Materials costing

Derived from approved sample style.

First step-Determine what specific products will be
used and the required number of units per garment.
Material costs are affected by % of utilization.
Utilization depends on how much material is actually
consumed compared to the amount that becomes a
part of the final product.

Materials costing
Most people use % of cost of each material
to cover waste.
Poor utilization produces waste.
Other costs associated with materials such
as inspecting and shading of fabrics are
treated as an activity cost or included in
total cost of the product.

Material costing
Material costing:
First thing, find out the specific
material.voile, cambric, canvas etc
Then what is consumption in one
garment..
While doing costing , the unit for each
material need to be kept in mind
For E.g.Fabric is generally supplied
in yardButton are supplied in Gross.

Material costing parameter

Factor affecting Sourcing of fabric

Various sizes.XS,S ,M,L,XL

Minimum qty (LOT) supplied by
supplier
Utilization or Efficiency of marker.
Cost of Inspection of fabric
Large number of shades..

Reason for Waste

Poor Utilization of fabric ie..
Inefficeint markar planning
Poor quality of material..
Inconsistent fabric width
recutting
Design Requirement.i.e. matching
Extra cutting

Fabric Costing
Important to know the following:
Count/construction/weight of the fabric
The area from where this fabric has
been sourced
The order quantity
Width of the fabric
The no.of colors in a print/yarn dyed
fabric
Limitations of each type of fabric

Fabric Costing

2 types of costsValue added process cost

Commercial cost
VAP Cost-Starts from the fiber/yarn
stage and goes on till the fabric is
ready.
Commercial Cost-Rate at which the
fabric is selling in the marketplace.

VAP cost
Fiber-Spinning-DyeingWeaving/Knitting-Fabric.At each
stage there is finishing so that the
input to the next stage ready for use
and clean

Commercial cost
The price at which the fabric is being
sold in the market.
This cost is VAP cost+Profit of the
manufacturer or agent.

Materials & Trim costs

Costs increase when moving from
basic/staple to fashion garments
What are Staple or Fashion garments
Some trims might show very little
variance in cost between staple to
style
Other considerations are minimum
quantities and lead times
Risks involved in fashion colors

Style requires Precise Cost

Information
Tracking actual vs standard costs
Even with common fabric & trims
usage can vary greatly
Important to know which styles are
winners
Important to realize these areas of
cost and price the line accordingly

Example
1000pcs fashion pants order
60% with pink stripe fabric with
matching drawstring & piping
40% with same fabric 3/4 elastic,pink
drawstring and pink zippers
The color pink was a special run-hence
both for fabric and trims-required
premiums.
After receipt of trims & fabrics,order was
revised:
Total 800pcs:80% 5pocket jeans and
balance was full elastic

Risks of fashion goods

Buying high fashion fabric at a premium
price
Customer changing style at the last
minute
50% more time spent by
sales,marketing,manufacturing to
overcome crisis
Fabric, trim carry over costs
Re-dying trims

Fabric Procurement
Considerations

Quality
Delivery
Service
Price

Costing in Fashion Colors

All color price
All color price with exceptions
Base price with specific color up
charges
Base price with color up charges for
each color group
Advantages and disadvantages to an
apparel Manufacturer

Forecasting Fabric color

demands
Mfger doing basic items decided to take
orders for fashion items for Spring99
Spring line included ladies full elastic
shorts in stripe sheeting of various
colors.
Based on first estimates given by
buyer,it was calculated that about
230,000mts of fabric would be required
Based on historical color
consumption's,merchandising estimates
etc the color usage was :

Quality Considerations
Fabric Inspection
Identification & removal of fabric
defects through out manufacturing
cycle
Loss of fabric yield due to defect splice
out
Additional cutting room costs
Sewing room costs to re-cut and re sew
defective panels
Fall out effect of irregulars during final
inspection

Case Study -1
Fabric color Up-charges

>
>
>
>
>
>

Color
Sky blue
Khaki
White
Pink
Fuschia
Lime

> Burgundy

Yardage
36,800
29,900
75,900
46,000
16,100
20,700
4,600

Fabric color Up-charges

All color Price = Rs 60/mt

All color price with exceptions:
All colors:Rs 55/mt
Except
Fuschia- Up-charge of Rs 5/mt
Lime- Up-charge of Rs2.50/mt
Burgundy- Up-charge of Rs 3/mt

Base Price with color up-charge for each color

Base-Rs 45/mt
Sky blue-Rs 2.50/mt Khaki-Rs 2.00/mt White- Rs
0/mt
Pink- Rs 3.00/mt, Fuschia-Rs 4.50/mt, Lime-Rs
4.75/mt Burgundy- Rs 5.00/mt

Fabric color Up-charges

Base price with color up-charges for color groups

Light- Blue/Khaki/White=Rs 50/mt
Medium-Pink/Lime=Rs 54/mt
Dark-Fuchsia/Burgundy=Rs 65/mt

 Calculate the weighted average

price/mt for all the 4 types of fabric
costing.

First Quality Fabric v/s Off Quality

Fabrics

First quality fabric 19.25yds/doz@$2.55/yd

Off Quality fabric 19.25yds/doz@2.20/yd
Additional Costs
Spreading/cutting $0.60/yd
Fabric Cn varinance $1.12/dz
Sewing floor extra handling $0.73/dz
Finishing room extra handling $0.05/dz
Loss of profit due to irregulars$1.14/dz
Fallout effect on finished goods
inventory$1.11/dz

TOTAL

$4.752/dz

First Quality Fabric v/s Off Quality

Fabrics
Comparison of costs per dozen

1 st quality
Off
Quality

Yds Reqd
Addnl Handling
Total
$49.09
Net Saving

@$2.55
@$2.20
$49.09
$42.35
0
$4.75
$47.10
$1.99-4%

Case Study -3
Costing for Material variances

800 dozen of pink stripe sheeting

Initial size ratio: 3 5 7 9 11
2: 3: 3: 2: 2
60 fabric width, 1.25mt consumption
Revised Size ratio 5 7 9 11 13

2: 3: 3: 2: 2
48 fabric width, 1.60mt consumption

Projected
Cn/doz 15.0204mts/doz
19.24mts/doz
Size Mix
3 5 7 9 11
11 13

Actual

5 7 9

(Cn=19.2450 on 48

to 19.8420 on 48)

Fabric Cost

3.1875(60)

2.55(48)

Calculate fabric cost per dozen in each

 Fashion Tops
Basic Trousers
Deal with Mill Only
Bigger Dye lots
Easy fabric
replacement
Physical features
Co-op of mill in
solving problems
Sewing FeaturesPredictable
Lead time-Long

Deal
/mill,finishers,jobber
s
Small dye lots
No replacement of
fabric
Physical features
Co-op reqd. at 3
levels
Sewing FeaturesPredictable
Lead time-Long