The garment cost sheet → FOB price

In a real company

Costing merchandiser, buying house, export house owner

This is the most important sheet in an export house. It turns fabric, trims, processing and CMT into a price you quote to the buyer — and shows whether the order makes money.

Key ideas

• Fabric per piece = fabric cost × consumption × (1 + wastage%).
• Direct cost = fabric + trims + processing + manufacturing + packaging + testing/inspection/transport.
• Add factory overhead %, then profit % on total cost.
• Commission is a share of the final FOB, so divide by (1 − commission%) — don't just add it.

Formula

Fabric / piece

= Fabric cost × Consumption × (1 + Wastage%)

Total cost

= Direct cost × (1 + Overhead%)

FOB

= (Total cost + Profit) ÷ (1 − Commission%)

Worked example

Men's linen shirt, 10,000 pcs. Fabric ₹185/m × 1.65 m + 3%. Trims ₹18, processing ₹20, CMT ₹65, packaging ₹9, testing + inspection + transport ₹7.50. Overhead 8%, profit 12%, commission 5%.

1. 1Fabric = 185 × 1.65 × 1.03 = ₹314.41
2. 2Direct = 314.41 + 18 + 20 + 65 + 9 + 7.50 = ₹433.91
3. 3With 8% overhead = ₹468.62
4. 4Profit 12% = ₹56.23 → 524.86
5. 5FOB = 524.86 ÷ 0.95 = ₹552.48

✅ Quote FOB ₹552.48 per shirt (order value ₹55.2 lakh).

Common mistakes

• Adding commission on cost instead of grossing up the FOB.
• Leaving out testing, inspection and inland transport.
• Using sample consumption instead of bulk consumption.

Quick quiz

Answer 2 of 3 correctly to complete the lesson.

1. 1. Cost + profit = ₹475, commission 5%. FOB?

   ₹498.75₹500₹451.25₹480

2. 2. Fabric ₹200/m × 1.5 m + 2% wastage = ?

   ₹300₹306₹302₹330

3. 3. Which is NOT a direct cost?

   FabricCMTProfitTrims