CM
COST OF
MANUFACTURING
CM is the abbreviation for Cost of Manufacture. In apparel
industry CM means Manufacturing Cost of 12 pcs garments. To calculate
Manufacturing Cost of 12 pcs knit garments of a specific order we must know-
1. Monthly expenditure of the
factory,
2. Total running machine,
3. Machine qty to execute the layout
of the specific order,
4. Daily (8 hour/day) productivity
of the said order (excluding alter and reject) and
5. Dollar conversion rate (if
monthly expenditure amount is other than US Dollar)
Suppose,
-Monthly Factory Expenditure is BD
Taka 40,00,000
-Working days of the month=26
days
-Daily Factory Expenditure= BD Taka
153,846.2 (Monthly Factory Expenditure/working days in a month)
-Total running machine qty=125
Machine
-Daily Expenditure of 1 Machine = BD
Taka 1230.769 (Daily Factory Expenditure/Total running machine)
-Machine qty for the layout (for the
said order)=30
-Daily cost for the layout= BD Taka
36923.08 (Daily Expenditure of 1 Machine x Machine qty for the layout)
-Hourly production of the
layout=120pcs
-Normal daily working
hour=8hours
-Daily Production of the layout=960
pcs (Hourly production of the layout x Normal daily working hour)
-Manufacturing cost of 1pc=BD Taka
38.46154(Daily cost for the layout / Daily Production of the layout)
-So, CM (Manufacturing Cost of 12
pcs garments)= BD Taka 461.5385 (Manufacturing cost of 1pc x 12)
-Dollar conversion rate: BD Taka
78=US$1
-So, CM (Manufacturing Cost of 12
pcs garments) in US$= US$ 6.24
-20% profit could be added with CM=
US$1.24
-Final CM = US$7.484 (US$6.24+
US$1.24)
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