Method of Garments Costing
for Knitted Polo Shirt (Factory Costing)
→ Introduction:
In garments merchandising, costing is a very important
issue. As its importance in garments sector, today its seen that, some buying
house make an another department only for costing. The main reason of that is
to prepare accurate costing for any order. To make accurate costing you have to
know the method of costing, by which you can solve any costing issue without
any hesitation.
Method of Garments Costing for
Knitted Polo Shirt:
Before starting of a knitted
polo shirt garments costing, a knit garments merchandiser must be known
about the following matters:
1.
Yarn Price,
2.
Knitting and Washing Cost,
3.
Dyeing Cost,
5.
Printing cost,
6.
Accessories Cost,
8.
Commercial Cost,
9.
Others Cost.
Important tips***
§
The 2nd duty is to calculate the fabric consumption and costing.
§ Normally,
we calculate the grey fabric consumption.
§ After
completing grey fabric consumption and costing, all the required fabric
processing cost (knitting+ washing cost, dyeing cost) should be added with grey
fabric cost. After that, we can achieve the actual fabric cost.
§
At last, all the others necessary cost should be added with
actual fabric cost to achieve total cost of a garment.
Need
verius consumption:
1.
Body fabric
consumption (Body & Sleeve )
2.
Fabric
consumption for pocket
3.
Fabric
consumption for Collar
4.
Fabric
consumption for Cuff
5.
Fabric
consumption for Half-moon
6.
Fabric
consumption for RIB
An example for the knitted polo
shirt garments costing method are presented in the below:
Example:
Suppose,
One of the buyers named “Ha-Meem Group” forwards a knitted polo shirt item order (20000pcs) to you with following specification.
One of the buyers named “Ha-Meem Group” forwards a knitted polo shirt item order (20000pcs) to you with following specification.
1.
100% cotton single jersey fabric for body parts (Body + Sleeve),
Half-moon and Pocket. Where fabric GSM is 170.
2.
1 × 1 Rib fabric for collar and Cuff. Where the fabric GSM is
220.
Follow the below measurement chart.
Follow the below measurement chart.
3.
Print on Pocket.
4.
Embroidery on Back part.
Follow the below measurement sheet.
Actual length
|
Allowance
|
Measurement with Allowance
|
|
Body length
|
65cm
|
6cm
|
71cm
|
Sleeve length
|
18cm
|
6cm
|
24cm
|
½ Chest width
|
50cm
|
6cm
|
56cm
|
Collar length
|
36cm
|
0cm
|
36cm
|
Collar width
|
7cm
|
3cm
|
10cm
|
Cuff length
|
20cm
|
4cm
|
24cm
|
Cuff width
|
3cm
|
2cm
|
5cm
|
Pocket length
|
11cm
|
3cm
|
15cm
|
Pocket width
|
8cm
|
3cm
|
11cm
|
Half-moon length
|
14cm
|
3cm
|
17cm
|
Half-moon width
|
7cm
|
3cm
|
10cm
|
Now,
determine the garments costing (On FOB) for the above order.
Solution:
Fabric GSM- 170 for cotton single jersey,
Fabric GSM- 220 for 1 × 1 Rib fabric.
Fabric GSM- 220 for 1 × 1 Rib fabric.
Let,
Yarn Price per kg- $3.90
Knitting and Washing Cost per kg- $1.50
Dyeing Cost per kg- $2.10
Printing Cost per dozen- $3.90
Embroidery Cost per dozen- $6.00
Accessories Cost per dozen- $2.00
Knitting and Washing Cost per kg- $1.50
Dyeing Cost per kg- $2.10
Printing Cost per dozen- $3.90
Embroidery Cost per dozen- $6.00
Accessories Cost per dozen- $2.00
Now,
we have to calculate the fabric consumption for the above order.
Fabric Consumption:
1.
Fabric consumption for Body parts (Body +Sleeve):
Here, we will follow the following formula (per dozen),
Here, we will follow the following formula (per dozen),
(Body Length + Sleeve Length + Seam Allowance) x (½ Chest + Seam
Allowance) x 2 x GSM / 10,000 /1000 + 10% (Wastage and extra cutting) x Doz
={(71+24)×56×2×170
/10,000 /1,000/100×110×12
= 2.39 kg per dozen.
So, fabric consumption for Body
parts (Body +Sleeve) is 2.39 kg per dozen.
2.
Fabric consumption for Collar:
Here, we will follow the following formula (per dozen),
Here, we will follow the following formula (per dozen),
= Collar length × Collar width
× 12 × GSM /10,000 /1,000
= 36 × 10 × 12 × 220 / 10,000 /
1000
= 0.10kg per dozen.
So, fabric consumption for
Collar is 0.10kg per dozen.
3.
Fabric consumption for Cuff:
Here, we will follow the following formula (per dozen),
Here, we will follow the following formula (per dozen),
= Cuff length × Cuff width × 2
× 12 × GSM / 10,000 / 1,000
= 24×5×2×12×220/10,000/1,000
= 0.06kg per dozen.
So, fabric consumption for Cuff
is 0.06kg per dozen.
4.
Fabric consumption for Pocket:
Here, we will follow the following formula (per dozen),
Here, we will follow the following formula (per dozen),
= Pocket length × Pocket width
× 12 × GSM /10,000/1000 + 10 % Wastage
= 15×11×12×170/10,000/1,000
= 0.03kg per dozen.
