CHAPTER IX 

JOB COSTING

901. The objects of Job Costing system.—All Indian Railway Workshops, except the Chittaranjan Locomotive Works, Chittaranjan, Diesel Locomotive Works, Varanasi, and Integral Coach Factory, Perambur, Diesel Component Works, Patiala, and Rail Coach Factory Kapurthala are designed and primarily intended for the repairs and maintenance of the rolling stock and other property required for railway operation. It would ordinarily have been simple matter to analyse the total expenses of such repairs and maintenance under the detailed Heads of Accounts under which the expenses of a railway are required to be shown in its Financial Accounts. But, as in a large number of cases the repairs have to be carried out by using a multitude of spare parts and fittings manufactured in advance and kept in stock for the purpose, the cost of such spare parts and fittings has to be ascertained with a fair degree of accuracy and system of detailed job costing of such parts becomes more or less inevitable.

902. The object of job costing system in Railway Workshops is:

(a) To compare the cost of similar articles manufactured from time to time in the workshops and finding out reasons for variations in cost and 

(b) To compare the cost of articles manufactured in the workshops with those manufactured on other railways or with the market price of similar articles. 

It should meet the needs of the purpose in view if job costing is done to the extent indicated below:— 

(i) Cost of manufacture of each of the workshop manufactured stock items should be worked out in the first instance and the rates thus determined should be notified. After this has been done, job costing of each workshop manufactured stock item should, as a rule, be done only once a year subject to the exceptions specified below;

(ii) Cost of manufacture should be worked out on each and 'every occasion in respect of such of the workshop manufactured stock items as are extremely liable to defects (e.g. cylinders which have to stand pressure and slide valves which have to be machined to a clean face) in whose case the wastages and defective costs are required to be allocated to the jobs concerned instead to on cost. All such stock items should be selected by the CWE in consultation with the FA & CAO. This is considered necessary to enable the workshop authorities to know expenditure incurred on wastages and defective casting and to take remedial steps to reduce this wasteful expenditure; 

(iii) Every time the method of manufacture is changed, the cost of manufactures of the stock item involved should be worked out to arrive at the new rate under the changed method. 

903. Essential Features of Job Costing System.— The essential features of job costing system is the estimating in advance of the time that should be spent and the materials that should be used and a systematic comparison of the results of actual performance with such estimates. The institution of any detailed system of costing is, thus, contingent upon the initial fixation by suitably trained technical staff of standards of time and of materials for the items of work to be undertaken and for the prompt comparison of the standards, thus, set with the actual results obtained. In the paragraphs that follow, details are given of the system of job costing that has been found to work well in practice. The system described should be followed with minor changes here and there, which may be decided upon by the FA & CAO in consultation with the CWE to suit the local requirement. 

904. Stock Requisitions on Workshops.—In the case of items manufactured in railway workshops, the maximum and minimum stocks are fixed taking into consideration the length of time required by the workshops to deal with the requisitions placed by the Stores depots. Upon the depot's stock, of an item dropping to the level of the minimum, a requisition in Form S.1437 is required to be prepared in triplicate (vide para 1437-S) of which one copy is sent to the workshop production department. Therefore, no articles may be manufactured in railway workshops for stock purposes without a requisition for such articles being placed by the stores department and approved by the Works Manager (vide Para 1530-S). 

905. Planning.—When a new standard part is to be manufactured for stock purposes, the drawing as finally approved should be sent to the Workshop Production Office where the following procedure should be adopted by the Planner and Rate Fixer, working under the supervision of the Production Engineer. 

(1) The number of parts to be manufactured should be decided. 

(2) The drawing should be examined to see if there are any alterations required to design, in order to cheaper the cost of production. 

(3) When parts are made from castings, it should be decided whether the moulds are to be made on a Moulding Machine or by hand. 

(4) The Section and length of material, required for making one part, should be recorded (This applies to parts not made from castings).

(5) The details of various operations and types of machines, on which the parts are to be made, should be set out, estimated times being fixed for each operation on the best data either available or obtained for the purpose. 

(6) The jigs, fixtures or special tools required should be decided on. Particulars of jigs and tools required should be passed to the Jig and Tool Draughtsman, who should prepare the necessary drawings. The layout of operations explained briefly in the Code under paragraph 907, together with particulars of jigs to be used and lists of material required, should be passed on to the Progress Office.

906. The Progress Office should then issue pattern requisition and prepare process sheets described in paras 908-910. 

907. The Operation Code.—The code index shown below should be used for indicating, on the cost records, the operations involved and the machines to be used—

Index letter Code Index for Operations and Machines
Bar Lathes and Bar Automatics
B Broaching
C Copper-smith
D Drilling
E Tin-smith
F Forging
G Grinding
H Heat treatments
J Joinery work
K Boiler maker 
L Lathes
M Milling
N Horizonal and Turning
P Planting
Q Shaping
R Rolling, Shearing, Punching and Flanging
S Slotting 
T Tube Repairing
U Screw Machine
V Sawing
W Electric or Acetylene, welding & cutting
X Fitting, Assembling
Y Gear cutting
Z Polishing
( Marking off
£ Hammering Piston Rings
% Castings available
? Material available except Castings

908. Pattern Requisitions.—In the case of castings, the Pattern Requisition, for making new patterns, should be made out by the Progress Office in Form W. 908 and placed on the Pattern Shop. On completion of manufacture of the pattern, the pattern requisition should be returned to the Progress Office with the date of actual completion filled in.


