In the clothing manufacturing, supplier gives final manufacturing cost to buyer prior to order confirmation.

For that factory prepares cost sheet estimating costs in different cost heads. Cost heads like Fabric, Trims and Packing materials, Labor cost and Overheads. At costing stage, supplier only get one sample of the garment and specification of fabric and trims for the reference. For raw material cost suppliers directly take price quote from fabric and trim suppliers. For labor cost it is very important to estimate as near as it will be during actual production. The scientific method for estimating CM (Cut and make) cost of a garment involve two steps as 1. First determine SAM of the garment (refer garment SAM calculation) and 2. Then multiply garment SAM with labor cost per minute. How to calculate the minute cost of the operator? Formula: Minute Cost = (Monthly salary of the operators/Total minutes available in the month) Suppose, Operator monthly salary is INR 5000.00 Total available capacity per month (in minute) = 26 working days*8 hours/day*60=12,480 minutes So, per minute cost of the direct labor = 5000/12480 = 0.4006 INR Formula for labor cost calculation per pieces CM cost = SAM of the garment * Minute cost of the labor If Sewing SAM is 15 minutes then estimated garment make cost = 15*0.40=6 INR And Cutting SAM is 2 minutes then estimated cutting cost = 2*0.40=0.8 INR So, Total estimated CM cost of the garment = (6.00+0.80) = 6.8 INR Following above formula easily one can estimate garment CM cost and use it for the product costing