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Garment Costing: How To Calculate Garment Cost Using Available Information

The document provides information to calculate the cost of a garment, including fabric consumption, fabric price, trim costs, thread costs, labor rates, and more. It describes a 7 step process: 1) arrange the information in a table, 2) calculate total fabric consumption including wastage, 3) calculate fabric cost, 4) note the trim cost, 5) calculate thread cost, 6) calculate labor cost, 7) calculate total garment cost by summing the subcosts. Following the steps, the total garment cost is calculated as $5.76.

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477 views3 pages

Garment Costing: How To Calculate Garment Cost Using Available Information

The document provides information to calculate the cost of a garment, including fabric consumption, fabric price, trim costs, thread costs, labor rates, and more. It describes a 7 step process: 1) arrange the information in a table, 2) calculate total fabric consumption including wastage, 3) calculate fabric cost, 4) note the trim cost, 5) calculate thread cost, 6) calculate labor cost, 7) calculate total garment cost by summing the subcosts. Following the steps, the total garment cost is calculated as $5.76.

Uploaded by

alamin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Garment Costing: How to Calculate

Garment Cost using available Information


Prasanta Sarkar Dec 11, 2013
Question:  I am a merchandising management student, I want to know how to calculate the cost
of a garment using following details.

1. Fabric consumption: 0.8 yards per garment.


2. Fabric wastage allowance 3%
3. Fabric price: $2.7per yard.
4. Total charges for insurance & fright $ 0.3 (per yard). Fabric is being ordered from Hong
Kong.
5. Finance charges for fabric purchasing is 15%.
6. Trim cost: $ 1.5 per garment (excluding thread cost).
7. 5000 meter of thread cones being used for sewing, 210 meters of threads needed for a garment
and the price of a thread cone is $6.
8. Garment SMV is 40.
9. Labor rate: the selling price of a minute is $ 0.03

... by OCS reader.

Answer:
To calculate the cost of the garment, I will first create a table in excel sheet. Then I will calculate
material cost and labor cost. Finally sum up all cost together to calculate total cost of the
garment. In the following I have shown you step by step process for calculating cost of the
garment using information provided on the above.

Step 1: Arrange information in the excel table, provided on the above problem. See the
following table, where I have arranged all required information to find final garment cost. I have
given code number to each information A, B, ...J.
I added extra rows where I need to calculate something to calculate sub costs and necessary
information. Like M, N, O and P.  
Step 2: Calculate total fabric consumption including wastage percentage (M)
Total fabric consumption per garment = Calculated fabric consumption (1+Wastage%)
Or M=A(1+B)

Step 3: Calculate fabric cost per garment (N): Factory has incurred cost in insurance and freight
and finance charge. I have calculated fabric related cost together. 

So, Fabric cost per garment (including freight and finance charge) = (M*(C+D))+(M*C*E)

Step 4: Trim cost: Total cost of the trims has been given.  

Step 5: Calculate thread cost (O): From the thread rate (unit 5000 meters) and thread
consumption, thread cost per garment is calculated. 
Here thread cost per garment = G*H/5000
Step 6: Calculate labor cost per garment (P): Labor cost per garment is calculated using garment
SMV (standard time) and labor cost per minute.

Labor cost per garment (P) = Garment SMV * Labor cost per minute

Step 7: Calculate total garment cost (GC):


I have calculated all sub costs required to find total garment cost. 
Total garment cost = (Fabric cost + Trim cost + Thread cost + Labor Cost)
Total garment cost = ($2.81 + $1.50 + $0.25 + $1.20) = $5.76

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