Form W. 908

PATTERN REQUISITION 

Order No. S.O. 16/1 

Completion date................

Part No. Material Type of pattern Remarks
1 2 3 4
IR 40 G.M. Plate Pattern for Hydraulic Moulding Machine A 5 Make Pattern to Drawing No. 14327

Date...........................         

                                                                                                                                                 

                                                                                                                   ......................................................
                                                                                                                              for Officer-in-charge of workshop

909. Pattern Alterations.—A Pattern Alteration is an order form altering patterns and should be made out in Form W. 909 and dealt with in the same way as a pattern requisition.

Form W 909

PATTERN ALTERATION

Order No. S.O. 16/1

Part No. Drawing No. Alteration No. on Drawing  Alteration
1 2 3 4
T.W.I. 15361 2 Alter Pattern leaving Journal Radious 2 3/4" rough instead of 3" finished.

Date............................                                                                                                           

                                                                                                                       .................................................
                                                                                                                           for Officer-in-charge of Workshop

910. Process Sheet.—(a) Process Sheet in Form No. W. 910. compiled by the Planner who first enters the usual information in the different cages on the heading portion. The planner then details the operations required to manufacture components/assembly in their sequence. Against each operation, in the appropriate columns, he enters the operation number, the Shop number and the Section in which the operation is to be done and the code of the machine on which the operation will be performed. 

(b) The Operation is briefly but precisely stated. The Process Sheet is checked by the incharge, Processing Section and initialed in token of his approval. it  is, thereafter forwarded to the Rate Fixing Section. The Rate Fixer fills in the necessary information regarding PA and AT (Preparatory Allowance and Allowed Time) in the appropriate columns. The Process Sheet, after being initialled by the Chief Rate Fixer in token of his approval, moves to the Adrema Section (Production Control). Adrema Section embosses adrema plates from the Process Sheet for subsequent printing of Factory Forms. 

(c) Process Sheet is the basic record. On return from the Adrema Section, it is filed in the Planning Office. Whenever any change in the process is decided, it is noted on the back of the relevant Process Sheet indicating the authority and the reasons for the change. Each alteration is initialled by the Incharge, Processing Section in token of its record. All alterations to processes are advised to the Rate Fixing Section and the Adrema Printing Section. The Adrema Section blanks off all plates which become obsolete because of the changes and alterations and embosses new plates instead. Whenever computer is available the production documents will be printed through the computer.

Form W 910

PROCESS SHEET

Control Cork Order No. Set Nos.  DATE REQD 
LATEST STARTING DATE 
Sub Work Order                                     Name of Part                                  NQ/Set                                Batch No.
Component of                                         Drawing No.                                  Priority 
MATL. SPECN                                     MATERIAL SIZE & LENGTH/PIECE 
Route                                                     Delivery to                                      Kgs.    
Dept.                              M/C Class                      Operation                        Time                           No. off.

                                                                 P.

.............................                                     ...................................

                                                                A

................................                                ......................................... 

                                                                P.

.............................                                     ...................................

                                                                A

................................                                ......................................... 

911. To enable production control to ascertain readily at the time of  issuing production documents whether or not the cost sheet (Form W. 934) for the sub-work order concerned is required to be supplied to the job costing section for job costing purposes in accordance with the policy enunciated in para 902, the following entries should be recorded on the reverse of the process sheet.

 (Form W-910).

Record o Issue of Cost Sheet

1 2 3
Control Order No, Sub Work Order No. Date of issuing cost sheet

912. System of Work Orders.—The manufacturing activity should be suitably divided into different kinds of job orders e.g. "Manufacture of loco duplicates", "manufacture of carriage and wagon duplicates", "manufacture of miscellaneous fittings" etc. and each kind of job orders should be represented by a control work order. Separate sub-work orders under each of the control work orders should be issued by the production control (in the form of route cards explained further), for each individual work to be done and no expenditure should be incurred by the shops until a sub work order for the work concerned has been received. 

913. Revision of Control Work Order Series.—The series of the control work orders should be revised after every half year and all cases of sub-work orders remaining incomplete for more than 3 months after the old series has been revised should be listed by the job costing section and reported to the Works Manager for taking special steps for their completion. 

914. Recoupment of Stock.—All orders for newly designed parts, that have not previously been stocked, should emanate from the Progress Office. When a part becomes a stock item, the Officer-in-charge of the Workshop Stores should be made responsible for arranging for recoupment as soon as the stock reaches the fixed minimum. A requisition for such recoupment should be placed by the Stores Depot in duplicate on Form S. 1437. 

915. Issue of Production Documents.—On receipt from Stores Department of an order for requisition for manufacture of stores in form S-1437, the progress office should immediately refer to the process sheet (W. 910) and place orders direct on the shops for the manufacture of those items which have been manufactured previously. Where the item has not been manufactured before, the necessary examination should be made and if the estimated quantity Warrants it, drawings should be ordered and the full procedure gone through as for a new order. (Paragraphs 905 & 906). 

