Self-Employment

&
Entrepreneurship
Development
(3351906)

Practical: 3 Identification of self-employment areas. (Market Survey)

Market Survey

Company Name: Arvind Industries

Company’s Product: Gear Manufacturing

Location: Dudheswar road

Manufacturing Process:

o Raw Material (Round Bar)

o Cutting
o Turning (Lathe Machine)
o Hobbing Process
o Finishing (Grinding)

Manufacturing Costing:

Manufacturing cost = Material cost + Process cost + Factory Overhead

1) Material cost:

Gear Dimensions (Raw material):

D = 200mm

T = 50mm

Material = Alloy steel

Price = Rs. 57/kg

Density = 7.85gm/cm3

Volume = ∏r2h

= ∏×100×100×50
 = 1570796.32mm3

= 1570.79cm3

Weight = Volume × Density

= 1570.79 × 7.85

= 12330.70gm

= 12.33kg

Per piece material price = 12.33 × 57

∴ Material cost = 702.81 Rs.

2) Process Cost:

Cutting machine - 3.50 lakh

Lathe machine - 1.50 lakh

Hobbing machine - 9.50 lakh

Drilling machine - 70,000

Surface grinding - 3.54 lakh

Cylinder Grinding - 75,000

Testing Machine - 4.28 lakh

Total = 23.77lakh

Average Machine Life 7 years

Per year = 23.77/7

= 3.39 lakh

Working days = 365 – [ 52(Sunday) + 27(Festival)]

= 365 – 79

= 286

Machine Cost per day = 3.39/286

= 1185.31 Rs.

Profile grinding Rent = 600 Rs. Per hour

= 600 × 8

=4800 Rs. Per day

8 machine costs = 4800 + 1185.31

 = 5985.31

Per piece machine cost

Suppose 100 gear made in 1 day then,

= 5985.31/100

∴ Process cost = 59.85 Rs.

3) Factory overhead

It consists of = labour cost + land cost + electricity cost + other cost

Labour cost

Suppose 16 labour works in industry and average salary is 20,000 Rs.

= 20,000 × 16

3,20,000 Rs. Per month

Per day labour cost = 320000/25

= 12,800 Rs. Per day

Per piece labour cost = 12,800/100

= 128 Rs.

Land for rent = 60,000 Rs. / Month

Per day = 60,000/25

= 2400 Rs. Per day

Per piece land cost = 2400/100

= 24 Rs.

Electricity cost

Monthly electric bill = 43,300 Rs.

Electric bill per day = 1731.84 Rs.

Per piece electric bill = 1731.84/100

= 17.31 Rs.

Other cost
Material supply per day = 1000 Rs.

Round bar cutting cutter = 500 Rs.

Hobbing machine = 4133 Rs.

Grinding wheel = 800 Rs.

Drill = 750 Rs.

Total = 7,183 Rs.

Per piece = 7,183/100

= 71.83 Rs.

Factory overhead = labour cost + land cost + electricity cost + other cost

= 128 + 24 + 17.31 + 71.83 = 241.14 Rs.

∴ Manufacturing cost = Material cost + Process cost + Factory overhead

= 702.81 + 59.85 + 241.14

= 1003.8 Rs.