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An
Assignment
On Cost Analysis of a Garment Garment Type: Womens Gypsy SKIRT
Submitted by: Anand Bhargava (06) Anoop Mammen (07) Abhishek Gattani (09) Sankar Chatterjee (30)
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.
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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.
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.
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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.
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In the whole garment all the fabric cut pieces are of rectangular shape, which leads to lesser fabric consumption and lesser cutting time.
Flared
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
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Attaching interlining and shell fabric with waist band by lock stitch60 sec (1m/c with 1 operator)
Attaching interlining and shell fabric with waist band by lock stitch
Seam finish of interlining cut piece on 1cm & hem finish
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)
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Operation Spreading Cutting Sewer (operator) Sewer (Helper) Sewer (Floater) Finishing Ironing/Packing QC Total
Operator Number 2 1 38 7 4 2 2 2 24
AVG salary/day (Rs) 100 120 120 100 100 120 100 200
Total cost (Rs) 600 120 13680 2100 1200 720 600 1200
20220
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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)
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In case of 58 fabric width the marker efficiency is better so we chose to purchase fabric of 58 width fabric. Per garment printed fabric consumption = 7.47mt/8= 0.93mt
Fabric Cost (Per kg of yarn) (Polyester) Yarn Weaving Dyeing (Yellow shade Only) Printing cost (Polka dot) Compaction Shrinkage 4% Profit margin of fabricator (15%) Total Rs30/Kg Rs15 Rs25 Rs60 Rs8 Rs6 Rs22 Rs166
Total consumption of yarn in fabric per garment (120gsm) = 0.157Kg Cost of 0.93mt fabric = 166x 0.157= Rs26
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In case of 44 fabric width the marker efficiency is better so we chose to purchase fabric of 44 width fabric. Per garment interlining fabric consumption = 7.57mt/6= 1.26mt
Fabric Cost (Per kg of yarn) (poly viscose) Yarn Knitting Dyeing (Yellow shade Only) Compaction Shrinkage 4% Profit margin of fabricator (15%) Total Rs45/Kg Rs15 Rs25 Rs8 Rs4 Rs15 Rs112
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Description Dyed Fabric Cost ( Including Wastage) Polka Dot printed fabric Interlining fabric CMT Sewing thread Elastic Hanger Poly Bag Cartons Overhead & Margin 20% Total
Cost (Rs) 15.50 28.00 21.00 20.22 1.00 1.00 6.00 2.00 2.00 18.54 115.26
Dyed Fabric Cost (Per kg of yarn) Yarn Weaving Dyeing (Yellow shade Only) Compaction Shrinkage 4% Profit margin of fabricator (15%) Total Rs30/Kg Rs15 Rs25 Rs8 Rs3 12 Rs93
Printed Fabric Cost (Per kg of yarn) Yarn Weaving Dyeing (Yellow shade Only) Rs30/Kg Rs15 Rs25 Rs60 Rs8 Rs6 Rs22 Rs166
CMT
Printing cost (Polka dot) Compaction Shrinkage 4% Profit margin of fabricator (15%) Total
13.68
Interlining Fabric Cost (Per kg of yarn) Yarn Knitting Dyeing (Yellow shade Only) Compaction Shrinkage 4% Profit margin of fabricator (15%) Total Rs45/Kg Rs15 Rs25 Rs8 Rs4 Rs15 Rs112
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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 2530%. Among that sewing room operators 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.
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