How to Calculate Operator Cost per Minute From Production Data and Monthly Salary?

Question: If 50 operators and 30 helpers produced per hour 150 Pieces garments, garments SMV 13.88. Operator's salary per month 9500 Tk. and Helper's salary per month 8400 Tk. How we can calculate Per Minutes Operator and Helper cost with CM?

The above question is received from an OCS reader. We have posted an answer to this question here.  Continue reading to learn the method. Further, we will show you calculating the cost of manufacturing.

You can calculate operator cost per minute and helper cost per minute with the given data. To calculate cost per minute and salary per minute we will use the following formula. 

Step-1: First, find the hourly salary of your employees ( operators and helpers) from their monthly salary.  
Hourly Salary per employe = (Monthly Salary/ Working hours in a month)

Let’s assume the factory works 26 days in a month. So, the average salary per hour for operators and for helpers will be as follows. 
  (i) Hourly salary for operator: Monthly salary / 26*8 = 9500/208 = BDT 45.673 
  (ii) Hourly salary for operator: Monthly salary / 26*8 = 8400/208 =BDT 40.385 

Step-2: Calculate salary per minute by diving hourly salary by 60 minutes. This is also known as the cost per minute. 
  (i) Average salary per minute for sewing operator = 45.673/60 = BDT 0.76  
  (ii) Average salary per minute for helper = 40.385/60 = BDT 0.67 

Step-3: Calculate total minutes produced by operators and helpers. 
You have the garment SAM (13.88 Minutes) and per hour production quantity (150 pieces).  Therefore, 

  Total produced minutes = (150 x 13.88) = 2082 Minutes (in one hour of production ) 

Step-4: Calculate the total salary amount paid to the workers per hour. 
In step-2, you have calculated average salary for operators. We have a total number of operators (50) and helpers (30) working in the production line.   
  Total amount paid to workers per hour as a salary = (50 x 45.673 + 30 x 40.385)
             = (2283.65 + 1211.55) =BDT 3495.20

Step-5: Calculate average salary per minute. 
To calculate the average salary per minute using this formula. 
Average salary per minute per worker=(Total amount paid to all workers / Combined total minutes in one hour)

Therefore, average salary per minute per worker = (3495.20/(80 x 60)) = 3495.20 / 4800 = BDTk 0.728

Cost of manufacturing per minute  = (BDT 3495.20 / 2082) = BDT 1.679 

As we can't separate the total produced minutes done by operators and helpers, from the given information, cost per operator and helpers can't be calculated separately.   

In the calculation, you can see the difference between the following 
    (i) Cost of manufacturing per standard minute production = BDT 1.679 
   (ii) Operator cost per minute = BDT 0.76
  (iiii) Helpers cost per minute = BDT 0.67 

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