50

0.02

20,000

10,000

Tag

1.5

0.09

4.5

30,000

45,000

*Cartoon

1/10

10

0.20

1,000

10,000

0.388

10.40

Total

104000

Total direct material cost= 106.52+17.95+10.40=Rs 134.87


Total hidden cost with 2% margin for one garment=2.5+0.359+0.388=Rs 3.247
Total hidden cost with 2% margin for 10,000 garments=3.247 X 10,000=Rs 32,470

Indirect cost

Assumptions :
1. Number of m/c=105
2. Number of line=5
3. Average production/day=600
4. Total floor area=6000sqft
5. Depreciation=10%/annum
6. Cost of m/c=Rs 50,00,000
7. Cost of equipment=Rs 10,00,000
8. Number of light point=50(Rs 5/light/day)
9. Power consumption=13222 kw/year, 1kw=Rs 10
10. Rent=Rs 102857
11. Insurance=Rs 200/qtr/m/c
12. Stationary/year=Rs 5000
Note:
Order quantity=10,000gmt
Time for completion of order=17days

Indirect labor

Sr
no.

Indirect labor

Security

No.of labor

Cost/labor/day

Cost for 17 days

(INR)

(INR)

18

612

Supervisor

200

13600

Storekeeper

200

10200

Canteen staff

150

5100

Maintenance worker

200

17000

Housekeeping

20

2720

Checker

17

40

11560

Helper

14

20

4760

848

65552

Total

Note:
Total indirect labor cost for 10000 garments=Rs 65552
So, total indirect cost for one garment=Rs 6.55

Indirect expenses

Sr no

Area of
expenses

Allocation

Yearly cost
(INR)

Cost for 17
days
(INR)

Rent

Floor area

102857

4790

Power

No. of m/c

132221

6158

Depreciation

Value of m/c &


equipment

600000

27945

Insurance

No. of m/c

80000

3912

Light

No. of light point

91250

5367

Total

48172

Note:
Total indirect expenses for 10000 garments=Rs 48172
So, total indirect expenses for one garment=Rs 4.81

Indirect material
Indirect material cost for 17days=Rs 232.71
Total indirect material cost for 10000 garments=Rs 232.71
So, total indirect material cost for one garment=Rs 0.0232

Calculations:
Total direct cost= direct material cost + direct labor cost + direct expenses
=(106.50+17.95+10.40)+(48.18+25.82)+0=Rs 208.85
Total hidden cost(2% margin)=2.5+0.359+0.388=Rs 3.24

Total direct cost with hidden cost=208.85+3.24=Rs 212.09


Total indirect cost= indirect material cost + indirect labor cost + indirect expenses
=0.0232+6.55+4.81=Rs 11.36
Total cost=212.09+11.36=Rs 223.45
Total cost with 3% wastage=223.45+6.72=Rs 230.17
Total cost with 15% margin=230.17+34.52=Rs 264.69
Lets consider MRP=Rs 1000
Mark Up for retailer=3
Target cost=1000/3=Rs 333.33
Range for negotiation= (333.33-264.69)=Rs 68.64

Analysis & Conclusion


Whatever costing we had done in this assignment we can conclude that the fabric cost is Rs 99
which is 43% of total cost so, if the cost of fabric is lesser extent then it gives more benefit
from the buyer.

The above costing gives us idea to understand the importance of direct materials cost which
covers major percentage of total cost of manufacturing .We also understood about the
recovery of factory overheads based on cost centers as well as got some idea to calculate the
labor and machine hour rate.

Objective
To determine the cost involved while manufacturing of denim jeans by the method of
absorption costing for single jeans and also for 10,000 jeans.

ASSIGNMENT
OF

COSTING OF APPAREL
PRODUCTION
ON
COSTING OF DENIM JEANS

SUBMITTED TO
Ms. Nithya Venkataraman
Asst professor
Nift,Bangalore

SUBMITTED BY
Pravin kr. Mahato
Satish Kumar
MF.Tech(AP)
Sem-II,Nift, Bangalore.

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