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Costing technique in clothing industry

In order to achieve perfect garment costing, one must know about all the activiti

purchase of fabrics, sewing, packing, transport, overheads, etc and also about procedures, advantages and risk factors, advocates C Vigneswaran.

The Indian textile and apparel industry is very large and diverse, employing

people and accounting for 27 per cent of the country's exports. The apparel indu pivotal role as a key driver of the national economy and has grown to b

significant contributor to the country's economy over nearly three decades of it However, during last 10 years, the industry's actions, government policies as we

events have begun to converge, providing several growth opportunities for domestically as well as in the global market.

As the MFA quota-regime ended, India presented many opportunities for buyers, suppliers and investors to colla its textile industry, and to profit from the partnership. While the industry recorded a remarkable growth in a prote

environment, it faces a series of challenges that have come to the fore in the post-quota situation, notably in area

    

Price competitiveness. Faster lead times. High raw material base. Full service offering.

Access to market. "A Cost is the value of economic resources used as a result of producing or doing costed".

Garments costing

tags. twill tapes. blan and made ups are woven. packing of garments. L. over heads. Medium (M) Extra large (XL) and Double Extra Large (XXL). Sizes: S. Cartons are to . We must be aware that there are always fluctuations in the costs of raw materials and accessories. etc). Cost of accessories (hangers. The method of making costing w style to style. Costing is the deciding factor for fixing of prices and the important thing to follow in all stages like purchase. XL.solid dyed . Other charges (print. pyjamas and socks are knits. medium and dark colours in equal ratio. the following things should things be calcuated:           Fabric consumption. Fabric cost per garment.1:2:3:2:2 As the price is the same for all these sizes of garments.sea worthy. etc). Cost of trims (labels. To find out the costing of a garment. trouser. bed spreads. The quantity ratio or assortment can be any one of the following a ratio.light. etc. the quantity of L size will be higher or equal to the quan of other sizes.1:2:2:2:1 S: M: L: XL: XXL . CMT charges. cartons. Generally. sweaters.100% Cotton 140 GSM Single je ribs at neck . Hence let us take men's basic T-shirt style as exam in regular in use.There are two types of garments. Price of a garment. marketing. sales. Cost of a garment. processing and finishing of fabrics. M. buttons. the author have taken the centre size large(L) calculation. Also update knowledge about everything related to garments. Generally they are in sizes Small (S). Men's Basic T-shirt Description: Men's Basic T-shirt-short sleeves. undergarments. T-shirts. Fabric cost per kg. badges. sarees. charges of transport and conveyance. bows. banking charges and commissions. polybags. embroidery. Shirt. etc). charges processing. namely woven and knitted garments. inner boards. Gross weight of other components of garment. is essential to make perfect c Costing includes all the activities like purchase of fabrics and accessories. As there are many different styles in garments.1:2:1:2:1 S: M: L: XL: XXL . shipping. finishing. sewing and packing. transport and conveyance. etc. Fabric consumption The garments manufactured in many sizes to fit for everybody. S: M: L: XL: XXL . XXL Ratio: 1: 2: 2: 2: 1 Export carton: 7 ply -120 GSM virgin corrugated .

60 cm Length .8. The weight of the cut pieces after taking the shape according to the pattern is called net weight of fa Fabric cost per kg (in Rs) (all charges approximately) Cost of fabric per kg is calculated and given in Particulars 34's combed yarn Knitting charge Dyeing charge Compacting charge Fabric wastage @ 5% Light colours Rs.78 cm Sleeve length .3 cm Hem .00 Rs. the fabric consumption per garment is 197 grams.with 2 nylon straps.24 cm Neck rib width .00 Rs.00 Rs.8.70 Dark colo .135.3 cm Patterns are generally made with the seam allowance and cutting allowance. Gross weight & net weight The above weight is the gross weight of fabric. Measurements in cm: (Finished garment) Size: L Chest . This is the consumed fabric for the particular garment. Fabric consumption =(Body length + Sleeve length + allowance) * (Chest + allowance) * 10000 = (70 + 24 10000 + 12) * (60 + 3) * 2 * = 187 grams Body & Sleeves : 187 grams Neck rib : 10 grams (approximately) Gross weight : 197 grams Therefore.00 Rs.00 Rs.45.6. That is.70 Rs.00 Rs. It means the weight of the fabric bits cut in tubular form wit shapes is called gross weight.00 Rs. Hence costing is to be made gross weight. G cm is added with the total of body length and sleeve length.135.6.00 Rs.00 Rs.35.9.00 Rs.135.8.20 Medium colours Rs.6.00 Rs.00 Rs.55.10.9.

