The Real Cost of Fabric
The textile industry is a global commodity chain with fabric being one of the most important pieces that determine how much the final product will cost. Textile manufacturing involves several steps, from cotton picking through spinning and weaving to finishing. The industry serves as a source of livelihood for over 45 million people in India. To fully understand the creation of fabric and its costs you may want to know that there are different parameters involved—these can be understood as direct and indirect costs. The direct costs would include:
5. Interest on investment, loan, working capital and depreciation that comprise seven percent,
6. Overheads and administrative expenses like traveling, telephone, couriers, legal issues and taxes make up another seven percent. It may be represented as follows: The big picture is that direct and indirect costs can have influence on the production of fabric. The different parameters that make up the costs of the fabric can be grouped into two different ways. That is, raw material, size and chemicals, production cost and worker wages and salaries make up the direct costs. On the other hand interest on investment, loan, working capital, depreciation and overheads and administrative expenses make up the indirect costs. Amidst these costs, a 10-20 percent profit margin is achieved making fabric production a worthy but intensive process.