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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