RMK ENGINEERING COLLEGE

DEPT. OF MECHANICAL ENGINEERING

ME 2027: PROCESS PLANNING AND COST ESTIMATION
2-Marks Ques!"# a#$ A#s%er
&#! ': ("rk su$) a#$ Er*"#"+!,s
'. (-a )"u +ea# .) %"rk su$)/
Work study is the systematic examination of the methods of carrying on
activities so as to improve the efective use of resources and to set up
standards of performance for the activities being carried out.
2. (r!e -e e0e+e#s "1 %"rk su$).
Two elements of work studies are method study and work measurements.
2. De3#e -e er+ +e-"$ su$).
Method study is the systematic recording and critical examination of
existing and proposed ways of doing work, as a means of developing and
applying easier and more efective methods and reducing costs.
4. De3#e -e er+ %"rk +easure+e#.
Work measurement is the application of techniques, designed to establish
the time for a qualied worker to carry out a specied !ob at a dened level of
performance.
5. L!s "u -e s,"6e "1 %"rk su$).
"cope of work study is not only to manufacturing industries only it can
also use in service sectors. This can be applied in o#ces, hospitals, banks, and
also marketing, material handling, design, building construction, army,
agriculture etc.
7. Sae -e +a!# ".8e,!9es "1 +e-"$ su$).
$i% To improve the processes and procedures.
$ii% To improve the design of plant and equipment.
$iii% To improve the plant layout.
$iv% To improve the use of men, materials and machines.
$v% To improve the &ow of production and processes.
$vi% To improve the safety and standards.
$vii%To develop a better physical working conditions.
7. L!s "u -e .as!, 6r",e$ure "1 +e-"$ su$).
There are seven essential stages in the application of method studies are
"election, 'ecording, (xamine, )evelop, )ene, *nstall and Maintain
:. (-a are -e 1a,"rs " .e ,"#s!$er -e se0e,!"# 1"r +e-"$ su$)/
Three factor should be consider such as
$i% (conomic consideration, $ii% Technical consideration and $iii% +uman
reactions.
;. L!s "u -e ,"++"#0) use$ re,"r$!#* e,-#!<ues !# +e-"$ su$).
,harts and )iagrams
'0. Des,r!.e -e 9ar!"us s)+."0s use$ !# +e-"$ su$).
-.('/T*-0 T'/0".-'T
*0".(,T*-0 "T-'/1(
)(2/3
''. (r!e -e 9ar!"us )6es "1 6r",ess ,-ars.
The various types of process charts are
$i% -utline .rocess chart,
$ii% 4low process chart and
$iii% Two5handed process chart.
'2. De3#e ="% 6r",ess ,-ar.
/ &ow process chart is a process chart setting out the sequence of the
&ow of a product or a procedure by recording all events review using the
appropriate process chart symbols.
67. L!s "u -e 9ar!"us )6es "1 ="% 6r",ess ,-ars.
Three types of &ow charts are
$i% 4low process chart 5 man type,
$ii% 4low process chart 8 material type,
$iii% 4low process chart 8 equipment type.
'4. De3#e SIMO ,-ar.
/ "*M- $S!multaneous M"tion cycle chart% , often based on lm analysis,
used to record simultaneously on a common time scale the therbligs performed
by diferent parts of the body of one or more workers.
'5. (-a )"u +ea# .) -er.0!*s/
Therbligs are the symbols used to denote the various activities and
movements done for diferent purposes.
'7. De3#e -e er+ T!+e su$).
Time study is dened as a work measurement technique for recording the
times and rates of working for the elements of a specied !ob carried out under
specied conditions and for analysing the data so as to obtain the time
necessary for carrying out the !ob at a dened level of performance.
'7. H"% " ,a0,u0ae -e sa#$ar$ !+e/
"tandard Time 9 0ormal time : /llowances

-bserved time x performance rating $;%
0ormal Time 9 555555555555555555555555555555555555555555555555555555
6<<
':. (-a )"u +ea# .) 6er1"r+a#,e ra!#*/
.erformance rating is the process of ad!usting the actual pace of working
of an operator by company it with the mental picture of pace of an
operator working at normal speed.
