CM stands “Cost of Making”. Cost of making is very common
word in garment sector because we get order from buyer based on CM. It depends
on direct & indirect cost of making of a product. If cost of making of a
product is expensive then CM will be high & cost of making of a product is
low then CM will be less. So, we should carefully calculate CM of a garment
otherwise we may face huge loss. According to this garments industry, we want
to know accurate CM calculation in the following way.
We will apply two methods of CM calculation.
- Mathematical method.
- Operation Breakdown Method by SMV.
Before CM calculation we have to know below important
notes
- Total factory monthly expenditure. Like as factory rent, utilities
bill, commercial charge, transport, worker & staff wage etc.
- Total Number of machine in the factory.
- Total number of machine for a garments layout.
- Production target as per layout of a garment.
- Per month total working hours.
- Per day total working hours.
- Mathematical method.
We know CM formula in the following
CM = Overhead machine cost X require machine / produce
quantity per day of a specific style
Overhead machine cost=Monthly total expenditure / (26 X
running machine of a factory on that month
Example:
If overhead machine cost is $22 & required machine
(60 machines) as per layout of a particular garment. Per day production output
1200 units then what will be CM?
CM= ($23 X 60 / 1200)
= $1320/1200
= $ 1.10
=$1.10X12(if we consider per doz)
=$13.20/dz
- Operation breakdown method by SMV
We will calculate CM in the following way.
CM=SMVX Labor cost per minute
As we know,
Labor cost per minute=Total salary of the labors in a
month / Actual minute worked in a month.
Example:
If a basic pant produced by 18 minute & labor cost is
$ 0.08 then what will be CM.
Here given,
SMV=18 minute
Labor cost=$0.08
CM=SMVX Labor cost per minute
CM=18x$0.08
CM=$1.44(100% efficiency)
If we consider per dozen then
CM=$1.44×12
CM=$17.28
So, CM will be $17.28
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