Unit 3: Departmental costing & garment costing
Textile / Textile Product Costing notes · PTU syllabus (BSTD 502-20)
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Unit summary
Departmental costing allocates costs to the departments that incur them. This unit covers administration, sales and production departments, direct and indirect costs and costing of a shirt, trouser or home furnishing product.
After this unit you can
- Identify costing departments and their costs
- Prepare a garment cost sheet
- Compute cost per piece
PTU syllabus topics
- Various departments of costing — administration
- sales
- production
- direct and indirect elements of cost
- costing a shirt
- trouser or home furnishing product
- FOB price
Total cost + profit
- Total cost
+ overheads and commercial costs
- Manufacturing cost
+ cutting, making, trimming (CMT)
- Fabric and trims
Consumption × rate
Topic 1
Departments and cost elements
| Department | Costs |
|---|---|
| Administration | Salaries, office, accounts |
| Sales and marketing | Commission, advertising, samples |
| Production | Fabric, trims, labour, machine running |
| Packing and shipping | Cartons, labels, freight |
Topic 2
Garment costing: a shirt
| Item | ₹ per shirt |
|---|---|
| Fabric 1.8 m at ₹120 | 216 |
| Thread, buttons, interlining, labels | 34 |
| Cutting and sewing labour | 70 |
| Finishing and packing | 20 |
| Factory overhead | 30 |
| Total cost | 370 |
| Profit at 15% | 55.5 |
| Ex-factory price | 425.5 |
Fabric is about 58% of cost: small savings in fabric consumption have the biggest effect on profit
Exam tip
Trousers and home furnishing items are costed the same way, adding more fabric, lining, zip and finishing; for furnishings add stitching, filling and packing.
Key terms
- Direct cost
- Cost traced to a product
- Indirect cost
- Overhead shared across products
- Cost sheet
- Statement of cost elements
- Ex-factory price
- Price at the factory gate
- Consumption
- Fabric used per garment
Quick revision
- Cost = material + labour + overhead.
- Fabric is the largest cost.
- Price = cost + profit.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.List four cost elements of a shirt.
- Q2.What is a cost sheet?
- Q3.Compute the price if cost is ₹300 and profit 20%.
Long-answer questions
- Q1.Prepare a cost sheet for a shirt with prices.
- Q2.Explain departmental costing in a textile unit.
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