Garment costing is one of the most important skills in Bangladesh's ready-made garment (RMG) industry, and also one of the areas where mistakes are most common. A costing sheet that is even 3–5% off on a large order can turn a profitable order into a loss. This guide walks through how a complete FOB cost sheet is built — from fabric to factory overheads to commercial expenses — the way it is actually done in Bangladeshi factories and buying offices.
The Structure of a Garment Cost Sheet
A complete garment cost sheet in Bangladesh's export garment industry is typically broken into four sections: fabric cost, trimming and accessories, CM (cut-make) cost, and commercial and overhead charges. Together these build up to the FOB (Free On Board) price.
Typical FOB Cost Sheet Structure
| Component | Typical % of FOB | Notes |
|---|---|---|
| Fabric cost | 55 – 65% | Largest component; GSM, construction, and rejection % matter most |
| Trimmings and accessories | 5 – 8% | Buttons, zipper, label, hang tag, poly bag, carton |
| CM (Cut and Make) | 15 – 20% | Factory labour and direct overhead |
| Commercial charges | 5 – 8% | Freight, insurance, agent commission, testing fees |
| Profit margin | 8 – 12% | Negotiated; typically 10% for standard CMT orders |
How CM (Cut and Make) Is Calculated
CM (or CMT — Cut, Make, Trim) is the factory's charge for producing the garment, excluding material cost. In Bangladesh, CM rates are typically quoted in USD per piece and vary with the complexity of the style, the output per hour of the sewing line, and the factory's overheads.
CM per piece = (Hourly cost of the line / Output per hour) Where: Hourly cost = (Total workers on line × hourly wage) + overhead allocation per hour Output per hour = 60 minutes / SAM (Standard Allowed Minutes for the style) Example: Line of 30 operators at avg BDT 180/hr total cost Hourly line cost = 30 × 180 = BDT 5,400 (or approx USD 47 at current rate) SAM for a basic t-shirt = 8 minutes Output per hour = 60 / 8 = 7.5 pieces per operator Line output per hour = 30 × 7.5 = 225 pieces/hr (at 100% efficiency) CM = 47 USD / 225 = USD 0.21 per piece at 100% efficiency At 85% efficiency: CM = 0.21 / 0.85 = USD 0.25 per piece
Calculating Fabric Consumption and Cost
Fabric cost is the single largest component of a garment's price and the area where costing errors are most expensive. Fabric consumption depends on the pattern dimensions, marker efficiency, fabric width, and allowances for wastage and shrinkage.
Fabric consumption (kg/dozen) = [Length (m) × Width (m) × GSM × 12] / 1000 + wastage allowance Alternately for woven with marker length: Fabric per piece (m) = Marker length / Pieces per marker × (1 + wastage %) Fabric cost per piece = Fabric per piece × price per metre
Common Costing Mistakes in Bangladesh RMG
- Using GSM without considering yarn count and construction. A 180 GSM jersey can vary in price by 15–25% based on yarn count and construction method.
- Forgetting to add testing fees. Most European and US buyers require third-party chemical and physical tests — OEKO-TEX, REACH compliance, dimensional stability, colour fastness. These add USD 50–200 per test per fabric, which spreads across the order.
- Calculating CM at 100% efficiency. No line runs at 100%. Use 80–85% for standard lines in Bangladesh; tier-1 factories with lean manufacturing may reach 88–92%.
- Ignoring rejection and re-work rate in fabric usage. A 2% rejection rate on fabric sounds small but becomes significant on a 100,000-piece order with expensive fabric.
- Quoting in BDT when the buyer expects USD and using an exchange rate from the previous month. Exchange rate risk on a 60-day production cycle can significantly erode margin.
Tip
Build every cost sheet with a 'what if' scenario: what happens to your margin if fabric price rises 5%, or if line efficiency drops to 75% during the order? If the answer is 'the order becomes unprofitable', the FOB was not negotiated with enough buffer.