Costing in Textile and Apparel Industry

in Garment Manufacturing
By: Vijaya Shanbhag
Introduction
Costing is a very complex procedure with set patterns and guidelines followed by the
industry and it is difficult to find out costs for every process as there are some inbuilt
costs while costing. The yarn is made and fabric is weaved and thus generates Grey
cloth.
The general sequence of processes carried out on Grey cotton cloth to the final garment
is as follows:

About 65-70% cost of the garment is the cost of the fabric and hence it is very crucial to
get the right cost of the fabric from fabric manufacturers and suppliers.
A large variety of fabrics are used in the export/domestic market for different end uses.
Costing depends a lot on quantity and order received. Buyers send specifications and
the fabric has to be developed as per the design trend. Garment manufacturers source
fabrics with specific construction and characteristics in different quantities for different
end uses. Garment manufacturers struggle to get the best possible cost of the fabric. It
would be interesting to know the important points to consider for getting a
comprehensive understanding of costing. Costing seems to be a complex exercise as it
depends on a number of variables. Costs are calculated taking into consideration the
complete production process and machinery involved.
Costing
The Different costs to consider are
i) Direct Cost

Cost of raw material 66%, cost of size and chemicals 4%, Production cost comprising of
running the machine, maintenance, power fuel, humidification, and other utilities-8%,and
workers wages and salaries 8% losses incurred due to shrinkage, wastage, grading,
and also selling commissions.
ii) Indirect Cost
Interest on investment, loan, working capital, depreciation etc. above 7%, overheads and
administrative expenses like travelling, telephone, couriers, legal issues, taxes
comprising of 7%.
iii) Profit
10-20% depending on the order size. In some companies, 70%of the fabric cost will
compromise of direct cost, but in corporate selling only 40%cost of the fabric is direct
cost and 60% is overheads.

What are the factors which affect the cost?

Raw material cost

a) Type of raw material
This includes cost of fibre or yarn .The cost of this fibre will largely depend on its generic
typecotton, linen, wool, silk, nylon, rayon, polyester, polyester cotton blend, etc and
also its quality. The yarn cost will depend on the count of the yarnfiner the yarn ,more
expensive it will be. The cost of man-made spun yarns will depend on the fineness- finer
the yarn, more expensive it is. Number of fine filaments used in making the yarn will also
affect the cost. Bright yarns are more expensive than dull ones. Textured yarns are more
expensive than flat because of additional process cost.
b) Amount of raw material or GSM of the fabric.
Amount of raw material is reflected by the weight or GSM (Gms per square metre) of the
fabric. GSM is directly dependent on the EPI (ends per inch) and PPI (picks per inch) or
construction of the fabric and is inversely proportional to the count of the yarn. Relation
between GSM and cost is a little complex. For the same variety of the fabric as the GSM
increases the cost increases. But when the yarn becomes very fine and there is a
variation in picks per inch in the fabric, then the cost of spinning and weaving plays a
more important role than the GSM and even when the GSM is similar, the cost of voile
fabric with finer yarns and more picks per inch is more.
Weight of fabric is the weight of warp and weft which can be calculated by the formula
below:
Weight of the warp in grams /sq mt of fabric= EPI x0.6
--------------count of warp
Weight of the weft in gms /sq mt of fabric = PPI x 0.6
--------------

