In this paper, we propose a practical cut generation method based on the Chvatal-Gomory procedure for the (0, 1)-Knapsack problem with a variable capacity. For a given set N of n items each of which has a positive integral weight and a facility of positive integral capacity, a feasible solution of the problem is defined as a subset S of N along with the number of facilities that can satisfy the sum of weights of all the items in S. We first derive a class of valid inequalities for the problem using Chvatal-Gomory procedure, then analyze the associated separation problem. Based on the results, we develop an affective cut generation method. We then analyze the theoretical strength of the inequalities which can be generated by the proposed cut generation method. Preliminary computational results are also presented which show the effectiveness of the proposed cut generation method.