Costing Procedure
1Using your completed BOM (Bill of Materials) calculate all product costs on a per-unit basis. Using the cost sheet template, you will be calculating a target cost for your tech packages. Be sure to include the following in your cost sheets:
Fabric or Raw Materials: Calculate total costs for each line item. You will need to estimate fabric consumption, but fabric quotes should come directly from mood.com or fabric the mill or fabric.com
Components, Labels, and Packaging: For each of the items in your product line, use the BOM for that item and copy all materials, components, labels, packaging, and packing items from the tech-pack sheets to the appropriate sections of your cost worksheet. Insert new rows in the spreadsheet where needed. Eliminate any blank cells. When complete, you should have one cost sheet for each item in your product line for each country.
Labor: Once you have calculated the target FC using the cost calculator the difference between all fabrics and components is the labor. (note this is only an estimate)
Duty Based on the country, identify all applicable duties, and calculate these for your product.
Transportation: Use transportation rates provided in IFF chart. Verify that your cost sheet information is complete and accurate. Take particular care to ensure that your duty costs are correct and current.
Bill of materials and corresponding references must accompany cost sheets at time of submission. Please create one PDF that incorporates all items.
Note that the accuracy and integrity of costs are paramount to the validity and viability of the sourcing strategy and ultimately the supply chain strategy. Costs will determine whether you’re going to make the required margins. If inaccurate, it can be devastating.
