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COSTING OF APPAREL PRODUCTS

STAGES OF COSTING

PRELIMINARY/PRE COSTING (FOR DESIGN DEVELOPMENT) ROUGH ESTIMATE BASED ON COSTS OF PRODUCING SIMLAR DESIGNS IN THE PAST, BEFORE A SAMPLE IS MADE

COST ESTIMATING ( FOR LINE ADOPTION)- IS DONE JUST PRIOR TO LINE ADOPTION, BASED ON SAMPLES AND STANDARD DATA
DETAILED COSTING (POST ADOPTION) IS DONE AFTER STYLES ARE ADOPTED IN THE LINE, BASED ON PRODUCTION METHOD OF EACH OPERATION DETERMINING ACTUAL COSTS (IN OR POST PRODUCTION) IS DONE AFTER THE STYLE REACHES THE SEWING FLOOR

Some Definitions .
PRIME COST DIRECT COSTS PRODUCTION COST PRIME COST + OVERHEADS TOTAL COST PRODUCTION COST + GENERAL OPERATING EXPENSES WHOLESALE PRICE TOTAL COST + PROFIT RETAIL PRICE WHOLESALE PRICE + SELLING AND DISTRIBUTION COST + MARK UP

Material an Important factor


For the majority of mass produced garments, material is at least 40% of the entire cost.
Quote: Dr. Joseph Ludden

Engineers have to look long and hard to find a 10 cents savings opportunity in labor; but material savings of 10 cents are relatively easy to find.

Elements of Material Cost

Fabric Thread Trims Accessories Packaging

Material Procurement Considerations

Lead Time Quality Delivery Service Price Order Quantity Discounts Manufacturing Process

Other Parameters

Sizes Excess material cost Percentage of utilization Wastage Inspection cost Dyeing / Printing

How to arrive at the Cost of material..


Step 1 Designers croquis and specification sheet is prepared A sample pattern, often called a first pattern is developed Step 2 The amount of fabric, is estimated for single garment of one size. Number of buttons, quantity of bindings, tape, lace and other components needed for a single size is estimated Amount of thread required per garment, is estimated Step 3 Total quantity required for a dozen garment is established

Labor Costing

Begins with a breakdown of all operations involved in assembling a style. The style can be broken into component parts and sub totaled or the production standards for each operation can be added together for the total garment. Production standard reflects the normal time required to complete one operation using a specified method that will produce expected quality.

Overhead & GOE


For every std hour of labor content produced, a certain fixed OH is applied to direct labor. The OH is hence absorbed into product cost