CMT cost from SMV and cost per minute

In a real company

Costing merchandiser, IE manager, factory owner

A sewing line sells minutes. If you know the garment's SMV and what one minute costs your factory, you can quote CMT (cut, make, trim) that covers labour and overhead instead of guessing.

Key ideas

• Cost per minute (CPM) = operator cost per hour ÷ 60.
• Lines never run at 100%, so divide by efficiency to get the real cost of a standard minute.
• Labour per piece = SMV × effective CPM; then add overhead and factory margin.

Formula

CPM

= Operator cost per hour ÷ 60

Effective CPM

= CPM ÷ Efficiency%

Labour / piece

= SMV × Effective CPM

CMT

= Labour × (1 + Overhead%) × (1 + Margin%)

Worked example

A shirt with 22 SMV, line efficiency 60%, operator cost ₹85/hour, overhead 35%, factory margin 10%.

1. 1CPM = 85 ÷ 60 = ₹1.417
2. 2Effective CPM = 1.417 ÷ 0.60 = ₹2.361
3. 3Labour = 22 × 2.361 = ₹51.94
4. 4CMT = 51.94 × 1.35 × 1.10 = ₹77.13

✅ Quote about ₹77 CMT per shirt.

Common mistakes

• Using 100% efficiency — the quote will lose money.
• Using basic wage instead of fully loaded cost (PF, ESI, bonus).
• Using a long-run efficiency for a small order.

Quick quiz

Answer 2 of 3 correctly to complete the lesson.

1. 1. Operator cost ₹90/hour. CPM?

   ₹1.50₹5,400₹0.67₹15

2. 2. CPM ₹1.50 at 50% efficiency. Effective CPM?

   ₹0.75₹3.00₹1.50₹2.00

3. 3. SMV 20 × effective CPM ₹2.50 = labour per piece?

   ₹8₹50₹22.50₹500