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What is the Cost Per Minute
(Minute Value) ?
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Factors Effecting for Minute Value
Factory Over Heads
Direct.
Indirect.
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Factors Effecting for Minute Value
• Salaries
• Wages
• Over Time
• Store Consumptions
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Factors Effecting for Minute Value
Salaries
• Stitching
• Inline & Final Inspector
• Clipping, Finishing & Packing
• All over staff in the factory
( Including Managers, GMS & Directors )
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Factors Effecting for Minute Value
Wages
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Factors Effecting for Minute Value
Over Time
• Stitching
• Inline & Final Inspector
• Clipping, Finishing & Packing
• All over staff in the factory
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Factors Effecting for Minute Value
Store Consumption
Example
• Machines Parts (Sewing & Others)
• Needles
• Stationeries
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Factors Effecting for Minute Value
Indirect Over Heads
• Traveling & Conveyance
• Entertainment
• Fuel & Power
• Water
• Carriage & Freight
• Communication (Postage & Telephonic)
• Security Service
• Building Rent
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Factors Effecting for Minute Value
No of Machine Operators
( Machine use capacity Per Day )
Assume that there are 03 production units with
each150 machines in a plant,
No. of Machine / section = 150
No. of section in Factory = 03
No. of Machine in Factory = 450
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Factors Effecting for Minute Value
Working time = 8 am to 6 pm
No of hours = 08
working minute = 480 min/day
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Factors Effecting for Minute Value
Absenteeism Percentage
If consider absenteeism = 05%
Present (Machine Operators)= 95%
( excluding 04 Sundays )
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How Calculate the Cost Of Minute ?
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How Calculate the Cost Of Minute ?
Rs.10,000,000 *+ Rs.5,000,000*
450 x 480 x 85% x 95% x 26
Rs. 15,000,000
4,534,920 Rs. 3.31
COST PER MINUTE
0.018 $
* - Assumptions
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How Can We Reduce Minute Cost?
Increasing Plant Efficiency
Reducing Absenteeism percentage
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How to Cost a product on ?
( According to Minute Value )
Manufacturing Cost
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•Total Number of Machine = 180 Unit
•Number of Workers Required = 200
Person
•Total Working Hours a Day = 8 Hours
•Number of Working Days for a Given
Month = 26 Days
•Workers Efficiency = 65%
•SMV of Trouser = 35 Minute
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•Available Minute = (200 Workers x 8
Hours x 26 Days x 60 Minute) X 65%
•Available Minute = 16,22,400
Minutes in a Month
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•Salary = (40,00,000/16,22,400) = 2.47 Rs/Minute
•Interest = (100,000/16,22,400) = 0.06 Rs/Minute
•Depreciation = (50,000/16,22,400) = 0.03 Rs/Minute
•Rental Expense = (2,00,000/16,22,400) = 0.12
Rs/Minute
•Transportation = (150,000/16,22,400) = 0.09
Rs/Minute
•Repair & Maintenance = (50,000/16,22,400) = 0.03
Rs/Minute
•Utility Expense = (10,00,000/16,22,400) = 0.62
Rs/Minute
•Total Cost Per Minute = 3.42 Rs/Minute
So, the Cost of Making (CM) of Trouser = 35 Minute x
3.42 Cost Per Minute = 119.7 Rs
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Suppose Your Sewing Section has 30 machines and
for this machine 30 operators and 5 helpers are
working.
•Total Salary Expense = ( 30 Operators * Average
Monthly Salary) + (5 Helpers * Average Monthly
Salary)
•Salary and Wages Expense = (30*10000 Rs.) + (5 *
8000 Rs.) = 340000 Rs/Month.
•Available Minute Per Month = ((30 operators+5
helpers)* (8 hours *60 minutes)) * 26 days = 436800
Minutes in a Month
CM of Garments = (340000/436800) = .78 Rs./Minute
If a garments need 45 minutes to make then the total
cost of making the cost of that particular garments
will be = (.78 Rs * 45 minute) = 35.1 Rs./Per Piece
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