Fabric and Trim Costing
Costing is a process to analyze the price of the garment which the factory hopes to sell to the buyer. There should be a good knowledge of the garment producing in order to do a good garment costing. Mainly costing is for calculating the expenses incurred for the garment production.
And also the costing process should consider about the other related things such as transport, purchasing, other overheads in addition to the production process.
Before the costing process, factory has come to an agreement with buyer on the payment term that they intend to use during their business. Most of the time they tend to select the FOB term for the convenience of both the parties. So the garment cost is also calculated according to the FOB term and the final FOB is given to the buyer as the garment price.
When costing a garment order there are two types of cost affect to final garment cost.
- Direct cost: Mainly affects the raw material cost for the direct cost. In addition to that production cost,- cost for running machines, maintenance, power, fuel and other utilities. Then anther portion for workers’ salaries. Finally for the wastages.
- Indirect cost:
Indirect cost is for the expenses, like travelling, telephone, couriers, legal issues and taxes. Then finally depletion of machineries and other sources.
The profit of the factory also adds to this cost and they can increase their profit by adding some allowances to these figures. The limit of adding buffers or allowances to this costing, is mainly depends on the quantity of the order and the garment FOB that buyer requested.
The garment FOB is included with following factors.
I. Fabric cost
II. Trim cost
III. Labour cost
IV. Profits
In the BIA there is a special computer application used for calculating the garment FOB. They only have to input the fabric and trim YY. Other details are automatically inserted through the system data base.
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