Saturday, October 22, 2022
Please attend MCQ Test (CBT mode) on Workshop Accounts - Rolling Stock Code at 8 PM on 22nd October, 2022 (Saturday)
Friday, November 6, 2020
On cost charges in Workshops
The expenditure which cannot be directly allocated to the product or service and
can only be apportioned on some logical basis
Another name is Overheads
On Cost charges - 3 types
Shop On Cost (SOC) - comprising Labor and Materials
General On Cost (GOC - comprising Labor and Materials
Administrative On Costs (AOC) . Also called as Proforma On Cost (POC)
On costs are always expressed and levied as a percentage of Direct labour including incentive Bonus and overtime paid in that work order.
Annual Budgeting is required.
Shop On cost and General On cost need to be charged to all types of works executed at the workshop irrespective of their nature.
A review of efficiency of overhead percentages should be made quarterly with reference to total actual expenditure incurred vis-à-vis that recovered at the overhead percentages.
A comparison of these actual overheads with recoveries made through estimated percentages will reflect over/under charges for the month under different overheads
If these are found unduly large, the percentages are revised without waiting for the Annual On cost Budget so as to minimize the difference between the actual and the predetermined percentage.
The Under / Over charges at the end of the year should be less than 5% so as to make On cost budget realistic and the same must be cleared through the final Heads before the end of the Financial Year.
Senior scale/JA grade executive officer in charge of Production Control Organization should review the trend of on-cost budget every quarter, jointly with workshop Accounts Officer
The outcome of this review in the form of management summary shall bring to the knowledge of Chief Workshop Manager for the management review and ‘on-cost’ control exercise
Shop On Cost (SOC)
All on cost incurred within a Shop or Section. Examples are
Wages, overtime etc. of Shop apprentices, JEs, unskilled labour.
Leave pay, idle time, sick hurt and holiday pay, travelling allowances and arrear pay, and pay allowed to men on volunteer duty or part-taking in sports.
Shop scrap (credit)
Stationery and forms
Defective and spoilt work, in the case of experimental work
Power chargers, whether electric pneumatic, gas or hydraulic which can be directly allocated to shops.
Wages of operators of automatic machines, not otherwise allocated
Wages, overtime etc. of men employed on mechanical transport in the shop
Wages, overtime etc. of all general labour in shops including those employed on transport.
Hammer driving in shops
Small differences between muster rolls and time sheets
Consumable stores (Lubrication oil, waste, sponges, etc.)
Charges for coal and coke in the smithies
Lighting charges in shops
Fine creditable to works
Wages etc. of shop messengers
Working expenses of crane and shunting engines, lorries, autotrucks, traversers etc.
Small tools for shop use
General On Cost (GOC)
Denotes all On cost charges common with more than one Shop. Examples are:
Wages and allowances of staff of Yard shop
Wages & allowances of Workshop apprentices not attached to shops.
Freight charges .
Hydraulic and pneumatic power and gas
Replacement of articles stolen or lost
Expenditure on apprentices’ school and hostel
Working expenses of crane and shunting engines, lorries, auto trucks, traversers etc.,
Working expenses of central works pumping plant.
Messengers’ wages, uniforms etc.
Consumable stores for general use
Maintenance of mess rooms
Administrative On Cost or Proforma On Cost
Charged - percentage of direct labour - to RSP works and all works done for outsiders.
Profit will also be charged for work done for outsiders.
To make competitive, GM can waive whole charges or reduce with concurrence of PFA.