Production control will issue various production documents e.g. route cards, material requisitions, job cards/squad cards, material tags and cost sheets as described in the following paras. 

916. Route Card (Normal Production Work) W. 916.—The route card which shall be in Form W. 916 is the authority for the shops to undertake manufacture of the component/assembly for which it is issued. This is an exact replica of the Process Sheet (Form W-910) with adequate space provided for the inspection staff to record the results of inspection or checking on completion of each operation. The Route Card is issued by the Production Control (through the Progress Office) to the Shop initiating manufacture and thereafter it accompanies the material till its delivery to Stores on completion of all operations. The Stores Depot acknowledges, on the Route Card, receipt of the component/assembly sent to the Depot from the Shops. The Shop Foreman thereafter passes on the Route Card to the Progress Office. The Progress Office sorts out the Route Cards by different Control work orders after scrutinising that necessary references of material requisitions and piecework Job Cards have been entered therein and forwards the Route Cards to the Job Costing Section of the. Workshop Accounts Office. Normally, only one Route Card is issued to cover the number of components/ assembly on order against a sub-work order.

Form W 916

ROUTE CARD 

Control Work Order No.               Quantity On order               Date Reqd.                         Requisition No. shop 

                                                                                Latest starting date     Requisition Date   Forwarded  signature                             

Sub work order                              Name of Part                                            Material Issued                   

                                                                                                     date                          Signature 

Component of                 Drawing No.       Priority                                        Material Received                    

                                                                                                    date                          Signature 

Matle Specn.                   Material size and length/piece                             Posted                        

                                                                                                     date                          Signature 

Route                   Delivery to           Kgs.                            Qty.              Qty.                REJECTS                             Inspectors 

                                                                                           produced      passed        Mat.             Man.                     Signature 

Dept.             M/C Class          Operation          Time       No. off.         

                                                                 P.

.............................                                     ...................................

                                                                 A

................................                                 ......................................... 

                                                                 P.

.............................                                     ...................................

                                                                 A

................................                                 ......................................... 

Note: Operating Times and Prices given are "for each" Unless otherwise stated. 

Reverse of from w. 916

Class of Stores                                                                                                                                      P. L. No. 
Qty. Demanded                  Kgs.                          Rate                        Unit                       Value        Closing Balance 
Qty. Issued 

917. Route Card (Replacement)—Form W. 917.— This document is exactly the same as the Route Card for normal production work except that its use Is confined to replacement work and is of pink colour for easy identification. This document is issued for the manufacture of components in replacement of rejections on the authority of Inspection Form issued by the Inspector. As far as possible, replacement orders are issued along with a normal production order, so that additional preparatory time, otherwise required, is saved.

Form W. 917

ROUTE CARD REPLACEMENT WORK 

 

Control Work Order No.               Quantity On order               Date Reqd.                         Requisition No. shop 

                                                                                Latest starting date     Requisition Date   Forwarded  signature                             

Sub work order                              Name of Part                                            Material Issued                   

                                                                                                     date                          Signature 

Component of                 Drawing No.       Priority                                        Material Received                    

                                                                                                    date                          Signature 

Matle Specn.                   Material size and length/piece                             Posted                        

                                                                                                     date                          Signature 

Route                   Delivery to           Kgs.                            Qty.              Qty.                REJECTS                             Inspectors 

                                                                                           produced      passed        Mat.             Man.                        Signature 

Dept.             M/C Class          Operation          Time       No. off.         

                                                                 P.

.............................                                     ...................................

                                                                 A

................................                                 ......................................... 

                                                                 P.

.............................                                     ...................................

                                                                 A

................................                                 ......................................... 

........................................

........................................

Note: Operating times and Prices given are "for each" unless otherwise stated.

918. Job Card (Normal Production Work).—On this card is booked the time worked by workmen (other than squads) ok individual operations. Job Cards are printed by the Production Control (Adrema Section) separately for each operation indicated on the Route Card and sent direct to the Shop concerned simultaneously when the Route Card and other forms are handed over to the Stage Progress Section. When a job is taken up the operator punches 'ON' (the time of commencement) the job card with the aid of the Time Clock installed beside the Time Booth. Similarly, when the job is finished the operator punches 'OFF' time on the Job Card. The time taken by the operator for each date, the operation remained in progress, is recorded by the Time Booth Clerk in the columns provided for this purpose on the reverse of the Job Card. On completion of the operation, the Job Card is passed on to the Shop Inspector for certifying the quantity passed. On receipt back in the Time Booth the Card is passed on to the Incentive Bonus Section of the Workshop Accounts Office. 

919. Job Card (Replacement Work).—This document is exactly the same as the form of Job Card (Normal Production Work) except that its use is coo-fined to the "replacement" work and is in pink colour for easy identification. 

920. Squad Summary Card/Job Card for Squad Work (Proceeding Time Card for Squad Works).— Detailed instructions for maintaining these forms have been laid down in para 507, 508 and 513-W. 

