Title

The professional cost Accountants can play a great role

in the RMG Industry to make sustainable export growth.

Presented by Abbas Malik FCMA

CEO-Patriot Group
Thursday, October 01, 2020
 The Industry Insights
Cotton
/Poly

Readymade Service
• Spinning Garments • Accessories and Trims Industry • Bond & Customs
• Fabrics • Printing • EPB
• Woven • • Bank •
Embroidery Port
• Knits • • Insurance •
Washing Policy
• Sweaters • Transports • Etc.
• Etc.
Backward Government
Textile
Linkage Agencies
 Volume of RMG Exports
$40.00

$35.00 $34.13
Billion Dollars

$30.61
$30.00
$27.20
$25.00

$20.00
Export
$15.00 Growth
Polynomial (Growth)
$10.00

$5.00 $3.51
$2.46

$-
FY 2017-18 FY 2018-19 FY 2019-20
$(5.00)
($6.93)
$(10.00)

Export YoY
RMG Export Target for the FY 2020-21

$ 37 b
Functions of the RMG industry :

Exports

2. Procure
raw
materials

1. Collect work
orders
 Trade Terms

3. Sales 13. FC
Contract 10.UPAS A/C
9. BBLC
4. LC

12. FOC 8. FOB 16. CM

5. TT

11. EDF
1. PO
14.
BE/BL
7. C&F 2. PI
6. CIF 15.
Discounting
 Marketing and
Job Costing
Merchandising

Supply Chain

Scope of works
Commercial
Process Costing
Production
Production
Accounting
HR and Admin

Operations

Planning and IE Planning

Finance and
Accounts
 Statement of Costs Sheet
Products : Men’s long sleeve casual shirts
Order Quantity : 10,000 Pcs
Per
# Particulars Quantity unit Rate Amount in US $
Unit
1 Direct Materials 26,000 2.60
Fabrics 17,500 Yards 1.50 21,000
Accessories and Trims 10,000 Pcs 0.50 5,000
2 Direct Expenses 5,000 0.50
Printing Costs 10,000 Pcs 0.05 500
Embroidery Costs 10,000 Pcs 0.10 1,000
Washing and Dyeing Costs 10,000 Pcs 0.25 2,500
Test and Inspection Charges 10,000 Pcs 0.05 500
Other Expenses 10,000 Pcs 0.05 500
3 Direct Labour Expenses 200,000 SMV 0.06 12,000 1.20
4 Factory Overhead Expenses 10,000 Pcs 0.30 3,000 0.30
5 Commercial Costs 10,000 Pcs 0.20 2,000 0.20

6 Costs of Goods Sold 48,000 4.80

Add: Buying Agents Commission @5% 2,400 0.24
7 Costs of Sales 50,400 5.04
Add : Profit/Loss-Balancing Fig. 4.600 0.46
8 Sales/Invoice Prices 55,000 5.50
Allocation of costs with percentages:

1)Pattern
Fabrics Accessories
2)Planning & IE
40% 9% 3)Production

Print/Embroi Labour
Marketing & dery/Wash
costs
Merchandising 9%
22%

Others Media
Overhead Commission
Accounting
10% 5%
Fabrics
• Select best fabrics width
• Accurate pattern
• Efficient marker
• Direct sourcing
• Ensure fabrics quality
• Good cutting master
• Etc.
Accessories
Perfect Booking
Procure from competitive sources
Ensure materials quality
Reduce wastages
Washing
Reduce process losses
Improve accuracy
Proper management
Control wastages
Labour costs
Make an effective layout
Use production engineering tools
Good supervising
Production Accounting
Avoid reworks
Etc.
Others Overhead
Budgetary control
Limit working time
Uses of technology
Efficient management
Etc.
Media Commission
• Direct marketing
• Direct sourcing
• Offer own design products
• Build new markets and customers
• Etc.
Together everyone achieves more:
Work Enjoy works
Pressure
Individual Team
Outcomes:
Comparisons
12/31/1899 12/31/1899 01/01/1900 01/01/1900 01/02/1900 01/02/1900 01/03/1900 01/03/1900 01/04/1900 01/04/1900 01/05/1900
2.50 0.12

0.10 0.10
2.00 2.10
2.00

0.08
1.50

0.06
1.20 1.15
1.00 0.05 0.05 0.05 0.05

0.04

0.50
0.50 0.45 0.50 0.45 0.50 0.45 0.02

0.24 0.24
0.00 0.00 0.00
Fabrics Accessories Direct Expenses Labour Costs Other Overheads Media Commission

Series 1 Series 2 Series 3

Analytical analysis:

2,000 Factories 4 Million Manpower

32 Billion U.S Dollars Export 1.60 Billion U.S Dollars savings