This is one of those less that 5-minute projects that actually yields something that will last a whole lot longer!
All you need is a large, recycled t-shirt.
I got this stack from the Goodwill for Mr. P.'s superhero party for around $12.
Cut along the lines as shown below:
and then all the way around the back of the neck. That way, all you need to do is slip your head through the hole to wear the cape.