Entrepreneurship, Costing and Occupational Safety
This domain tests costing a garment, pricing it for profit, keeping records and working safely. Questions often ask you to build a cost sheet, distinguish markup from margin, or identify a workshop hazard.
Cost sheet
Material plus labour plus overhead equals total cost. Add profit to get the selling price. Fixed costs do not change with output, such as rent; variable costs rise with each unit, such as fabric and thread. Break-even is the number of units whose contribution covers fixed costs.
Pricing and records
Markup is calculated on cost; margin is calculated on selling price. Keep records of purchases, sales, wages and stock. A simple market survey of comparable products helps set a realistic price.
Occupational safety
Use a needle guard, keep fingers away from the needle path, earth electrical machines, avoid loose hair and sleeves near moving parts, maintain good posture, keep the floor dry and store sharps safely. Know first aid for needle pricks and burns, and keep a fire extinguisher accessible.
Worked example
Fabric 3 m at 120 rupees is 360. Thread, buttons and zip cost 40. Labour is 150 and overhead is 50. Total cost is 360 plus 40 plus 150 plus 50, which equals 600. A 20 percent profit on cost is 120, so the selling price is 720. For 10 units the profit is 1,200. Reasoning: the profit percentage is applied to total cost, not to material only.
Traps
Forgetting to charge your own labour; confusing markup on cost with margin on price; leaving electrical wiring exposed; recording sales but not purchases.
Key points
- Material plus labour plus overhead equals cost; profit is added to cost to set price.