';. De3#e -e er+ A00"%a#,e.
/llowance is an amount of time added to the normal time to provide for
personal delays, unavoidable delay and fatigue of the operator.
20. L!s "u -e 9ar!"us )6es "1 a00"%a#,es.
$i% 'elaxation allowances
$a% .ersonal need allowances, and
$b% 4atigue allowances
$ii% ,ontingency allowances
$iii% .rocess allowances
$iv% *nterference allowances
$v% "pecial allowances.
2'. (-a !s +ea# .) Er*"#"+!,s/
(rgonomics can be dened as =the application of human biological
sciences in con!unction with engineering sciences to the worker and his working
environment, so as to obtain maximum satisfaction for the worker which at the
same time enhances productivity.>
&#! 2: PROCESS PLANNING
'. De3#e -e er+ 6r",ess 60a##!#*.
.rocess planning can be dened as =an art of preparing a detailed
processing documentation for the manufacture of a piece part or assembly.>
2. L!s "u -e 9ar!"us a,!9!!es "1 6r",ess 60a##!#*.
The various activities of process planning are
/nalyses, )etermine, "elect, ,alculate, )ocument, and ,ommunicate.?
2. (-a are -e 1a,"rs a>e,!#* 6r",ess 60a##!#*/
The factors afecting process planning are@
Aolume of production
The skill and expertise of manpower
)elivery dates for parts and products
Material specications
/ccuracy and process capability of machine
/ccuracy requirements of parts or products.
4. (r!e -e a66r"a,-es " 6r",ess 60a##!#*.
The two general5approaches to, process planning are
*. Manual process planning, and
B. ,omputer /ided .rocess .lanning $,/..%.
$i% 'etrieval ,/.. system, and
$ii% 1enerative ,/.. system.
5. De3#e +a#ua0 6r",ess 60a##!#*.
*n traditional process planning systems the process plan is prepared
manually. The task involves examining and interpreting engineering drawings,
making decisions on machining processes selection, equipment selection,
operations sequence, and shop practices. Therefore, the manual process plan is
very much dependent on the skill, !udgement and experience of the process
planner. ThatCs why, if diferent planners were asked to develop a process plan
for the same part, they would probably come up with diferent plans.
7. (r!e A$9a#a*es a#$ D!sa$9a#a*es "1 Ma#ua0 Pr",ess P0a##!#*.
A$9a#a*es
Manual process planning is very much suitable for small scale companies
with few process plans to generate.
This method is highly &exible.
This requires low investment, costs.
D!sa$9a#a*es
Manual process planning is a very complex and time consuming !ob
requiring a large amount of data.
This method requires the skilled process planner.
More possibilities for human error
*t increases paper work

7. De3#e CAPP
*n order to overcome the drawbacks of manual process planning, the
,omputer /ided .rocess .lanning $,/..% is used. With the use of computers in
the process planning, one can reduce the routine clerical work of manufacturing
engineers, /lso it provides the opportunity to generate rational, consistent and
optimal plants. *n addition ,/.. provides interface between ,/) and ,/M.
:. (-a are -e a66r"a,-es "1 CAPP/
The two basic approaches or types of ,/.. system are D
6. 'etrieval $or variant% ,/.. system,, and
B. 1enerative ,/.. system.
;. De3#e rer!e9a0 ?"r 9ar!a#@ CAPP s)se+.
/ retrieval ,/.. system, also called a variant ,/.. system, has been
widely used in machining applications.
The basic idea behind the retrieval ,/.. is that similar parts will have
similar process plans.
*n this system, a process plan for a new part is created by recalling,
identifying and retrieving an existing plan for a similar part and making
the necessary modications for the new part.

'0. Dra%.a,ks "1 Rer!e9a0 CAPP S)se+

The components to be planned are limited to similar components
previously planned.
(xperienced process planners are still required to modify the standard
plan for the specic component.

