2. Production Cost for knitted sweater Jimmy Lam Institute of Textiles & Clothing

3. Learning Objectives n Material cost Material cost Material cost n Knitting cost Knitting cost Knitting cost n Making cost Making cost Making cost n Accessories cost Accessories cost Accessories cost

4. Introduction n The knitted sweater costs can be divided into several parts, namely : –the material costs; –knitting costs; and –cut and make costs n However, in the actual production, the costs are more complicated that this one. n Can you name a few production costs for knitted sweater ?

5. Material cost n Yarn is the material cost for knitting. The yarn can be divided into grey yarn and dyed yarn. Different kind of yarns (says cotton or woollen) will bear a significant different in yarn cost. In addition, the knitted yarn for sweater will be blended into 2, or 3 or 5 plyed yarn before knitting. This additional process will increase the material cost in knitting. n In short the costs are : –grey yarn + dyeing costs + winding and blending costs = knitting material cost

6. Material cost (II) n For example, the cotton yarn for dyed material is about HK$20/lb for 20/2 cotton. n A pullover, 5-7 gauge middle size plain stitch sweater will take about 13-15 lbs of yarn /dozen. –Ie. Material cost per dozen sweater is HK$300 n Please name the factors for affecting the material consumption of knitted sweater and suggest possible way to determine/calculate the yarn consumption of a knitted sweater.

7. Knitting cost n The knitting cost involves the cost of the knitting machine, the knitter wages and running cost of the factory. n Modern V-bed machine can produce roughly SIX dozen sweaters per day (explain what factors affecting the knitting production). n If each knitting factory has to cover $1,200 per day (both the machine cost and knitter cost), the minimum knitting cost for a sweater is therefore, $200 per dozen.

8. Linking/Inspection/Washing cost n This is approximately HK$100/dozen for a pullover sweater

9. Accessories n This will mean handtag, cartoon box and package cost. n It is rougly HK$20-30/dozen n What other cost we have to consider for sweater ?

10. Summary On top of that, you have to add PROFIT and Quota. The quota cost can be ZERO to over 1,000 per dozen