Costing for the Fashion Industry

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Tilte Page
Contents
Introduction
Chapter 1: Small and medium-sized (SMEs) clothing businesses
	Introduction
	Leadership in SMEs
	Business strategy
	Processes, products and services
	Exercises
	Further reading
Chapter 2: Risk management
	Introduction
	Business risk management
	Financial risk management
	Developing a risk management plan
	Specific risks affecting the fashion industry
	The industry response
	Key performance indicators
	Exercises
	Further reading
Chapter 3: Global awareness and new markets
	Introduction
	The global supply chain
	Barriers and facilitators in market-entry strategies
	Contemporary issues
	Purchase order
	Lead times
	Critical path
	Exercises
	Further reading
Chapter 4: Product cost when sourcing
	Introduction
	Global sourcing
	Range planning
	Factories
	Shipping terms
	Exercises
	Further reading
Chapter 5: The nature of clothing manufacture and the need for costing
	Introduction
	What is clothing manufacture?
	Two important questions
	Definition of cost
	The need for costing
	From manufacturing to sourcing
	Exercises
	Further reading
Chapter 6: The elements of cost
	Introduction
	Classification of cost
	Direct costs
	Indirect costs – the overheads
	Exercises
	Note
	Further reading
Chapter 7: Costing over periods of time
	Introduction
	Period cost reports
	Capital equipment costs
	Depreciation – the straight-line method
	Period cost report
	Stocks and inventory
	Value of the work-in-progress
	Period-end adjustments
	Exercises
	Further reading
Chapter 8: Product cost – job costing
	Introduction
	What is job costing?
	Treatment of the direct costs
	Treatment of the overheads
	Absorption of production overheads
	Cost centres
	Absorption of non-production overheads
	Example of a job cost
	Over-/underabsorption of overheads
	Process costing
	Exercises
	Further reading
Chapter 9: Marginal costing
	Introduction
	Variable costs
	Fixed costs
	Semi-variable costs
	Contribution
	Treatment of the semi-variable costs
	The variable costs are made up of the direct material, direct labour and the variable elements of the supervision and the heat, light and power.
	Case study
	Exercises
	Further reading
Chapter 10: Break-even analysis
	Introduction
	Establishing the break-even point
	Break-even tabulation
	Break-even chart
	Margin of safety
	Profit/volume chart
	Break-even point by calculation
	Break-even illustration
	Exercises
	Further reading
Chapter 11: Budgeting and standard costing
	Introduction
	Budgeting
	The cash budget
	Sales lag
	Flexible budgets
	Zero-based budgeting (ZBB)
	Standard costing
	Variance analysis
	Direct material
	Causes of direct materials variances
	Direct labour
	Causes of direct labour variances
	Overhead in standard costing
	Advantages and disadvantages of standard costing
	Exercises
	Further reading
Chapter 12: The changing nature of cost
	Introduction
	From traditional to advanced manufacturing technology
	Just-in-time
	Component manufacture and assembly
	Summary of changes in costs with the move into advanced technology
	Cost behaviour change
	Service industries
	Activity-based costing
	Exercises
	Further reading
Chapter 13: Activity-based costing
	Introduction
	Activity-based costing
	Advantages and disadvantages of ABC
	Activity-based budgeting
	Exercises
	Further reading
Chapter 14: Capital investment decisions
	Introduction
	The capital cost
	Accounting rate of return (ARR)
	Net cash inflows
	Payback period
	Discounted cash flow (DCF)
	Discounted payback period
	Conclusions
	Exercises
	Further reading
Bibliography
Answers to exercises
	Chapter 1
	Chapter 2
	Chapter 3
	Chapter 4
	Chapter 5
	Chapter 6
	Chapter 7
	Chapter 8
	Chapter 9
	Chapter 10
	Chapter 11
	Chapter 12
	Chapter 13
	Chapter 14
Acknowledgement
Index