How to cost a garment order
To cost a garment, add up the cost of one piece: fabric (after wastage and process loss), trims, outside processes like printing or washing, the making cost, packing, an allowance for rejects and commercial costs, then add your margin. After the order, compare this pre-cost with the real cost.
This guide is for owners, merchandisers and costing teams. It builds a full costing sheet for one sample order, a knitted polo shirt, and shows the two places where most costings go wrong: process loss and the making cost. For how Karpan ERP tracks the real cost of an order, see garment costing and order profit.
The cost heads of a garment
| Cost head | What it includes |
|---|---|
| Fabric | Main fabric, rib, collar, lining. Includes cutting wastage and loss in dyeing or other processing. |
| Trims | Buttons, zips, labels, thread, interlining, tags. |
| Outside processes | Printing, embroidery, washing done by job workers. |
| Making (CM) | Cutting, stitching and finishing in your own factory: labour and factory overheads. |
| Packing | Polybag, hang tag, carton share. |
| Rejects allowance | The cost of pieces you will make but cannot ship. |
| Commercial | Freight to port, testing, bank and finance charges. |
| Margin | Your profit. |
Step 1: Fabric cost per piece
First the fabric rate after processing. Fabric bought grey and sent for dyeing comes back lighter or shorter, so the loss must go into the rate:
Rate after processing = (grey rate + process charge) ÷ (1 − loss %)
Sample: grey fabric ₹300/kg, dyeing ₹90/kg, 6% loss. (300 + 90) ÷ 0.94 = ₹414.89 per kg of dyed fabric. Leaving the loss out would make the fabric look ₹25 per kg cheaper than it is. More on this in job work in textile.
Then the consumption per piece. From the marker, the polo body and sleeves use 0.240 kg per piece. Add 8% cutting wastage: 0.240 × 1.08 = 0.259 kg. Fabric cost: 0.259 × 414.89 ≈ ₹107.50 per piece. Our garment BOM guide shows how to work out consumption for woven and knit fabric.
Step 2: Making cost from cost per minute
The making cost is easiest to get right with a cost per minute (CPM):
CPM = daily cost of the line ÷ productive minutes per day
Making cost = SMV × CPM
Sample: a line of 30 operators costs ₹21,600 a day, including wages and its share of rent, power and staff. It works 30 × 480 = 14,400 minutes at 60% efficiency, so 8,640 productive minutes. CPM = 21,600 ÷ 8,640 = ₹2.50. The polo has an SMV of 12 minutes, so making costs 12 × 2.50 = ₹30.00 per piece. If efficiency drops to 50%, CPM rises to ₹3.00 and making to ₹36. That is why efficiency matters so much in garment costing.
Step 3: The full costing sheet
| Item | ₹ per piece |
|---|---|
| Fabric (dyed, after wastage) | 107.50 |
| Rib and collar | 6.00 |
| Buttons, labels, tags | 12.00 |
| Thread | 3.00 |
| Printing (job worker) | 12.00 |
| Making (12 min × ₹2.50) | 30.00 |
| Packing | 5.00 |
| Cost before allowances | 175.50 |
| Rejects allowance, 3% | 5.27 |
| Commercial, 3% | 5.42 |
| Total cost | 186.19 |
| Price for a 10% margin (186.19 ÷ 0.90) | 206.88 |
Sample numbers. Note the last line: a 10% margin means profit is 10% of the selling price, so you divide by 0.90. Adding 10% to the cost (186.19 × 1.10 = 204.81) gives only about 9% margin.
Step 4: Compare pre-cost with the real cost
The costing sheet is a promise. The real cost shows up during the order, and it is often different. Compare each head once the order is running:
- Fabric: the rate of the lots you actually used, and what was really issued, not the marker figure.
- Processing loss: what came back from the dyer or printer, not what you expected.
- Making: your real efficiency on this style.
- Rejects: pieces really rejected, less anything recovered from suppliers.
If one head is far off, fix it in the costing of the next order of that style, not only in this one.
Common mistakes
- Leaving process loss out of the fabric rate.
- Using one average consumption for all sizes when XL uses far more than S.
- Costing making at 100% efficiency.
- Forgetting rejects, samples and short shipments.
- Adding margin to cost (markup) when you meant margin on price.
- Never checking the real cost after the order.
How Karpan ERP helps with costing
Karpan ERP does not make the quotation sheet before an order exists, so the pre-cost in steps 1 to 3 is still made by your team. Once the order is booked, Karpan tracks the real side: the BOM holds material by size and colour, job work returns roll process charge and loss into the rate, and component costing builds the cost of one good piece from the lots actually issued, every process and the rejects, next to the planned cost and the buyer’s price. The order-wise profit and loss report then shows what each order made. See costing and order profit in Karpan ERP.
Questions people ask
How do you calculate the cost of a garment?
Add fabric (after wastage and process loss), trims, outside processes, making cost, packing, and allowances for rejects and commercial costs. Then add your margin to get the price.
What is CM in garment costing?
CM (cut and make) is the cost of cutting, stitching and finishing in your own factory. It is usually worked out as SMV × cost per minute.
How do you calculate cost per minute in a garment factory?
Divide the daily cost of a line (wages plus its share of overheads) by its productive minutes per day: operators × working minutes × efficiency.
What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of cost. A 10% margin needs the price to be cost ÷ 0.90, which is about an 11% markup.
What is post-costing in garments?
Post-costing is working out the real cost of an order after (or while) it is made, from the material really used, real processing loss, real efficiency and real rejects, and comparing it with the pre-cost.