=A

= B

count of weft
GSM = A+ B

Sizing and chemicals cost

The sizing cost depends upon the count of yarns.The count becomes finer the size and
chemical cost increases. As a rich solution, better quality of size and chemicals is
required for better strength.
One needs to add Rs 35/per kg as additional cost which includes steam, power or
wages.For two plied yarn no sizing is needed.
Production cost or Cost of weaving process or Wet Processing
It includes machine running cost, maintainence, labour cost, power and fuel etc. The
weaving cost is affected by the beam size- if the beam is small in length ,the cost will be
more as beam gaiting and knotting will add to the cost.
Mill made or powerloom made:
The quality of the mill-made fabrics is better than powerloom made fabrics in terms of
yarn quality; therefore cost of fabric is higher. At times it can be as high as 25% eg. The
cost of 40s poplin 92x88 can vary between Rs. 22/mt and Rs. 34/mt.It depends on the
type of loom whether powerloom, rapier, air jet, dobby, or jacquard and the weave and
construction.
Cost of fabric varies from place to place. The fabrics produced in different textile centres
like Bhiwandi, Surat, Benaras, Meerut, Panipat, varies and hence cost varies due to
variation in quality.
For yarn dyed stripes and checks in handlooms the efficiency is affected by the number
of colours in the weft but mill-made stripes and checks are made on Sulzer loom in
which the production is not affected by the number of colours in the warp or weft.
Wastage and shrinkage
Wastage of 2-3% in warping and weaving and shrinkage of 1-1.5% from loom to grey
folding stage is included in the weaving cost. About 92% of fabric produced is sold as
fresh. The value loss is about 7% while running cotton material but is only 3% in using
polyester yarn.
Processing Cost
The processing cost includes bleaching and whitening if white fabric is sold; includes
dyeing cost if dyed cloth is sold; includes printing cost if fabric is dyed and printed; and
garment cost included if fabric is sold as Garment.
Generally in composite textile mills fabric is sold as garment in Retailers shops. In small
weaving houses fabric is sold as cloth to process houses. In Process houses Processing
is carried out as per the above flow diagram right from grey cloth to dyed or printed
fabric and this dyed/printed fabric is sold to Garment houses where garment is prepared

and displayed in Shops or Retailers shops. When people buy the Garments (dresses)
the garment cost is inclusive of all above parameters. When people buy bedsheets or
sarees, curtain cloth ,furnishings etc. after it is well processed it will not include garment
make-up cost as the fabric is sold in cloth form without making the garment.
Bleaching costs/ Dyeing Costs/ Printing Costs
These costs depend on whether the fabric as white is sold, or dyed cloth is sold; or
printed cloth is sold; or garment is sold. We in this case shall consider that dyed cloth
and dyed and printed cloth is sold. So costs incurred will be dyeing and dyeing and
printing cost.
Cost of Dyeing
Cost of dyeing depends upon:
Length: A minimum of 2,000 mts of fabric is accepted, if the quantity of fabric is more
say 15,000 mts or 20,000 mts then the processing charges will be lowered by about
Rs 1 - 2/mt.
Width of the fabric:
If the width of the fabric is doubled ,the cost of processing is not doubled. So it is
beneficial to go for wider width fabrics rather than fabrics with more length. This is
because the overheads and cost of running the material are dependent on the length
and not the width.
Shade %:
Lighter the shade lowers the cost. The amount of dye required is less as well as time
required for dyeing is less. e.g. for dyeing pastel shades if it takes 24 hours, it takes 36
hours for dyeing black shades and dark shades.
Class of dye and quality:
Some dyes are more expensive than the other. e.g. Vat dyes are more expensive than
the reactive dyes and better expertise is required for dyeing,so for the same shade the
cost of a fabric with vat dyes is more than a fabric dyed in reactive dyes.The choice of
the dye depends on the buyer,the fastness properties and also on the shade selected.
Colour:
Within the same dye class some colours are more expensive than the others.For e.g.
Turquoise colours are more expensive than others.
Metamerism:
Some colours change their shade in different lights .If shades are matched in two or
three lights only then the cost is less but when the matching is required in all the six
lights, natural daylight( D-65) ,Tube light ( TL -83 ),Horizon ( yellow light as produced
during sunset) ,Incandescent, ( Inca A), Fluorescent ( CWF or cool white fluorescent),

