P a g e | 148

Chapter 11

Cost Analysis

Quality comes first, rest are

consequences

P a g e | 149

Costing of the Final product:

Costing system mainly describe how the cost of the final product is
fixed by the company or top managements. As it is manufacturing
factory, so according to the buyer or customer requirements of final
goods, merchandiser gives the consumption of fabric with
specifications. Then it is calculated how much it will cost during
manufacturing. After that, the final cost is fixed including some profit.
Then the unit price is offered to the buyer for their approval.

Costing of a product includes:

Yarn cost.
Weaving cost.
Factory overhead cost.
Labor cost (direct & indirect).
Office & administrative cost.
Sales and caring cost.
Utility cost.
Others cost.
Profit etc.

Price of the Product:

Generally price of product is determined by the required profit adding
to the total expenses.
Price of Product = Direct expenses + Indirect expenses + Factory
Overhead + Profit
An Approximate cost analysis is given below for,
Construction: 20 16 / 84 28;
Finish Width 62".
Quantity 1000 Meter.

Quality comes first, rest are

consequences

P a g e | 150

Costing Calculation: (Standard)

Calculation of Factory Cost:
Say, 1

So,

Say, 2

So,

Say, 3
So,

Total salary & wages

700000
0
Total production capacity in meter
120000
Salary & wages cost or Administrative cost per
meter

58.33
Tk

Total gas expenses

Total electric expenses
Total Expenses
Total production capacity in meter
Gas & Electricity expenses per meter,
(412000/120000)

400000
120000
412000
120000
3.43T
k

Total Sizing Chemical expenses

Total production capacity in meter
Sizing Chemical cost per meter

250000
120000

Factory Cost Per Meter (For Grey & Yarn Dyed

Fabric)

Calculation of Fabric Manufacturing Cost:

Say,
(4)

Fabric Construction 20 16 / 84 28
Finish Width 62"
Quantity 1 Meter
Yarn Value
in kg
in lbs
20 count yarn
120Tk 54.43T
k
16 count yarn
90Tk 40.82T

Quality comes first, rest are

consequences

2.08T
k
63.84
Tk

P a g e | 151

k
So,

Fabric Consumption
Weight in Warp (20 Ne)
Weight in Weft (16 Ne)
Total Weight per meter

in kg
0.170
0.071
0.241

in lbs
0.375
0.157
0.531

Warp count 20
Weft count 16

Yarn Costing:

Price
Price
in kg
in lbs
Warp
20.40 20.40T
Tk
k
Weft
06.39 06.39T
Tk
k
Total Cost
26.79 26.40
Tk
Tk
As a Result Yarn Cost Per Meter Fabric

Say
(5)

Shift in hour

24

Machine RPM

500

Efficiency in %
Loom Operator Wages/ Month
(Avg.)
So,

for Toyota
Airjet

95
7500T
K

Production/sh (500860)(2839.37
ift
)95 %
Production per month

Cost per meter. Fabric

Total Cost Per Meter

206 Meter
5356 Meter

7500/ 5356

1.40

= (Factory Cost

Quality comes first, rest are

consequences

26.79
TK

P a g e | 152

+ Yarn Cost + Labor Cost)

= (63.84 +
26.79+ 1.40)Tk
= 92.03 Tk
+ Profit
So, For 1000 Meter
92.03) Tk

= (1000X
= 92030 Tk

Remarks:
The costing of the product is an internal matter of the Industry. Mostly
the costing of product is done in the headquarter of Noman group in
Dhaka. In here, Noman Weaving Mill is produce goods as required. The
costing is given here is an approximate calculation .

Quality comes first, rest are

consequences