COSTING IN RAILWAY WORKSHOPS

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COSTING IN RAILWAY WORKSHOPS

• RAMANAND BHAGAT
• IRAS (P)

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The salient information generated is

• Average unit cost of POH, IOH, SR for each class
  of locomotive.
• Cost of repairs to individual locomotive, with
  details of repair activities carried out viz.
  normal overhauling (Group 'A'), unscheduled
  repairs (Group 'B') and high value items utilised
  on each locomotive ( Group 'C').
• Average unit cost of overhauling for each
  identified major assembly.
• Average unit cost of all major unscheduled repair
  activities.

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CONTD

• Average unit cost of each of the major
  modifications undertaken.
• Cost of high value items used on individual
  locomotives, cost centre wise.
• Cost of high value items used on individual
  locomotives, cost centre wise.

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PROCESS

• Work Order
• It is the authority under which Work is
  undertaken in the workshop.The workorder has 8
  digits, the last 3 digits denote the cost centre
  number applicable to the individual repair
  activity.
•  0 (indicates Rly No.)
• 0 0 (indicates shop No.)
• 0 (indicates Demand No)
• 0 (indicates Minor Head of the demand)
• 0 0 0 (indicate cost centre No).

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Cost Centre

• Cost centre is a section or a group thereof
  where a specific repair activity is undertaken.
  Each cost centre is identified by a cost centre
  number. Each Cost Centre will have a fixed work
  order number.
• Elements of cost of repair activity
• Basic cost element (Group-A Cost Centres.)
• Variable cost element ( Group B Cost Centres)
• Cost of high value items (Group C Cost Centres)

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• Time Book
• Time Book is filled up daily by the supervisor of
  individual section/cost centre indicating the
  number of hours, which each worker has been
  utilised during the day, on different work
  orders.
• Time Sheet
• Time sheet is prepared by the Time Office from
  Time Book and is reconciled with gate attendance
  card (GA Card). It indicates the ticket number
  and hours worked daily, total hours for the
  month, Hourly Rate of the worker and the amount.

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• Outturn
• Outturn represents the quantum of work/repair
  activity done during a month .
• Shop Outturn
• Section outturn
• Equated Outturn

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• Labour Sub-Ledger
• Labour Sub-ledger consolidates the labour charges
  against each work order, which in the revised
  costing system incorporates the respective cost
  centre number.
• Stores Sub Ledger
• Stores sub ledger consolidates total charges on
  account of stores (stock and non-stock) against
  each cost centre, work-order wise. In such cases
  where debit for non-stock item is not received in
  time, the cost is to be charged off on last rates
  available and final adjustment made later in the
  month in which debit is received.

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• Workshop General Register (WGR)
• Workshop General Register is the basic document
  in which total expenditure of labour, stores and
  on-cost expenditure are consolidated cost
  centre/work order wise. The revised costing
  system makes no change in the format of existing
  WGR.
• Outturn statement
• The outturn statement showing total debits for
  the.month under labour, stores and on-cost
  charges should be prepared in respect of each
  work order/cost centre by the accounts office.
  These are prepared in two

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• Part I Shows the outlay on completed and turned
  out locomotives/items of work which is adjustable
  to final heads of account during the month. "
• Part II Shows the outlay on locomotives/works
  in progress and completed works awaiting
  adjustment

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• Average Hourly Rate
• Average unit Cost
• Average unit cost of a cost centre is arrived at
  by dividing the total expenditure of the cost
  centre by its equated output.

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JOB COSTING IN RAILWAY WORKSHOPS FOR WORKSHOP
MANUFACTURED ITEMS

• Objective
• To compare the costs of similar articles
  manufactured from time to time in the workshops
  and finding out reasons for variation in the
  Workshops with those manufactured in other
  railways or with the market price of similar
  articles.
• Essential Feature
• It is the estimating in advance of the time that
  should be spent and the materials that should be
  used and the systematic comparison of the results
  of actual performance with such estimates.

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Process Involved

• Progress Sheet
• Route Card
• Job Card
• Material requisition
• Material tag

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COLLECTION OF EXPENSES AND FIXATION OF THE UNIT
COST OF MANUFACTURE OF WORKSHOP MANUFACTURED
ITEMS.

• Cost Sheet
• Collection of cost in the Workshop General
  Register.
• Works Managers Cost Card.

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THANK YOU