921. Material Requisition (Form W. 921).—This form serves as an authority for the Shop Superintendent to draw material as specified therein for manufacture of components, etc. This form is printed with the aid of Adrema plates and shows all particulars as shown on the top portion of the Route Card. Necessary cages are provided on the reverse of the form for the particulars and the value of the material issued. The number of copies of Material Requisition to be prepared should be settled in consultation with the FA & CAO.

From W 921

MATERIAL REQUISITION

Control Work Order No.               Quantity On order               Date Requd.                         Requisition No. shop 

                                                                                Latest starting date     Requisition Date   Forwarded  signature                             

Sub work order                              Name of Part                                            Material Issued                   

                                                                                                     date                          Signature 

Component of                 Drawing No.       Priority                                        Material Received                    

                                                                                                    date                          Signature 

Matle Specn.                   Material size and length/piece                             Recorded                         

                                                                                                     date                          Signature 

Route                   Delivery to           Kgs.       

Issue Note No...........................                             Date .....................................................        P. L. No..............                  

Value                           Price                        Proof                        Class of Store                      Qnty.      Demanded          Qty.  Issued

Depot Closing Balance

Quantity .........................................

Date ..............................................

Signature ........................................

 

922. Material Requisition (Replacement)—Form 922  This form is the same as that of the Material Requisition for production work except that its use is contained to replacement work. This form is issued in pink Colour for easy identification

Form VV. 922

MATERIAL REQUISITION REPLACEMENT WORK

Control Work Order No.               Quantity On order               Date Requd.                         Requisition No. shop 

                                                                                Latest starting date     Requisition Date   Forwarded  signature                             

Sub work order                              Name of Part                                            Material Issued                   

                                                                                                     date                          Signature 

Component of                 Drawing No.       Priority                                        Material Received                    

                                                                                                    date                          Signature 

Matl Specn.                   Material size and length/piece                             Recorded                         

                                                                                                     date                          Signature 

Route                   Delivery to           Kgs.       

Class of Stores                                                                          P. L. No. 

                                                                                                  Kgs.           Rate           Unit              Value                    Closing 

                                                                                                                                                      Rs.    P.          Balance                            

Qty. Demanded 

Qty. Issued 


923. Material Tag (Form No. 923).—This form is also printed with the aid of the same Adrema plates with which the top portion of the Route Card is printed. The form remains tagged with the material right from the time the raw material is drawn till the component/assembly is delivered to the Stores Department so as to identify the sub-work order to which it relates.

Form W. 923

MATERIAL TAG

Control Work Order No.               Quantity On order               Date Requd.    THIS LABLE STAY WITH WORK 

Sub work order                              Name of Part                    

Component of                 Drawing No.       Priority                

Matl Specn.                   Material size and length/piece         

Route                   Delivery to           Kgs.       

Receipt Note No.................................................... Dated ......................................................................
Value                       Price         Proof                      Class of Store                              Qnty. Ordered              Qnty. Recd.

Depot Closing Balance

Quantity .........................................

Date ..............................................

Signature ........................................

924. Material Tag (Replacement)—Form No. 924.—This form is the same as that of the Material Tag for ordinary production work except that its use is confined to replacement work. This form is issued in pink colour for easy identification.

Form W 924

MATERIAL TAG
REPLACEMENT WORK

Control Work Order No.               Quantity On order               Date Requd                                    

                                                                                                   LATEST STARTING DATE 

Sub work order                              Name of Part                          THIS LABLE MUST STAY WITH WORK

Component of                 Drawing No.                       Priority                

Matl Specn.                   Material size and length/piece         

Route                   Delivery to           Kgs.       


925. Rectification and Replacement work order.— Inspection forms (W. 925 are issued in block pads to the Shop Inspectors and are used as follows: — 

(i) In the case of jobs requiring rectification, the Inspector prepares this form in 3 copies. One copy is retained as the Inspector's copy and one handed over to the Progress as an advance intimation. The third copy is passed on by the Inspector to the Shop Superintendent who after his signature and counter-signature of the officer-in-charge of workshop makes it over to the Shop Progress for arranging necessary rectification Fixer will prepare a Job card giving details of the operation to be performed, the time allowed for the same and the Shop oncost work order to which the cost of rectification is chargeable. 

(ii) In the case of rejections requiring replacement, the Inspector makes 5 copies of this form, One copy is retained by the Inspector and one copy is passed on to the Progress as an advance intimation. The 3 copies are passed on to the Shop Superintendent who, after his signature and countersignature of the officer-in-charge of workshop, returns 2 copies to the Progress retaining one copy. The Shop Superintendent also indicates reference to the relevant Advice Note on each of the 3 copies under which the rejected material was returned to the Stores as scrap. 

The Shop Progress forwards one copy received from Shop Foreman to the Production Control Office for the issue of a replacement work order and one copy to the Job Costing Section of the WAO's Office. The copy retained by the Shop Foreman is sent to the Stores Depot along with the necessary advice Note and the rejected material. The Stores Deptt. takes necessary action for the replacement of materials from the supplying firm in case the rejection is due to faulty materials supplied by the firm. 

