The term CM is very important in calculating the garment costing.
CM of garments can be calculated in various ways. One of the simplest formulae of CM calculation is as below-
CM = SMV x CPM,
Here, SMV = Standard Minute Value and CPM = Cost Per Minute
CPM= Factory Overhead/(no of machines x no of working hours per month x 60)*factory efficiency.
Example:
•Monthly total expenditure of your factory with factory rent, commercial cost, electricity bill, water bill, transportation, repairing, worker & stuff wages etc. (8hrs/day) is Suppose - 50,00,000/- tk.
•Qty of running Machine of your factory of the following month (which total expenditure we have considered here), Suppose - 100 machines.
•Number of the machine to complete the layout for the following Items (which CM we are calculating), Suppose - 25 machines.
•Production target/capacity of the following items, per hour from the existing layout, excluding alter & reject, Suppose - 200 pcs per hour.
•Total working day of the followings month,(though the house rent, commercial expenses, machine overhauling & some other cost remain same), Suppose- 26 days.
•If you want to calculate the CM in US$ (dollar) then pls input present dollar conversation rate BDT, Suppose $1 = 81 BDT.
Solution:
= ((Factory total expense per month x no of m/c required for making the garment))/((total m/c x total working hrs per month x target production))
= ((50,00,000 x 25))/((100 x 26 x 8 x 200)) BDT
= 30.048 X 12 BDT [per dozen]
= 360.58 / 81 $ [1$= 81 BDT]
= $4.45 / dozen