35 Rs.30 per garment Master Polybag: Rs 2 per master polybags to contain 8 garments .40.Rs 0.70 197 gms Rs.13 Rs. Let us see what are the trims required for this style.00 Rs.27 The accessories which are attached to the garments are called Trims.40.38.35 per garment.35 Rs.06 Rs.00 Rs. as example.20 197 gms Rs. Labels: Woven main label (2.83 Rs.1.0.76 Rs.00 Dark c .54.85 Rs.80 per garment. Now the author have taken Men's Basic T-shirts.38.85 Rs.1.85 Rs.1.06 Rs.00 Medium colours Rs.193.203.50 Rs. Price of garment estimation is give Particulars 34's combed yarn Fabric cost per garment Cost of Trims CMT Charges Cost of accessories Rejection of garments (commonly 3%) Cost of Garment Local Transport Light colours Rs. Garment costing Now we at last have to take the step to find out the freight charges for the Men's Basic T-shirt.35 Polyester printed wash care label: Single colour print: Rs 0.85 per garment.58.50 Rs.224.00 Rs.40 So the total cost of trims is Rs 0.25 per g Export carton: Normal: Rs 40 per carton to contain 48 garments .00 Rs.1.50 Rs.135.35 Rs.00 Rs. Rs.44.1.135.Fabric cost per kg Fabric consumption per garment Fabric cost per garment Cost of trims Rs.1.0.5 cm width x 7 cm length): Rs 0.70 197 gms Rs. So the total cost of accessories is Rs 1. Price of garment e given in Table 2. Table 2: The freight charges for the Men's Basic T-shirt.52.00 Rs.Rs 0.1.Rs 0.11. Cost of accessories: Polybags: Normal . Hang tag: Rs 0.44.00 Rs.27 Rs.97 Rs.

published M Reader Comments muthu | 8/26/2010 4:04:49 PM very very helpfull for a beginner. Finally. Commission/ pc Rs.7.90 Rs.2. He also extends his tha Ravi.2.8. we have to convert the Indian rupee value to USD or Acknowledgement The author expresses his thanks to Dr R Rudramoorthy.00 Rs. Production Manager.66 Rs. Costing Manager.8. PSG Coimbatore Daprtment College of Textile 641 of of Fashion Vi T T Email : vignes_waran@rediffmail.03 Rs. Principal and Dr K Ramachandralu.70.63. for their help towards the practical approach in bringing out this For men's basic T-shirt.2. Professor & H Technology. the delivery terms in the buyer enquiry as 'FOB'.hats off to this site Roshni | 8/25/2010 2:58:02 PM VERY HELPFUL INPUTS. Thanks I mean GREAT! suhas | 8/4/2010 3:16:59 PM t-shirt consumption .Profit@15% appro. So sea freight charges is not added.00 Price of Garment Shipping charges Rs.00 Rs. B transport with the cost of garment has to be added. Coimbatore for their continuous encouragement.90 Rs.66.. PSG College of Technology. Tirupur and Mr Jagadeesh. Note: For detailed version of this article please refer the print version of The Indian Textile Journal May 2009 issue C Lecturer..LOOKING FORWARD FOR MORE SUCH ARTICLES Ayush | 8/20/2010 5:08:24 PM There are very few people who share knowledge. Stallion Garment. Apple Clothing Limited.20 Rs.

