Embroidery Cost Calculation Process in Garments Industry with Easy Simple Steps: 3 Example

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Introduction

This article is about how to calculate embroidery cost in garments industry. Before going to the main embroidery cost calculation process, lets come to learn about embroidery. A good example of ornamental stitching is embroidery. Embroidery is used to make garments more attractive and fashionable look according to buyer requirements. Today, it is very widely used in garments industry. It is hardly seen that there are not order get without embroidery. It is an essential part for decorating garments. Merchandising should take embroidery into account when he makes costing garments in his garments industry. Therefore, it is necessary that she or he knows how to calculate embroidery cost in the garments industry.

Embroidery flower design
Figure 1: Embroidery flower design

Key factors of Embroidery Cost Calculation Process

The following are the factors affecting embroidery cost calculation Process

  1. Type of embroidery should me consider when calculate embroidery cost.
  2. Identify how many colour of threads are in the embroidery design.
  3. Identify the place of embroidery because embroidery cost me be vary place to place.
  4. Any restriction on the selection on the embroidery machine
  5. Any restriction on the use of embroidery thread
  6. Number of stitches should be calculate.
  7. Time require to complete one batch
  8. Resource and hand involvement in doing embroidery.
  9. Any compliance requirement
  10. Any lab test requirement.
Method of Embroidery design
Figure 2: Method of Embroidery design

Standard Location of Embroidery

Here the prime location of embroidery of polo shirt is mentioned below.

Standard Location of Embroidery of polo shirt front side
Figure 3: Standard Location of Embroidery (Front side)
Standard Location of Embroidery of polo shirt back side
Figure 4: Standard Location of Embroidery (Back side)

Embroidery Cost Calculation Formula

Below given embroidery cost calculation formula which is use to calculate embroidery cost in garments industry.

  • Embroidery Cost per garments= {(Stitch quantity ÷ 1000) × Rate per unit}
  • Embroidery Cost per dozen = {(Stitch quantity ÷ 12,000) × Rate per unit}×12

Note: There are generally 1000 stitches in a unit. For a dozen garments, a unit is usually 12,000 stitches.

Exercise: Embroidery Cost Calculation Process

Example 1: Textile trainer order 15,000 T-shirt for 3 years celebration in a eco-friendly garments industry. The T-shirt contain logo of textile trainer which have to embroidery. Stitch quantity of the logo is 8000 and rate per unit design is Rs. 0.55. Now calculate embroidery cost per T-shirt.

Solution

Here,

  • Total order quantity= 15,000
  • Stitch quantity of the logo= 8000
  • Rate per unit design= Rs. 0.55
  • Embroidery cost per garments= ??

We know that,

  • Embroidery Cost per garments= {(Stitch quantity ÷ 1000) × Rate per unit}= {(8000 ÷ 1000) × 0.55}= Rs. 4.4
  • Total embroidery cost= Total order quantity × embroidery cost per garments= 15,000× 4.4= Rs. 66,000
  • Total embroidery cost for textile trainer logo is Rs. 66,000

Example 2: Suppose H&M buyer order 2,40,00 ladies T-shirt in a garments industry which have a embroidery flower design. If design require 10000 stitches and rate per unit is Rs. 0.45. Now, Calculate embroidery cost per dozen of garments.

Here,

  • Total order quantity= 2,40,000 pcs
  • So, order quantity in dozen= 2,40,000 ÷ 12= 20,000
  • Stitch quantity of embroidery flower design= 10000
  • Rate per unit= Rs. 0.45
  • Embroidery cost per dozen=?

We know that,

  • Embroidery Cost per dozen = {(Stitch quantity ÷ 12,000) × Rate per unit}×12= {(10000 ÷ 12,000) ×0.45}×12= Rs. 4.5
  • Total embroidery cost for this order= 20,000 ×4.5= Rs. 90,000

Example 3: A garments industry received an order for 10,000 polo shirts. Figure 1 illustrates the polo shirt in detail. The operator wages for the machines are Rs. 400 (over lock), Rs.300 (single needle lock stitch), and Rs.350 (flat lock). Assume the company works two shifts per day, the actual target date is 4 days from today. During manufacturing, the company rented externally the button hole and button attaching machines from a vendor for this order. A button hole-making machine is rented on a per-hour basis, whereas a button attaching machine is rented on a per-shift basis. The button attaching machine rents for Rs. 1500 per shift, while a button hole-making machine rents for Rs.200 per hour. Button can be attached about 200 garments per hour and making hole on 300 garments per hour. An average garment requires 75 metres of sewing thread, 0.45 metres of twill tape, and three buttons to be constructed. The cost of sewing thread is Rs. 70 per cone, the cost of twill tape is Rs. 3 per metre, and the cost of buttons is Rs. 80 per gross. In order to embroider the design, 8000 stitches are required. The cost of the embroidery process is Rs. 0.40. Now,

  1. Calculate Embroidery Cost per garment
  2. Calculate the sewing cost with 10% profit.
Polo shirt for embroidery cost calculation
Figure 5:Descripton of a polo shirt

Solution

Step 1: Calculate embroidery cost

  • Here, design for embroidery is requires 8000 stitches and the cost of the embroidery process is Rs. 0.40.
  • Embroidery Cost per garments = {(Stitch quantity ÷ 1000) × Rate per unit}= { (8000÷1000)×0.40}= Rs. 3.2
  •  Total embroider cost for this order= Total order quantity × embroidery cost per garments= 10,000 × 3.2= Rs. 32,000

Step 2: Calculate target production per hour

  • The order quantity= 10,000 garments
  • Target date= 4 days
  • Target shift=4 ×2= 8 shift ( two shift per day)
  • Garments production per day to complete order= Order quantity ÷ target day= 10000÷4= 2,500 garments per day.
  • Since the company works two shifts per day.
  • Production require per shift= 2500 ÷ 2= 1250 garments per shift
  • Target production per hour= 1250÷ 8= 156.25= Almost 157 garments per hour.