''. De3#e *e#era!9e CAPP s)se+s.

*n the generative approach, the computer is used to synthesiEe or
generate each individual process plan automatically and without
reference to any prior plan.
/ generative ,/.. system generates the process plan based on decision
logics and pre5coded algorithms. The computer stores the rules of
manufacturing and the equipment capabilities $not any group of process
plans%.
When using a system, a specic process plan for a specic part can be
generated without any involvement of a process planner.
The human role in running the system includesD $i% inputting the 1T code
of given part design. and $ii% monitoring the function.
'2. (-a are -e C"+6"#e#s "1 a Ge#era!9e CAPP s)se+/
The various components of a generative system areD
A 6ar $es,r!6!"#, which identies a series of component
characteristics, including geometric features, dimensions, tolerances and
surface condition.
A su.s)se+ " $e3#e -e +a,-!#!#* 6ara+eers, for example
using look5up tables and analytical results for cutting parameters.
A su.s)se+ " se0e, a#$ se<ue#,e !#$!9!$ua0 "6era!"#s,
decision logic is used to associate appropriate operations with features of
a component, and heuristics and algorithms are used calculate operation
steps, times and sequences.
A $aa.ase of available machines and tooling.
A re6"r *e#era"r which prepares the process plan report.
'2. A$9a#a*es "1 Ge#era!9e CAPP.
1enerative ,/.. has the following advantages
*t can generate, consistent process plans rapidly.
0ew components can be planned as easily as existing components.
*t has potential for integrating with an automated manufacturing facility
to provide detailed control information.
'4. (-a are -e 1a,"rs s-"u0$ .e ,"#s!$ere$ 1"r 6r",ess a#$
e<u!6+e# se0e,!"#/
While selecting a process or equipment, the following factors considered 5
1. Economic-considerations: ,ost analysis should be made with respect to
the initial cost, maintenance and running cost. /n alternative which
results in lower total cost should be selected
B. .roduction rate and unit cost of production.
7. Fuality and reliability aspects.
G. 2ower process re!ection.
H. Minimum set5up time.
I. 2onger productive life of machines or equipment.
J. 4unctional versatility i.e. ability to perform more than one function.
'5. De3#e 6r",ess a#a0)s!s
1. Process analysis, also known as method study, enables the
industrial engineer to sub!ect each operation to systematic analysis.
B. *t analyses each step of the manufacturing process and aims at
improving the industrial operations.
7. .rocess analysis helps in nding better methods of doing a !ob and this
is achieved by eliminating unproductive and unnecessary elements of the
process.
G. The process is analysed with the help of process charts and &ow
diagrams.
'7. (-a are -e ".8e,!9es "1 6r",ess a#a0)s!s/
The main ob!ectives of process analysis are
6. To improve work methods and procedures.
B. To determine the best sequence of doing work.
7. To eliminate the waste and unproductive operations.
G. To improve plant utilisation and material utilisation.
H. To improve the working conditions and hence to improve labour
e#ciency.
I. To eliminate unnecessary fatigue and thereby efect economy in human
efort.
'7. (-a are -e se6s !#9"09e$ !# 6r",ess a#a0)s!s/
"teps involved in carrying out a complete a process analysis i.e., method
study are as follows
6. "electionD "elect the process or !ob to be studied keeping in technical
and economical factors.
2. Recording: 'ecord all facts regarding present and proposed to work
methods using appropriate recording techniques. The recording can be
done with the help of process charts and diagrams.
7. (xaminingD /nalyse or examine the recorded facts carefully and
critically to see whether some elements can be eliminated combined or
simplied. This step will expose defects in the existing methods. The
purpose place and sequence of every operation should examine.
4. Developing new method: )evelop the new and improved method.
)evelopment involves the analysis of the three phases of evaluation
investigation and selection.
5. Dening the new method: )ene the new method and its requirements
!. "nstalling the new method: *nstall the new method with the cooperation
of supervisor and operator.
*nstallation refers to the implementation of the proposed method. *t is
composed of two phases recommendation implementation.
