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7/29/2019 Inventory, Wastage & Parameters for Fabric Costing
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MATERIAL CONTROL
the function of ensuring that sufficient goods
are retained in stock to meet all requirements
without carrying unnecessarily large stocks.
Ref: publication of the Institute of Cost and Management Accountants on Budgetary Control
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MATERIAL CONTROL
Exact quality to be ascertained
no interruption
price paid should be the minimum
no over stocking
Wastage and losses while the materials are in store should be avoided asfar as possible; and
Wastage during the process of manufacture should be the minimum
possible.
* information about availability of materials and stores should be continuously available sothat production may be planned properly and the required materials purchased in time.
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Cost associated
Cost Of Purchase
Cost of keeping stocks
ABC Analysis, or the Selective Inventory Control.
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central or main stores,
sub-stores and
departmental stores
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The record of stores may be maintained in three forms:
(a) Bin Cards
(b) Stock Control Cards,(c) Stores Ledger.
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Treatment of shortages in stock taking
Unavoidable - cost of the loss or shortage may be treated asoverheads
Avoidable(abnormal losses) should be debited to theCosting Profit and Loss Account
Losses or surpluses arising from errors in documentation, posting
etc., should be corrected through adjustment entries.
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INVENTORY CONTROL
The main objective of inventory control is to
achieve maximum efficiency in production and
sales with the minimum investment in
inventory.
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Cost a Garment
Efficient companies cost a garment soon after thesample is completed for assistance in weighing its
merit as a potential addition to the line.
Estimated cost of materials and production are the
determining factors.
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Cost a Garment
Despite Industry looking for consistent
costing methods there exist, about as many
techniques for costing as there are individual firms.
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Staple Vs Fashion Products
What are Staple or Fashion garments
Fabric Costs increase when moving from
basic/staple to fashion garments
Some trims might show very little variance in
cost between staple to style
Other considerations are minimum quantities
and lead times
Risks involved in fashion colors
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Risks of fashion goods
Buying high fashion fabric at a premium price
Customer changing style at the last minute 50%
more time spent by sales, marketing, andmanufacturing to overcome crisis
Fabric, trim carry over costs
Re-dying of trims
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Risks of fashion goods
Why female gray flannel mantailoredtrousers have a higher retail price thancomparable garments in the Mens
department?
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Direct Material an Important factor
For the majority of mass produced garments,material is at least 40% of the entire cost.
Quote: Dr. Joseph Ludden
Engineers have to look long and hard to find
a 10 cents savings opportunity in labor; butmaterial savings of 10 cents are relativelyeasy to find.
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Key stoning
Key stoning establishes the Retail price bydoubling the retailers cost.
A keystoned ten dollar garment probably bears aprice tag which reads $19.99.
Manufacturer rather uses terms line Profit Margin
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Dogs and Hot Numbers
Most manufacturers operate somewhere
between the two extremes ofhot numbers and
dogs therefore strive to have some rhyme and
reason to their costing methods.
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Essential elements of Costing process
+ +
++
1 34 52
1 2 3 4 5
1 2 3
Factory Cost GOE Profit
DM DL Factory O/H
COST TO THE RETAILER
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Sometimes the latter four denoted asIndirect cost are computed aspercentage of the more obvious direct
costs of material and direct labor.
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Elements of Material Cost
Fabric
Thread
Trims
Accessories
Packaging
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Fabric Procurement Considerations
Lead Time
Quality
Delivery
Service
Price
Order Quantity Discounts
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How to arrive at the Cost of material..
Step 1
Designers croquis and specification sheet is prepared
A sample pattern, often called a first pattern is developed
Step 2
The amount of fabric, is estimated for single garment of one size.
Number of buttons, quantity of bindings, tape, lace and othercomponents needed for a single size is estimated
Amount of thread required per garment, is estimated
Step 3
Total quantity required for a dozen garment is established
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Things to remember..
Pattern measurements should first be verified toensure that the pattern indeed does confirm in sizeto the specification sheet of finished garmentmeasurements
To ensure a small percentage may be added to thepattern margins to accommodate cutting and sewinginconsistencies as a manufacturing loss allowance.
Seam margins do not exceed 3/8 in patterns formass production but couture and custom tailoredgarments have generous seam margins.
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Things to remember..
Similar as markers, a similar layout of patterns
in in a limited representative form termed as
stencil
Inaccurate yardage estimates can be harmful
to business.
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Quick Method of Material estimate..
Step 1 - Representative sizes and quantities are used with theaddition of a percentage for error (Say 4 %)
Step 2 - An average size must be determined and then fromexisting sample pattern the average size should manually be
produced.Step 3 - Any other size needed is produced by rough estimated
grading.
Step 4 - The aim is to determine area consumed by the widestand longest portions of the pattern pieces.
Step 5 - With the preceding information and activitiescompleted, the material amount may be calculated.
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Trim estimate..
Step 1 Measurement or calculation of the
exact amount used in the single garment.
Step 2 The specification chart is helpful in
determining the different amounts which will
be needed by different sizes.
Step 3 The same extra percentages may be
figured, as for fabric.
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Things to remember..
The buttons, rivets and other fasteners usuallyremain constant for all sizes
The method for applying trims which will be used inmanufacturing must be known, in order to calculate
accurately the amount to cost and order. However the total cost of the garment may not vary
as the method applied may invite extra time for theoperator.
Some materials are sold in minimum quantities suchas 1,000 yds, 1000sets, 100 Dozen or 10 gross. Thecost may be accrued accordingly.
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It continues to be more art andimagination than science, and thechances of two manufacturers arriving
at the same cost for the same garmentis just as unlikely as it ever was.
Source: Garment costing Method ormadness in Bobbin Magazine
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Fabric Costing
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Fabric Costing
Elements of fabric costs
Value added process cost
Commercial cost
VAP Cost- Starts from the fiber/yarn stage and goes ontill the fabric is ready.
Commercial Cost- Rate at which the fabric is selling inthe marketplace.
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VAP cost
Fiber-Spinning-Dyeing-Weaving/Knitting-
Fabric.
At each stage there is finishing so that the
input to the next stage ready for use and clean
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Commercial cost
The price at which the fabric is being sold in
the market.
This cost is VAP cost + Profit of the
manufacturer or agent.
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Fabric Costing
Important to know the following:
Count/construction/weight of the fabric
Width of the fabric Source
Quantity
The no.of colors in a print/yarn dyed fabric Limitations of each type of fabric
Finishes / Value Addition
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Fabric Costing
Up charge for Dyeing colors
Discounts
Seconds
stock
Overruns
Consumption
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Georgette
Fabric
Module - Costing of Apparel Products 34
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Georgette Fabric
44-45" or 114 cm. common
57-58"or 140 cm. common
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Width Range
Lay Statistics
Lay Height 4"-4.5
No. of Fab Layers 240-300
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textured and slightly slippery hence difficult to sew.
Interweaving tissue paper or something similar keeps fabric pieces while
working
Pins used with caution since georgette fabric shows pin holes.
Handling
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Georgette Fabric
o 40 gm Variant
o
60 gm Varianto 90 gm Variant
o 80 gm Variant
o 100 gm Variant
o 200 gm Variant
Types of GeorgettePolyester Georgette
Viscose Georgette
Silk Georgette
Cotton Viscose Georgette
Dobby Georgette
o Micro Georgette
o Single Georgette
o Double Georgette
o Moss Georgette
o Laser Georgette
o 6 Kg Variant
o 8 Kg Variant
o 10 Kg Variant
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