Costing | Garments Costing | Methods of Textile Costing

Since the industrial beginnings,textiles and apparel have been the leaders in terms of cost awareness as well as product innovations.

Textile Costing includes all the activities like purchase of raw materials and accessories, knitting fabrics, processing and finishing of fabrics, sewing and packing of garments, transport and conveyance, shipping, over heads, banking charges and commissions, etc.

garment costing
To do perfect garment costing, one must know about all these activities thoroughly about their costs, procedures, advantages and risk factors. Also he must know how to solve the problems when occurred and to take suitable alternate decision immediately in time.

There are always fluctuations in the costs of raw materials and accessories, charges of knitting, processing, finishing, sewing and packing, charges of transport and conveyance. Hence Knowledge Update is required about the latest prices and charges, latest procedures, methods and quality systems, market prices and availability, transportation (road, sea, air) and freight charges, etc.

Quality depends on price; price depends on quality. Each product will have different price according to its quality.

Different Costing methods include :

  • Job Costing,
  • Batch Costing,
  • Contract or Terminal Costing,
  • Single or Output Costing,
  • Process Costing,
  • Operation Costing,
  • Operating Costing,
  • Departmental Costing,
  • Multiple Costing.
Job Costing
Job Costing is done, as the name suggests, on job works which may differ from case to case basis. By giving different job numbers and debiting the costs on the jobs, cost of each job work can be ascertained. 

Batch Costing or Batch Costing method
Batch Costing is similar to job costing but pertains to batches.

Contract Costing or Terminal Costing
Contract Costing is done for large contracts. Such businesses need not maintain costs separately as financial accounting will indicate the costs and expenses. In such contracting firms, the cost sheets are maintained for individual contracts. In the absence of expense budgets, inefficiencies are often hidden in such cost sheets. 

Single or Output Costing
Single Costing is done when the end product is single like a colliery or a power station. Cost sheets are maintained.

Process Costing
Process Costing is useful when a product passes through various processes, yielding different by products of commercial value. This is useful in industries like refineries.

Operation Costing
Operation Costing is followed by mechanical engineering industries which make products or parts. Each manufacturing operation cost is taken into account. There is no difference between this and process costing.

Operating Costing
Operating Costing method is followed when the company does not have a specific product as output like the service industries.

Departmental Costing
When an end product is ultimately manufactured by different departments this method can be useful.

Multiple Costing
Multiple Costing is useful when a product is manufactured in an assembly line like an automobile. It is important to choose the most appropriate method of costing for your business or industry. Most businesses do not like to engage cost accountants and leave it to financial accountants to take care of this job. It is not recommended. There are many free lance cost accountants available and they can be engaged on need basis.

Sharing Knowledge: Students, teachers and professionals can publish your article here. It is a platform to express your knowledge throughout the world. For details: Submit Article


Mazharul Islam Kiron is a textile consultant and researcher on online business promotion. He is working with one European textile machinery company as a country agent. He is also a contributor of Wikipedia.

Let's Get Connected: LinkedIn | Facebook | Google Plus

Back To Top