Ultraviolet light (uv, UL -30 or ultra lume),or no metamerism is required then better
quality dyes are required and the cost is more.
Weight of the fabric:
Lighter the fabric quicker is the dye pick-up so lesser is the dyeing time required.
Capacity of the machine is expressed in weight of the material, for lighter weight fabrics
more length of the material can be processed at one time,so dyeing cost is reduced.
All the above prices are for a minimum quantity of 1,500 to 2000mts and if the quantity is
less the price will go up.This principle applies for all yarn dyed fabrics also.Pastel shades
are dyed in procion cold brand dyes and medium and dark shades are dyed in hot
reactive dyes.
Cost of Printing
Depending on the class of dyestuff used and style of printing employed, suitable
components are selected in making print paste in Printing process. Variety of chemicals
is available in each group of components and a particular compound used for one class
of dye may not be suitable for use with another class of dye. Thus print paste comprises
of dyestuff, chemicals and thickeners and costing in printing industry is done on basis of
Print /metre depending on type of print.
Higher the depth of printing higher is the cost similar to dyeing. Here also dark shades
require more of dyes, chemicals and thickeners and hence become more expensive. Vat
printing is expensive to reactive printing. Here too choice of the dye and type of print
depends on buyers specifications, shade and fastness properties of print.
Finishing Cost
If softeners are added in the jigger after dyeing ,then the cost is Rs.10/kg whereas if it is
done on a separate machine and later on stentering is done then the cost is Rs 20/kg.
The quality of fabric is better in second case as the cover is better and there is no
shrinkage later.
Shrinkage and wastage
It is important to note that wastage and shrinkage are integral part of the costing.
Generally a minimum shrinkage of 5- 7% is acceptable.
Thus Cost of Fabric = Cost of fabric+ dyeing charges + Printing charges + finishing
charges + shrinkage + wastage.
Costing depends a lot on quantity and orders received. Indirect cost is about 15-20%.On
top of the cost a profit of about 15-20% is added. It is not only the cost of final product
that matters.
For an export product (here product can be fabric or garment) cost is given as FAS (Free
alongside), FOB (Free on board), CIF (Cost insurance and freight), LDP (Landed and
duty paid.)

FAS-It is the cost of finished goods plus it includes delivery of the goods to the port, dock
etc. This cost does not include the shipping, loading on to ship or any other costs
incurred.
FOB It is the cost of finished goods, cost of delivery of the goods to port and loading
onto the ship, plane etc.The cost does not include the shipping or any other costs
incurred from that point.
CIF - It includes the cost of finished goods plus it includes the delivery of the goods to
the port, loading on the ship, shipping charges, all applicable insurance fees along the
way. The price does not include going through customs or any duties or other costs
incurred from that point.
LDP It is the cost of the finished goods, plus it includes the delivery of the goods to
port, loading on the ship, shipping charges and the goods brought through the customs
with all applicable duties and taxes paid.
Lead time plays an important part in domestic and export market. Generally for
production of greige fabric the lead time is 30 days. Processing time for grey fabric is 15
20 days but when the buyer needs urgency then the above costing parameters
sometimes are not significant. It depends on the demand and supply. If you can deliver
on time you can ask for the price.
Cost of Garment
This cost will be stitching cost. i.e. Garment manufacturing cost. Also in some cases the
garment processing cost comes into picture as some garments are given chemical
treatments for some fashion outlook. But in our case we will consider only garment
manufacturing cost. i.e. stitching cost.
Thus Cost of Garment = Cost of fabric+ dyeing charges + Printing charges + finishing
charges + shrinkage + wastage + stitching cost.
Conclusion:
Thus from the above it is seen that costing is a very complex procedure. There are set
patterns and guidelines followed by the companies in their very own format. It is difficult
to find out costs for every process as there are some inbuilt costs while costing. Costing

depends a lot on quantity of orders received.

Following proper norms and guidelines keeping all the above factors in mind and proper
planning one can carry out costing and reduce or increase the price of final garment as
one desire.
Thus by trying to keep the wastage to a minimum one can increase profits to a greater
extent.