A costing sheet is the document that shows how an order's price is built, and it is the tool a merchandiser uses every time a price is quoted, questioned, or checked before an order is confirmed. Lesson T01-C07-L02 showed how a T-shirt's costing sheet lists five fixed cost components that sum exactly to the FOB price. This lesson shows you what to do when an order does not yet have that full breakdown: Order B, the jeans, has only two figures genuinely fixed today, fabric cost and the buyer's target FOB, and this lesson teaches you to calculate honestly with exactly those two, instead of guessing at the rest. This lesson mainly teaches the money flow of an order: how a price is checked against a fixed target, piece by piece.
You need: the idea of a cost component and a total price, taught in an earlier costing lesson. You do not need the jeans order's full trims, making and overhead figures; this lesson explains why.
By the end of this lesson you can:
Not covered here: the jeans order's own separately fixed trims, making, overhead and profit figures (not yet fixed; see lesson T06-C01-L05 once Track 12 sets them), and how margin and markup carry a price forward to the buyer (T01-C07-L03).
| Term | Meaning |
|---|---|
| Costing sheet | The document that lists an order's cost components and adds them up to its total price. |
| Cost component | One part of an order's total price: fabric, trims, making, overhead, or profit. |
| Formula | An instruction in a spreadsheet cell that calculates a value from other cells, instead of a value typed in by hand. |
| FOB (free on board) | The factory delivers the goods on board the ship at its own port. Freight from there is the buyer's cost. |
| Denim | A woven cotton fabric, usually in a twill weave, commonly used for jeans and often quoted by weight in ounces per square yard. |
| Lump-sum bill of materials | A bill of materials that states only a total figure, with no separate component costs shown underneath it. |
Costing any order, denim included, starts from real fixed inputs and calculates everything else with formulas, never typed totals, the same rule lesson T01-C07-L02 taught on Order A's T-shirt. Order B gives two genuinely fixed inputs: fabric consumption and price, and the buyer's target FOB. Multiplying the first gives the fabric line cost by formula; subtracting that from the target FOB gives the residual that must cover everything else, also by formula. This is a live, honest calculation, not a guess at how that residual splits between trims, making, overhead and profit.
| What can differ | The shapes you will meet | Why it matters to you |
|---|---|---|
| How complete the fixed breakdown is | A full fixed breakdown (Order A's own costing): fabric, trims, making, overhead and profit are all individually fixed and sum exactly to the FOB price; every component is separately known. A partial fixed breakdown (Order B's own jeans costing, this lesson's real case): only fabric cost and target FOB are currently fixed; the rest is a genuine unknown residual until Track 12 fixes it. | Treating a partial breakdown as if it were a full one means inventing figures that are not real; the correct response is to compute and label the residual honestly. |
| Wash-inclusive or wash-exclusive quoting | Some denim mills or laundries quote wash cost separately from fabric cost. Order B's residual line implicitly includes the 2-wash cost from Cairo Wash Works, since no separate wash-cost figure has been fixed. | You must know what a residual already contains before assuming a wash cost still needs to be added on top of it. |
| Export or domestic pricing | Order B's (the jeans order's) target FOB is an export price, paid by letter of credit. Cedar & Co.'s own domestic costing follows the same fabric-first method, but without an FOB framing: its "price" is what it pays a factory ex-factory, before its own local delivery cost is added. | The fabric-then-residual method still applies, but the total you are working towards changes with the pricing framework. |
| The product being costed | The same fabric-then-residual method that works for Order B's jeans also works for Order A's T-shirt, once Order A's own trims, making, overhead and profit figures are treated as one combined line instead of five separate ones. | Learning the method on a partial breakdown lets you apply it to any order, complete or incomplete. |
Mona, merchandiser at Delta Garments, needs to show Northline Apparel that Order B's fabric cost fits within the fixed FOB target before committing to the order. Order B is a 3,000-piece run of five-pocket jeans, 12 oz denim with 2% elastane, 2 washes, with fabric bought from Suez Denim at 1.45 m per piece and USD 3.20 per metre. The buyer has fixed the target FOB at USD 9.80 per piece, paid by letter of credit. Mona enters the target FOB as its own reference figure, calculates the fabric line cost by formula, and calculates the residual by formula, using the Costing sheet's fabric-cost formula and residual formula, this lesson's own worked example.
| Cost line | Order B (USD per piece) | How it is found |
|---|---|---|
| Buyer's fixed FOB target | 9.80 | Entered directly; docs/02 section 7 |
| Denim fabric (1.45 m/piece x USD 3.20/m) | 4.64 | Formula: quantity times unit price |
| Everything else (trims, making, the two washes, overhead, profit) | 5.16 | Formula: target FOB minus fabric line cost |
| Total (FOB, formula-summed) | 9.80 | Formula: SUM of the two lines above |
The total row's formula-summed result equals the fixed FOB target exactly, which is the sanity check that the sheet reconstructs the buyer's own number.
