In the wave of economic globalization, changes in market structure and the transition from a seller's to a buyer's market have highlighted the dominant position of “customers” in the market. The division and cooperation of products in the international industrial chain are closely linked. Chinese garment enterprises have ushered in new development opportunities. The entry of foreign clothing companies into China has provided a reference and model for the reform and development of Chinese clothing enterprises. Under new opportunities and challenges, if garment enterprises want to stand out in fierce market competition and achieve sustainable development, they need to continuously adjust their cost calculation and cost management models based on the market environment. This article analyzes the cost calculation settings based on the characteristics of garment enterprises and the current problems existing in the cost management of garment enterprises, and provides several specific solutions under the current situation.
On the other hand, due to the unique embroidery, cutting, and other techniques of Hanfu, its production costs are relatively high. In new Hanfu, some elements of traditional Hanfu still need to be retained, so its production costs are also higher compared to other daily wear. Moreover, considering that the audience for Hanfu is not yet widespread, the scale effect has not yet reduced manufacturing costs for new Hanfu. Currently, the new Hanfu industry faces intense competition with homogenized products, making it difficult for manufacturers to raise product prices. High costs and difficulty in raising prices lead to small overall profit margins and insufficient profitability in China's new Hanfu industry.
The characteristics affecting the cost calculation settings of garment enterprises mainly include two aspects: the characteristics of the garment industry and the characteristics of the enterprise's organizational structure. Regarding the characteristics of the garment industry, the garment industry has complex processes, including design, negotiation and order acceptance, pattern making, grading, confirmation samples, testing, purchase of fabrics and accessories, delivery of fabrics and accessories, mass production, quality inspection and warehousing, booking, shipment, etc. Each step is interlinked and interdependent. Additionally, garment enterprises have clear product classification and obvious seasonal production characteristics. Regarding the organizational structure of the enterprise, the main organizational structure of garment enterprises includes the early-stage production department (design, sampling), mid-stage production department (production, order tracking), and post-production service department (finance, personnel).
Product. The company insists on taking scientific and technological innovation as the driving force and has established a technical center with relatively advanced infrastructure, forming a relatively complete system of scientific and technological innovation. Through various means such as independent research and development, technical cooperation, and introduction, digestion, and absorption, the company constantly promotes the upgrading of product technology. The company's leading products' quality and production processes rank among the top in the country, providing significant competitive advantages. The company implements a general manager responsibility system under the leadership of the board of directors, promotes modern enterprise systems, establishes a scientific and flexible operating mechanism, and improves effective management systems. The project sponsor has a complete organization and management system, following the operation mechanism of the socialist market economy, strictly adhering to the laws of the People's Republic of China on companies, independently conducting business operations; to adapt to the trend of international economic development, the project sponsor fully establishes and implements a computer information network system, building up a logistics system from product development, design, production, sales, accounting, inventory to after-sales service.
On the other hand, due to the unique embroidery, cutting, and other techniques of Hanfu, its production costs are relatively high. In new Hanfu, some elements of traditional Hanfu still need to be retained, so its production costs are also higher compared to other daily wear. Moreover, considering that the audience for Hanfu is not yet widespread, the scale effect has not yet reduced manufacturing costs for new Hanfu. Currently, the new Hanfu industry faces intense competition with homogenized products, making it difficult for manufacturers to raise product prices. High costs and difficulty in raising prices lead to small overall profit margins and insufficient profitability in China's new Hanfu industry.
Firstly, update cost management concepts. Traditional cost management models of garment enterprises include production models and management models. In the current reforms of garment enterprises, traditional management models are increasingly showing their limitations. Therefore, to strengthen enterprise cost management, enterprise managers must update management concepts from the ideological level, placing the focus of cost management concepts on indirect expenses, improving cost calculation models, introducing activity-based costing, combining the actual situation of the enterprise, applying cost management models throughout the entire process of enterprise operations, to achieve true cost control and optimization.
Currently, the cost management issues of Chinese garment enterprises mainly manifest in the following aspects: first, one-sidedness of cost control subjects. Most garment enterprises' cost management relies entirely on enterprise managers and financial departments, treating other cost item departments merely as producers without involving them in the cost control process. When the financial department conducts cost management, it formulates cost control methods for cost item departments according to regulations but ignores the variability of cost control content, causing the enterprise's cost management work to stagnate and fail to meet actual development needs. Secondly, unreasonable procurement cost control. Due to the lack of a sound procurement system, enterprises may encounter two extremes in procurement work: one is excessively focusing on optimal cost while ignoring the quality of procurement materials, and the other is excessively demanding the optimal quality of procurement materials while ignoring cost control. Both extremes will affect product profitability. In addition, procurement personnel do not consider reaching long-term supply agreements with suppliers during the procurement process, and each procurement involves changing suppliers and subsequent product issues, which invisibly increase procurement costs. Finally, there are issues with inventory control. Inventory control issues mainly arise from unreasonable demand forecasts by enterprises at the product design stage. After production, when supply exceeds demand, product overstock leads to inventory issues. Some products may have quality issues due to production process problems, resulting in overstock. Furthermore, unreasonable sales strategies and unsmooth sales channels may also trigger inventory issues.
There are both finished goods and semi-finished goods produced every month, how should these be allocated? If the cost differences between products are not significant, the costs of semi-finished goods and finished goods can be allocated using output, also known as the equivalent units method. For example, assuming no balance in the production cost account at the beginning of the period: this month's incurred costs = 00 + 5 + 0 = 500 thousand yuan; finished goods ratio = 300 / (300 + 00) = 0.75; semi-finished goods ratio = 00 / (300 + 00) = 0.25; finished goods cost = 500 thousand yuan * 0.75 = 86.25 million yuan; semi-finished goods cost = 500 thousand yuan * 0.25 = 275 thousand yuan; journal entry for transferring completed goods: debit inventory 86.25 million yuan; credit production costs 86.25 million yuan; the remaining 275 thousand yuan remains in the production cost account, which is the cost of semi-finished goods. It serves as the opening balance next month, added to the costs incurred next month, to calculate the finished goods cost next month. The calculation method is the same as above.
In summary, enterprise cost management has completely surpassed the scope of traditional accounting and product cost management. It is necessary to realize that enterprise cost management must be led by “strategy,” customer-oriented, based on value chain analysis and process optimization, aiming to obtain competitive total costs as the management goal, ultimately achieving the enterprise's long-term competitive advantage. Confirm, measure, collect, analyze, and report cost information related to implementing the enterprise strategy and key success factors, providing comprehensive support for decision-making, planning and budgeting, management and operational control, financial reporting, etc. Cost management is a comprehensive management involving all personnel and processes, covering all aspects and management fields such as the market and customers, research and development and design, procurement, production and manufacturing, services, etc., and supported by cross-organizational, cross-functional teamwork.
Core courses in Business Administration major: Management Accounting, Financial Management, Marketing Management, Introduction to Enterprise Management, Public Finance, Monetary Banking, International Finance, Production and Operations Management, Quality Management, Enterprise Innovation Management, Cost Calculation, Financial Markets, Human Resource Management, Consumer Communication and Sales Management, Strategic Management Seminar, Consumer Behavior Issues and Analysis, Supervision and Leadership Mechanisms, E-commerce, Project Management, Small Enterprise Management. Language skills: Foreign language: Good English; Mandarin proficiency: Fluent; Cantonese proficiency: Fluent. Work ability and other specialties: Sincere, confident, full of charisma, I believe I can bring a lot of impetus to the company. Enjoys communicating with people, warm and cheerful, enthusiastic about socializing, which gives me a great advantage in the service industry.