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INSTITUT LATIHAN JABATAN TENAGA MANUSIA

KEMENTERIAN SUMBER MANUSIA
MALAYSIA

KERTAS PENERANGAN

KURSUS MC-030-4 PLASTIC INJECTION MOULD MANUFACTURING

TAHAP EMPAT (4)

COMPENTENCY
CU 02: PLASTIC INJECTION MOULD COSTING
UNIT

WA01: Interpret bill of material (BOM)

CU Work WA02: Compute plastic injection mould raw material cost
WA03: Compute plastic injection mould base & standard part
Activities cost

CALCULATE COST USING BILL OF MATERIALS, PRICE LISTS,

DESIGN DRAWINGS, STANDARD COMPONENT CATALOGUES /
DATABASE, CUTTING PARAMETER CHART, MATERIAL
OBJEKTIF TREATMENT PROCESS CHART, STANDARD RATES AND OTHER
PENCAPAIAN INFORMATION SO THAT :-
1) THE RESPECTIVE COST FACTORS ARE IDENTIFIED
2) THE COST IS CHECKED, CALCULATED AND DOCUMENTED
ACCORDING TO ESTABLISHED PROCEDURES

TAJUK

TUJUAN

OBJEKTIF:

DIAKHIR PEMBELAJARAN PELAJAR MESTI BOLEH :-

ESTIMATE RAW MATERIAL AND STANDARD COMPONENT COST

USING BILLS OF MATERIAL, DESIGN OF DRAWINGS, PRICE LIST,
VENDOR INFORMATION, STANDARD COMPONENT CATALOGUE,
STANDARD COMPONENT DATABASE SO THAT THE RAW
MATERIAL AND STANDARD COMPONENT COST ARE ESTIMATED.

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1.0 INTRODUCTION

Any organization, whether is a business or a government department or a

charitable foundation will eventually fail if costs exceed revenue. Therefore, costs are
fundamental to all enterprises including engineering. Engineering businesses must make
a profit. This is the business imperative; revenue must exceed costs. This, however, is
not the sum total of an engineers interest in costs. Engineers will often be required to
submit cost plans (budgets) for approval, and once approved, a budget will be used to
monitor the engineers production performance. Engineers often tender for work and/or
price their services or products for potential customers; tendering and pricing cannot be
achieved successfully without a clear understanding of the principles of costing.

In this dynamic economy era, estimation is an important activity in any

organization. It is crucial to determine estimated cost before starting a products new
market. Cost estimation for raw material, labor and overhead as well must be carefully
estimated before a manufacturing process start. Accuracy of cost estimation depends
greatly on manufacturing cost and business profit. On the other hand, customer would
like to know the cost of a product before making any order. A supplier will loose an order
if the offered price is too high; and at the same time will have to bear losses if the price
offered is too low. Weak cost estimation will lead to company management failure and
cause losses to a company/organization.

1.1 Standard cost and estimated cost

Estimated cost is different compared to standard cost although both costs

determined at the early stage of planning. Estimated cost gives an overall picture on
actual cost determination without involving time and fluctuating cost (ex: raw material
cost). herefore this estimated cost has to be updated from time to time. Standard cost is
determined sciencetificly and is reliable compared to estimated cost. Cost estimation is
done by engineers while standard cost is handled by accountants. Estimation will provide
an overview of cost involved; while standard cost will shows profit gained.

Estimation intends

To calculate possible cost before manufacturing starts.

Fix a product cost after considering various changes.

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1.2 Importance of cost estimation

Cost estimation plays an important role for job order basis industry. This part
became more crucial when involving quotation for competitive tender. Underestimate or
overestimate will bring effects in cost management in future. Procurement department
will carry out purchasing according to cost estimation before any proceeding to
manufacturing process. Early stage cost estimation must be done accurately. Accuracy
can be achieved by using proper method. One must take into consideration fluctuating
market price. A good cost estimation will help the management to do the best decision
with minimum risk. Cost estimator has to follow rules as below:-

(i) Avoid guessing. Act rational rather than following what you think.

(ii) Use procedure and standard format in order to carry out estimation

systematically.

(iii) Always keep organized and detail record.

