How to Calculate Apparel Sewing Cost in Garments Industry with 5 Easy Steps

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Introduction

This article will discuss how to calculate apparel sewing cost in garments industry. In the sewing department of an apparel industry, the apparel sewing costing process involves the type of machine involved. Because the operators are paid based on their operating machine. So, it is important for all merchandiser in garment industry to understand where particular seams are used in apparel. The sewing department employs three fundamental machines to sew both woven and knitted fabrics: the single needle lock stitch machine, overlock machine, and flat lock machine. The sewing department may need special machines based on the garment style. In those cases, the company rents these machines from a variety of companies. When this is the case, the rent also needs to be taken into account in the apparel sewing costing process. Therefore, the merchandiser needs to be able to identify the detailed operation breakdown, stitches, and seams used in a given garment as a whole.

sewing line
Figure 1: Sewing line

Factors Effect on Apparel Sewing Cost Calculation

There are some important factors which is effect on apparel sewing cost calculation. So, these factors should to be consider when calculate apparel sewing cost. In general, the influencing factors of apparel sewing cost calculation are given below:

  1. Quality requirement: Quality details define expected requirements of buyer. Therefore, to achieve the required quality, the sequence or number of steps in any operation may need to be adjusted, increasing the cost of the process. So, merchandiser must have to consider when she or he calculate apparel sewing cost in her or his garments industry.
  2. Types of fabric: The types of fabric that is used in the apparel plays a very important role when apparel sewing cost calculation.
  3. Apparel style details and number of operation: There will be a variation in the number of machines and operating procedures that are needed based upon the complexity of the style and therefore the apparel sewing cost of the garment will differ accordingly.
  4. Number of component and the size: There will be a significant increase in the time required in order to complete an operation or garment due to the number of components and the size of the garment. This will also affect the efficiency of the operator handling the garment, which in turn will decrease the productivity. Hence, it increase the production cost. So that, number of component and the size of the apparel need to be consider while apparel sewing cost calculation.
  5. Special operations: Sometimes, a special operation requires a special machine, which increases the cost of the garment. So, special operation effect on apparel sewing cost calculation.

The following example of detail of apparel sewing cost process in the sewing department of a garments industry.

Exercise: Calculate Apparel Sewing Cost

Example 1: A garments Industry employs 15 single needle operators, 20 over-lock sewing machine operators, and 10 flat lock sewing machine operators to complete an order quantity of 20,000 garments with a production average of 2000 garments per shift. Operators were paid Rs. 300, Rs. 250 and Rs. 200 for flat lock, single needle and over lock machines, respectively. There are 10 helpers on this line, and they are paid Rs. 100 per shift. Additionally, each garment requires 80 metres of sewing thread, 1.25 metres of twill tape, and 3 buttons during construction. For the sewing thread, it costs Rs. 70 per cone, for the twill tape, it costs Rs. 10 per metre, and for the buttons, it costs Rs. 100/gross. In addition to the salary of other staff is Rs. 30,000, building rent is Rs. 25,000and other expenses, Rs. ,1,00,000 per month for other expenses. If the company works one shift per day, calculate apparel sewing cost per garment of these garments industry for these order with 10% profit.

Solution:

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

  • The order quantity= 20,000 garments
  • Daily production= 2000 garments.
  • No. of shifts required to complete the order= order quantity ÷ daily production= 20,000÷2000= 10 shifts
  • The company works 1 shifts per day.
  • Hence the number of days required to complete the order is 10

Step 2: Calculation of labour cost

The operators in this department are 15 single needle operators, 20 over-loack machine operators, and 10 flat lock machine operators and 10 helpers. There wages per shift Rs. 250, Rs. 200, Rs. 300, and Rs. 100 respectively.

  • Labour cost of single needle machine operators= Number of operators × total working shifts× wages per shift= 15×10×250= Rs. 37,500
  • Labour cost of flat lock machine= 10×10×300= Rs. 30,000
  • Labour cost of over lock machine= 20 ×10×200= Rs.40,000
  • Labour cost of helper= 10×10×100= Rs. 10,000
  • Total labour cost= 37500+30000+40000+10000= Rs. 1,17,500

Step 3: Calculation of raw material cost

  • Sewing thread
    • During sewing, each garment consumes 80 metres of sewing thread.
    • Total number of garment= 20,000
    • Amount of sewing required= 80 × 20,000= 16,00,000 metres.
    • Normally, sewing thread for industrial usage comes in 5000 metre per cones. For domestic purpose, it is available in 2000 metre per spools. Hence, the cots provided is the cost of one cone with 5000 metre.
    • Number of cones required to finish the order= 16,00,000÷ 5000= 320 cones
    • Cost of one cone is Rs. 70.
    • Total sewing thread cost= 70× 320= Rs. 22,400
  • Twill tape
    • During sewing, each garment consumes 1.25 metres of twill tape .Total twill tape required= 1.25 × 20000= 25,000 metres
    • Cost of tape is Rs. 10
    • Total cost of twill tape= 10×25000= Rs. 2,50,000
  • Button
    • During sewing, each garment consumes 3 buttons
    • Total number of button required= 3× 20000= 60,000 buttons
    • Note: Buttons are generally available in the unit of gross (12 dozen). Each gross consists of 144 buttons. Hence, the price of the button is usually provided for a unit (gross).
    • Cost of button/ gross is Rs. 100 hence, the total number of buttons required= 60,000÷144= 416.66= Almost 417 gross
    • Total cost of button= 100× 417= Rs. 41,700
  • Toal material cost= 22,400+2,50,000+41,700 = Rs. 3,14,100

Step 4: Calculation of overhead cost

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

  • Rs. 30,000 per month for salary of other staff
  • Rs. 25,000 per month for building rent
  • Rs. 1,00,000 for other expenses.
  • Total overhead= 30000+25000+100000= Rs. 1,55,000
  • Overhead cost per day= 1,55,000÷ 26= Rs. 5,961.54
  • Company works for this order only 10 days. Hence, the cost of six days can be made as
  • Overhead cost for this order= 5,961.54× 10= Rs.59,615.4

Step 5: Calculate Apparel Sewing Cost

  • Total cost= Labour cost+ material cost+ overhead = 1,17,500+3,14,100+59,615.4= Rs. 4,91,215.4
  • Total cost with 15% profit= 4,91,215.4 + ( 4,91,215.4× 10%)= Rs. 5,40,336.94
  • Sewing cost per garments= Total cost÷ order quantity= 5,40,336.94 ÷ 20,000= Rs. 27.02
  • The sewing cost per garment is Rs. 27.02

Conclusion

These are the apparel sewing cost calculation. By using step you can calculate apparel sewing cost in your garments industry. If you have any questions about apparel sewing cost calculation, feel free to ask my below comments box.

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