The cost of replacement of rejected materials and of rectification of deficient items manufactured in shops are debited to the over heads of the shops responsible for the rejection and deficiency.
                                                                                                                                                                              

FORM W-925

INSPECTION FORM

Control Order No.                           Sub-work No.                           Drawing No.                                                   Name of Parts.               
.
Quantity on order           Quantity Inspected       Quantity Passed          Quantity rejected     Quantity or stage No.     Source of supply
.
Scrapped in shop              Fault made by                Qty. to be replaced         Chargeable work order               Reasons for rejections 
.
Signature of Inspector and date.                   Signature of Foreman & date                   Reject & Replace/Rectify 

                                                                                                                                    Works Manager 

(1) One copy to be retained by Inspection; (2) One copy to Production control; (3) One copy to accounts; (4) One copy to the Shop Superintendent for disposal of the rejected material (5) One copy to the DGOS, for getting replacement of the material from the supplying firms in case the rejection is due to faulty material supplied by the firm. 

926. Advice Note of Returned Stores (W. 926).— The instructions contained in Para 1539-S should be followed.

Form W 926

ADVICE NOTE OF RETURNED STORES
REJECTED ( OTHER STORES 

Control Work order No.         Sub-work order No.                Unit                        Wt. Returned kgs.     Wt. Regd. in word kgs. 
Description                              Allocation  

P. L. No. & CLASS                           Rate                                                                                VALUE 

                                                                                                                                        Rs.                       P. 

MATERIAL RETURNED                           MATERIAL RECEIVED IN WARD                                     POSTED 
Date                                   Signature                        Date                                    Signature            Date                Signature 

927. Request for Investigation, (W. 927) . - This form is used whenever the Shop Superintendent desires to have investigation carried out in respect of any process or time laid down in the Process Sheet. He submits 2 copies of the form to the Processing/ Rate Fixing Section depending upon the nature of investigation required. The forms are required to be signed by the Shop Superintendent personally. Investigation, as required, is undertaken by the Planner/Rate Fixer and the result recorded on the 2 copies. One of the copies is forwarded to the Shop Superintendent and the other retained in the office for record.

Form W. 927


REQUEST FOR INVESTIGATION

Control/Work ,                To: Processing/Rate fixing Section
Order No........................Having thoroughly investigated this job I am satisfied that the process/time is inadequate for the following reasons:—

Sub-work
Order No........................
Part Name......................     ..........................................................
Drawing No ....................     .........................................................
Deptt.............................     ........................................................
Section...........................    .........................................................
Operation .......................    ........................................................
Clock No.........................    Date..........Shop Superintendent's Signature.
Operation ................ .....     Result of Investigation  .....................................................................................................
                                         Date Planner's Signature Rate Fixer's Signature

928. Reservation of Materials.—The Stores Officer, Incharge of the Stores Depot attached to the Workshop should have arrangements for reserving raw and basic materials for the work of manufacture to be done in the Workshop before the order is actually released by the Production control. After the production documents have been printed and got ready for release, the Material Tag together with the Material Requisition, is sent by the Production Control to the Section reserving the material in the Stores Depot for certifying the availability and reserving the quantity of raw materials. The quantity required is posted in the Reservation Card of the relevant PL. No. maintained in the Reservation Section and the Material Tag as also the Material Requisition are returned with suitable endorsement thereon. In cases where the specified raw material is not available, alternatives are offered by the Stores Department and, if acceptable, the Production Control carries out necessary corrections in the Material Tag, in the Material Requisition and in the Route Card. 

929. Consumable Stores for Repairs and Maintenance and Other Stores for Foundries.—Consumable stores for repairs and maintenance and metal and other stores for foundries are drawn on combined "Requisition and Issue Notes" in Form S-1523 which is prepared by the Shop Superintendent concerned as per the procedure prescribed in para 1523-S. 

930. Ferrous and Non-ferrous Casting Produced in Foundries.—The cost of ferrous and non-ferrous castings produced in Foundry Shops is ascertained from the monthly out-turn statements as described in Chapter X-W. 

931. Accounted of Non-ferrous Borings.—Non-ferrous castings Brass and White Metal Foundry are passed on to the machine Shops for machining. Borings arising out of machine operations are returned by the Machine Shops to the Stores Department on Advice Note of returned stores. Credit for non-ferrous borings arising in machine shop be afforded to the "Metal and Melting work orders of the brass foundry on pre-determined percentage which should be fixed on the basis of the ratio of total borings arising for a year to the total tonnage of machine able castings made during the year, by giving contra-debit to a standing work order. The percentage should be fixed after careful examination of the pattern of type of castings made and the amount of boring resulting there from each year. Satisfactory arrangements .should be made for watching the credit for the borings returned to the Stores to clear the contra-debit afforded initially to a standing work order by credit to "metal and melting work orders. Any balance under the standing work order representing the variations between the estimated credit and actual credit received which should not be very substantial if the percentage has been fixed on a realistic basis, should be treated us "Shop on cost" of the machine shop. 

Where, however, satisfactory arrangements exist for affording credit to the individual casting work orders on actual basis the same procedure should continue provided the administration ensures that necessary credit for borings are obtained from stores without delay every month and that work orders are not kept open for extended period for want of necessary credit for borings.

