Costing of Skirt

Costing of Apparel Products

MF TECH-(08-10) NIFT, New Delhi 1

Subject name: Costing of Apparel Products

An

Assignment

On

“Cost Analysis of a Garment”

Garment Type:

Women’s Gypsy SKIRT

Submitted by:

Anand Bhargava (06)

Anoop Mammen (07)

Abhishek Gattani (09)

Sankar Chatterjee (30)

Master of Fashion Technology-II

National Institute Of Fashion Technology: New Delhi



Costing in Production Houses and Product Development

―Costing is the process of estimating and then determining the total cost of producing a garment,

including the cost of materials, labor and general expenses of indirect costs.‖

The increased number of seasons or offerings per year has put tremendous pressure on product

development and the costing process. Constant style changes require constant feedback and

adjustments for whichever costing strategy a company chooses to adopt. This has resulted in a

multilevel costing process, which includes:

• Quickie costing (cost estimating)

• Costing for sale (cost calculating)

• Production costing (cost monitoring)

• Accounting costing (cost reporting)

Cost Estimating: Cost estimation is the forecast of costs made before the item is manufactured. The first step in

the costing process can also be called as pre-costing. Pre-costing is a preliminary estimate or

―best guess‖ of what it will cost to produce the garment, based on judgment and past experience.

This quick cost is usually accurate within 10 to 15% of the actual cost and gives the

manufacturer some idea of whether the style can be produced and sold at a profit. The quick cost

helps the manufacturer decide whether to reject the style, accept it as a part of the line, or send it

back to the designer or merchandiser for changes to reduce its cost.

For a proposed new style, summarized cost data, previous garments cost sheets and fabric

requirement approximations are used to prepare cost estimates. Cost estimates are standing at an

important step of product development. Product development process is shown at Fig.



Cost Calculation: Cost calculation is the computation of the actual cost of manufacturing. This process is a

detailed calculation of the costs required to manufacture a style based upon available data. A

detailed analysis is made based upon prototypes. This level of costing is important in

determining price values.

Production Costing:

Production costing is related with the actual costs of production but does not take into

consideration the overhead costs and profit margins.

Accounting Costing: accounting costing is used to make the final adjustments to all elements

of costing and pricing processes.

Here as we are considering the garment is finished in all respect so we are doing

the cost calculation that is actual costing of the garment.

Unit Cost of Goods

To provide a highly effective cost system, costs in companies should be categorized and be

searched according to some categories. The main cost categories in apparel companies can be

classified into these titles and sub categories:

• Assignment to a cost object

Direct costs / Indirect costs

• Behavior pattern in relation to changes in the level of activity or volume

Variable costs / Fixed costs

• Components (elements)

Material costs / Labor costs / Overhead costs

• Business function

Administration costs / Sales costs / Purchasing costs / Production costs

• Aggregate or average

Total costs / Unit costs

• Assets or expenses

Inventorable costs / Period costs

To define the unit cost of goods each component (element) of a garment should be defined

clearly. The unit cost of goods includes all expenses involved in the manufacture of an apparel

product. The cost of goods is summarized under the categories of material cost, labor cost and

overhead costs.

Material costs: Material costs include fabric and accessory costs. Fabric is the most costly material in most

garment styles. Fabric accounts for 45% of a garment according to the statistical data. Since

fabric is the most significant factor in costing a garment, an accurate calculation for the required

amount of fabric per garment is essential. There are two stages to determine fabric expenditure.



First of all, unit fabric price is defined. Accordingly, the expenditure of fabric per unit garment is

determined. To accurately determine the average amount of fabric needed for a garment style,

marker plans are prepared by using the size scale and the fabric width.

After determining the consumption of fabric required to produce a style, including a waste factor,

total cost of the fabric is defined by multiplying the expenditure value by the price per square

meter.

For all other direct materials such as trim, thread, buttons, zippers, labels, shoulder pads and poly

bags, quantities per garment are measured in units, sets or meters. Waste factors are also

calculated to accommodate materials that are dropped, broken or damaged during the

manufacturing process.

Labor Costs: Labor costs include those costs that change the condition or physical appearance of raw

materials.

Examples of direct labor functions are cutting, bundling, folding, sewing and finishing. Labor

accounts for a large portion of the total cost of garments and sewing is the most costly process.

Regarding this, each individual operation in the production of a garment should be defined and

total time of sewing operations should be carefully calculated.

Overhead costs:

Overhead costs include all the costs except material and labor costs. Manufacturing overhead,

general and administrative expenses are all included in overhead costs.

Marketing and selling expenses, merchandising, design or product development expenses and

distribution expenses can be examples of this group.

Method of Actual costing in Production houses:

Product ID-SKR06070930 Order Qty: 1000 Pcs

Product Name- Women Flared Gypsy Skirt



Product Description:

Women skirt having 7 bottom down layers, consistently flared towards bottom hemline.

Shell fabric of skirt is made of crushed fabric of pale yellow colour provided with printing in two

alternate layers. Interlining fabric is knitted which is dyed with yellow colour. Printed fabric is

polka dot printing and technology used is screen printing. Hem finishing of each layer done by 3-

thread over lock with dark pink colour for giving aesthetic appeal.