(iv) Refer to experienced personnel if there are doubts.

(v) Be open-minded.

(vi) Verify cost estimation record. It is recommended that this is done by an

experienced personnel.

1.3 Qualification of a cost estimator

An engineer is qualified as a cost estimator because an engineer understands the

manufacturing process and able to read technical drawing. Below listed down main

characteristics of a cost estimator:-

a) Posses engineering background especially in mechanical.

b) Skillful and able to understand manufacturing process and machining

process.

c) Posses knowledge on types of machines used for various types of

machining process.
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d) Able to read and draw technical drawing.

e) Familiar with material characteristics and its engineering application.

f) Good analytical skill.

g) Posses knowledge on cutting parameters such as cutting speed, feed

speed, and horse power.

h) Good mathematic skill.

i) Costing knowledge.

2.0 AIM OF COSTING

2.1 Cost Estimation Is Carried Out In Order:

To determine the cost of each article.

To determine the cost incurred during each operation in order to keep

control over worker wages.

To provide information or detection of wastages.

To helps in reducing the total manufacturing cost.

To suggest changes in design, when the cost is high.

To helps in formulating the policies for changing the prices of the product.

Even the cost of manufacture is not straightforward, but there will be an identifiable
material cost; and labor costs are incurred when operatives work upon that material.
Other costs involved will be cost for heating and lighting, depreciation in the value of the
buildings and equipment, consumables used in maintenance and servicing, salaries of
supervisory staff, and administration.

2.2 Cost Classification

There are two major cost clasification, which are direct cost and indirect cost. Costs
that arise directly from production are known as direct costs. Direct costs included
materials costs, labor costs and expenses. Those that arise whether production takes
place or not are known as indirect costs, this included service cost.
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The allocation of indirect costs is an arbitrary process. How should the costs of rent,
administration and heating and lighting be assigned to different products? A further
question needs to be considered. What would have happened if, during the development
stage, a decision had been made to proceed no further? The costs incurred still have to
be covered by the revenue earned from selling the companys other products; therefore
each product may have to be assigned a proportion of these costs. The subsections
which follow will consider the ways in which the costs of materials and components, of
labor and of overhead (indirect costs) are measured. Direct costs are costs which
involved directly with a certain work/project.

2.2.1 Direct cost

1. Direct material cost raw material used in producing a product. Part of the

product as it is shipped. These are both manufactured items and purchased

finished components.

2. Direct labor cost salary paid to workers to produce product or salary involved in

providing services.

3. Direct expenses cost expenses covered for a particular work, project or

services.

Prime cost is total of all direct costs, where:-

Prime cost = direct material cost + direct labor cost + direct expenses cost

2.2.2 Indirect cost (overhead cost)

Total indirect cost is known as overhead cost. Cost which involved indirectly in a
manufacturing process are categorized indirect cost. This cost is unchangeable
according to production volume in a certain period. Indirect material cost is cost which is
necessary to make and test the product but is not part of the product as it is shipped.
Indirect labor cost including any other labor, who helps the experts labor in performing
their duties exp supervisor, foreman etc. Overhead can be categorized to production
overhead, management overhead and sales overhead. This including insurance cost and
office suppliers.

Overhead = indirect raw material cost + indirect labor cost + indirect expenses
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TOTAL COST = DIRECT COST + INDIRECT COST

2.3 Cost Estimation Procedure

Cost estimation can be divided into few sub categories according to material cost,
abor cost and machine cost. The procedure may need previous record or mathematic
formula. In order to carry out cost estimation, steps below are suggested:

1. Prepare product component part list. Use code in the part list for ease.

2. Determine sub-part which are available in market or able to sub-contract

to a vendor.

3. Prepare operation sheet and list down operation needed in sequence.

4. List down machines, facilities and tools needed.

5. Make simple notes on operation sheet if jig, fixtures or special tools are

needed.

6. Prepare material estimation needed for manufacturing process.

7. Prepare Bill of Material (BOM) and identify types of material needed.

8. Choose proper cutting speed, feed speed and other relevant parameters.

9. Estimate machining time for all manufacturing process using software or

mathematic formula.

10. Analysis and figure out material handling time, tool setup time and

machines setup time.