#. $aintaining the new method: Maintain the new method as the standard
practice and verify with the help of proper control procedures that it is
achieving the desired results.
&#! 2: I#r"$u,!"# " ,"s es!+a!"#
'. De3#e -e er+ ,"s es!+a!#*.
,ost estimating may be dened as the process of determining the
probable cost of the product before the start of its manufacture.
2. (r!e -e !+6"ra#,e "1 ,"s es!+a!#*/
,ost estimating is very important for all organisations, before starting
actual production or lling up the tenders. Kecause only accurate estimating
can enable the factory owner to make vital decisions such as manufacturing
and selling policies. Koth, over estimating and under5estimating are dangerous
for a concern.
*f a !ob is over5estimated, i.e., the estimated cost is much more than the
actual cost of the product, then the rm will not be able to compete with its
competitors who estimated the price correctly and loses the order to its
competitors. -n the contrary, if the !ob is underestimated, i-e., the estimated
cost is below the actual, cost@ of product, then the rm will face, huge nancial
loss which may cause utter failure or closure Cof the rm. Therefore a realistic
and accurate estimating should be done. +ence the staf preparing estimates
be highly qualied and experienced.
2. (r!e -e a!+s "1 ,"s es!+a!"#/
To establish the selling price of a product for a quotation or contract, so as
to ensure reasonable prot to the company.
To ascertain whether the proposed product can be manufactured and
marketed protably,
To take make or buy decisions, i.e., to determine whether the part or
assembly can be manufactured economically, in the plant itself or to be
purchased from outside.
To determine the most economical method process, or material for
manufacturing a product.
To establish the standard of performance that may be used to control
costs.
To prepare production budget.
To evaluate alternate designs of product.
To initiate means of cost reduction in existing production facilities by using
new materials, new methods of tooling and processing.
4. (-a are -e 1u#,!"#s "1 ,"s es!+a!"#/
,ost estimates are required to submit accurate tenders for getting the
contracts.
,ost estimates are required for the manufacturer to choose from various
methods of production the one which is likely to be most economical.
,ost estimates are required for xing the selling price of a product.
,ost estimate gives detailed information of all the operations and their
costs, thus setting a standard to be achieved in actual practice.
,ost estimate enables the management to plan for procurement of raw
materials, tools, etc., and to arrange the necessary capital, as it gives
detailed requirement.
5. G!9e -e )6es "1 es!+aes/
The four groups of estimates generally used in a manufacturing enterprise
are D
(stimates for xing the selling price of the product.
(stimates to help the contractors to submit accurate tenders for entering
into new contract.
(stimates for setting various standards for the purpose of comparison.
(stimates to forecast the progress of production and cost of the order to
keep control of any variation of the material costs.
7. (r!e -e !+6"ra#,e "1 rea0!s!, es!+aes/
Three possible estimating are $i% -ver estimation, $ii% Lnder5estimation, and
$iii% 'ealistic estimation.
Koth the over5estimation and underestimation are dangerous because both will
ultimately lead the enterprise to failure. *n over estimating, the rm will not be
able to compete with its competitors who estimated the price correctly and
losses the order to its competitors. *n case of under estimating, the rm will
face huge nancial loss which may utter failure or closure of rm. Therefore a
realistic estimation is the need of the hour for any concern.
7. (-a are -e ,"+6"#e#s "1 a 8". es!+ae/
Kefore doing the cost estimation of a product, one should know the constituents
of estimation. The total estimated cost of a product of the following cost
components. )esign cost,
i. ' M ) cost,
ii. 2abour cost,
iii. )rafting cost,
iv. Materials cost,
v. *nspection cost,
vi. ,ost of tools, !igs and xtures, and
vii. -verhead cost.
:. De3#e Des!*# C"s/
The cost of design of a. product is estimated by ascertaining the expected
time for the design of that product.
(stimated design cost 9 (stimated design time x "alary of designer per unit
time.