Cutting room operation:

Requirement of fabric cut pieces:

Shell Fabric

Piece Name

Type of layer

Girth of layer (Cm)

Width of cut pieces (Cm)

Length of cut pieces (cm)

1 2 3 4

waist band

Woven Solid dyed 100 9 102

1st layer Woven Printed 100 30 102

2nd layer Woven Solid dyed 163 16 47 120

3rd layer Woven Solid dyed 206 16 105 105

4th layer Woven Printed 227 16 50 90 93

5th layer Woven Printed 287 16 87 87 119

6th layer Woven Solid dyed 347 16 167 184

7th layer Woven Printed 372 9 95 95 95 95



Interlining Fabric

Piece Name

Type of layer

Girth of layer (Cm)

Width of cut pieces (Cm)

Length of cut pieces (cm)

1 2 3 4

Interlining Knitted Solid dyed 107 63 109

In the whole garment all the fabric cut pieces are of rectangular shape, which leads to lesser

fabric consumption and lesser cutting time.

Time taken for the operations:

Sl.No Style of Garment Order Qty(No)

Spreading Time

Cutting Time

Ticketing &Bundling Time

1

Women Flared

Long Skirt 1000 17hrs 4.5hrs 3.5hrs

Considerations:

1) Fabric width 58‖

2) Table length is 8mt

3) Lay length is

4) Lay height 154

(Reference to assignment on ―capacity utilization of cutting room‖ during sem-1)

(Consideration: 8hr shift, 2 operators for spreading fabric roll, 1 spreading table)

Spreading operator day require= (17/8) x2 = 4.25 working day

(Consideration: 8hr shift & 1 operator for cutting fabric lay in one table)

Cutting operator day require= (4.5/8) = 0.56 working day

(Consideration: 8hr shift & 2 operator for cutting fabric lay in one table)

Spreading operator day require= (3.5/8) = 0.44 working day



Sewing room operation: Garment construction is taking place in assembly line (PBU system)

Standard Allowed Minute (SAM) of different garments parts

Hem finish of cut pieces-- 428 sec

(8 m/c with 8 operator)

Finishing of waist band by putting elastic—

150 sec (3m/c with 3 operator)

Attaching of cut pieces to make complete

layer— 614 sec (10m/c with 10 operator)

Seam finish of interlining cut piece on 1cm –

20 sec (1m/c with 1 operator)

Stitching on 1cm across and providing

gathers— 856 sec (14m/c with 14 operator)

Hem finish of interlining

-- 45sec (1m/c with 1 operator) Attaching interlining and shell fabric with waist band by lock stitch—60 sec (1m/c with 1 operator)

Average bundle size=10 pcs WIP between operation=1 bundles (10 pcs.)

Existing operation sequence as under:

First piece will come out after = 2173(1+10) sec = 6.64hrs (Through put time)

For total order quantity of 1000pcs time require= 6.64hrs+60sec X 999= 23.29hrs=24hrs

Here we conceder 1 assembly line with 7 operation.

So total construction of 1000pcs of garments will be finished by = 3 operating days.

So there will be 38 operators, 7 helper and 4 floater

(Consider cutting, sewing, finishing, packing will overlap in operation flow)

Hem finish of cut

pieces of each layer by

3-T O/L

Attaching interlining

and shell fabric with

waist band by lock

stitch

Attaching of cut pieces to make

complete layer by lock stitch

Stitching on 1cm across and

providing gathers to match

end seam

Completion of

attachment of layers

Finishing of waist band

by putting elastic and

giving top stitch

Placing top layer under

next layer on 1cm on

seam

Seam finish of interlining

cut piece on 1cm & hem

finish



Total Direct Labor Cost Calculation

Material inputs:

Fabric Input:

In the skirt, crushed fabric has been used for shell fabric. Some layers are solid dyed and some

are of polka dotted printed with adhesive. Dyeing and printing had been out sourced. Due to

three different type of fabric as solid dyed shell fabric, printed shell fabric and knitted interlining

had been laid in three different tables.

We make the marker planning in Tukamark for finding out maximum efficiency for lesser

wastage during cutting. Marker planning has been done for dyed fabric, printed fabric and

interlining.

Operation Operator Number

AVG salary/day (Rs) Effective operating days Total cost (Rs)

Spreading 2 100 3 600

Cutting 1 120 1 120

Sewer (operator)

38 120 3 13680

Sewer (Helper) 7 100 3 2100

Sewer (Floater) 4 100 3 1200

Finishing 2 120 3 720

Ironing/Packing 2 100 3 600

QC 2 200 3 1200

Total 24 20220



Marker planning for dyed fabric (Width 58‖)

Marker planning for dyed fabric (Width 52‖)



In case of 52‖ fabric width the marker efficiency is better so we chose to purchase fabric of 52‖

width fabric.

