A COMPARATIVE STUDY ON ESTIMATED COST VERSUS ACTUAL COST OF THE GARMENTS MANFACTURED IN AN APPAREL EXPORTER, TIRUPUR

Abstract

Costs and its control have a major impact on firm’s successes and thus must be managed for successful business. In apparel manufacturing and exporting industry the pre-costing (theoretical costing or estimated costing) of the product is being carried out before booking of an order. Later, after the accomplishment or execution of the order the final cost is being calculated to ascertain the profit margin and the cost effectiveness of the given style or order. It has been noticed on several occasions, the pre-costing and actual costing are varying significantly; and this variation has significant impact on the profitability and sustainability. The present study is planned with the objective to calculate and compare the pre and post cost variance of the styles executed in an apparel manufacturer and exporter located in Tirupur Apparel Cluster. Suitable statistical tools are applied to find the cost variance significance levels. The findings of the study reveals that no significant variation of cost at pre-costing and postcosting level and suggesting to reduce the variation by careful consideration of several cost influencing factors.