'0. De3#e Dra1!#* C"s
/fter the completion of the design, the drawings have to be prepared by
draftsman.
)rafting cost 9 (stimated time by draftsman in preparing drawings x "alary of
the draftsman per unit time
''. De3#e C"s "1 Resear,- a#$ De9e0"6+e# ("rk
,onsiderable time and money has to be spent on research and
development work. The research may be theoretical, experimental or
developmental research. The estimated time and the costs to be incurred on it
are decided by !udgement or past experience.
'2. De3#e "9er -ea$ ,"s
-verhead expenses are those which cannot be charged directly to a
particular product manufactured.
/ll expenses other than the direct material cost, direct labour cost, and direct
expenses are known, as overhead costs or indirect expenses. /dministrative
expenses, selling and distribution expenses are added to the overhead costs.
The overhead costs may be estimated by referring to the records of overhead
costs in similar parts produced in past.
'2. De3#e C"s!#*
,osting is the determination of an actual cost of a component after adding
diferent expenses incurred in various departments.
,osting or cost accounting may be dened as a systematic procedure for
recording accurately every item, of expenditure incurred on the manufacture of
a product by diferent sections of any manufacturing concern.
'4. (-a are a!+s "1 ,"s!#*/
The main aims of costing are
'5. (-a are -e !+6"ra#,es "1 ,"s!#*/
,osting is necessary because it provides information for D
$i% )etermining, classifying and analysing the cost and incoming to a
business rm.
$ii% )etermining the prices to be quoted to customers.
$iii% 4orming basis for managerial decisions that have to do with,
$a% Make or buy decisions,
$b% To introduce a new product or to drop an existing one, and
$c% To expand or contract the existing one.
$d% ,ost control through accumulation and utilisation of cost data.
$e% (stablishing standards for measuring e#ciency.
'7. (r!e -e ,"++"# +e-"$s "1 ,"s!#*.
6. Nob costing or order costing,
B. Katch costing,
7. .rocess costing,
G. )epartmental costing,
H. -perating cost method,
I. Lnit cost method, and
J. Multiple cost method.
'7. De3#e A". C"s!#* "r Or$er C"s!#*
This method is concerned with nding the cost of each individual !ob or
contract.
*n this method, the total cost for each order is obtained from the daily cost
sheet.
This method is adopted in !ob order industries such as ship building,
machine manufacturing, fabrication, building contracts, etc.
':. De3#e Ba,- C"s!#*
Katch costing is a form of !ob costing. *n this method, instead of costing
each batch of components separately, each batch of components is taken
together and treated as a !ob.
';. (-a )"u +ea# .) Pr",ess C"s!#*/
6. This method is employedC when a standard product is made which involves a
number of distinct processes performed in a denite sequence.
B. This method is adopted in industries such as oil rening, chemical, paper
making, paint, cement manufacturing and other similar industries.
7. This method indicates the cost of a product at diferent stages as it passes
through various operations or processes or departments.
4or example,, in the manufacture of cement, the operations of mixing, grinding
the raw material, burning, cooling and grinding the clinker are readily separable
and cost of each of these stages can be accurately calculated.
20. De3#e De6ar+e#a0 C"s!#*
6. This method is adopted in determining the cost of the output of each
department separately for the manufacture of the standardised products.
B. This method is applied in industries like steel industry, automobile industry,
etc., where each department is producing independently one or more
components.
7. *n this method, the actual expenditures of each department on various
components is entered on a separate cost sheet and the costing for each
department is separately undertaken.
2'. De3#e O6era!#* C"s Me-"$
This method is used in rms providing utility services.
(xampleD *n transport services, water works, electricity boards, railways, etc.,
cost is determined on the basis of operating expenses. That is, charges are
made as passenger per km, per m7 volume, per kilowatt5hour, tonne, etc.
22. De3#e &#! C"s Me-"$
This method is adopted by the rms, which supply a uniform product rather
than a variety of products such as mines, quarries, etc
22. De3#e Mu0!60e C"s Me-"$
This method is used in rms which manufacture variety of standardised
products, having no relation to one another in cost, quality and the type of
process, etc.