Per garment dyed fabric consumption = 7.54mt/8= 0.94mt

Fabric Cost (Per kg of yarn) (Polyester)

Yarn Rs30/Kg

Weaving Rs15

Dyeing (Yellow shade Only) Rs25

Compaction Rs8

Shrinkage 4% Rs3

Profit margin of fabricator (15%) 12

Total Rs93

Total consumption of yarn in fabric per garment (120gsm) = 0.157Kg

Cost of 0.94mt fabric = 93x 0.157= Rs15

Marker planning for Printed fabric (Width 58‖)



Marker planning for Printed fabric (Width 52‖)


width fabric.

Per garment printed fabric consumption = 7.47mt/8= 0.93mt

Fabric Cost (Per kg of yarn) (Polyester)

Yarn Rs30/Kg

Weaving Rs15


Printing cost (Polka dot) Rs60

Compaction Rs8

Shrinkage 4% Rs6

Profit margin of fabricator (15%) Rs22

Total Rs166





Marker planning for interlining fabric (Width 44‖)


width fabric.

Per garment interlining fabric consumption = 7.57mt/6= 1.26mt

Fabric Cost (Per kg of yarn) (poly viscose)

Yarn Rs45/Kg

Knitting Rs15


Compaction Rs8

Shrinkage 4% Rs4


Total Rs112





So total consumption of fabric in 1000 pieces of skirt

Solid dyed fabric = 0.94mt x 1000=940mt

Polka Printed fabric = 0.93mt x 1000=930mt

Interlining fabric = 1.26mt x 1000=1260mt

[Consideration Woven crush fabric role is available in 120mt/ Roll & Knitting role is available in

60mt/Roll]

Total requirement of fabric role in solid dyed fabric= 8 roll=960mt

Total requirement of fabric role in printed fabric= 8 roll=960mt

Total requirement of fabric role in interlining fabric= 21 roll=1260mt

So modified cost

Dyed fabric= Rs15.5

Printed fabric= Rs28

Interlining fabric= Rs21 (No change)

Sewing Thread Input:

Here three kinds of thread have been used. First is dark pink thread for baby three threads over

lock (504) on the hem. Second is white thread for over lock on the hem (wrong side of

garments). Third is dye to match yellow thread for lock stitch in whole garments.

Consumption of thread has been calculated through SPI and stitch length.

Dye to match yellow thread require: 9200yards

White thread for over lock: 60100yarda

Pink thread for baby over lock: 60100yards

Total thread consumption for 1000 pieces = 12kg

Total cost of thread= Rs75x 12= Rs900

So cost of thread/garments= Rs1



Cost sheet

Product code:

SKR06070930

Product Name:

Women Flared Gypsy Skirt

Description Average Cost (Rs)

Dyed Fabric Cost (Per kg of yarn)

Dyed Fabric Cost ( Including Wastage) 0.157 15.50

Yarn Rs30/Kg

Polka Dot printed fabric 0.157 28.00

Weaving Rs15

Interlining fabric 0.195 21.00


CMT

20.22

Compaction Rs8

Sewing thread

1.00

Shrinkage 4% Rs3

Elastic

1.00

Profit margin of fabricator (15%) 12

Hanger

6.00

Total Rs93

Poly Bag

2.00 Cartons

2.00

Printed Fabric Cost (Per kg of yarn)

Overhead & Margin 20%

18.54

Yarn Rs30/Kg

Total

115.26

Weaving Rs15


CMT Cost (Rs)

Printing cost (Polka dot) Rs60

Spreading 0.60

Compaction Rs8

Cutting 0.12

Shrinkage 4% Rs6

Sewer (operator) 13.68


Sewer (Helper) 2.10

Total Rs166

Sewer (Floater) 1.20 Finishing

0.72

Interlining Fabric Cost (Per kg of yarn)

Ironing/Packing 0.60

Yarn Rs45/Kg

QC 1.20

Knitting Rs15

Total 20.22


Compaction Rs8

Shrinkage 4% Rs4


Total Rs112



TOTAL COST CALCULATION IN PRODUCTION HOUSE FOR 1000PCS OF SKIRT:

Material cost: 76.5 X 1000 = Rs76500

Labor cost :

Direct/variable = Rs20.22 x 1000 = Rs20220

Processing cost & over head & margin 10%:

10% of (Rs76500 +Rs20220) = Rs9672

Cost of production: Rs106392

Cost of production per garment : Rs 106.4

FOB for production house (10% margin on cost of production): Rs115260

FOB per garment: Rs115



Conclusion:

During the study of costing we get the following findings:

Maximum share of cost incurred is by raw material and which is around 55-60% of final

cost price.

Labor cost is the second share holder towards total cost incurred, which is around 25-

30%. Among that sewing room operator’s contribution towards the cost is maximum.

In this garment we saw that cutting room efficiency is quite high and marker efficiency is

also very high as because this garment cut pieces are of rectangular shape.

Higher the order quantity leads to reduction of cost of garment.

References:

China is The Big Winner in the U.S. - Jordan Free Trade Agreement by

Texport Industries Pvt. Ltd. (Cost sheet collected from Production House).

Development of a Software about Calculating the Production Parameters in Knitted

garment Plants by Ender Bulgun, and Arzu Vuruskan.

Gene Barbee & Association Ltd. (1993, October 4). Product costing for small to medium

sized manufacturers.

Costing of Skirt

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