Giant Textiles Limited is a conglomerate founded over 25 years ago that now has 20 companies and annual turnover of $35 million. It uses job order costing to keep records for its 6 knit and woven garments establishments as it produces a wide variety of garment products. Job order costing allows it to track costs for different products produced at different times.

1. Cost accounting
method of
Giant Textiles Limited

2. The Giant Textiles LTD, a
conglomerate including 6 knit
and woven garments
establishments, was founded
more than 25 years ago. It is a
concern of The Giant Group of
industries. Today with a total of
20 companies, their annual
turnover is a hefty 35 million
dollars.

3. Giant Textiles LTD.
Shafi Processing
Industries Ltd.
01
SPL-2 (Dyeing & Finishing
Unit)
02
Mavis Garments Ltd.
03
Giant Knit Fashion
Ltd.
04
Giant Apparels Ltd.
05
Giant Yarn Ltd.
06

4. They use Job Order Costing for
keeping their regular records.
Generally, the job order costing
system is used only when the
products manufactured are
sufficiently different from each
other.
Which
method is
used to keep
records by
Giant Textiles
Limited?

5. As Giant Textiles Limited produce garments
products, they have to go through a wide
variety. They produce different products in
different times. So, job order costing is
appropriate for them.
Why Job Order Costing?

6. Purchase is controlled
from the head office.
Issue is maintained
by the production
center.
Purchase
department
&
Issue
department

7. Cotton is raw
material for
spinning section.
Yarn is knitting
section’s raw
material.
RAW
MATERIAL

8. Yarn & clothes both are
raw material for dyeing
section.
Moreover, liquid color is very
important for dyeing section.
RAW
MATERIAL

9. Giant Textiles LTD. follows economic
order quantity to keep their cost
minimum.
Economic
Order
Quantity
(EOQ)

10. First IN First Out.
Material
costing
method

11. Ledger
&
Bin Card
A document that records the status of a good
held in a stock room. Bin card is used in the
store by issue department.

12. Stores ledger is a manual or computer record of the raw
materials and production supplies stored in a production
facility.
Ledger
&
Bin Card

13. No for raw materials.
Because, they have to produce different products in
different times. So reserved safety stock will not help
for further production. That will be just waste.
A little safety stock is maintained for spare parts,
printing materials like paper, ink etc.
Is there
any
safety
stock ?

14. Direct &
indirect labor
Direct labor :
Indirect labor :
wages
bonus &
overtime.

15. REGULAR
WORKING HOUR
9 hours
Including
one hour break

16. BONUS PLAN OTHER BONUSBONUS
WAGE PLAN
Workers are
paid in
monthly basis.
Double of
regular
wages are
paid as bonus
for over time
 Attendance
bonus
 Target
fulfillment
bonus
 2 Eid bonus.
Group bonus plan

17. BONUS PLAN OTHER BONUSWAGE PLAN
BONUS
Double of regular
wages are paid as
bonus for over
time
Workers are
paid in
monthly
basis.
 Attendance
bonus
 Target
fulfillment
bonus
 2 Eid bonus.
Group bonus plan

18. BONUS OTHER BONUSWAGE PLAN
BONUS PLAN
Group bonus plan
Double of
regular
wages are
paid as bonus
for over time
 Attendance
bonus
 Target
fulfillment
bonus
 2 Eid bonus.
Workers are
paid in
monthly
basis.

19. BONUS BONUS PLANWAGE PLAN
OTHER BONUS
 Attendance bonus
 Target fulfillment
bonus
 2 Eid bonus.
Double of
regular
wages are
paid as bonus
for over time
Workers are
paid in
monthly
basis.
Group
bonus plan

20. Factory
Overhead
Factory overhead is the costs incurred during
the manufacturing process, not including the
costs of direct labor and materials.

21. Quality assurance
salaries
Equipment
maintenance
Factory utilities
Factory
depreciation
Factory building
insurance
Equipment
depreciation
Factory supplies
Equipment setup
costs
Security
Insurance on
production
facilities and
equipment
Terms considered as overhead

22. Method of overhead allocation
Primary distribution
Secondary distribution
Absorption

23. Methods of absorption
0
1
0
5
As a % of ‘Direct Material Cost’
As a % of ‘Direct Labour Cost’
On the basis of ‘Direct Labour Hours’
On the basis of ‘Machine Hours’
0
2
0
4
03On the basis of ‘Production units’

24. Opportunity
Cost
You can take ANYTHING
But you can’t take EVERYTHING.

25. Thank You
Have a good day…