The dozen pair, and the five denominators on one cost sheet

Hosiery is priced by the dozen pairs, and that is not a formality

Quillan's cost sheet says USD 11.40. Ask any hosiery person what that is a price for and they will say a dozen pairs at once. The trade has quoted socks that way for as long as it has quoted them at all. A merchandiser arriving from woven tops divides by twelve, gets USD 0.95 a pair, and feels safe.

They are not safe. The trap in a sock cost sheet is not the dozen. It is that five of its lines have five different denominators. A denominator is the unit a cost line is counted in, and only one of these lines is counted in dozens.

Get one denominator wrong and the error is not ten per cent. It is a factor of two, five or twelve. The most common one in practice is treating knitting as a per-pair cost, which halves it. People do that because everything either side of it in the sheet really is per pair.

Course 8.1 owns the shape of a cost sheet, and how a making cost becomes an FOB price (free on board, the price with the goods loaded at the port of export). Everything below is the part that is different because the product is a sock.

The yarn line

A 39-42 HS-244 weighs 74 g a pair finished. Twelve pairs is 0.888 kg of yarn actually in the socks. The mill issues 7.5% more than that, to cover machine tails, start-up socks, transfer waste and the yarn left on a cone that is too short to run. That is 954.6 g a dozen pairs.

There is no marker efficiency here and no cutting loss. Course 4.5's whole apparatus has no equivalent, because a sock is knitted to shape and the fabric is never larger than the garment. What replaces it is the over-issue above, and it is both smaller and much steadier than a marker.

Now read that table against the label. They do not say the same thing, and a merchandiser is expected to reconcile them.

The elastane does not arrive as elastane. It arrives covered: a bare 44 dtex elastane core wrapped with two ends of 44 dtex polyamide. Bare elastane cannot be fed reliably into a fine cylinder, and it would rub against the needles. So two thirds of the weight on that cone is polyamide, and it counts as polyamide on the label.

So the covered elastane yarn is 6.0% of the yarn you buy by weight, 11.3% of the yarn money, and 2% on the label. Three different numbers for one cone, and somebody uses every one of them. The mill orders the first, you cost the second, and the customs entry and the care label carry the third. Course 1.2 made the money half of this point on a legging, where the elastane content is far larger. On a sock it is small enough that people leave it out of a value-engineering conversation entirely, and it is still dearer than the polyamide.

The rest of the sheet

Dyeing comes after knitting. The socks are dyed as finished garments in a rotary machine, not knitted from dyed yarn. The rate is USD 1.10 a kilogramme of goods on a full load, and there are 0.888 kg a dozen pairs, so USD 0.98. Lesson 5 shows what happens when the load is not full.

Knitting is machine time. Twenty-four socks at 2.75 minutes is 66 machine-minutes a dozen pairs. Tanyeri's machine-minute rate is USD 0.0155. It covers depreciation, power, the knitter who tends twelve machines, needles, sinkers and oil. That is USD 1.02.

Toe closing, boarding, pairing and packing are the next three lessons. The numbers here are for the automatic-linking route, which is what Tanyeri quoted.

Two lines in that table are hosiery rather than general costing.

The seconds line is a cost per shippable dozen, not a percentage. Seconds are socks that fail inspection. To ship twelve pairs you must knit 4.4% more than twelve, and a second sells locally for about USD 1.80 a dozen rather than nothing.

The freight line sits inside the price because the terms are delivered Northampton. That is normal for Turkish hosiery going into the United Kingdom, and it is why lesson 1's part-load mattered so much.

On 7,200 dozen the margin is USD 8,562.

The mistake nobody made

The quote was built on the 39-42, because that is the middle size and it is what everybody does. Look again at lesson 1's size table, but this time at the weights instead of the machines.

The biggest sock is 51.6% heavier than the smallest. Weight the four sizes by their share and the order's real average is 79.6 g a pair, not 74. So the quote understated the yarn by 7.6% on every dozen in the order.

Yarn scales with weight, and so does dyeing, because dyeing is charged by the kilogramme:

• Yarn: USD 4.66 becomes USD 5.01, up USD 0.35 a dozen pairs
• Dyeing: USD 0.98 becomes USD 1.05, up USD 0.07 a dozen pairs
• Multiply by the seconds factor and it is USD 0.45 a dozen pairs

On 7,200 dozen that is USD 3,204, which is 37.4% of the order's margin.

Now put it next to the thing everyone remembers. Quillan's buyer pushed the price from USD 11.55 to USD 11.40 in a February call that both sides afterwards called hard. That was USD 0.15 a dozen pairs, and USD 1,080 on the order.

This is the category difference, stated plainly. Consumption varies by size in every garment. But a woven size step is a few centimetres of a pattern. A hosiery size step is a whole shoe-size range, and four ranges span half a foot of adult. That turns the size curve into a material decision.

Act as a hosiery costing manager. Build me a cost sheet for one sock style per DOZEN PAIRS, and name the denominator underneath every line, because the lines in a sock cost sheet are counted in at least five different units and that is where the errors live. Style facts: [STYLE], [QTY] dozen pairs, price [AMOUNT] a dozen pairs, terms [TERMS], pack format [HOW MANY PAIRS TO A PACK]. Size ranges, their share of the order, and the finished weight in grams a pair for EACH size: [LIST THEM]. Yarns bought, with grams a dozen pairs and price a kilogramme: [LIST EACH, AND SAY WHICH ONE IS THE COVERED ELASTANE AND WHAT ITS CORE AND COVERING ARE]. Over-issue above the in-sock weight: [PERCENT]. Dyeing: [PRICE A KILOGRAMME], machine load [KG], and the split between chemistry that scales with weight and machine cost that does not, if known. Knitting: cycle minutes a sock and the machine-minute rate. Toe closing: the route and its rate. Boarding, pairing, packing and packaging: rates and the unit each is quoted in. Seconds rate and the salvage value of a second. Freight and overhead. Do the following. First, build the cost per dozen pairs line by line with the denominator written beside each line, and flag any line I have given you in the wrong unit. Second, reconcile the yarn bill against the label composition, showing how much of the covered elastane yarn is core and how much is covering, and what percentage of the finished sock each declared fibre is. Third, recalculate the yarn and dyeing lines at the ORDER'S BLENDED WEIGHT rather than at the middle size, and tell me in money what the size mix costs against the size the quote was built on. Fourth, express seconds as a cost per SHIPPABLE dozen pairs, net of salvage, not as a percentage. Fifth, carry it to a margin a dozen pairs and a margin on the order. Sixth, tell me what a defective sock costs at each unit: opened and remade at the mill, and sorted at the customer's warehouse. Name every assumption in a list at the end, and do not give me a range where a number is possible.