Table of Contents

1. Why Is Garment Costing Important?

Garment costing connects product development, merchandising, production planning and commercial decision-making. A quotation that excludes even a small but repeated expense can affect the financial result of a large order.

2. Main Components of Garment Costing

The final cost depends on the garment design, fabric type, order quantity, construction, buyer requirements, production location and delivery terms.

3. Fabric Consumption and Cost Calculation

Fabric is often one of the largest cost components in apparel manufacturing. Consumption should be based on the approved pattern, marker efficiency, garment construction, fabric width, size ratio and applicable allowances.

Example: A T-shirt requires an estimated 0.22 kg of fabric, and the fabric costs $3.20 per kg.

Fabric cost = 0.22 × $3.20 = $0.704 per garment.

If an allowance for cutting waste or other loss is required, calculate it according to the factory’s approved method. Avoid adding waste twice if the consumption figure already includes it.

Factors Affecting Fabric Consumption

• Garment pattern, size range and style complexity.
• Fabric width, GSM, composition and shrinkage.
• Marker efficiency and cutting layout.
• Stripe or check matching, nap direction and print placement.
• Approved wastage allowance and quality requirements.

4. Trims and Accessories Costing

Trims and accessories include all supporting materials needed to complete and pack a garment. Prepare a Bill of Materials (BOM) using approved specifications and quantities.

• Main label, size label, care label and hangtag.
• Sewing thread, buttons, zippers, elastic and drawcords.
• Interlining, tape, patches and other construction materials.
• Polybag, carton, barcode sticker and packing accessories.

5. Cutting, Sewing and CM Cost

CM stands for Cut and Make in common apparel costing practice. The precise definition varies by factory and commercial agreement. A CM quotation may include specified conversion activities such as cutting, sewing, finishing, labor and factory-related expenses, while some services are charged separately.

What Is SMV?

Standard Minute Value (SMV) is the standard time allocated to produce a garment or perform a specific operation under defined conditions. It is useful for estimating labor requirements and production capacity.

6. Printing, Embroidery and Washing Costs

Value-added processes should be calculated from the actual technical requirements rather than using one fixed rate for every garment.

Confirm whether these processes are included in the CM rate or charged separately. Record sampling, setup and development charges according to the order agreement and the factory’s costing policy.

7. Overheads and Other Expenses

Overheads are costs that support factory or business operations but cannot always be traced directly to a single garment. The allocation method should be consistent with the company’s accounting and costing policy.

• Factory rent, maintenance and depreciation.
• Utilities, administration and production supervision.
• Quality assurance, testing and compliance-related expenses.
• Commercial, banking and documentation charges where applicable.
• Freight, insurance, port charges and other delivery costs where required by the agreed shipping terms.

Separate direct production costs from overhead, finance costs, selling expenses and delivery costs where appropriate. This makes the quotation easier to audit and reduces the risk of double-counting.

8. Garment Costing Formula and Worked Example

A basic costing sheet can combine the main per-piece costs into one estimate.

The following example uses illustrative values for one garment. It is not a market quotation or a recommended price.

In this example, the estimated cost is $1.604 per garment. Before submitting a buyer quotation, verify each rate, currency, consumption figure and cost inclusion.

How Do You Calculate a Selling Price?

There are different pricing methods. One simple method is to add a markup to the estimated cost. Another is to calculate the selling price from a target gross margin.

Important distinction: A 20% markup on cost is not the same as a 20% gross margin on selling price. The chosen method must be stated clearly in the costing sheet.

9. Common Garment Costing Mistakes

• Using unapproved fabric consumption or outdated supplier prices.
• Ignoring size ratios, fabric width, shrinkage or print-placement requirements.
• Forgetting labels, special trims, packing materials or testing charges.
• Counting printing, washing or other services twice—or leaving them out entirely.
• Using an unrealistic CM rate without considering SMV, efficiency and factory costs.
• Failing to identify currency, exchange-rate assumptions or price validity.
• Confusing markup with gross margin.
• Submitting a quotation without confirming freight terms and other buyer requirements.

10. Best Practices for Accurate Garment Costing

1. Use a standard costing template for every style.
2. Maintain current supplier prices and approved material specifications.
3. Coordinate with merchandising, sampling, production, printing, quality and commercial teams.
4. Document assumptions, exclusions, currency and quotation validity.
5. Compare estimated costs with actual production consumption and expenses.
6. Review major cost differences and update future estimates using verified data.

Frequently Asked Questions

Conclusion

Editorial note: The numerical figures in this guide are illustrative examples for explaining costing calculations. They are not supplier quotations, industry benchmarks or a substitute for style-specific costing.