Page 18 - Clothesline - November 2020

PAGE 18 / NATIONAL CLOTHESLINE / NOVEMBER, 2020

SHIRT TALES BY DON DESROSIERS

Doing shirts with limited service

ou can make a grave three days are around five Hmmm. Food for thought. Variable Total for Cum. Cost/
error in figuring your hours each. Nobody pads the More information is needed Costs 3,500 shirts Shirt
Ycosts. I have seen many time clock. Employees clock and sought, and in the end the
Supplies
people do this. Let’s set up a out when they are done. For proposal is as follows: (incl. hangers, .22
hypothetical scenario so that I the purpose of illustration, let’s Someone who is not truly a poly, detergents, .22 $770
pads & covers)
can illustrate my point. say that the employees average competitor wants you to do

Imagine a shirt department $10 per hour including PTax 150 of his shirts every day. He Labor .50 (10 cents
that has two pressers, a touch- and associated expenses. Gross explains that he is at capacity, (5 people per shirt $1,750 .72
@$10/hour =

up person and a bagger/as- revenues per shirt averages or whatever. He offers to pay $50/100 shirts/hr per person

sembler plus a wash person. $2.25 each. you $1.25 per shirt. You do not Utilities .15 $525 .87
The press team regularly aver- Management has done a need to tag, wash, touch-up,
ages 100 shirts per hour. Five good job of calculating cost per assemble or bag the shirts. Claims .005 $17 .875

people in total do 100 shirts shirt and that is outlined in the The shirts will come in wet Fixed Costs

per hour for an average of 20 table on top, to the right. (Note: and extracted. All you need to
Repair &

pieces per labor hour (PPLH). Costs such as supply costs do is press the shirts. What do Maintenance .02 $140 .895
This is a PPLH that is better vary, but we’ll calculate this to you do? Perhaps you reason
than average (17-18 PPLH is be at least six cents per shirt. that this is a cash cow. It takes Rent (500 sq.ft. .054 $192 .949
average), but poor by my stan- There is always something that five people to do shirts now, @20/ft.)

dards (Tailwind clients aver- we didn’t figure on, so add a but for these 150 shirts, the Equipment
age 27.2). But, 20 is a good penny per shirt for Misc. costs, touch-up person, the assem- Depreciation .01 $35 .959

number to use here because I etc.) bler and the washer are not Customer
want to paint a picture that de- Let’s assume that this plant needed. It costs you a mere 20 Service Labor .50 $1,700 .1.459

picts a plant that has better- operator is on the ball and cents each to press them and Amortization .03 $105 1.489

than-average management knows these numbers. If you you gross $1.25 per shirt, over
Employee
and in general is better than asked him what his cost per $900 per week. Sweet! Or, is it? Benefits .05 $170 1.539
most. shirt is, he’d answer in a heart- On the surface, it appears
At 3,200 shirts per week, beat: “Just a hair under a dollar clear that you don’t have to do Admin, Office, .02 $70 1.559
this is a well-equipped plant and 57 cents. We make 68 cents much, or incur much expenses, Management

that isn’t bulging at the seams. per shirt.” to process shirts that only re- Misc., Other .01 $35 1.569

A bit more volume is possible, The plant has a history of quire pressing and nothing Income
but the employees are content good service and good quality more. A closer look will yield $7,878
with 32 hours per week. A and they are reasonably an entirely different conclusion. 3500 @ $2.25

surge in business would prob- friendly with their competi- More importantly, in a vast ma- Less Costs ($5,491)

ably not lead to overtime. tors. A friend or quasi-com- jority of these situations, the Profit (or loss) $2,387

Mondays and Tuesdays are petitor asks this plant owner to gross revenue per shirt isn’t Profit per shirt .68
eight-hour days; the remaining do his shirts wholesale. Continued on page 20
Variable Total for Cum. Cost/
Costs 4,250 shirts Shirt

Supplies
(incl. hangers, .22 $770 .06
poly, detergents,
pads & covers)

Labor .50 (10 cents
(5 people
@$10/hour = per shirt $1,700 .533
$50/100 shirts/hr per person

Utilities .15 $525 .10

Claims .005 $17 .005

Fixed Costs

Repair & .02 $140 .02
Maintenance

Rent (500 sq.ft. .054 $192
@20/ft.)

Equipment
Depreciation .01 $35 .01

Customer
Service Labor .50 $1,700

Amortization .03 $105

Employee .05 $170
Benefits 1.539 .05

Admin, Office, .02 $70
Management 1.559

Misc., Other .01 $35 1.569 .01

Total cost/
wholesale shirt .788

Income
3500 @ $2.25 per shirt, plus $8,815.50
750 shirts at $1.25

Cost for the first 3,500 shirts ($5,491)
(816) 739-2066 Cost to produce those extra
750 shirts ($591)
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