What purpose did the costume serve in the image above?

Answer:
Seems to have been a parody of the elaborate costume designs of avant-garde groups such as the Russian Constructivists and must surely have inspired the wildly creative designs for ballet costumes by Bauhaus designer, Oscar Schlemmer only a decade later.
Explanation:
The image shows the costume for the performance of a poem, by Hugo Ball, called "Karawane".
Hence, the costume was a radical representation of the strangeness of the poem and its meaning.
Learn more about Dada Poems here:
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