Entrepreneurship, Costing and Workplace Safety in Textile Design
This domain tests whether you can price a product correctly, choose a support scheme, and identify the safety controls expected in a textile workshop.
Costing rules
- Prime cost = direct material + direct labour + direct expenses.
- Factory cost = prime cost + overheads (power, rent, supervision, depreciation).
- Selling price = total cost + profit.
- Markup is calculated on cost; margin is calculated on selling price. They are not interchangeable.
- Break-even quantity = fixed cost / (selling price - variable cost per unit).
Support schemes and compliance
Udyam (MSME) registration, GST registration above the threshold, PMEGP subsidy for new units, Mudra loans (Shishu, Kishore, Tarun), DPIIT startup recognition, design protection under the Designs Act 2000, trademark for brand names.
Safety essentials
Machine guarding, needle guard, eye guard on overlock, no loose hair or jewellery, closed-toe footwear, dust and fume extraction in dyeing, MSDS for every chemical, PPE (gloves, goggles, apron, respirator), hearing protection above about 85 dB, CO2 extinguisher for electrical fires, first-aid box, ergonomic seating for embroidery frames. The Factories Act 1948 sets the legal frame.
Worked example
A cushion cover uses 0.6 m fabric at Rs 120/m, trims Rs 18 and labour Rs 40. Overheads are 15% of prime cost. What price gives a 20% margin on selling price? Prime = 72 + 18 + 40 = Rs 130. Overheads = 0.15 x 130 = Rs 19.50. Cost = Rs 149.50. Price = 149.50 / (1 - 0.20) = Rs 186.90, say Rs 187. Check: a 20% markup would have given Rs 179.40, which yields only 16.7% margin. Reasoning: margin is on the selling price, so divide by (1 - margin).
Traps that cost marks
- Treating markup and margin as the same calculation.
- Leaving sampling and development cost out of the price.
- Counting overheads as profit.
- Handling dye chemicals without an MSDS or PPE.
- Quoting a scheme without saying what it actually funds.