CM is
the abbreviation for Cost of Manufacturing. 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)