Garments Costing for Knitted T-shirt (factory costing)

Garments Costing for Knitted T-shirt (factory costing)

Garments Costing:

In the garments business, costing is an important part of a merchandiser. The whole business totally depends on it. Accurate garments costing is the heart of this business. So, as a garment merchandiser, you have to fix an accurate price for the garments. As its importance on garments business today I will present an easy garments costing method for in the following.

Knitted T-shirt

Knitted T-shirt

Method of Garments Costing for Knitted T-shirt:

Before going to the knitted T-shirt costing, a knit garments merchandiser should confirm the following matters:

  1. Yarn Price,
  2. Knitting and Washing Cost,
  3. Dyeing Cost,
  4. Printing cost,
  5. Accessories Cost,
  6. Cost of Making (CM),
  7. Commercial Cost,
  8. Others Cost.

The next duty is to calculate fabric consumption and costs.

  • Normally, we calculate the grey fabric consumption.
  • After completing grey fabric consumption and costing, all the required fabric processing costs (knitting+ washing cost, dyeing cost) should be added with grey fabric cost. After that, we can achieve the actual fabric cost.
  • Then finally all the other necessary costs should be added with the actual fabric cost to achieve the total cost of a garment.

Now, I will present an example of knitted T-Shirt costing in the following. Hope all the confusion will be cleared.

Example:

Suppose,
The buyer “Fashion Xpress” provided you the following measurement chart of a knitted printed T-Shirt order by mentioning the order quantity and fabric GSM.

  1. Fabric is 100% cotton single jersey, and fabric GSM is 160
  2. The order quantity is 10000pc.

Then calculate the garments Costing (on FOB) per pcs for this order.

Solution:

Given that,

  • Fabric GSM- 160,
  • Body length with allowance- 90cm
  • Sleeve length with allowance – 55cm
  • ½ Chest width with allowance – 77cm

Let,

  • Yarn Price per kg- $3.20
  • Knitting and Washing Cost per kg- $1.00
  • Dyeing Cost per kg- $1.70
  • Printing Cost per dozen- $4.00
  • Accessories Cost per dozen- 1.60

Now, we have to calculate the fabric consumption for this order.

Fabric Consumption:

All the measurements are applied on the following formula-

Fabric consumption per dozen, (All measurement in cm),

Fabric consumption per dozen
= 4.29 + 10% (in kg)
= 4.72kg per dozen.

So, grey fabrics needed per dozen garments are 4.72kg.

As yarn price per kg is $3.20 then, grey fabric cost per dozen is (4.72kg × $3.20) = $15.104
After adding all the fabric processing costs (Knitting+ Washing Cost, Dyeing Cost) with grey fabrics cost, the actual fabric cost will be determined.

So,
Actual fabric cost = Total Grey fabric cost + [{(knitting cost + washing cost) + dyeing cost} × 4.72kg] per dozen
= $15.104 + {($1.00 + $1.70) × 4.72} per dozen
= $27.848 per dozen.

So, the actual fabric cost per dozen is………. $27.848 ………………….. (A)
Printing Cost per dozen……………………… $4.00 ……………………. (B)
Accessories Cost per dozen……………….…$ 1.60 ……………….…… (C)
Cost of making (CM)……………………………. $5.00 …………………… (D)
Commercial cost …………………………………. $0.60 ……………………. (E)
Others cost …………………………………………. $0.20 …………………… (F)

Now, by adding A, B, C, D, E, and F we will get the total FOB cost of garments per dozen.

Total FOB cost per dozen = (A +B + C + D + E + F)
= $ (27.848 + 4.00 + 1.60 + 5.00 + 0.60 + 0.20)
= $39.248 per dozen.

Normally, in the case of a factory, we received the order from a buying hose (Here, we got the order from Fashion Xpress Buying House), so we have to pay 8%commission to them for that order.

So, in this situation, total FOB cost per dozen stands at-
= $39.248 per dozen + 8% commission
= $42.39 per dozen.

In factory costing, profit% for the factory (here-12%) should be added with total FOB cost per dozen.

So,
Total FOB cost per dozen with profit% stands at ($42.39 + 12%) = $47.48
Now, total FOB cost per pcs is ($47.48 / 12) = $3.96
So, the factory cost (FOB) per pcs garment is $3.96

In the end, there is one thing everybody likes, and that is a lovely print on their T-shirts. You can start a business by learning about the machines that are required for this very purpose. If you go through the heat press review thoroughly, I’m sure you will find something to your liking. The fascinating part about these machines is that they can be used at home or office depending on your purpose. Some devices come with extra heating elements, so I’d suggest giving them a try.

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