sleeve hem & armhole joint (in cm). as listed below: (During the consumption pls used measurement of middle size for calculation or used the size which have most of the qty.. Hence.52 cm v. Say it is .. Historically. Here we will consider the size: "L" for calculate the consumption) i. Chest width (1/2) in cm.4 cm vi.ipfonline. Say it is . Approximate sewing allowance at body hem. full viewpoint. If the style have 6 sizes then used size number 04 for consumption. shoulder joint. Learn Fashion design.. it has been observed that whenever the excise duty on man-made fibre yarn and fabrics has been Calculate the consumption of knit garments Learn Apparel Merchandising. Fabric GSM (finish). Say it is . Features Towards zero burnouts in motors in spinning mills Features World-class sys apparel manufa Since the electricity has become a scarce commodity in India and the cost of power has been increasing alarmingly.73 cm ii. more. The following information you need at first.. if a motor is not maintained. Sleeve length of the garments in cm. energy conservation assumes great importance. Body length of the garments in cm.19. Let us look at some interesting observations regarding the production comparison between.5 cm iii.comwww.. For calculating the consumption of your knit garments pls follow the below instruction.. Say it is .160 gsm .10 cm Post a back to Features | back to Garments. Motors consume almost 90% of the electricity in a spinning mill..automotiveproductsfinder. Fashio Viewpoint Powerless Powerlooms The powerloom sector produces more than 70% of the fabrics produced in India. Focus on Indian appar with respect to new te adoption and investme management procedu poor figures. the production of these has come down drastically. Experts att Table of Contents Most Recent Issues Write to E Subscribe to ITJ | Write to the Editor | Rate Card | ITJ Ads | Tell A Friend | About Us | Contact Us | Login | Register | www. Dear All. Approximate sewing allowance at both side seam (in cm).. Say it is . Say it is . Majority industry work with bas and further investmen management procedu negligible..

5 + 10) X (52 + 4)} X 2 X 160 X 12 / 10000000 + 10% = ( otherwise you can follow the below rules Rules: {(B/length + S/length + Sewing Allowance) X (1/2 Chest + Sewing Allowance)}X 2 X GSM X 12 / 10000000 + Wastage = {(73 + 19.43 kg per dozen. Say it is .blogspot. Garment CM cost estimation using SAM or SMV gives partial answer of this question. I have explained it further to make it clear how you can quickly calculate CM of a product at the time of order booking or initial stage of product development.vii. (Consumption) How to Calculate Product CM Cost at the Time of Order Booking? One of my popular posts.5 X 56) X 2 X 160 X 12 / 10000000 + 10% = 5740 X 2 X 160 X 12 /10000000 +10% = 22041600 / 10000000 + 10% = 2.If the garments has rotary print.424576 = 2.20416 + 10 % = 2.http://knitgarmentsconsumption.which may changed in any time.10% (In this regards pls note just put the following information and get the fabric consumption. fabric wastage depend on how many additional elements the garments have. enzyme stone wash etc than the fabric wastage will be more than normal wastage) If you already have all the above information then. . Approximate fabric wastage in various stage.

Calculate labor cost per pieces for cutting and finishing department. If you want accuracy in cutting and finishing cost then calculate product wise labor cost per piece. Step 1: Make database for labor cost per pieces for cutting and finishing Just get last six months labor wages for cutting and finishing departments (excluding staffs) and total units cut and finished in lat six months. Step 2: Determine sewing labor cost per minute Per minute cost of a factory depends on line efficiency. Following steps will help you to determine product CM cost. you may find it is very difficult to answer with correct figure due to complexity in CM is referred to fabric cutting and garment sewing (making) labor cost per unit. But if you follow logical method and keep your database ready and updated you can determine CM of a product with no time. to calculate sewing labor cost create database for average style . So for cutting and finishing process there is less variation in labor cost per unit. Actually. folding and packing are included into CM. all labor costs like cutting. Cutting labor cost per piece = Total salary paid to cutting labors in a time period / Total pieces cut in that time period Finishing labor cost per piece = Total salary paid to finishing labors in a time period / Total pieces packed in that time period. And average line efficiency of a style depends on style run (order quantity). sewing. Preparation of a database is onetime job and you need to update regularly or when updating is required. If one asked you what would be the CM of a product. First thing first. pressing. Sewing process has much variation in terms of work contents (time required to make a garment) than cutting and finishing process.Garment Sample image courtesy: Jabong.

