Costing is the foundation for a stable price-quality ratio. Each product or service has a cost to the customer, although it can be calculated individually based on production specialization. Choosing the appropriate costing system model allows one to optimize pricing and meet the needs of the audience. Espadrilles, sweatpants, and crafts were selected as products with unique costing methods in production. Their peculiarity is that the audience’s specifics sets the parameters for paying for processes or specific works that made it possible to obtain a high-quality output.
Sweatpants are not associated with high fashion, but they become more in demand during a pandemic. Thakoon Panichgul adapted apparel development to the updated needs and concentrated production on sweatpants (Segran). It is process costing, as production is divided into many procedures to obtain the final product. On the other hand, the USS Zumwalt destroyer was created in a single unit (Crucchiola). This job costing project was custom-made and is not standardized. Each of the examples presented justifies the chosen strategy in terms of production volumes.
Espadrille is a trendy shoe made from sustainable materials in Cervera, northern Spain. The manufacturer is not a specific company, but rather the entire population of the town. The final product is provided by Jose Luis, who puts the product pieces together (Science Channel). Espadrille is made from compressed jute rope and soft fabric for the upper part of the shoe. The debit part of the T-account shows the cost of extracting the material, the craftsmen’s work, and depreciation, while the credit is the selling price.
Jute and textiles are direct materials, while bonding threads, adhesives, equipment cleaners, and work surfaces are defined as indirect. Direct labor is craftsmen who provide manual work for the sole and soft upper material. On the other hand, indirect labor is truck drivers and industrial premises guards. Manufacturing overhead costs are supplies, insurance, repair, and depreciation of equipment. Process costing is more suitable as espadrilles are produced as a mass product in a standardized system.
Espadrilles production is environmentally friendly and reflects regional culture, which is essential in modern fashion. Management should be aware of the cost of work due to growth opportunities, potential resource optimization, decisions about possible business closures, the feasibility of the current production structure, and the potential to replace expensive materials. Besides, the USS Zumwalt and sweatpants manufacturers have adopted the correct pricing models for their production volumes.
Works Cited
Crucchiola, Jordan. “The New $3B USS Zumwalt as a Stealthy Oddity That May Already Be a Relic“. WIRED, 2015. Web.
Science Channel. How Espadrille Shoes are Made. 2015. Web.
Segran, Elizabeth. “Can Sweatpants Ever Be High Fashion? Thakoon is Here to Persuade You“. Fast Company, 2020. Web.