How to Calculate Garments Cost of Making (CM)

 How to Calculate Garments Cost of Making (CM)

Introduction:

Calculating cost of making (CM) for any garment items is an important factor in garments merchandising. Every garments merchandiser should know the actual calculating method of it. Other-wise, factory may fall in huge loss. As its importance in garments merchandising, today I will present an easy method for calculating cost of making (CM) for any garment items.

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Garments making

How to Calculate Cost of Making (CM) of Garments?

Before calculating cost of making (CM) for any garment items, a garment merchandiser should confirm the following matters:

1.    Factory total expenditure per month (running), it includes factory rent, electricity bill, water bill, commercial cost, transportation, worker & staff wages etc.

2.    Total number of machines in the factory.

3.    Total number of machines required to complete an item.

4.    Targeted production per hour from the existing layout (excluding alter and reject).

5.    Total working day per month.

6.    Total working hours per day.

Now by applying following formula, a garment merchandiser can easily calculate the actual cost of garments making.

Cost of making (CM) per pcs,

Now one example is enough to remove all the confusions from the above discussion.

Example:

Suppose,
H.N apparels has received an order of basic T-Shirt item.

Where,
H.N apparels total expenditure per month-30,00,000 taka
Total number of machines in the factory-100
Total number of machines required to complete an item-25
Targeted production per hour from the existing layout-180
Total working day per month-26
Total working hours per day-08

Now calculate the cost of making(CM) of the mentioned item.

Solution:

Cost of making (CM) per pcs,

= 20.03 taka per pcs
= (20.03 × 12) taka per dozen
= 240.38 taka per dozen
= 240.38/78 (in dollar) {1dollar-78taka (running)}
= $3.08 per dozen

So, the cost of making (CM) per dozen basic T-Shirt is $3.08