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Textile Costing · Lecture 26
Stitching Costing II — Order Costing
A made-up order from fabric consumption to profit: linear rating, B-grade and rag proceeds, accessories, labour, loading and allocated fixed cost.
Fabric costAccessoriesDirect labourProfitability
One line of a stitching order
Each row of the mill’s costing sheet is one item: pieces made, fabric consumed (A-grade pieces × linear rating, plus the B-grade pieces and rags), fabric cost at the rate per linear metre, credits for B-grade and rag proceeds, then accessories, direct labour and loading, with fixed cost allocated as 3.2 × direct labour. Edit the inputs to cost any item.
| A | B | C | |
|---|---|---|---|
| 1 | A-grade pieces | ||
| 2 | B-grade pieces | ||
| 3 | Linear rating (m per piece) | ||
| 4 | Fabric in A-grade pieces (m) | 763.68 | |
| 5 | Fabric in B-grade pieces (m) | 4.30 | |
| 6 | Rags (m) | ||
| 7 | Fabric consumed (m) | 792.98 | |
| 8 | Yield (A-grade share) | 96.3% | wastage |
| 9 | Fabric rate (Rs per linear metre) | ||
| 10 | Fabric cost | 132,427.66 | 74.57 |
| 11 | B-grade proceeds (Rs per piece) | 150.00 | |
| 12 | Rag proceeds (15% of fabric rate) | 15% | 626.25 |
| 13 | Accessories per piece | 17,760.00 | |
| 14 | Direct labour per piece | 2,131.20 | |
| 15 | Loading cost (total) | ||
| 16 | Total variable manufacturing cost | 85.42 | 151,709.61 |
| 17 | Fixed cost allocated (3.2 × direct labour) | 3.84 | 6,819.84 |
| 18 | multiplier | ||
| 19 | Total cost | 89.26 | 158,529.45 |
| 20 | Sales price per piece | ||
| 21 | Profit / (loss) per piece | (9.26) | (16,449.45) |
blue = input (edit me)grey = formula (click to see it)
The full order sheet (eight items, two customers)
| # | Item | Size | Shade | Construction | Pieces | Rating | Cost / pc | Price | Profit / pc | Total |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Pillow case 20×32 | Queen | White | 40×40/110×100 | 1,776 | 0.43 | 89.26 | 80 | (9.26) | (16,449) |
| 2 | Comforter shell 91×107 | King | Black | 60×60/200×100 | 210 | 5.49 | 922.64 | 900 | (22.64) | (4,755) |
| 3 | Comforter shell flat 91×91 | Queen | Black | 60×60/200×100 | 1,000 | 4.67 | 800.09 | 900 | 99.91 | 99,913 |
| 4 | Comforter shell flat 91×91 | Queen | Stone | 60×60/200×100 | 1,000 | 4.67 | 730.14 | 900 | 169.86 | 169,865 |
| 5 | Comforter shell 91×107 | King | Stone | 60×60/200×100 | 210 | 5.49 | 870.47 | 900 | 29.53 | 6,200 |
| 6 | Pillow sham 20×26 | Standard | Stone | 60×60/200×100 | 2,208 | 0.48 | 91.25 | 90 | (1.25) | (2,754) |
| 7 | Pillow sham 20×36 | King | Stone | 60×60/200×100 | 432 | 0.54 | 100.50 | 90 | (10.50) | (4,535) |
| 8 | Pillow sham 20×36 | King | Black | 60×60/200×100 | 2,016 | 0.48 | 93.37 | 90 | (3.37) | (6,792) |
| Grand total | 8,852 | 240,693 | ||||||||
The order as a whole is profitable only because of the two large comforter lines; every pillow item loses money. That is exactly the pattern Activity Based Costing predicts for small, labour-heavy pieces — and the reason a stitching unit must price pillow cases on their own cost, not on an average.