How to Calculate Finishing Cost and Finishing Rate in Textile Industry?

To change the fabric appearance, textile finishing process has great importance in textile industry. Finishing cost also included when total cost is calculated. So, to know the actual method of textile finishing cost calculation is mandatory for the responsible person.

Calculate the finishing cost and rate per of by following the below chart.

SL No.	Parameters	Quantity and Cost
01	Fabric quantity	400kg
02	Finishing chemical consumed	5kg
03	Chemical A consumed	4kg
04	Chemical B consumed	2kg
05	1 day	3 shift
06	Total finishing process time	4 hours
07	Number of labors	3
08	Labor wages	Rs. 200 per shift
09	Compacting	Rs. 8 per kg
10	Steam	Rs. 30000 per month
11	Power	Rs. 10000 per month
12	Transport	Rs. 20000 per month
13	Salary	Rs. 50000 per month
14	Other expenses	Rs. 40000 per month
15	Finishing chemical price	Rs. 250 per kg
16	Chemical A price	Rs. 25 per kg
17	Chemical B price	Rs. 60 per kg
18	Profit	15%

To calculate textile finishing cost and finishing rate, below formula has to apply.

    Direct labor + Direct material + Direct expense + Direct overhead

= …………………………………………………………………….…………      …. (1)

                               Total finishing production

Total production,

= Fabric input

= 400kg

Total finishing production time,

= Finishing process time

= 4 hours

= (4/8) shift

= 0.5 shift

Operator wages,

= Number of labor × No. of shift × labor wage per shift

= 3×0.5× Rs. 200

= Rs. 300

Finishing chemical cost = Amount of chemical consumed × chemical price = 5× Rs. 250 = Rs. 1250

Chemical A cost = Amount of chemical consumed × chemical price = 4× Rs. 25 = Rs. 100

Chemical B cost = Amount of chemical consumed × chemical price = 2× Rs. 60 = Rs. 120

So,

Direct material cost is,

= (Rs. 1250 + Rs. 100 + Rs. 120)

 = Rs. 1470

Compacting,

= Fabric quantity × compacting rate per kg

= 400 × Rs. 8

= Rs. 3200

In steam cost calculation,

= (Cost × 0.5 shift) / (30days × 3 shifts in a day) = {(30000 × 0.5)/90} = Rs. 167

In transport cost calculation,

= (Cost × 0.5 shift) / (30days × 3 shifts in a day) = {(20000 × 0.5)/90} = Rs. 112

In power cost calculation,

= (Cost × 0.5 shift) / (30days × 3 shifts in a day) = {(10000 × 0.5)/90} = Rs. 56

In other expenses cost calculation,

= (Cost × 0.5 shift) / (30days × 3 shifts in a day) = {(40000 × 0.5)/90} = Rs. 224

In salary cost calculation,

= (Cost × 0.5 shift) / (30days × 3 shifts in a day) = {(50000 × 0.5)/90} = Rs. 279

So,

Total overhead cost stands at,

= Rs. 167 + Rs. 112 + Rs. 56 + Rs. 224 + Rs. 279

= Rs. 838

Textile finishing cost per kg,

     (Rs. 1470 + Rs. 300 + Rs. 3200 + Rs. 838)

= …………………………………………………………..

                                  400

= Rs. 14.50

After adding 15% profit, textile finishing rate stands at

= {14.50/ (1-15%)}

= Rs. 17.10