Step 3: Calculation of labour cost

Due to the lack of information regarding labour in the details, we can calculate the number of hours of labour required to complete the order using the garment picture. From figure 1, we can determine how the operation will be broken up as shown in table 1.

  • Formula for operator required= {(SMV× Target production per hour) ÷ 60}
S/NOperationsM/C usedSMVOutput/hourNo. of Operators
Target: 157 garments per hour
 1.Placket preparationSNLS0.32000.785~1
 2.Placket attachSNLS0.61001.57~2
 3.Placket finishingSNLS0.32000.785~1
 4.Size and brand label attachSNLS0.252400.654~1
 5.Shoulder attach (both the sides)OL0.61001.57~2
 6.Sleeve rib attach (both the sleeves)OL0.32000.785~1
 7.Sleeve attach (both)OL0.51201.31 ~ 2
 8.Collar attchOL0.61001.57~2
 9.Collar finishingSNLS0.41501.04 ~ 1
 10.Collar tape attachSNLS0.51201.31~2
 11.Slit preparationOL0.32000.785~1
 12.Side seamOL0.61001.57~2
 13.Bottom hemFL0.41501.04~1
 14.Top stitch on arm holeFL0.61001.57~2
Total SMV6.25Total operator21
Table 1: Operation break up and SMV allocation

To achieve the provided target, the company needs to use totally 21 operators. 8 operators for single needle machine, 10 operators for overlock machine, and 3 operators for flat lock machine.

  • Labour cost for single needle machine operator= Number of operator × total working shifts× wages per shift= 8×8 ×300= Rs. 19,200
  • Labour cost for overlock machine operator= 10× 8 ×400=Rs. 32,000
  • Labour cost for flat lock machine operator= 3×8×350=Rs. 8,400
  • Total labour cost= 19,200+32,000+8,400= Rs. 59,600

Step 4: Calculation other expenses ( machine rental cost)

  • Button hole machine
    • Button hole machine is rented Rs. 200 per hour and average production per hour is 300Hence, total requirement of the machine= order quantity ÷ target per hour= 10000 ÷ 300= 33.33 hour= Almost 34 hours.
    • Total cost for button hole machine= 34×200= Rs. 6,800
  • Button attaching machine
    • Button attaching machine is rented Rs. 1500 per shift and average production is 200 garment per hour.Hence, the total requirement of the machine= order quantity ÷ target per hour= 10000 ÷ 200= 50 hour= 50 ÷ 8= 6.25 shifts= Almost 7 shifts
    • Total cost for button attaching machine= 7 × 1500= Rs. 10,500
  • Total rental expenses for this order= 6,800+ 10,500= Rs. 17,300

Step 5: Calculation of raw material cost

  • Sewing thread
    • During seing, each garment consumes 75 metres of sewing thread.Total amount of sewing thread required= 75 × 10000= 7,50,000 metresNumber of cones required= 7,50,000 ÷ 5000 = 150 cones [ 1 cone holds 5000 metre thread]
    • Total sewing thread cost= 70 × 150 = Rs. 10,500
  • Twill tape
    • During sewing, each garment consumes 0.45 metres of twill tapeTotal twill tape required= 0.45 × 10,000= 4500 metres
    • Total cost of twill tape= 3 × 4500=  Rs. 13,500
  • Button
    • During sewing, each garment consumes three buttoms.Total number of button required= 3× 10,000= 30,000 buttonsCost of button per gross is Rs. 80Total number of button groos required= 30,000 ÷ 144= = 208.33 gross
    • = Almost 209 gross [ 1 gross= 144 button]
    • Total button cost= 80 × 209= Rs. 16,720
  • Total material cost= sewing thread+ twill tape cost+ button cost+ embroidery cost= 10,500+13,500+16,720+32,000 = Rs. 72,720

Note: The overhead cost is not provided in the calculation due to the lack of information. In industry, however, if the information is not available, the merchandiser will assume the overhead is 120 % of the direct labour cost (based on the risk factor associated with the order).

Step 6: Calculate sewing cost per garment

  • Total cost= labour cost + material cost+ other expenses + overheads= 59,600+72,720+17,300+ (59,600×120%)= Rs. 2,21,140
  • Total cost with profit= 2,21,140 + ( 2,21,140× 10%)= Rs. 2,43,254
  • Sewing cost per garment= total cost ÷ order quantity= 2,43,254 ÷ 10,000= Rs. 24.32
  • The sewing cost per garment is Rs. 24.32

Conclusion

Here are the embroidery cost calculations. All data is used for understanding purposes. If you calculate embroidery cost in your garment factory, be sure to consider the market price. I would, however, be happy to answer any questions you may have regarding embroidery cost calculation.

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