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AAF Costing Process
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Costing
What is cost/costing?Costs are expenditures, such as time or labor, and other necessaryrequirements for the attainment of a good.
Costing is a process.
Why is costing important?
Its important for AAF because costs (fixed and variable) have to be paidregardless of how much is produced.
Why costing is done?
Well-prepared costing information contributes to accountability and
transparency as well as good decision making and intelligent risk taking.
Wage Payment
Section wise payment of wages(Wash, Iron, Embroidery, Tailoring etc.)
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AAF Value Addition
Embroidery (Hand EMB, Machine EMB, Erri etc.)
Print (Block and Screen)
Dye
Chemical Vegetable
Tie Dye
Batik (Wax batik, sand flash, brass print etc.)
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Types of Costing in
Value Addition
Print Dye and Tie-Dye BatikEmb.
BP
SP
Wax
Sand FlashBrass Print
etc.
Dye
Natural
Chemical
H. Emb
M. EmbErri
etc. Tie Dye
Pipe
Spray
Spoon Rope
Tailoring
Only
Tailoring
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12% mark up is added to the cost of goods
manufactured. Mark up rates for different product lines
might change from time to time and are finalized bythe director.
Mark Up Policy
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Staff Salary and Benefit
Indirect raw materials
Indirect labors
Transportation cost
Other Miscellaneous production expenses-
Taxes, insurance, depreciations, factory supplies of materials
Maintenance and repairs of machineries and utilities
AAF Markup Charges
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AAF Costing Sheet
A. Cost of basic raw materials
B. Wages
C. Cost of accessories
D. Mark up = (B+C) X 12%
E. Total cost = A+B+C+D
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Required Documents for CalculatingCost of Production
Approved sample
Breakdown costing of the product
Instruction paper
Price sheet, information of raw materials, utilities etc.
Circular of wages
Pattern (occasionally)
Costing sheet
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1. Embroidery
2. Print
3. Dye and Tie-Dye
4. Batik
5. Tailoring
Sample of Costing Sheet
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Costing Flow Chart
Order Development
Aarong Costing
AAF-HO (Head Office) Costing
AAF (Field) Sample Costing
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Function of Costing Unit (Field AAF)
AAF Field Costing Personnel
Collect sample costing from OD (Order Development) team (AAF-HO)
Prepare costing sheet and send it to OD team.
Follow instruction sheet and coordinate with other sections (raw materials,
wages, iron, wash etc.)
Prepare costing sheet for non textile product
Communicate with the updated market price11
OD team will send it to Aarong Costing team for approval
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Function of Costing Unit (AAF- HO)
AAF HO Team (Costing)
Collect sample costing from OD Team
Prepare costing sheet for approval by Aarong costing team
Handover sample costing to OD team after approval
Communicate with production centre for various costing problem
Collect information for the updated price of raw materials
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Costing may be revised if designer changes any criteria of design, and
based on his/her written instruction costing personnel revises the costing
of goods.
Changes in the qty/unit, price of raw materials and wages will be considered
for re-costing.
Revise/Re-costing policy
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If the product design is same then order section will do the job. If
criteria of design is changed then costing personnel evaluates
according to designers indication and finalizes the costing.
Designers need to mention costing.
Re order costing policy
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Question - Answer
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Thank You
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