932. Collection of Expenses (Production Documents).—As already stated in the foregoing paragraphs, Route Cards together with Material Requisitions, job Cards/Squad Cards and Material Tags are issued by the Production Control to the Shops through the Stage Progressmen. These production documents constitute authority for the Shops to undertake the work as per processes and instructions laid down therein. All these documents are printed with the aid of the adrema plates or computer and contain ail necessary information which enables the Stores Department to regulate issue of raw materials and receipt back of the manufactured items and post the transactions in the Numerical Ledgers. It enables the Stores Accounts Office to post the transactions, in the Priced Ledgers/Transaction Register and include them into accounts. It also enables the Job Costing Section to compile cost accounts. The Production documents will be printed through the computer wherever it is available. 

933. booking of Expenditure and Accountal of Credit,- (a) Material Requisitions (for the drawal of raw materials) and the Combined form of Requisition-cum-issue Notes (for drawal of metal and other stores for foundries) are priced by the Stores Accounts and posted in the Priced Ledgers/Transaction Register as issues. Material Tags for return of workshop manufactured items are also received in the Stores Accounts Office and priced at unified nomenclature list rates fixed every year and posted in the Priced Ledgers/Transaction Resistors as receipts. 

(b) Job Cards/Squad Cards are used for booking of time spent by workers on jobs. The Job Cards/Squad Cards are punched 'ON' and 'OFF with the aid of Time Recording Clocks when operations are commenced and completed respectively. The total time taken for the operation is ascertained from the punched time on the job Cards and recorded in the relevant cages in the Job Cards by the Time Booth Clerks. The "average rate" per hour for costing purpose is quoted on the Job Cards/Squad Cards by the Time Booth Clerks. Later, "'total time allowed" as also the "time saved/time lost" are worked out in the Incentive Bonus Section. The "'time taken ' is evaluated at the average rate for the purpose of costing and recorded on the Job Cards, if the labour tabulations are prepared with the aid of the accounting machine; otherwise the evaluation of the "time taken" is recorded in the relevant column of the form of Tally Sheet (W-518). 

(c) In addition to the expenditure for employment of direct labour and drawal of material, the Workshops will receive credit from the Stores Department on account of the scrap returned on Advice Notes and for supply of articles manufactured in Workshops on the basis of the current unified nomenclature list rates notified by the Workshops Accounts Officer in consultation with the Works Manager. 

934. Cost Sheet (W-934).-The cost should cover the whole field of record of productive activity. The entire progress of a production order in the way of consumption of material and the charging of labour and of on cost should be reflected on the cost sheet. the cost of each job should be ascertained through the cost sheet which should be opened by the production control at the time of issuing production documents. The cost sheet should be supplied to the job costing section by the WAO's Office only when the cost of manufacture for a sub work order needs to be worked out in accordance with the procedure emancipated in para 902. 

Form W-934

COST SHEET
(for articles manufactured for stock)

Railway ...............................
Workshop ............................
Control W. O. No...................
Sub Work Order No................

Shop No.           Month        Labour Hours   Labour Cost                 Material Cost            On Cost           Total cost Col 4 to Col. 8

                                                                      Direct Wages    Piece Work profit            Labour    Material 

1                          2                 3                          4           5                       6                      7              8                 9
 

.     

Total 

Credit received for        Difference between                                            Unit cost of Manufacture                                          

supply of articles to       the actual total cost       Labour           Material                              On Cost              Total              

 stores                          and the credit recd.

                                    col 9 minus col 10

10                                       11                           12                            13                           14                             15
 

.

Total 

Unit Cost @ approved Cost Card Posted 

Section officer (Accounts) W.A.O

935. Completion Certificate.—As and when a sub work order for which cost is required to be worked out is completed, the completion thereof will be advised by the Production Department by submission of the connected route card to the job costing section of the workshop Accounts Office. Receipt of route card, will therefore, serve as a signal for undertaking job costing of the sub work order concerned. 

936. Submission of route cards to the job costing Section - On completion of an operation, the materials are inspected by the Inspector and the quantity passed and rejected recorded on the Route Card in the relevant columns. The passed quantity is delivered to the Stores Department with the Material Tag. The representative of the Stores Department acknowledges receipt of the passed quantity by suitable endorsement on the Route Cards. The Route Cards are thereafter passed on by the Shop Progress men to the Progress Office where the fact of completion is noted. The Route Cards are thereafter scrutinised by the respective Stage Progress men to see that the Piece work Job Cards number has been indicated therein against each operation in token of the booking of labour charges and that the Issue Note number and quantity for the material drawn has been recorded. The Route Cards are then sent to the Job Costing Section separately for each control work order under cover of a list showing the sub-work orders numbers, etc. 

937. Record of Route Cards.- Route Cards serve the purpose of a completion certificate in respect of individual sub work orders. A progressive record of the receipt of route cards, their scrutiny and costing of relevant cost sheets, point referred to the Works Manager for the clarification and final disposal should be maintained in the job costing section so as to be readily in a position to ascertain the movement of the cost sheets. 

