2/27/2017

COST ESTIMATION IN FOUNDRY SHOP

ESTIMATION OF COST OF CASTINGS

The total cost of manufacturing a component consists of

following elements :

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Material Cost
A. Cost of material required for casting is calculated as follows :
i. From the component drawing, calculate the volume of
material required for casting.
ii. This volume multiplied by density of material gives the
net weight of the casting.
iii. Add the weight of process scrap i.e. weight of runners,
gates and risers and other material consumed as a part
of process in getting the casting.
iv. Add the allowance for metal loss in oxidation in furnace,
in cutting the gates and runners and over runs etc.
v. Multiply the total weight by cost per unit weight of the
material used.
vi. Subtract the value of scarp return from the amount
obtained in step (iv), to get the direct material cost.

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Material Cost
B. In addition to the direct material, various other materials are
used in the process of manufacture of a casting.

i. Materials required in melting the metal, i.e., coal,

limestone and other fluxes etc. The cost of these materials
is calculated by tabulating the value of material used on
per tonne basis and then apportioned on each item.
ii. Material used in core shop for making the cores, i.e., oils,
binders and refractories etc. The cost of core materials is
calculated depending upon the core size and method of
making the core. Similarly the cost of moulding sand
ingredients is also calculated. The expenditure made on
these materials is generally expressed as per kg of casting
weight and is covered under overhead costs.

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Labour Cost

Labour is involved at various stages in a foundry shop.

Broadly it is divided into two categories :

i. The cost of labour involved in making the cores,

baking of cores and moulds is based on the time
taken for making various moulds and cores.
ii. The cost of labour involved in firing the furnace,
melting and pouring of the metal. Cleaning of
castings, fettling, painting of castings etc., is generally
calculated on the basis of per kg of cast weight.

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Direct Other Expenses

Direct expenses include the expenditure incurred on

patterns, core boxes, cost of using machines and other
items which can be directly identified with a particular
product.

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Overhead Expenses

The overheads consist of the salary and wages of

supervisory staff, pattern shop staff and inspection staff,
administrative expenses, water and electricity charges etc.
The overheads are generally expressed as percentage of
labour charges.

The cost of a cast component is calculated by adding the

above constituents.

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Example

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Calculate the total cost of CI (Cast Iron) cap , from the

following data :

A Cost of molten iron at Rp 6000 per Kg

cupola spout
B Process scrap 17% net wt casting
C Process scrap return value Rp 1000 per Kg
D Administrative overhead Rp 400 x per kg of metal
charges poured
E Density of material used 7,2 gr/cm3

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The other expenditure details are :

Shop
Labour
overhead
Time per charges
Process s (Rp)
piece (Rp) per
per hr
hr

Moulding and
F 10 min 6000 6000
pouring
Casting removal,
G 4 min 2000 6000
gate cutting etc.
Fettling and
H 6 min 2000 6000
inspection
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Solution : To calculate material cost

I Volume of the component Cm3

J Net weight of the casting IxE Kg
K Process scrap JxB Kg
L Metal required per piece J+K Kg
M Material cost/piece LXA Rp/Kg
N Process return KxC Rp
O Net material cost per piece M–N Rp

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Calculate Labour Cost and Overheads

Process Time per Labour Shop
piece charges per overheads
piece (Rp) per piece
(Rp)
Moulding
10 min 10/60 x 6000 6000 x 10/60
and pouring
Casting
removal,
4 min 4/60 x 2000 6000 x 4 / 60
gate cutting
etc.
Fettling and
6 min 6/60 x 2000 6000 x 6 /60
inspection
Total P Q
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R Labour charges P
S Shop overheads Q
T Administrative overheads D
U Total cost per piece O+R+S+T

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