4 Steps of Apparel Costing in Clothing Manufacturing Factory

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Steps of Apparel Costing in Clothing Manufacturing Factory

Apparel Costing Factors in RMG Industry:

When apparel manufacturing factory offers an apparel export order from apparel buying house then the responsible person should have taken some necessary steps about the total costing and profit percentage of that order. By analyzing those steps, he can easily take the decision about the export order, whether it is perfect for them or not. If he doesn’t take those steps, he may have faces so many problems after receiving the order.
Steps of apparel costing in clothing factory
Steps of apparel costing in clothing factory
Factors of Apparel Costing in Clothing Manufacturing Factory:

There are mainly four steps of apparel costing in readymade clothing manufacturing factory. Those are listed in the below:

  1. Calculation of apparel weight (For any size),
  2. Calculation of fabric cost per kg,
  3. Calculation of fabric cost per apparel,
  4. Apparel costing per piece.

All the above four key points have discussed in the following:

 

1. Calculation of apparel weight:

The apparel weight for any one size, normally the middle size of the all sizes in an apparel export order enquiry is calculated. For example, if there are three sizes apparel i.e. S, M, L, then the M size weight is taken for calculation. The apparel weight can be calculated by following the actual fabric consumption calculation formula.

2. Calculation of fabric cost per kg:

If the fabric for the apparel export order is purchased directly from the market which may be readily available, then the price per kg of the fabric is taken as fabric cost per kg. If the fabric for the apparel export order is made specifically then the fabric cost per kg is calculated as follows. It should be noted here that, the below fabric costing table is just shown a fabric costing format, where costing is not specified. You have to put required amount or costing amount in the table during fabric costing calculation.

SL No.
Particulars
Costing Amount
01
Yarn price per kg
Rs. ××××
02
Knitting rate per kg
Rs. ××××
03
Dyeing rate per kg
Rs. ××××
04
Printing rate per kg
Rs. ××××
05
Compacting rate per kg
Rs. ××××
06
Heat setting rate per kg (Synthetic fabric)
Rs. ××××
07
Total
Rs. ××××
08
Process loss (8-10%)
Rs. ××××
09
Final fabric cost per kg
Rs. ××××
3. Calculation of fabric cost per apparel: 

Fabric cost per apparel can be calculated by multiplying apparel weight and fabric cost per kg.

Fabric cost per apparel = Apparel weight × fabric cost per kg

4. Apparel costing per piece using costing sheet: 
The cost of the apparel per piece can be calculated by using apparel costing sheet which is shown in the following table. One thing is noted here that, no number is put in the below table. You have to put required amount or costing value in the apparel costing sheet format during apparel costing.
 
Apparel Costing Sheet Format:
SL No.
Particulars
Costing Amount
01
Fabric cost per piece apparel
Rs. ××××
02
Cost of making or CMT cost
Rs. ××××
03
Special operations
Embroidery
Rs. ×××
Rs. ××××
Printing
Rs. ×××
04
Trimmings and Accessories
Buttons
Rs. ×××
Rs. ××××
Zippers
Rs. ×××
Twill tape
Rs. ×××
Main label
Rs. ×××
Wash care label
Rs. ×××
Poly bag or pouch
Rs. ×××
Hang tag
Rs. ×××
Insert card
Rs. ×××
Barcode sticker
Rs. ×××
Hologram sticker
Rs. ×××
05
FOB + Packing
Rs. ××××
06
Sub total
Rs. ××××
07
Overhead (10%) +
Rs. ××××
08
Sub total
Rs. ××××
09
Rejection (3%) +
Rs. ××××
10
Sub total
Rs. ××××
11
Profit (%) +
Rs. ××××
12
Sub total
Rs. ××××
13
Agent’s commission
Rs. ××××
14
Insurance
Rs. ××××
15
Apparel price (FOB) in Rs.
Price in Rs. ××××
16
Apparel price (FOB) in US ($)
Price in US ($)
17
Apparel price (FOB) in Euro.
Price in Euro.

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