Typical Costing of a Product in Export Oriented Garment Industry

Introduction: 
Costing is very important for a productive factory. Without proper costing all production curriculums will go vain. Because a factory cannot reach to its goal without achieving good profit and good profit is not possible without skillful costing.

Costing of the product: 

Let, price of yarn is $ 3.00/kg 
Process loss of yarn for knitting (10%) = $0.30 
Knitting fabric cost = $3.30 
Cost of dyes & chemicals = $2.50 
Process loss for dyeing (12%) = $0.30 
Dyed fabric cost = $6.10 
Packing cost = $0.05 
Production cost of fabric = $6.15 
Fabric price (with 25% margin) = $7.79 

Fabric consumption/doz,  

   (Body length + Sleeve length + 10) x Chest length x 2 GSM x 12 
= …………………………………………………………....................………
                                            10000000 

Garment specification: 

Body length = 78 cm 
Sleeve length = 33 cm 
Chest length = 62 cm 
GSM = 210 

                                           (78 + 33) x 62 x 2 x 210 x 12 
Fabric consumption/doz. = ………………………………
                                                            1000 
= 3.469 kg 

Fabric consumption/doz (with 10% wastage) = 3.816 kg 
Body fabric cost/doz = $(7.79 × 3.816) = $29.73 
Cost of collar & cuff/doz = $4.00 
Cost of trims = $2.25 
Cost of trims (with 5% process loss) = $2.36 
Production cost of garment/doz = $36.09 
Garment price/doz (with 25% profit) = $45.12