So, fabric consumption for
Pocket is 0.03kg per dozen.
5. Fabric consumption for Half-
moon:
Here, we will follow the following formula (per dozen),
Here, we will follow the following formula (per dozen),
= Half-moon length × Half-moon
width × 12 × GSM
= 17×10×12×170/10,000/1,000
= 0.03kg per dozen.
So, fabric consumption for
Half- moon is 0.035kg per dozen.
Now, total amount of cotton
single jersey fabric needed for this order is (per dozen),
= [{Fabric consumption for Body parts (Body +Sleeve) + Fabric consumption for Pocket + Fabric consumption for Half- moon} + wastage (10%)]
= {(2.17 + 0.03 + 0.03) kg + 10%}
= 2.23kg + 10%
= 2.45kg per dozen.
= [{Fabric consumption for Body parts (Body +Sleeve) + Fabric consumption for Pocket + Fabric consumption for Half- moon} + wastage (10%)]
= {(2.17 + 0.03 + 0.03) kg + 10%}
= 2.23kg + 10%
= 2.45kg per dozen.
So, cotton single jersey Grey
fabrics needed per dozen 2.45kg.
And,
Total amount of (1 × 1) Rib
fabric needed for this order is (per dozen),
= {(Fabric consumption for Collar + Fabric consumption for Cuff) + wastage (10%)}
= {(0.10 + 0.06) kg + 10%}
= (0.16kg + 10%)
= 0.18kg per dozen.
= {(Fabric consumption for Collar + Fabric consumption for Cuff) + wastage (10%)}
= {(0.10 + 0.06) kg + 10%}
= (0.16kg + 10%)
= 0.18kg per dozen.
So, 1 × 1 Rib Grey fabrics
needed per dozen 0.18kg.
Total grey fabric needed to
make the polo shirt is – (2.45+ 0.18 = 2.63kg) per dozen
As yarn price per kg is $3.90 then, total grey fabrics cost per dozen is (2.63kg × $3.90) = $10.26
As yarn price per kg is $3.90 then, total grey fabrics cost per dozen is (2.63kg × $3.90) = $10.26
So, Total grey fabrics cost per
dozen is $10.26
Now, adding all the fabric
processing cost (Knitting+ Washing Cost, Dyeing Cost) with grey fabrics cost,
actual fabric cost will be determined.
So,
Actual fabric cost,
= Total Grey fabric cost + [{(knitting cost + washing cost) + dyeing cost} × Total grey fabric] per dozen
= [$10.26 + {($1.50 + $2.10) × 2.63}] per dozen
= $19.79 per dozen.
Actual fabric cost,
= Total Grey fabric cost + [{(knitting cost + washing cost) + dyeing cost} × Total grey fabric] per dozen
= [$10.26 + {($1.50 + $2.10) × 2.63}] per dozen
= $19.79 per dozen.
So, actual fabric cost per dozen is………. $19.73 ………………….. (A)
Printing Cost per dozen……………………… $3.90 ………………………. (B)
Embroidery cost per dozen ………………… $6.00 ……………………….. (C)
Accessories Cost per dozen……………….…$ 2.00 ………………………… (D)
Cost of making (CM)……………………………. $5.00 ………………………… (E)
Commercial cost …………………………………. $0.55 …………………………. (F)
Others cost …………………………………………. $0.25 ………………………… (G)
Printing Cost per dozen……………………… $3.90 ………………………. (B)
Embroidery cost per dozen ………………… $6.00 ……………………….. (C)
Accessories Cost per dozen……………….…$ 2.00 ………………………… (D)
Cost of making (CM)……………………………. $5.00 ………………………… (E)
Commercial cost …………………………………. $0.55 …………………………. (F)
Others cost …………………………………………. $0.25 ………………………… (G)
Here,
By adding A, B, C, D, E, F and G, we will get the total FOB cost of garments per dozen for the above order.
By adding A, B, C, D, E, F and G, we will get the total FOB cost of garments per dozen for the above order.
Total FOB cost per dozen = (A
+B + C + D+ E + F + G)
= $ (19.73 + 3.90 + 6.00 + 2.00 + 5.00 + 0.55 + 0.25)
= $37.43 per dozen.
= $ (19.73 + 3.90 + 6.00 + 2.00 + 5.00 + 0.55 + 0.25)
= $37.43 per dozen.
So, total FOB cost per dozen is
$37.43
Normally, in case of factor
costing, it should be think that, as we have received the order from a buying
house (Here, we got the order from Ha-meem Group’s Buying House), so we have to
pay 8%commission to them for that order.
So, in this condition, total
FOB cost per dozen stands at-
= $37.43 per dozen + 8% commission
= $40.42 per dozen.
= $37.43 per dozen + 8% commission
= $40.42 per dozen.
In factory costing, profit% for
the factory (here-10%) should be added with total FOB cost per dozen.
So,
Total FOB cost per dozen with profit% stands at ($40.42 + 10%) = $44.46
Total FOB cost per dozen with profit% stands at ($40.42 + 10%) = $44.46
Now, total FOB cost per pcs is
($44.46 / 12) = $3.71
So, factory cost (FOB) per pcs
garment of the above order is $3.71
Variable function:
1. Fabric consumption
2. Fabric cost
3. Accessories cost
4. Print/Embroidery/Washing charge
6. Freight (C & F)
7. Payment mode (at side differed payment 60 days or 90 days or 120
days TT sales contract)