To find out the CM of a item we need the following things:
- Working Hour Per Day…. Suppose – 8 hrs
- Working Day Per Month….. Suppose – 25 days
- Hourly cost of a Worker (WC)
- Hourly cost of Machine (MC)
- Productivity of The Item……. Suppose – 200 pcs with 25 m/cs & 10 helpers
Calculation of Hourly cost of a Worker:
For this we need the following Information:
Collect the 06 (six) Monthly total expenditure of the factory with factory rent, commercial cost, electricity bill, water bill, transportation, repairing, worker & stuff wages etc. And from this find the Avg. monthly cost of the factory. Suppose- 50,00,000/-Tk
Find the total Number of worker (Only Operator & Helper) present into the factory. Suppose- 300
Total Avg. Monthly Cost
Hourly Cost Per Worker= --------------------------------------------------------------------
Total Worker x Working Day Per Month x WH Per Day
Calculation of Hourly cost of Machine:
Find out the quantity of sewing machine. Suppose- 200 m/cs
Find out the Purchase cost of all type of sewing machine & the minimum lifetime of the machine. Suppose- 1,50,00,000 /-Tk for 3 years lifetime
Total Purchase Cost
Hourly Cost Per Worker= ------------------------------------------------------------------------------------------------------
Total M/C x M/C Lifetime (in month) x WD Per Month x WH Per Day
WC x Rqd. m/cs + Hourly cost M/C x (Opt. + Helper)
COST OF MAKING (CM) = --------------------------------------------------------------------------- x 12
Production per Hr x Currency Conversion Rate
= $ / dozen
However, normally at present (after starting the new salary scale)in Bangladesh we calculate the CM of any item consider the overhead sewing machine cost 1200 tk to 1400 tk/day that means $16.216 to $18.92/per day for a non-compliance factory.
For the a compliance factory the per day machine cost will be 1800 tk to 2100 tk ( $24.32 to $28.37)
SO, if the an items produce 1600 pcs per day using 25 machines then the CM will be
= Overhead machine cost X require machine / produce quantity X 12 / $74
= 1400 X 25 / 1600 X 12 / 74
= $3.547/DOZ