Note:

The Cost of Making (CM) formula helps in estimating the total manufacturing cost of a product based on time, labor cost, and efficiency.

Formula Explanation:

• SMV (Standard Minute Value): The standard time required to complete a task.
• CPM (Cost Per Minute): The cost associated with one minute of production.
• Expected Efficiency (%): The anticipated efficiency of the production process.
• CM (Cost of Making): The total cost of producing one unit.

Real-life Applications:

• Manufacturing: Used for cost estimation, production planning, and performance analysis.
• Garment Industry: Essential for costing, pricing, and profitability analysis.
• Any Production Setting: Helps in understanding and optimizing production costs.

Conclusion:

By accurately calculating CM, businesses can make informed decisions about pricing, resource allocation, and process improvements. This formula helps in maintaining cost competitiveness and ensuring profitability.