Garments Costing

Cost typically can be defined as’ the economic value placed upon the resources consumed to make a product. Costing of garment is a very important task for a garments export business. Costing of the garments considering the raw materials expenditure, salary and wages of officers and workers, distributions and advertisement expenses etc.

Cost Division:

Cost is divided into-

1. Pre-cost- merchandiser
2. Final Costing- Merchandiser+ import section

Garment for example :- $3.00 = cost
Garment costing: $3.00+ profit = costing

Pre Cost-

• It is an estimate made before the garment is adopted in to the line
• Fabric,trim and labour costs for each garment is calculated
• The merchandiser usually keep a record of all materials costs on a work sheet
• Then the costing department can roughly estimate the cost and price structure.

Final Costing-

1. It is an exact figures for fabric,accessories and labour cost
2. Using actual figures for fabric,accessories and labour cost
3. Costing department uses-
   • Merchandiser work sheet
   • A proto type garment
   • Production pattern
   • A detailed cost analysis made for each garment the final cost is plotted on a ‘’cost sheet’’.

Price Fixation Process in Garments Export Business

FOB (Free on board):-

• Exporter does not bear the cost of freight of ship or air
• It is buyer who him self bear the freight

C&F (Cost $ Freight):-

• Free on board+ freight= c& f
• In this case ship or air freight is carried by the exporter while while quoting price.
• This price a bit higher than FOB

CIF (Cost,insurance &Freight)

• C & f + insurance =CIF
• In this case in addition to the bearing of freight, the cost of insurance is also borne by the exporter.

CM (Cost of making)

• Manufacturing or exporter will get only making charge of that garment
• Fabric, trimming and other materials is supplied by the buyer

CMT(Cost of manufacturing and trimming)

• Manufacture or exporter will get the making charge and at the same time will get the trimming cost
• Fabric is supplied by the buyer.