Method of Garments Costing for Knitted Polo Shirt

Method of Garments Costing for Knitted Polo Shirt (Factory Costing):

In garments merchandising, costing is a very important issue. As its importance in the garments sector, today its seen that some buying house make another department only for costing. The main reason for 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,
4. Embroidery Cost,
5. Printing cost,
6. Accessories Cost,
7. Cost of Making (CM),
8. Commercial Cost,
9. Others Cost.

Important tips***

• The 2nd 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.
• At last, all the other necessary costs should be added with the actual fabric cost to achieve the total cost of a garment.

An example of the knitted polo shirt garments costing methodize presented below:

Example:

Suppose,
One of the buyers named “Ha-Meem Group” forwards a knitted polo shirt item order (20000pcs) to you with the 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.
3. Print on Pocket.
4. Embroidery on Back part.

Follow the below measurement sheet.

Now, determine the garments costing (On FOB) for the above order.

Solution:

Fabric GSM- 170 for the cotton single jersey,
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

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),

= 2.17kg per dozen.

So, fabric consumption for Body parts (Body +Sleeve) is 2.17kg per dozen.

2. Fabric consumption for Collar:
Here, we will follow the following formula (per dozen),

= 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),

= 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),

= 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),

= 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.

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.

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

So, the Total grey fabrics cost per dozen is $10.26
Now, adding all the fabric processing costs (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.

So, the 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)

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.

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.

So, the total FOB cost per dozen is $37.43

Normally, in case of factor cost, it should bethink 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.

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

Now, total FOB cost per pcs is ($44.46 / 12) = $3.71

So, the factory cost (FOB) per pcs garment of the above order is $3.71

Speech from the writer:
The main aim of This article is to show the calculating method. Don’t be disappointed about its result. All the numbered used here for completing the calculation only. So, please, don’t make any comments about the calculating result. You can pass your comment, advice just about the calculating method only if there’s any problem.

Besides,
If you read this article attentively then you can easily answer the following questions in the interview:

1. Clothing costing method for a knitted polo shirt.
2. Garments costing method for a polo shirt.
3. Costing method for a knitted polo shirt.
4. How to calculate knit garment costing?