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Materials costingDerived 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.

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Materials costingMost 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.

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

Material costing parameterFactor affecting Sourcing of fabric Various sizes.XS,S ,M,L,XLMinimum qty (LOT) supplied by supplierUtilization or Efficiency of marker.Cost of Inspection of fabric Large number of shades..

Reason for WastePoor Utilization of fabric ie.. Inefficeint markar planningPoor quality of material..Inconsistent fabric widthrecuttingDesign Requirement.i.e. matchingExtra cutting

Fabric CostingImportant to know the following:Count/construction/weight of the fabricThe area from where this fabric has been sourcedThe order quantityWidth of the fabricThe no.of colors in a print/yarn dyed fabricLimitations of each type of fabric

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Fabric Costing2 types of costs-Value added process costCommercial costVAP 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.

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

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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.

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Materials & Trim costsCosts increase when moving from basic/staple to fashion garmentsWhat are Staple or Fashion garmentsSome trims might show very little variance in cost between staple to styleOther considerations are minimum quantities and lead timesRisks involved in fashion colors

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Style requires Precise Cost InformationTracking actual vs standard costsEven with common fabric & trims usage can vary greatlyImportant to know which styles are winners Important to realize these areas of cost and price the line accordingly

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Example1000pcs fashion pants order60% with pink stripe fabric with matching drawstring & piping40% with same fabric 3/4 elastic,pink drawstring and pink zippersThe 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

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Risks of fashion goodsBuying high fashion fabric at a premium priceCustomer changing style at the last minute50% more time spent by sales,marketing,manufacturing to overcome crisisFabric, trim carry over costsRe-dying trims

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Fabric Procurement ConsiderationsQualityDeliveryServicePrice

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Costing in Fashion ColorsAll color priceAll color price with exceptionsBase price with specific color up chargesBase price with color up charges for each color groupAdvantages and disadvantages to an apparel Manufacturer

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Forecasting Fabric color demandsMfger doing basic items decided to take orders for fashion items for Spring99Spring 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 requiredBased on historical color consumption's,merchandising estimates etc the color usage was :

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Quality ConsiderationsFabric InspectionIdentification & removal of fabric defects through out manufacturing cycleLoss of fabric yield due to defect splice outAdditional cutting room costsSewing room costs to re-cut and re sew defective panelsFall out effect of irregulars during final inspection

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Case Study -1Fabric color Up-chargesColorYardageSky blue36,800Khaki29,900White75,900Pink46,000Fuschia16,100Lime20,700Burgundy 4,600

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Fabric color Up-chargesAll color Price = Rs 60/mtAll color price with exceptions:All colors:Rs 55/mtExcept Fuschia- Up-charge of Rs 5/mtLime- Up-charge of Rs2.50/mtBurgundy- Up-charge of Rs 3/mtBase Price with color up-charge for each colorBase-Rs 45/mtSky blue-Rs 2.50/mt Khaki-Rs 2.00/mt White- Rs 0/mtPink- Rs 3.00/mt, Fuschia-Rs 4.50/mt, Lime-Rs 4.75/mtBurgundy- Rs 5.00/mt

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Fabric color Up-chargesBase price with color up-charges for color groupsLight- Blue/Khaki/White=Rs 50/mtMedium-Pink/Lime=Rs 54/mtDark-Fuchsia/Burgundy=Rs 65/mtCalculate the weighted average price/mt for all the 4 types of fabric costing.

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First Quality Fabric v/s Off Quality FabricsFirst quality fabric 19.25yds/doz@$2.55/yd Off Quality fabric 19.25yds/doz@2.20/ydAdditional Costs Spreading/cutting $0.60/ydFabric Cn varinance $1.12/dzSewing floor extra handling $0.73/dzFinishing room extra handling $0.05/dzLoss of profit due to irregulars$1.14/dzFallout effect on finished goods inventory$1.11/dzTOTAL$4.752/dz

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First Quality Fabric v/s Off Quality FabricsComparison of costs per dozen 1 st quality Off Quality @$2.55 @$2.20Yds Reqd $49.09$42.35Addnl Handling 0$4.75Total$49.09$47.10Net Saving $1.99-4%

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Case Study -3Costing for Material variances

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800 dozen of pink stripe sheetingInitial size ratio: 3 5 7 9 11 2: 3: 3: 2: 260 fabric width, 1.25mt consumptionRevised Size ratio 5 7 9 11 13 2: 3: 3: 2: 248 fabric width, 1.60mt consumption

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Projected ActualCn/doz15.0204mts/doz19.24mts/dozSize Mix 3 5 7 9 11 5 7 9 11 13 (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 case

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Basic TrousersDeal with Mill OnlyBigger Dye lotsEasy fabric replacementPhysical featuresCo-op of mill in solving problemsSewing Features-PredictableLead time-Long

Fashion TopsDeal /mill,finishers,jobbersSmall dye lotsNo replacement of fabricPhysical featuresCo-op reqd. at 3 levels

Sewing Features-PredictableLead time-Long

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