consult with industrial engineering department.29 480 Step-3: Calculate CM cost of the product SMV is one very important component for product cost calculation. . Once you get product SMV add certain percentage on it as buffer.efficiency according to order quantity. where it shows style efficiency is 55%. See Table-1 for example.29 Table -2: Factors to calculate sewing labor cost per minutes Order qty 800110000 Minimum wages (high skilled) 340 Minutes/day Efficiency level 55% Labor Cost/minutes 1. Table-1: Line efficiency at different order quantity Order qty. Or create your database for product SMV with style variations. So. Cost per minutes = (Minimum wages of high skilled labor / 480)/Efficiency% See following Table-2. To calculate efficiency of a style use following formula = (Order qty. cost per minutes is INR 1. 100-500 501-1000 1001-3000 3001-8000 8001-10000 10000 plus Average style Efficiency 30% 35% 40% 50% 55% 60% Once you have average efficiency based on order quantity calculate sewing labor cost per minute. * Garment SMV * 100) / (Total man hours spent to complete the style * 60) Instead of quantity you can use actual total production quantity in the style. Collect updated list of minimum wages for skilled labor or get average employee rates from Human Resource (HR) department. This database needs to be updated regularly. For the correct SMV of a product. minimum daily wages (for high skilled operator) INR 340 and work shift time 8 hours (480 minutes).

At costing stage. Later. For raw material cost suppliers directly take price quote from fabric and trim suppliers.Sewing labor cost per piece = Product SMV X labor cost per minute (@ predefined efficiency) Product CM = (Cutting cost + Sewing cost +Finishing cost) For safety. supplier gives final manufacturing cost to buyer prior to order confirmation.23 In the above example. Cutting rate per unit 2 Finishing rate per unit 4 Sewing SMV 14 Cost allowances 5% CM (INR) 25. Garment CM cost estimation using SAM or SMV By Prasanta Sarkar 85 In the clothing manufacturing. Cost heads like Fabric. 5% allowances are added to the calculated cost to reach to final CM cost. Determine SAM of the garment (refer garment SAM calculation) Calculate average line efficiency and Calculate direct labor cost per minute . The scientific method for estimating CM (Cut and make) cost of a garment involves following steps 1. For that factory prepares cost sheet estimating costs in different cost heads. To make the calculation easier I have made CM cost calculator on an excel sheet. Trims and Packing materials. cutting cost is INR 2. Labor cost and Overheads. For labor cost it is very important to estimate as near as it will be during actual production. supplier only get one sample of the garment and specification of fabric and trims for the reference. 2. finishing cost INR 4 and sewing SMV taken 14 minutes. 3. This sheet can be downloaded based on your demand. add allowances on the calculated CM prior to offering cost to your buyer.

4.60) = 13. 3. Total estimated CM cost of the garment = (12. When a line performs at lower efficiency than standard (100%) line will produce less units in a day compared to what line could make at 100% efficiency. instead of average operator salary you can take cumulative of all operators salary (monthly) and divide total amounts by total minute available to the line (total operator * total minutes per operator per month) to have more accurate value. so labor cost per minute increases when line efficiency goes down. Labor cost per minute = (Monthly salary of an operators/Total minutes available in the month) at 100% efficiency. So correct way to calculate labor cost per minute is #2. Related Articles: 1. But factory spends same amount of money as salary whether line perform at 100% efficiency or less. Example: Operator monthly salary is INR 5000.60 INR Following above formula easily one can estimate garment CM cost and use it for the product costing. So. per unit cost will increase when line performs at lower efficiency. Note: For the calculation of labor cost per minute. But no line can perform at 100% efficiency.40/50% =12 INR And Cutting SAM is 2 minutes and cutting room perform at 50% efficiency then estimated cutting cost = 2*0.4006 INR at 100% efficiency Formula for the projected labor cost per pieces CM cost = (SAM of the garment * Minute cost of the labor)/Line efficiency(%) (Minute cost determined from above formula#1.00 Total available capacity per month (in minute) = 26 working days*8 hours/day*60=12.6 INR So.00+1.How to calculate the minute cost of the operator? Formula: #1. per minute cost of the direct labor = 5000/12480 = 0. If you use second formula then don't divide by line efficiency) If Sewing SAM is 15 minutes and line perform at 50% efficiency then estimated garment make cost = 15*0. Actual Garment Production Cost – The way factory calculates it How to Calculate Raw Material Cost for Garments? Garment Production Cost: Actual Cost Vs Cost Per SAM Cost breakdown of a Men's woven shirt sold in USA market . 2. Labor cost per minute = Total salary of the labors in a month / Total SAM produced by those labors in that month. Why do you need to consider line efficiency in CM costing? Line output varies depending on the line efficiency.40/50%=1.480 minutes So.