Garment Costing: How to Calculate Garment

Cost using available Information

Question:  How to calculate the cost of a garment using the following details.

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A. Fabric consumption: 1.1 metres per garment (trousers)
B. Fabric wastage allowance 3%

C. Fabric price: $2.55 per mettre.

D. Total charges for insurance & freight $ 0.3 (per m). Fabric is being ordered from Taiwan
E. Finance charges for fabric purchasing is 15%.

F. Trim cost: $ 1.5 per garment (excluding thread cost).

G. Using 210 meters of threads needed for a garment, 5000 meters of thread per cone and the
price of a thread cone is $6.

H. Garment SMV (Standard Minute Value) is 30 mins .

I. Labour rate: the selling price of a minute is $ 0.05

Answer:
To calculate the cost of the garment, you should first create a table in excel sheet. Then you will
calculate the material cost and labour cost.

Garment costing method

Finally, sum up all cost together to calculate the total cost of the garment.

Step 1: Arrange information in the excel table, provided on the above problem, arrange all
required information to find the final garment cost. The code numbers locate to each information
A, B, ...J.

Add extra rows 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 a cost in insurance and freight
and finance charge. Now, we calculate the fabric-related costs 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 labour cost per garment (P): Labor cost per garment is calculated using garment
SMV (standard time) and labour cost per minute.

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

Step 7: Calculate the total garment cost (GC):

Calculate all sub costs required to find total garment cost. 

Total garment cost = (Fabric cost + Trim cost + Thread cost + Labor Cost)