Solution of textile and apparel calculation

How to Calculate Apparel Packing Cost in Clothing Industry?

Estimation of Apparel Packing Cost:
Packing or packaging is the part of apparel finishing department. Packing process is done according to the buyer’s requirement. In the past, I have shared two important articles about packing or packaging, where one is types of packing & apparel packaging method and the other one is apparel packing materials & packing cost calculation formula. Now, this article presents the actual packaging cost calculation process in clothing manufacturing industry.

Apparel packing or packaging department
Fig: Apparel packing or packaging department
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Apparel Packing Cost Calculation Method in RMG Sector:
Calculate the packing cost per apparel from the given chart.
SL No.
Parameters
Quantity and Cost
01
Order quantity
10000pcs
02
Packing person
10
03
Wages per packing person
Rs. 150 per shift
04
Production per shift
2000 pcs apparel
05
1 day
2 shifts (1shift= 8hrs)
06
1 carton box
50 pouch
07
1 pouch
4pcs apparel
08
1 pouch
1 insert card
09
1 pouch
1 tag
10
1 pouch
1 small barcode sticker
11
1 pouch
1 size sticker
12
1 pouch
1 bullet tag
13
1 carton box
1 big barcode sticker
14
1 apparel
1 hologram sticker
15
20 carton box
1 gum tape
16
1 carton box
4 meters plastic strap
17
1 carton box
Rs. 40
18
1 pouch
Rs. 5
19
1 insert card
Rs. 1.50
20
1 tag
Rs. 0.80
21
1 small barcode sticker
Rs. 0.50
22
1 size sticker
Rs. 0.10
23
1 tag bullet
Rs. 50 per 1000 bullets
24
1 big barcode sticker
Rs. 1.00
25
1 hologram sticker
Rs. 1.00
26
1 gum tape
Rs. 35.00
27
Plastic strap
Rs. 3 per meter
28
Strap machine rent
Rs. 500
29
Power
Rs. 5000 per month
30
Salary
Rs. 50000 per month
31
Rent
Rs. 10000 per month
32
Other expense
Rs. 15000 per month
33
Profit
15%

Solution:
The below formula has to apply in apparel packing cost calculation:

Packing cost per apparel,

   Direct labor + Direct material + Direct expense + Overhead
= ………………………………………....………………....………          ……… (1)
                        Total apparel packing production

Total Production Calculation:

Total production = 10000pcs apparel

Total Production Time Calculation:

Total production time,
= (Total production / production per shift)
= (10000/2000)
= 5 shifts

Direct Material Cost Calculation:

Carton box = (10000pcs/200pcs) = (50× Rs. 40) = Rs. 2000
Pouches = (10000pcs/4pcs) = (2500× Rs. 5) = Rs. 12500
Insert card = (2500 pouch ×1) = (2500× Rs. 1.50) = Rs. 3750
Tag = (2500 pouch ×1) = (2500× Rs. 0.80) = Rs. 2000
Small barcode = (2500 pouch ×1) = (2500× Rs. 0.50) = Rs. 1250
Size sticker = (2500 pouch ×1) = (2500× Rs. 0.10) = Rs. 250
Tag bullet = (2500 pouch ×1) = {2500× (Rs. 50/1000} = Rs. 125
Big barcode = (50 cartons ×1) = (50× Rs. 1) = Rs. 50
Hologram = (10000pcs ×1) = (10000× Rs. 1.00) = Rs. 10000
Gum tape = (50 carton/20) = (2.5 × Rs. 35) = Rs. 75
Plastic strap = (50 carton × 4 meters) = (200× Rs. 3) = Rs. 600

So,
Total direct material cost stands at,
= Rs. (2000+12500+3750+2000+1250+250+125+50+10000+75+600)
= Rs. 32600

Direct Labor Cost Calculation:

Labor wages,
= (Number of labors × No. of shifts × wage per shift)
= (10×5× Rs. 150)
= Rs. 7500

Direct Expense Cost Calculation:

Strapping machine rent = Rs. 500

Overhead Cost Calculation:

In power cost calculation,
= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(5000 × 5)/60} = Rs. 417

In salary cost calculation,
= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(50000 × 5)/60} = Rs. 4167

In rent cost calculation,
= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(10000 × 5)/60} = Rs. 834

In other expenses cost calculation,
= (Cost × 5 shifts) / (30days × 2 shifts in a day) = {(17000 × 5)/60} = Rs. 1251

So,
Total overhead cost stands at,
= Rs. 417 + Rs. 4167 + Rs. 834 + Rs. 1251
= Rs. 6669

From the equation-01, we get,

Apparel packing cost per pc,

     (Rs. 32600 + Rs. 7500 + Rs. 500 + Rs. 6669)
= ………………………………………………………..
                                    10000

= Rs. 4.70

After adding 15% profit,

Apparel packing or packaging rate stands at
= {4.70/ (1-15%)}
= Rs. 5.50