Cost and Pricing – JSS3 Fashion and Garment Making Lesson Note (Second Term)

Costing is the process of adding up every kobo spent to make a garment, and pricing is deciding the amount at which you sell it to make a profit.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Define costing, pricing, profit and loss.
2. Name the direct and indirect costs of making a garment.
3. Calculate labour cost from hours worked and an hourly rate.
4. Use the formulae for total cost and selling price.
5. Work out the selling price of a simple garment such as a skirt.

Why do we need to calculate cost?

We calculate cost so that the selling price covers everything spent and leaves a profit.

• Costing: adding up every kobo spent to make a garment.
• Pricing: deciding how much to sell the garment for so that you make a profit.
• Profit: the money left after all costs have been paid.
• Loss: the shortfall when the selling price is lower than the total cost.

Example: a dress sold without costing

• Fabric: ₦3,000.
• Thread: ₦200.
• Transport to the market: ₦500.
• Selling price asked: ₦3,000, the price of the fabric alone.
• Money lost: ₦700 spent on thread and transport was not recovered.
• Time lost: the tailor also worked for free, because no charge was made for labour.

• Warning: a tailor who does not know the cost of a garment will soon run out of business.

What are the two types of cost?

There are two types of cost in garment making: direct costs and indirect costs.

Together with labour, they give the total cost of production.

What are direct costs?

Direct costs are the materials that go into the garment itself.

• Main fabric: the Ankara, lace or cotton used for the garment.
• Linings: the soft fabric sewn inside the garment.
• Notions: buttons, zips, elastic and thread.
• Embellishments: beads, stones or embroidery.

What are indirect costs?

Indirect costs are the “hidden” expenses of keeping the business running, even though they are not part of the garment.

• Transport: money spent travelling to the market to buy materials.
• Electricity: power for the sewing machine and the iron.
• Rent: the payment for a shop, if you use one.
• Maintenance: repairing the machine or buying oil for it.

• Teacher’s tip: many tailors forget to add transport to their cost.

What is the difference between direct and indirect costs?

How do we calculate labour cost?

Labour cost is the money charged for the time you spend making the garment.

• Why it matters: your time has value, so you must charge for every hour worked.
• Common mistake: beginners forget to pay themselves, so the business works like a charity.

Steps to find labour cost

1. Decide the amount your work is worth per hour.
2. Count the hours spent sewing the garment.
3. Multiply the hourly rate by the number of hours.

• Example: ₦500 per hour for 4 hours gives ₦500 × 4 = ₦2,000 labour cost.

What is profit margin?

Profit margin is the extra amount added to the total cost, and it is the profit of the business.

• When it is added: after materials, indirect costs and labour have been added up.
• Use of profit: to grow the business, buy new machines or save for the future.

What are the formulae for total cost and selling price?

Total cost is materials plus indirect costs plus labour, and selling price is total cost plus profit.

• Total Cost = Materials + Indirect Costs + Labour
• Selling Price = Total Cost + Profit
• Profit = Selling Price − Total Cost, when the selling price is higher.
• Loss = Total Cost − Selling Price, when the selling price is lower.

How do we price a simple skirt?

To price a skirt, list every cost, find the total cost, then add the profit you want.

Steps

1. Add the costs: ₦2,000 + ₦300 + ₦500 + ₦1,500 = ₦4,300.
2. Decide the profit wanted: ₦1,000.
3. Add them: ₦4,300 + ₦1,000 = ₦5,300.
4. The selling price of the skirt is ₦5,300.

What habit helps a tailor keep correct costs?

Keeping a small notebook is the simplest way to record costs correctly.

• Write down every purchase: record each kobo spent on materials and transport.
• Record hours worked: this makes labour cost easy to calculate.
• Check before pricing: add up the notebook before telling a customer the price.

Evaluation

1. Define costing in your own words.
2. State the difference between a direct cost and an indirect cost.
3. A tailor spends ₦5,000 to make a gown and sells it for ₦4,500. Has he made a profit or a loss? By how much?
4. Mention two hidden costs that people often forget when pricing their clothes.
5. A tailor charges ₦500 per hour and works for 6 hours. Find the labour cost.

Assignment

A dress needs fabric costing ₦4,000, a zip and thread costing ₦350, and transport of ₦400. Labour is 4 hours at ₦600 per hour. Calculate the total cost, then find the selling price if the profit wanted is ₦1,500.