&#! 4 : COST ESTIMATION
'. (-a )"u +ea# .) +aer!a0s ,"s/
*t is the cost of materials required for the manufacturing of the product. *t
consists of
$a% )irect material cost
$b% *ndirect materials cost.
D!re, Maer!a0s C"s
*t is the cost of direct materials required for the manufacturing of the product.
I#$!re, Maer!a0 C"s
*t is the cost of material which are essentially needed in various shops for
helping the direct materials to convert into nished product.
2. (-a !s +ea# .) $!re, +aer!a0/
)irect material is one which becomes a part of the product. *t is the
material which is consumed in the, manufacturing of product. *t can be
measured and charged directly to the cost of the product.
)irect materials are also known as C.roductive materialsC. C.rocess
materialsC. C"tore materialsC.
C,onstructional materialsC. and C.rime cost materials, (xamples direct materials
are D Mild steel bar used to manufacture spindles, cast iron used to manufacture
pulleys, wood used for making a table, plastics used to make buckets, etc.
2. (-a !s +ea# .) I#$!re, Maer!a0s/
*ndirect material is the one which cannot be traced as a part of the
product. *t is the material required for maintaining and operating the plant and
equipment but cannot be a part of the product.
(xamples of indirect materials areD 1rease, lubricating oil used to lubricate the
equipments, coolants used to cool the !ob and the tool, cotton waste, kerosene,
etc.
4. H"% " $eer+!#e "1 +aer!a0s ,"s/
6. "tudy the given drawing carefully. Then breakup the product into
simple geometrical shapes such as cubes, prisms, cylinders, etc., so that
their volume can be easily calculated.
B. ,alculate the volume of each part by applying the formulae of
menstruation.
7. /dd volumes of all the parts to get the total volume of the .roduct.
G. ,alculate the weight of material by multiplying the volume,, by its
density.
H. 4inally, calculate the material cost by multiplying the cost per unit
weight to the weight of the material
5. De3#e D!re, La."ur C"s
*t is the wages paid to the direct labour.
)irect labour are the workers who actually work or process diferent
materials either manually or with the help of machines.
)irect labour cost can be charged directly to, the !ob under preparation.
)irect labour is also called as %&roductive la'our%, %(perating la'our and
C.rocess la'our%.
(xamples of direct la'our are : )or*ers or operators working on varies
machines in diferent shops like machine shop, welding shop, foundry shop,
carpentry shop, sheet metal shop, etc.
7. De3#e I#$!re, La."ur C"s
*t is the wages paid to the indirect labour.
*ndirect labours are the non productive staf who helps the productive labour in
performing their duties. *ndirect labour cost cannot be charged directly to a
particular !ob, but are charged on the number of products produced in the plant
during a particular period.
(xamples of indirect la'our are: +upervisors, inspectors, foreman, store
keepers, time keepers, watchmen, drivers, etc.
:. H"% " $eer+!#e "1 $!re, 0a."ur ,"s/
"ince the labour cost contributes a signicant amount of total cost of product
therefore the efective and e#cient determination of labour cost is essential. *n
order to calculate the labour cost, an estimator must have the knowledge of
i% all the operations involved,
ii% the tools, and
iii% the machines used for production.
Some important defnitions:
1 Cost determination: To determine the actual cost of each component and
cost of the nal product.
2 For fxing selling price: To provide information to ascertain the selling price
of the product.
3. Cost control: ,o analyse the expenses incurred in production, so that
control can be kept over them.
4. Comparison %!- estimate: ,o compare the actual cost with the estimated
cost to know whether the estimate had been realistic or not.
5. a!e or "uy decisions: ,o decide wGich of the components to be
manufactured and which parts to be purchased from outside.
#. $astage reduction: ,o help in detecting the undesirable wastages and
expenses, so that corrective measures can be taken.
%. &o suggest changes !# design: ,o suggest changes in design, if the cost of
production is higher as compared to the competing product.
