How to calculate CM & CPM

 

What is CM & CPM?

CM means the cost of making a product or simply making a cost. In a broad sense, it refers to the total cost of cut, makes, and trims -CMT cost of a garments industry. 

If we want to calculate CM, we must know about CPM. Also note that we can calculate CM in two ways, let’s see the formula given below

1.       CM= (machine cost*no of the machine)/avg. production

2.       CM= (SMV*CPM@100% eff*12)/Expected to eff of that order

CPM is the cost per minute. It can be calculated for a production line or a factory or an organization.

CPM (Cost per Minutes) = (Direct Labor Cost + Operational Cost) of the month/ Usage Minutes

(Available Minutes) of the month.

Let’s, the machine cost $49.14, no of machines used is 16, and avg production is 238.80 pcs/hr.

CM= (49.14*16)/238.80=$ 3.30

Let’s try the next formula to calculate CM, suppose any item SMV is 5.5, Expected efficiency = 62.5 %, CPM= $0.03 (@100% eff)

CM = (5.5 × .0264)/ .625

= $0.264/PCs

= ($0.264 ×12)/ Dzn

=$3.168 / Dzn