T shirt manufacturingRaw Materials required:1)
Dyed Cotton This is purchased in bulk in the form of 100 m bundles from asupplier at a rate of Rs. 70 per bundle. A minimum of 2000 bundles per monthmust be bought according to the contract. Thus, this is a mixed cost. The cost of 2000 bundles per month is fixed and above that depends upon the level of production.2)
Neckbands Neckbands are bought from a supplier at Rs 2 per neckband. This isa variable cost.3)
Labels - A supplier supplies customized labels at a rate of 1200 Labels for Rs2000. A minimum of 60000 labels must be ordered per month. Thus this is amixed cost as the cost of 60000 labels is fixed and above that it depends upon thelevel of production.4)
Tape/Seam binding This is bought at Rs 3 per 15 m. Variable cost.5)
Elastic ± This is bought at a rate of Rs. 2 per 10m. Variable cost.
Thread ± 10000 reels are bought per month from a supplier for Rs. 50000. Anything above that is bought at a rate of Rs 10 per reel.
Again a mixed cost.
This is done by designers, who create designs on computer using the
Shirt Factory® Deluxe 3.0
software.The computers and software installation is a one-time cost.Once they have been bought, it is a sunk cost.The designers are paid a monthly salary of Rs. 10000 per head. This is a fixed cost.Initial cost of each computer = Rs. 30000Initial cost of Software for each system = Rs. 1500No. of Designers = 10No of computers = 10No. of Software licenses = 10The cost of computers and software is sunk cost.
ully automatic laser fabric cutting machines Golden Laser are used for cuttingthe fabric for the t-shirts. The cutting is done in batches for different sizes in the