How to Calculate Garments Cost of Manufacturing (CM) | Knit Garments CM Calculation Formula

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
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-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)