**Estimation of Apparel Packing Cost: **

**clothing manufacturing**industry.

Fig: Apparel packing or packaging department |

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**Apparel Packing Cost Calculation Method in RMG Sector:**

Calculate the packing cost per apparel from the given chart.

SL No. | Parameters | Quantity and Cost |

01 | Order quantity | 10000pcs |

02 | Packing person | 10 |

03 | Wages per packing person | Rs. 150 per shift |

04 | Production per shift | 2000 pcs apparel |

05 | 1 day | 2 shifts (1shift= 8hrs) |

06 | 1 carton box | 50 pouch |

07 | 1 pouch | 4pcs apparel |

08 | 1 pouch | 1 insert card |

09 | 1 pouch | 1 tag |

10 | 1 pouch | 1 small barcode sticker |

11 | 1 pouch | 1 size sticker |

12 | 1 pouch | 1 bullet tag |

13 | 1 carton box | 1 big barcode sticker |

14 | 1 apparel | 1 hologram sticker |

15 | 20 carton box | 1 gum tape |

16 | 1 carton box | 4 meters plastic strap |

17 | 1 carton box | Rs. 40 |

18 | 1 pouch | Rs. 5 |

19 | 1 insert card | Rs. 1.50 |

20 | 1 tag | Rs. 0.80 |

21 | 1 small barcode sticker | Rs. 0.50 |

22 | 1 size sticker | Rs. 0.10 |

23 | 1 tag bullet | Rs. 50 per 1000 bullets |

24 | 1 big barcode sticker | Rs. 1.00 |

25 | 1 hologram sticker | Rs. 1.00 |

26 | 1 gum tape | Rs. 35.00 |

27 | Plastic strap | Rs. 3 per meter |

28 | Strap machine rent | Rs. 500 |

29 | Power | Rs. 5000 per month |

30 | Salary | Rs. 50000 per month |

31 | Rent | Rs. 10000 per month |

32 | Other expense | Rs. 15000 per month |

33 | Profit | 15% |

**Solution: **

The below formula has to apply in apparel packing cost calculation:

**Packing cost per apparel, **

Direct labor + Direct material + Direct expense + Overhead

**= ………………………………………….………………….……… ……… (1) **

Total apparel packing production

**Total Production Calculation: **

Total production = 10000pcs apparel

**Total Production Time Calculation: **

Total production time,

= (Total production / production per shift)

= (10000/2000)

= 5 shifts

**Direct Material Cost Calculation: **

Carton box = (10000pcs/200pcs) = (50× Rs. 40) = Rs. 2000

Pouches = (10000pcs/4pcs) = (2500× Rs. 5) = Rs. 12500

Insert card = (2500 pouch ×1) = (2500× Rs. 1.50) = Rs. 3750

Tag = (2500 pouch ×1) = (2500× Rs. 0.80) = Rs. 2000

Small barcode = (2500 pouch ×1) = (2500× Rs. 0.50) = Rs. 1250

Size sticker = (2500 pouch ×1) = (2500× Rs. 0.10) = Rs. 250

Tag bullet = (2500 pouch ×1) = {2500× (Rs. 50/1000} = Rs. 125

Big barcode = (50 cartons ×1) = (50× Rs. 1) = Rs. 50

Hologram = (10000pcs ×1) = (10000× Rs. 1.00) = Rs. 10000

Gum tape = (50 carton/20) = (2.5 × Rs. 35) = Rs. 75

Plastic strap = (50 carton × 4 meters) = (200× Rs. 3) = Rs. 600

**So, **

Total direct material cost stands at,

= Rs. (2000+12500+3750+2000+1250+250+125+50+10000+75+600)

= Rs. 32600

**Direct Labor Cost Calculation: **

Labor wages,

= (Number of labors × No. of shifts × wage per shift)

= (10×5× Rs. 150)

= Rs. 7500

**Direct Expense Cost Calculation: **

Strapping machine rent = Rs. 500

**Overhead Cost Calculation: **

In power cost calculation,

= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(5000 × 5)/60} = Rs. 417

In salary cost calculation,

= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(50000 × 5)/60} = Rs. 4167

In rent cost calculation,

= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(10000 × 5)/60} = Rs. 834

In other expenses cost calculation,

= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(17000 × 5)/60} = Rs. 1251

**So, **

Total overhead cost stands at,

= Rs. 417 + Rs. 4167 + Rs. 834 + Rs. 1251

= Rs. 6669

**From the equation-01, we get, **

Apparel packing cost per pc,

(Rs. 32600 + Rs. 7500 + Rs. 500 + Rs. 6669)

= **……………………………………………………….. **

10000

= Rs. 4.70

**After adding 15% profit, **

Apparel **packing or packaging** rate stands at

= {4.70/ (1-15%)}

= Rs. 5.50