Entrepreneurship, Costing, and Marketing
What the exam tests
This domain tests costing, pricing, break-even, product mix, marketing, and enterprise planning for a block-printing unit. Expect numerical costing and questions on channels, branding, and customer segments.
Core rules
- Cost per metre = direct materials + direct labour + variable overhead + allocated fixed overhead + wastage and reject allowance.
- Direct materials include fabric, dye, thickener, chemicals, and blocks amortised over their print life.
- Labour should include preparation, printing, washing, finishing, and supervision; piece rates must still cover downtime.
- Pricing must cover full cost and margin; below-cost pricing destroys the unit even if sales rise.
- Break-even quantity = fixed costs ÷ (selling price per metre − variable cost per metre).
- Marketing channels include craft fairs, exhibitions, designer collaborations, retail stores, e-commerce, and export buyers; documentation, lead time, and consistency matter.
- Branding can use cluster identity and design stories; make natural-dye claims only if true.
Worked example
Fixed costs are ₹20,000 per month; selling price is ₹400 per metre; variable cost is ₹250 per metre. Contribution is ₹150. Break-even = 20,000 ÷ 150 = 134 metres per month (rounded up). Reasoning: below 134 metres the unit loses money; above it, each metre adds ₹150 before tax.
Traps
Do not omit reject wastage. Do not price from competitor rates alone. Do not count an order as profit before costing sampling, freight, and payment delays.