Application of costing systems in clothing and textiles industry in Limpopo Province

Abstract

Studies have shown that the primary objective of costing systems is to provide managers with detailed information for planning, control, and decision-making. However, developing and implementing costing systems presents a challenge to clothing and textile manufacturing companies since identifying and attributing costs to products can be a difficult process. This study investigates the application of costing systems in product pricing and profitability analysis in clothing and textile manufacturing companies in Limpopo province. Using questionnaires, the study analysed the impact of costing systems on product pricing decisions and profitability. The study also looked at the cost information needed for major pricing decisions in the clothing and textile manufacturing companies in Limpopo Province. The main findings are that relevant costing systems play an important role in the pricing of products and the associated profitability of product lines in clothing and textile manufacturing companies. The results show that clothing and textile manufacturing companies use different costing methods in calculating their product costs, which are significantly important in their decision making such as pricing