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Material Costing

the function of ensuring that sufficient goods are retained in stock to meet all requirements without carrying unnecessarily large stocks.

Ref: publication of the Institute of Cost and Management Accountants on Budgetary Control

Exact quality to be ascertained no interruption price paid should be the minimum no over stocking Wastage and losses while the materials are in store should be avoided as far as possible; and Wastage during the process of manufacture should be the minimum possible.
* information about availability of materials and stores should be continuously available so that production may be planned properly and the required materials purchased in time.

Cost associated
Cost Of Purchase Cost of keeping stocks
ABC Analysis, or the Selective Inventory Control.

central or main stores, sub-stores and departmental stores

The record of stores may be maintained in three forms: (a) Bin Cards (b) Stock Control Cards, (c) Stores Ledger.

Treatment of shortages in stock taking Unavoidable - cost of the loss or shortage may be treated as

Avoidable (abnormal losses) should be debited to the

Costing Profit and Loss Account

Losses or surpluses arising from errors in documentation, posting etc., should be corrected through adjustment entries.

The main objective of inventory control is to achieve maximum efficiency in production and sales with the minimum investment in inventory.

Cost a Garment
Efficient companies cost a garment soon after the
sample is completed for assistance in weighing its merit as a potential addition to the line. Estimated cost of materials and production are the determining factors.

Cost a Garment
Despite Industry looking for consistent costing methods there exist, about as many
techniques for costing as there are individual firms.

Staple Vs Fashion Products

What are Staple or Fashion garments Fabric Costs increase when moving from basic/staple to fashion garments Some trims might show very little variance in cost between staple to style Other considerations are minimum quantities and lead times Risks involved in fashion colors

Risks of fashion goods

Buying high fashion fabric at a premium price
Customer changing style at the last minute 50% more time spent by sales, marketing, and manufacturing to overcome crisis Fabric, trim carry over costs Re-dying of trims

Risks of fashion goods

Why female gray flannel mantailored trousers have a higher retail price than comparable garments in the Mens department?

Direct 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.

Key stoning
Key stoning establishes the Retail price by
doubling the retailers cost. A keystoned ten dollar garment probably bears a price tag which reads $19.99. Manufacturer rather uses terms line Profit Margin

Dogs and Hot Numbers

Most manufacturers operate somewhere between the two extremes of hot numbers and dogs therefore strive to have some rhyme and reason to their costing methods.

Essential elements of Costing process

2 3

Factory Cost
1 2





Factory O/H

Sometimes the latter four denoted as Indirect cost are computed as percentage of the more obvious direct costs of material and direct labor.

Elements of Material Cost

Fabric Thread Trims Accessories Packaging

Fabric Procurement Considerations

Lead Time Quality Delivery Service Price Order Quantity Discounts

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

Things to remember..
Pattern measurements should first be verified to ensure that the pattern indeed does confirm in size to the specification sheet of finished garment measurements To ensure a small percentage may be added to the pattern margins to accommodate cutting and sewing inconsistencies as a manufacturing loss allowance. Seam margins do not exceed 3/8 in patterns for mass production but couture and custom tailored garments have generous seam margins.

Things to remember..
Similar as markers, a similar layout of patterns in in a limited representative form termed as stencil Inaccurate yardage estimates can be harmful to business.

Quick Method of Material estimate..

Step 1 - Representative sizes and quantities are used with the addition of a percentage for error (Say 4 %) Step 2 - An average size must be determined and then from existing sample pattern the average size should manually be produced. Step 3 - Any other size needed is produced by rough estimated grading. Step 4 - The aim is to determine area consumed by the widest and longest portions of the pattern pieces. Step 5 - With the preceding information and activities completed, the material amount may be calculated.

Trim estimate..
Step 1 Measurement or calculation of the exact amount used in the single garment. Step 2 The specification chart is helpful in determining the different amounts which will be needed by different sizes. Step 3 The same extra percentages may be figured, as for fabric.

Things to remember..
The buttons, rivets and other fasteners usually remain constant for all sizes The method for applying trims which will be used in manufacturing must be known, in order to calculate accurately the amount to cost and order. However the total cost of the garment may not vary as the method applied may invite extra time for the operator. Some materials are sold in minimum quantities such as 1,000 yds, 1000sets, 100 Dozen or 10 gross. The cost may be accrued accordingly.

It continues to be more art and imagination than science, and the chances of two manufacturers arriving at the same cost for the same garment is just as unlikely as it ever was. Source: Garment costing Method or madness in Bobbin Magazine

Fabric Costing

Fabric Costing
Elements of fabric costs Value added process cost Commercial cost VAP Cost - Starts from the fiber/yarn stage and goes on till the fabric is ready.

Commercial Cost - Rate at which the fabric is selling in the marketplace.

VAP cost
Fiber-Spinning-Dyeing-Weaving/KnittingFabric. At each stage there is finishing so that the input to the next stage ready for use and clean

Commercial cost
The price at which the fabric is being sold in the market.

This cost is VAP cost + Profit of the manufacturer or agent.

Fabric Costing
Important to know the following: Count/construction/weight of the fabric Width of the fabric Source Quantity The no.of colors in a print/yarn dyed fabric Limitations of each type of fabric Finishes / Value Addition

Fabric Costing

Up charge for Dyeing colors Discounts Seconds stock Overruns Consumption

Georgette Fabric

Module - Costing of Apparel Products


Georgette Fabric

Width Range
44-45" or 114 cm. common 57-58"or 140 cm. common 52-53

Lay Statistics
Lay Height No. of Fab Layers 4"-4.5 240-300

textured and slightly slippery hence difficult to sew. Interweaving tissue paper or something similar keeps fabric pieces while working Pins used with caution since georgette fabric shows pin holes.

Georgette Fabric

Types of Georgette
Polyester Georgette
o o o o o Micro Georgette Single Georgette Double Georgette Moss Georgette Laser Georgette

Viscose Georgette
o 6 Kg Variant o 8 Kg Variant o 10 Kg Variant

Silk Georgette

o o o o o o

40 gm Variant 60 gm Variant 90 gm Variant 80 gm Variant 100 gm Variant 200 gm Variant

Cotton Viscose Georgette Dobby Georgette