Textile Costing

Lecture 8
CVP in Textiles
Analysis of Spinning, Weaving & Dyeing wrt Contribution Margin & Break Even

Spinning

Daily Production for Ne 20/1 250 Bags

Monthly Fixed Cost

Depreciation 3,500,000
Financial Charges 4,500,000
Admn 400,000
Miscellaneous 3,000,000
TOTAL 11,400,000
   
DAILY 380,000

Profitability Analysis

Net Cost of raw materials/lb 35

Yarn price 51 510 per 10 lb

Contribution 16
Daily Contribution 400,000

Profit/(Loss) per day 20,000

Profit/(Loss) per month 600,000

Weaving

Daily production per loom 500 mtr

item 20x16/128x60 63"
Total Looms 120
Daily prodoction for the unit 60,000 mtr

Monthly Fixed Cost

Depreciation 5,600,000
Financial Charges 6,500,000
Admn 300,000
Miscellaneous 2,000,000
TOTAL 14,400,000
   
DAILY 480,000
Daily fixed cost per loom 4,000

Profitability Analysis

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 Textile Costing

Cost of yarn & other materials per meter 50

Price per meter 59

Contribution 9
Daily Contribution per loom 4,500

Profit/(Loss) per day per loom 500

Profit/(Loss) per day 60,000
Profit/(Loss) per month 1,800,000

Dyeing

Analysis based on Medium Colors

Production per day 50,000 mtr

Monthly Fixed Cost

Depreciation 5,600,000
Financial Charges 6,500,000
Admn 300,000
Miscellaneous 2,000,000
TOTAL 14,400,000
   
DAILY 480,000
Fixed Cost per meter 9.60

Profitability Analysis - Commission Finishing

Cost of dyes & chemicals 5.00

Cost of utilities & misc 3.00
Charges per meter 20.00

Contribution per meter 12.00

Daily Contribution 600,000

Profit/(Loss) per day 120,000

Profit/(Loss) per month 3,600,000

Find out break even point for this plant

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