938. Scrutiny of route cards and cost sheets.—(1) On receipt of Route Cards from the Progress Office, which signifies completion of the sub-work orders, the relevant Cost Sheets are connected and scrutinised to see that— 

(i) Labour charges have been booked by the Shops required to perform operations as mentioned in the Route Cards; 

(ii) material charges, wherever necessary, have been booked by the Shop processing the first operation. Adjustment for the off-cuts or scrap, wherever utilised, has been made where required; 

(iii) labour and material charges have not been booked by Shops not mentioned in the Route cards: 

(iv) the quantity pissed by the Inspector in the final operation has been acknowledged by the Stores Depot by suitable endorsement on the Route Card and that necessary credit for the manufactured articles supplied to the Stores Department has been afforded by the Stores Accounts Office; and 

(v) There are no discrepancies between the number of articles actually completed and sent to Stores and that for which charges have been booked on the sub-work order and that the weight of raw material obtained for the sub-work, order is not out of proportion to the weight of the articles sent to Stores. 

(2) Any lapse in the booking of labour and /or material charges is first investigated in the Job Costing Section itself with reference to the Job Cards numbers and the issue Note Number, etc. quoted on the Route Card and if a clarification is still required a reference is made to the Works Manager to clear the objection. These objections are pursued till they are finally settled. 

939. Collection of Cost in the Workshop General - Register. The labour charges, the stores and miscellaneous charges, the oncost charges, as well as the credit for each month relating to each control work order should be transferred to the Workshop General Register (Form W-1201) and posted under the relevant control work order Shop by Shop in accordance with procedure prescribed in chapter XII-W. 

940. Collection of Cost under each Sub-work Order - on Cost Sheet.-(i) All the expenditure and the credit which has been transferred to the various control work orders in the Workshop General Register will be posted in respect of each sub work order relating to a control work order on the respective cost sheets received from the production control. 

(ii) The labour charges will be collected from tally sheets (W-518). The piece work profits will be collected from incentive bonus allocation statement (W-514). The "labour hours" to be posted in the cost sheet should be collected each month in respect of each shop from the tally sheets.

(iii) The stores charges will be collected from the material requisitions, advice notes and write back memo and other miscellaneous adjustments vouchers for which debit has been raised against workshop accounts through stores summaries. 

(iv) On cost charges will be added on the basis of current pre-determined on cost rates. 

(v) Expenditure incurred against various sub-work orders passing through the foundries should be collected from the foundry out turn statement for the month. 

(vi) The credit in respect of workshop manufactured articles supplied by the workshop to the Stores Department will be collected from the forms of material tags or from material supplied to stores by workshop form S-1531 as the case may be. 

941. Final Costing.—As soon as a sub-work order has been completed and its completion has been notified by the production department by submitting the connected completed route card to the job costing section, and after the job costing section has satisfied itself that the expenditure booked on the cost sheet as well as the credit received from the stores department have been completely and correctly accounted for, the total expenditure incurred from the commencement of the job till its completion should be totalled up and the unit cost of manufacture worked out by dividing the total expenditure as appearing on the cost sheet by the number of articles delivered to the Stores Department for which the credit has been afforded by that department to the workshops. The unit rates so worked out should be approved of by the Workshop Accounts Officer and posted in the relevant cost card maintained in the job costing section. 

942. Undercharge/Overcharge manufacture.—(i) In respect of all such constable sub-work orders for which cost sheets have been finalised during the month, the difference between the expenditure actually incurred and the credit in respect of the workshop manufactured articles afforded by the Stores Department should be listed and the resultant difference credit or the debit as the case may be should be adjusted as "undercharges/overcharges manufacture" in the workshop suspense account for the month in hand. 

(ii) The amount of "under/over charges manufacture" in respect of non-constable sub-work orders under the half yearly control work order series should however be adjusted against final heads of abstract 'C, 'D' and 'E' on completion of the sub work orders after ensuring that debits and credits against the relevant control series have been completely and correctly accounted for. 

943. Reconciliation of Cost Sheets with Financial Accounts.—There should be monthly reconciliation of the total debits (labour, material and oncost) booked against all the sub-work orders (under each control work order) in the Cost Sheets during the month with those booked at one place under the respective control work orders in Workshop General Register. Similarly, the total credits afforded by the Stores Department for the supply of Workshop manufactured articles by the Workshops to the Stores Depots appearing on all the sub-work orders (under a control work order) in the Cost Sheets during the month should be reconciled with those appearing at one place under the respective control work order in the Workshop General Register. Differences, if any, should be fully investigated and all discrepancies set right before the final cost of the job is worked out and posted in the Cost Card. 

Monthly reconciliation of cost sheets with Financial Accounts will be confined to the months during which entire expenditure booked under control work orders is required to be posted on the relevant cost sheets opened there under for job costing of all workshop manufactured stock items for the first time. 

944. Cost Cards.—(i) From the information available in the Route Card and the Cost Sheet particulars of the manufacture of articles should be posted by the Job Costing Section in the Cost Cards to be maintained in Form W-944. This card would enable the Workshop authorities to see if there is any improvement as successive orders pass through the Workshops. These cards should be used for fixing and revising prices of the Workshop manufactured articles. 

