Calculate Trimming and Checking Cost of Garments with 4 Easy Steps

Introduction

When prepare garments costing, trimming and checking cost should be include in costing sheet. Are you want to learn how to calculate trimming and checking cost in garments industry? If yes, your clicked right article which will be described trimming and checking cost calculation. Trimming department performs either machine trimming or manual trimming based on the factory size. It is the skill of the labour that determines the efficiency and quality of the operation. In the checking department, all work is done manually. Stitching garments are visually inspected for defects or deviations from the requirements. Damages or defects are identified, and the garments are sent to the sewing department for rework. Those garments are re-checked after re-stitching and then passed to the next department. In trimming and checking, no additional raw materials are generally used. Therefore, the cost of this department will usually be labour costs or, sometimes, the running costs of the trimming machine.

Cost Factors of Trimming and Checking Cost Calculation

Trimming and checking departments determine their cost by considering the following two factors:

Requirements for quality: Depending on the requirements of individual styles, the trimming and checking points are increased, which will result in higher costs.
Complications of size and style:
- In trimming, complicated styled garments will require more stitched components, resulting in more trimming places and therefore increased time per garment. With regard to larger garments, handling will delay the project. As price will be escalated.
- In checking. increasing the number of parts or complicated styles causes the standard checking procedure to deviate and thereby, increase the time requirement. So, price also will be increased.

The following examples demonstrate the steps involved in trimming and checking cost calculation.

Exercise: Calculate Trimming and Checking Cost

Example 1: A garments industry performs a checking process after receiving garments from the sewing department. The average production for the checking department is 1500 garments and the order quantity is 30,000 garments. The number of checkers for the checking operation is 20 with a wage of Rs. 200 per shift. If the company works one shift a day, now calculate checking cost with 15% profit. Additionally, the company spends Rs. 10,000 on power, Rs. 40000 on other salaries, and Rs. 6000 on building rent.

Solution

Step 1: Number of shifts required to complete the full order

The order quantity= 30000 garments
Daily production= 1500 garments
Number of shifts required to complete the order= order quantity ÷ daily production= 30000÷ 1500= 20 shifts
The company works one shift per day, hence number of days to complete the order is 20 days.

Step 2: Calculation of labour cost

The operators in this department are 20 and wage per shift is Rs. 200
Total labour cost= Number of labour × Total working shifts × wages per shift= 20 × 200× 20= Rs. 80,000

Step 3: Calculation of overhead cost

The company spends following costs as overhead. Assume the company works 26 days per month.

Rs. 10,000 per month for power
Rs. 30,000 per month for staff salary
Rs. 6,000 for rent.
Total overhead cost= 10,000+30,000+6000= Rs. 46,000
Company works 26 days in a month to complete the order.
Overhead cost per day= 46,000÷ 26= Rs. 1,769.23
Company works for this order only 20 days.
Overhead cost for this order- 1,769.23 × 20= Rs. 35,384.6

Step 4: calculate Checking Cost

Total cost= Labour cost + overhead cost= 80,000+35,384.6= Rs. 1,15,384.6
Adding 15% profit= 1,15,384.6+ (1,15,384.6× 15%)= Rs. 1,32,692.29
Total checking cost of this order= 1,32,692.29
Calculate checking cost per garments= Total cost ÷ order quantity= 1,32,692.29 ÷ 30000= Rs. 4.42
The checking cost per garments is Rs. 4.42

Example 2: The trimming and checking department of a garments industry received 20,000 garments. There are 10 and 15 labours involved in trimming and checking respectively. The wages for trimming and checking personnel are Rs. 200 and Rs. 250, respectively. There are 2 shifts in the department, which produces 1000 garments per day (for similar garments). Because of complexity of garments, 2 checking person are used for the re-checking with the wage of Rs. 225 but one shift per day. Now calculate trimming and checking cost with 10% profit.

Solution:

Step 1: Calculate the total number of shifts required to complete the order

The order quantity= 20,000 garments
Daily production= 1000 garments
Number of shifts required to complete the order= order quantity ÷ daily production= 20000÷ 1000= 20 shifts
The company works 2 shift per day, hence number of days to complete the order = 20 ÷2= 10 days

Step 2: Calculation of labour cost.

The operators in this department are 10 trimming persons and 15 checking persons and 2 re-checking persons with wages per shift Rs. 200 for trimming person, Rs. 250 for checking persons and Rs. 225 for re-checking person.

Note: the re-checking personnel work 1 shift per day. Hence, for 10 days they will work only 10 shifts. But the trimming and checking department personnel will work for 20 shifts in 10 days.

Labour cost of trimming persons= Number of labour × Total working shifts × wages per shift= 10× 200× 20= Rs. 40,000
Labour cost of checking persons= 15× 250×20= Rs. 75,000
Labour cost of re-checking persons= 2×225×10= Rs. 4,500
Total labour cost= 40,000+75,000+4,500= Rs. 1,19,500

Step 3: Calculation of overhead cost

Since, the overhead details are not provided, so that the about 120% of the direct labour cost will be used as overhead for the 10 days.

Overhead cost for the total order running days= Direct labour cost × 120%= 1,19,500× 120%= Rs. 1,43,400

Step 4: Calculate trimming and checking cost

Total cost= Labour cost + overhead cost= 1,19,500+1,43,400= Rs. 2,62,900
Adding 10% profit= 2,62,900+ (2,62,900× 10%)= Rs. 2,89,190
Total Trimming and checking cost of this order= Rs. 2,89,190
Trimming and Checking cost per garments= Total cost ÷ order quantity= 2,89,190 ÷ 20,000= Rs. 14.46
The trimming and checking cost per garments is Rs. 14.46

Conclusion

Sometimes trimming and checking process of garments gives to external garments factory or firms those who are specialized for trimming and checking process. In that case, the manufacturing company will pay the external garments factory. However, these are the trimming and checking cost calculation. If any question about trimming and checking cost calculation, feel free to ask me.

You May Read

Calculate Trimming and Checking Cost of Garments with 4 Easy Steps

Introduction

Cost Factors of Trimming and Checking Cost Calculation

Exercise: Calculate Trimming and Checking Cost

Conclusion

Related Posts:

Leave a Comment Cancel reply