Unit 5 PPC 28 Feb

7/27/2019 Unit 5 PPC 28 Feb

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Unit- 5 Production cost estimation

Contents:

Estimation of material cost, labour cost and over heads, allocation

of overheads – Estimation for different types of jobs.

Prof. A. Murugarajan

Department of Mechanical Engineering

Sri Ramakrishna Engineering College

7/27/2019 Unit 5 PPC 28 Feb


Estimation of material cost

Procedure

Study the drawing carefully and break up the component into simple

geometrical shapes. (Cubes, prisms, cylinders, etc.)

Add the necessary machining allowances on all sides which are to be

machined.

Determine the volume of each part by applying the formulae of

mensuration.

Add the volumes of all the simple components to get total volume of the

product.

Multiply the total volume of the product by the density of the material to get

the weight of the material.

Find out the cost of the material by multiplying the cost per unit weight to

the total weight of the material.

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Mensuration in estimation

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Mensuration in estimating

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Problem 1

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Determination of Labour Cost Cost spent to the workers are directly or indirectly involved in

manufacturing operations It is significant in amount of total cost

Factors consider for calculating time required for a particular job

Setup time

Operation time

Handling time and machining time

Tear down time

Miscellaneous Time

Personal allowances Interference allowancesFatigure allowance Special allowances

Contingency allowances

Process allowances

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Estimation of overheads and various cost components

• Prime cost• Factory cost

• Manufacturing cost

• Total cost

•

Selling price

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Allocation of overhead expenses

By percentage (i.e allocation by cost proportion)

% on prime cost

% on direct labor cost

% on direct material cost

By hourly rate (i.e allocation by hourly rate)

Man hour rateMachine hour rate

Combination of man-hour and machine-hour rate

By unit rate (i.e allocation by unit rate)

Unit rate method

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Estimation for different types of jobs

Forging shop Rough castings Machining Time Welding

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Estimation in Forging shop Metal forming process

It is defined as the process in which the desired shape

and size of an object is obtained through the plastic

deformation of the metal of the object

It is performed by hammering or pressing the work piecethat is to be brought into a specific shape and size

Types of forging: Hot forging and cold forging

Forging processes: Hand or smith forging, Drop forging,

Press forging, machine or upset forging

Forging operations: Upsetting, Drawing down, settling

down, Bending, Punching, Drifting, Swaging

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Estimation of material losses in forgingShear loss:

In forging, the long bars or billets are cut into requiredlength by means of a sawing machine.

The material consumed in the form of saw-dust or pieces

of smaller dimensions left as defective pieces is called

shear loss. This is usually taken as 5% of the net weight.

Tonghold loss:

This is the loss of material due to a projection at one end

of the forging to be used for holding it with a pair of tongs

and turning it round and round to give the required cross

section in drop forging. About 1.25 cm and 2.5 cm of the size of the bar is used

for tonghold.

The tonghold loss is equal tothe volume of the

protections.

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Estimation of material losses in forgingScale loss:

This is the material lost because of the surface oxidaton inheating and forging the piece. When iron is heated at a

high temperature in atmospheric conditions a thin of iron

oxide is formed all round the surface of the heated metal

which goes as a waste.

The iron oxide film is known as scale and it falls from the

surface of the metal on being beaten up by the hammer.

Scale loss depends upon the surface area, heating time

and the type of material.

For forgings under 5 kg loss is 7.5 per cent of the netweight, and for forgings from 5 to 12.5 kg and over an

addition of 6 per cent and 5 per cent of the net weight is

necessary for scale loss.

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Estimation of material losses in forgingFlash loss:

There is a certain quantity of metal which comes betweenthe flat surfaces of the two dies after the die cavity has

been filled in.

This material equal to the area of the flat surface is a

wastage.

For finding the flash loss, the circumference is determined

which multiplied by cross-sectional area of flash will give

the volume of the flash.

The volume multiplied by material density gives the flash

loss. Generally, it is taken as 3 mm thick and 2 mm wide allround the circumference.

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Estimation of material losses in forgingSprue loss:

The connection between the forging and tonghold is called

the sprue or runner.

The material loss due to this portion of the metal used as a

contact is called sprue loss. The sprue must be heavy enough to permit lifting the

workpiece out of the impression die without bending. The

sprue loss is generally 7.5 per cent of the net weight.

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Estimation of Forging cost

Cost of direct materials.

Cost of direct labour.

Direct expenses

such as due to cost of die and cost of press. Overheads.

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Estimation of Forging cost

Calculation of Material costStep 1: To calculate the net weight of forging

Step 2: To calculate the gross weight

Step 3: To find material cost

Step 4: To select the diameter and length of stock

Calculation of Labour cost

Labour cost=forging time per piece in hrs x labour rate in

hour

Calculation of Overheads (generally % of labour cost)

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Estimation in welding shop

Welding- Process of joining similar or dissimilar metals byapplications of heat

It can be done with or without application of pressure and

with or without the addition of filler metal.

Filler metal or rod is used to make up losses during welding,to fill up any gap between the joint surfaces and to produce

a fillet

Types of welding:

Plastic or pressure welding

Ex. Spot welding, projection weldingFusion or non-pressure welding

Ex. Gas welding and electric arc welding

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Estimation of welding cost

Direct material cost Cost of base materials to be welded

Cost of consumables –electrodes, flux

Direct labour cost

Preparation or pre-welding labour cost

Welding cost

Post welding or finishing cost

Direct expenses

• Cost of power consumed

• Cost of welding fixtures Overhead expenses

• Depreciation of welding tools and accessories etc.

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Estimation of Foundry shop

Foundry is the process of casting metals into objects of specified shapes

Casting: The molten metals or alloys are poured in the

moulds and allowed to cool

A mould is a cavity or matrix formed in a heat resistantmaterial (sand)

Pattern is a replica of the object to be made by the casting

process

Pattern material: wood, metal and plastics

Pattern allowance: Contraction or shrinkage allowanceDraft allowance, machining allowance

Distortion allowance, shake allowance

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Estimation of Foundry cost

Total pattern

cost

Direct materialcost

Direct labourcost

Over heads+ +=

Gross weight of thepattern material

including allowance

Cost perweightx

Estimated time tomanufacture the

pattern

x Labour rateEstimated time tomanufacture the

pattern

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Estimation of Foundry costStep 1: To find material cost

Direct material cost Indirect material cost

Volume of the materialrequired for casting

Density of materialx

To calculate the net weight of the casting

Materials required in melting the metal

-such coal, limestone etc

Material used in core shop for making the

Cores-binders, oils etc

Add the weight of lost in oxidation in

furnace and in cutting gates, spills andover arm etc – 8 5 to 10 % of net weight

Cost of material=Gross weight of casting x

cost per unit weight

Direct material cost=cost of material -

return value of scrap

Add the weight of process of scrap

i.e weight of runner, risers, gates etc

15 to 20% of net weight

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Estimation of Foundry costStep 2: To find Labour cost

→ Cost of labour involved in making the cores and moulds

→ Cost of labour involved in melting the metal, firing the furnace, baking of

cores, cleaning of casting

Step 3: Direct expenses

Step 4: Over head expenses

→ Expenditure incurred on patterns, core boxes, cost of using machines

Total cost of a cast component

Total materialcost

Labour cost Direct expensesOverheadexpenses

7/27/2019 Unit 5 PPC 28 Feb


Unit 5 PPC 28 Feb

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