'. Proft and loss: ,o locate the reasons for the increase or decrease in prots
or loss of a company.
(. Fixing the discount: ,o help in determining the discount on catalogue or
market price of the product.
1). Pricing policy: ,o help in formulating the policies for changing or prices of
the product.
11. *udget preparation: ,o help the enterprise to prepare its budget.
12 For preparing +uotations , tenders: ,o facilitate preparation of estimate
for submitting in quotations or tenders.
'2. Ou6u ar*es: To help in regulating, from time to time, the production of
a !ob so that the enterprise can earn more prots.
1-. .egal pro/isions: ,o meet certain legal and government regulations, cost
data is necessary.
15. Purchasing ne0 machines , plants: ,o provide information for economic
consideration for purchasing new machines, plants, etc.
5
-
&#!:
'. (r!e -e $e3#!!"# "1 M!s,e00a#e"us A00"%a#,es
/llowance is the additional time allowed to perform the Work over and
above the basic time.
To obtain the standard time a proper allowance must be added depending upon
the working conditions.
"tandard time 9 Kasic time : /llowances
2. 1efne Personal 2llo0ances
They are provided to the worker to full his O her personal needs such as
washing hands, going to the lavatory, getting water, tea, cofee, etc.
They are usually taken as H; for male and J; for female worker of the total
working time.
3. 1efne Fatigue 2llo0ances
They are intended to provide a workman an opportunity to recover from
physiological and psychological efects of fatigue caused by carrying out a
specied task under specied conditions.
4atigue may be due to excessive work, repeated work, poor lighting, poor
ventilation, machine noises, visual and mental strain, etc. 1enerally H; of the
total time is considered as fatigue allowance.
-. 1efne Contingency 2llo0ances
These allowances are provided for small unavoidable delays as well as for
occasional and minor extra work. "ome of these occurrences are D Tool
breakage, tool sharpening, tool replacing, lling coolant reservoirs, consulting
with foreman, daily oiling and cleaning, power failures of small duration, etc.
They are usually less than H; of the total time.
5. De3#e Pr",ess 2llo0ances
These are allowances provided to compensate for enforced idleness
during a process.
They include loss of time due to no work, power failure, faulty material, and
faulty tools or equipments.
7. De3#e I#er1ere#,e 2llo0ances
This allowance is provided when two or more work elements occur
simultaneously.
4or example, when one worker is attending more than one machine, then
interference idle time on one machine will result.
%. 1efne Special 2llo0ances
These allowances are provided for activities which are not normally a part
of the operation cycle, but they are essential for satisfactory performance of
the, work. These include the followingD
6. "tart up allowance, B. / shut down allowance,
7. / cleaning allowance, G. Tool allowance $for ad!ustment and maintenance of
tools%, and
H. ,hange over allowance.
:. De3#e D!re, EC6e#ses
)irect expenses are those which can be charged directly to a particular
!ob and are done for that specic !ob only. )irect expenses are also known as
%chargea'le e-penses%.
E-amples o. direct e-penses are
,ost of preparing designs, drawings for the manufacture of a particular product.
,ost of experimental work done specically for a particular product.
,ost of procuring or manufacturing special types of !igs and xtures for the
manufacture of a particular product.
,ost of hiring special types of patterns, moulding &asks, dies, etc.
,ost of consultancy charges for design and manufacture of a specic product.
;. De3#e I#$!re, EC6e#ses ?O9er-ea$ EC6e#ses@
*ndirect expenses are those which cannot be charged directly to a
particular product manufactured. /ll expenses other than the direct material
cost direct labour cost and direct expenses are indirect expenses. *ndirect
expenses are also known as %(verhead charges/ C-n cost and %0urden%.
'0. (-a are -e a#a0)ses use$ 1"r "9er-ea$ eC6e#ses/
$a% 4actory expenses,
$b% /dministrative expenses,
$c% "elling expenses, and
$d% )istribution expenses.
''. De3#e Fa,"r) EC6e#ses
*t includes all indirect expenses which are incurred in connection with
manufacture of the products, right from the receipt of the work order till it is
completed and ready for despatch.