A common mistake is splitting the USD 5.16 residual into "typical" trims, making, overhead and profit percentages borrowed from Order A's own fixed breakdown, and presenting that split as if it were Order B's real, fixed costing. Order A's ratios are specific to Order A's own T-shirt, a different product, a different construction, and a different factory route, and they do not transfer to Order B's jeans. Doing so silently invents a false precision this lesson explicitly avoids: a number that looks fixed and specific but was never actually calculated for Order B.
A costing sheet for Order B, the jeans, has two numbers that are really fixed today: what the fabric costs, and the price the buyer has agreed to pay. Multiplying how much fabric goes into one pair of jeans by the price of that fabric gives the fabric cost. Taking that fabric cost away from the buyer's price gives what is left over for everything else, all combined into one number. Nobody yet knows exactly how that leftover splits between the trims, the sewing, the two washes, the factory's running costs and its profit, so the sheet does not pretend to know. Adding the fabric cost and the leftover back together should give exactly the buyer's price again, which proves the sheet is correct.
Cedar & Co. is building a hybrid denim line: most units stock its own 12 shops domestically, and a small share is quoted to an overseas buyer on export terms, so Mona, its merchandiser, uses Order B's own fixed fabric and target-FOB figures as the reference method for this mixed run. A colleague asks Mona to "just use Order A's costing percentages" to fill in the trims, making, overhead and profit rows individually, so the sheet looks as complete as Order A's own sheet.
Here is what the colleague is proposing:
Should Mona do this? Decide before opening the answer.
No. Two facts decide this together.
First, Order A's percentages describe a different product made a different way. Order A is a basic cotton T-shirt; Cedar & Co.'s jeans, like Order B's own reference figures, use denim fabric, five-pocket construction and two washes at Cairo Wash Works. A T-shirt's making charge, overhead share and profit margin have no reason to match a pair of jeans' figures.
Second, applying those percentages to the USD 5.16 residual would present a guess as if it were Cedar & Co.'s own real, fixed costing. Read by Cedar & Co.'s own management or its export buyer, those typed rows look like calculated facts about this run, not borrowed estimates. If either side challenges a "making charge" figure never actually calculated for this jeans run, Mona has no real number to defend it with.
Neither fact alone is enough. Knowing the percentages come from a different order does not, by itself, show the harm; knowing the harm without knowing where the numbers came from would not explain why this specific shortcut is wrong. Mona should keep the USD 5.16 as one honestly-labelled combined residual line until Track 12 fixes the actual jeans component breakdown.
Framed qualitatively, presenting a fabricated cost breakdown as real can mislead a negotiation, since the buyer might challenge a specific "making charge" figure that was never actually calculated for this order, leaving Mona with no real number to defend it. It can also mislead Delta Garments' own management about true profitability, if management believes profit sits at a specific figure borrowed from Order A rather than an unknown share of the USD 5.16 residual. This is a credibility and decision-making risk the residual-not-invention discipline in this lesson avoids entirely.
The Costing sheet has five columns: cost line, quantity, unit cost, the buyer's fixed FOB target, and the calculated line value. The fixed target of USD 9.80 sits on its own row. The fabric row's quantity (1.45) and unit cost (3.20) are entered, and its line value is a live formula multiplying the two, giving USD 4.64. The residual row's line value is a live formula subtracting the fabric line from the target FOB, giving USD 5.16; its notes record that this stays one combined line, since Order B has no separate fixed breakdown yet. The total row is a live formula (SUM) adding both lines, and it must equal USD 9.80 exactly.
[Download the Denim order file](../../templates/T06-C01-denim-order-file.xlsx)
1. What are Order B's (the jeans order's) two genuinely fixed costing inputs used in this lesson?
2. Why does the Costing sheet keep trims, making, wash and overhead combined into one residual line for Order B, the jeans, instead of splitting them like Order A's sheet does?
3. A different order has a fixed target FOB of USD 12.40 per piece, and its fabric line cost, by formula, comes to USD 6.90. What is the residual?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Costing sheet | كشف التكلفة | Fiche de coûts | Maliyet tablosu | The document that lists a garment's cost components and adds them to the price the factory quotes. |
| Cost component | عنصر التكلفة | Élément de coût | Maliyet bileşeni | One part of a garment's total price: fabric, trims, making, overhead, or profit. |
| Formula | صيغة حسابية | Formule | Formül | An instruction in a spreadsheet cell that calculates a value from other cells, instead of a value typed in by hand. |
| FOB (free on board) | تسليم على ظهر السفينة في ميناء المصنع | FOB (franco à bord) | FOB (gemide teslim) | The factory delivers the goods on board the ship at its own port. Freight from there is the buyer's cost. |
| Denim | قماش الدنيم | Denim | Denim kumaş | A woven cotton fabric, usually in a twill weave, commonly used for jeans and often quoted by weight in ounces per square yard. |
| Lump-sum bill of materials | قائمة مواد بمبلغ إجمالي واحد | Nomenclature forfaitaire | Toplam tutarlı malzeme listesi | A bill of materials that states only a total figure, with no separate component costs shown underneath it. |
You can now calculate Order B's fabric cost and its honest residual by formula. The next lesson brings this Costing sheet together with the Order Identity sheet and the Quality Fault Log into one complete denim order file, the workbook's own final assembly lesson. Back to the course map