(ii) The variations in cost or man-hours per unit from work order to work order, if significant, should be immediately investigated with reference to the operations laid down in the Route Cards, vouchers for labour and material charges, man-hours and average rates for labour, the quantity, specifications and rates for material utilised, etc. If the investigators do not reveal the causes for variations which can be considered as reasonable, satisfactory clarification should be obtained from the Officer in-charge of workshops for further scrutiny.


Form W. 944

.............Railway
COST CARD


UNL No. ...............................                   Description............................                   Drawing No.............................

Date of           Number       Order No.      Estimated labour      Estimated labour     Estimated                   Estimated 

Manufacture        ordered                                    time                             Cost            Material quantity      Cost

1                          2                 3                          4           5                       6                      7              8                 9
 

.     

Actual                                                 Total cost                                                            Labour time per unit 

Material        Labour         on cost          Total cost           Estimated          Time allowed      Time taken     Percentage       Remarks  

Cost              Cost                                                                  Actual                                                                  Wastage 

8                       9                 10                 11                         12                       13                       14              15                   16
 


945. Maintenance of cost cards.—(A) The difference between estimated and actual cost should be analysed for taking remedial measures. The following guidelines should be kept in view while filling in the necessary information in the various columns of file cost card in respect of the items costing Rs. 500 or more each. 

(i) Estimated labour time (Col. 4).—The information in regard to the man-hours per unit at 80 rating with the break up of the same category-wise, shop-wise will be worked out by the production control organisation with reference to the muster process sheets in respect of each job order which is to be job coasted and supplied to the costing section of the Accounts Office simultaneously with the releasing of the production documents to the shops for the manufacture of the components. 

(ii) Estimated labour cost (Col 5).—On the basis of the information furnished by the production control in, Column 4 as stated above, the costing section should evaluate the labour cost at the labour hourly rates applicable on the date on which the production order was issued by - the production control organization. 

(iii) P. W. Bonus of Direct Workers. The estimated P. W. Bonus payable to direct workers for the time saved at 80 rating should be worked out by the Costing Section and posted in the Cost Card in Column 5 below "the estimated labour cost"; similarly the actual bonus paid to the direct workers should be posted in column 9 below the actual labour cost. 

(iv) Estimated material quantity (Col. 6).—The production control organisation should furnish to the costing section their required information on the basis of the specification given on the muster process sheet for each category of material specified therein. 

(v) Estimated material cost (Col. 7):-Production control organisation will evaluate for each category of material the cost at the current unified nomenclature list rate for the estimated quantity as furnished for Column 6 to the Accounts Office. The details of the estimated material cost so evaluated should be furnished to the Accounts Office for posting the same in this column. 

(vi.) Information in respect of the remaining columns of the cost card viz. (i), (ii), (iii) and (viii) to (xv) should be collected from the relevant records and posted on the cost card by the Costing Section. 

(B) As regards items costing less than Rs. 500 each the cost card should continue to be maintained without the information in Columns 4 to 7, column 12 in respect of Estimated Cost and Column 13. The variation in cost or man-hours per unit from work order to work order, if significant, should be investigated before revising the issue rates for shop manufactured items.

946. Issue rates for workshop manufactured items.—The issue rates for workshop manufactured items should be fixed  according to the unified nomenclature list rates in force in-each year and should not be altered for a period of 12-months except in special circumstances (when the unit cost jumps up owing to sudden rise/Jail in the cost of raw materials or when the method of manufacture of any stock item is changed), and at the instance of workshop Accounts Officer, in consultation with his Works Manager. 

947. Review Of unified nomenclature list rates for Workshop manufactured items.—The unified nomenclature list rates for items manufactured in Railway Workshops should be reviewed regularly in rotation from month to month in such a manner that the U.N. list rate of each item comes under review once every 12 months for rate revision wherever considered/ "called for in view of the latest cost of manufacture. The revised price list rates and the date from which the revised rates should take effect (preferably the 1st of a future month) should be intimated by the Job Costing Section to the Works Manager, the C.M.E. the Controller of Stores and the Stores Accounts Officer. 

948. Revaluation of balances, in transaction register in the workshop manufactured items.—On the unified 'nomenclature list rates being revised by the Works Manager and intimated through the workshop Accounts Officer to the Stores Accounts Office, the balances of stores in the transaction register on the date of coming into force of the revised unified nomenclature list rates should be revalued at such rates which will prevail as the issue rates for the item till the rate is revised again. The differences arising out of such revaluation should be debited or credited to .stock adjustment account Part II being collected under a separate heading titled "Adjustment on account of Revision of rates for the Workshop manufactured items"'. The total amount thus accumulating under this head each half year should be cleared finally by debit or minus debit to the heads of Accounts in Abstract C, D and E in consultation with the Mechanical Department. The general rule in paragraph 210-S against writing up of the value of stores in the transaction register does not apply to items of stores manufactured in workshops as the adjustments between actual and approximate costs of workshop manufactured items and on account of revaluation of stocks of such items both go to the same heads of revenue account.

*************--------------------------*********************