4actory expenses are also known as %1actory on-cost, )or*s (n-cost, %1actory
overhead%, %)or*s overhead/ %&roduction overhead/ etc.
'2. De3#e A$+!#!sra!9e EC6e#ses
*t includes the expenses which are incurred for general administration and
management for e#cient and proper functioning of the enterprise.
/dministrative expenses are also known as %(2ce e-penses% and
%Esta'lishment on-cost 3
'2. De3#e Se00!#* EC6e#ses.
These are the expenses which are incurred for creating and enhancing the
demand for the products. *t includes the expenditures spent towards securing
orders, creating and retaining markets for the products manufactured.
E-amples o. selling e-penses are:
$i% (xpenses incurred on salaries of sales manager, clerks and attendants in the
sales department.
4ii5 "alaries, commissions and travelling expenses of sales, representatives or
agents.
$iii% ,ost of advertisement and publicity.
'4. (-a )"u +ea# .) $!sr!.u!"# EC6e#ses/
These are the expenses which are spent for the distribution of the
product. ,
*t includes the expenditure made on holding nished stock, packing cost and
dispatching them to the
customer.
E-amples o. distri'ution e-penses are:
$i% (xpenses incurred on packing and forwarding.
4ii5 "alaries of workers employed for packing the products.
$iii% "alaries of stores o#cer, store keeper and their assistants, etc.
$iv% (xpenses incurred on loading and unloading, freight, welfare and
transportation.
'5. (-a are -e ,"+6"#e#s "1 ,"s/
6. .rime cost,
B. 4actory or works cost,
7. Manufacturing or production cost,
G. Total or ultimate cost, and
H. "elling price.
'7. De3#e Pr!+e C"s
.rime cost is also called as %Direct cost. "t consists of direct material cost,
direct labour cost and direct expenses.
'7. De3#e Fa,"r) "r ("rks C"s
*t consists of prime cost and factory expenses.
4actory cost 9 .rime cost : 4actory expenses
':. De3#e Pr"$u,!"# "r Ma#u1a,ur!#* "r OD,e C"s
*t is the cost of manufacturing a product. *t includes the cost of each item
incurred in manufacturing the nished product, right from purchasing the raw
material to the point when the nished product is ready for sale. *t consists of
factory cost and administrative expenses.
Manufacturing cost 9 4actory cost : /dministrative expenses
Essay Questions:
Unit 1
1. Explain briefly the various steps involved in work study procedure and how work study
leads to higher productivity in manufacturing sectors.
2. State and explain in brief the steps involved in method study procedure.
. Explain with suitable examples of method study symbols.
!. "riefly explain three types of flow charts in method study.
#. Explain S$%& charts with suitable example.
'. (ist the &b)ectives* purpose and scope of work measurement.
+. "riefly explain time study procedure.
,. -ow to classified allowances and briefly explain.
.. /alculate the Standard time.
10. 1hat is meant by ergonomics2 3escribe the ob)ectives of the study of ergonomics.
U4$5 $$
1. Explain the different steps involved in process planning
2. Explain in detail the process planning activities.
. 1rite short notes on 6tools for developing manufacturing logic and knowledge7.
!. 1hat are the factors that influence process planning2
#. "riefly explain material selection and machine selection.
'. Explain the manual approach to process planning. 1hat are its advantages and limitation.
+. 1hat are expert system shells2
,. 1hat factor should be considered while selecting the best process planning system2
U4$5 $$$
1. (ist out the functions of cost estimating.
2. 1hat is cost estimating2 State the ob)ectives of cost estimating.
. -ow to classified cost and explain briefly.
!. (ist out the various types and sources of data re8uired by the cost estimator.
#. Explain the procedure followed for estimating the cost of an industrial product.
'. (ist out the various elements of cost. Explain each element in detail giving suitable examples.
+. 3escribe with a block diagram how the selling price of a product is arrived at2
Important Questions form 3
rd
, 4
th
and 5
th
units.