11. Determine standard time for calculating allowance and external labor

cost.

12. Determine direct cost such as special equipment/tools cost.

13. Identify prime cost.

14. Total prime cost and overhead to obtain total cost.

15. Determine product selling price by including profit.

16. Send the relevant information to management for final decision.

3.0 ESTIMATION OF WORK RAW MATERIAL

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Work raw material estimation involving determination of weight or material quantity

needed to produce one unit product. This information is important not only because
involving cost but also to ensure the material stock is always sufficient. A table with detail
information including weight, density, price per unit, manual must be prepared by a cost
estimator.

Bill of Material (BOM) is a list of material and component needed for a

manufacturing process. Material means raw materials which are needed to produce a
component or product directly. Components are those used for fixing or to accomplish
certain part. Example of components are shown in Figure 1.

Figure 1: Example of components

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Information needed in a BOM including name of material/component,

material/component number, quantity needed, price, supplier name and stage where
material/component used. Other than that, it is noted that whether the component/part
are self-manufactured or need to order from supplier. BOM not only listed material
needed, but also indirectly show the manufacturing process in brief.

(Veen & Wortmann, 1992).

3.1 Work raw material cost estimation example

Listed down are steps in order to carry out work raw material estimation.

1. Read and observe component dimension in technical drawing.

2. Divide the technical drawing into small parts according to geometry for the
ease of density calculation (example: cube, pyramid, cylindar).

3. Determine each element volume. Provide certain space for allowance.

4. Total up volume for that particular element to obtain total volume.

5. Obtain weight by timing volume with density. (Refer table).

6. Use a price table to determine total cost involved.

Table 1: Density of materials

Aluminium (wrought) 2.640

Aluminium (cast) 2.499
Brass (rolled) 8.101
Bronze 8.500
Copper (sheet) 8.896
Iron (wrought) 7.690
Nickel (wrought) 8.691
Steel 7.850
Zinc cast 7.000
Zinc sheet 7.200

Example 1

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Estimate the weight of a machined cast iron body shown in the figure 1. The density of
the metal is 7.15 gms/cc. Thickness of material is 25 mm. If casting costs RM 1.50 per
kg., what is the likely cost of the casting?

Figure 1

Solution:

The body can be divided into 3 parts A, B and C, each of dimensions.

Body A = 400 x 125 x 25

Body B = 400 x 200 x 25

Body C = 200 x 125 x 25

Volume of casting = Volume A + Volume B + Volume C

= 1250000 +2000000 +625000

= 3875000 mm3

= 3875 cm3

Weight of the casting = 3875 x 7.15

= 27706.25 gms

= 27.706 kg.

Cost of the casting = 27.706 x 1.5

= RM 41.559

Example 2

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Estimate the weight of mild steel bell crank lever. Density of mild steel may be assumed
as 8.2 gm/cc.

Figure 2: Crank lever

Solution

The bell crank lever may be assumed to be composed of :

(i) Two hollow cylinders 50 x 25 x 40

(ii) One hollow cylinder 75 x 40 x 50

(iii) One taper plate of thickness 12mm, average length 219 mm, average width

62.5 mm.

(iv) One taper plate of thickness 12mm, average length 94 mm, average width

62.5 mm. (neglecting the effect of fillets etc.)

Volume of small hollow cylinders = 2(502 -352 )/4 x 40

= 63.8 x 1875

= 117.8 cc

Volume of taper plate = (219 x 12 x 62.5) x (94 x 12 x 62.5)

= 750.0 x 313

= 234.75 cc.

Volume of large-hollow cylinder = /4 x (752 402 )

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= 153 cc

Volume of Key way = 6 x 3 x 50

=0.900 cc

Total volume of the lever = 117.8 + 234.75 + 153 - 0.9

= 504.65 x 8.2 kg
1000

= 4.13 kg

Example 3

What will be the cost of cast iron eccentric if the cast iron casting is sold in the market at

the rate of RM1.50/kg. The density of the cast iron is 7.15 gm/cc.

Figure 3: Cast iron eccentric

Solution:

The casting can be divided into five parts A, B, C, D, and E

Part A has size = 153 mm dia x 20 mm thickness

Part B and C, each has a size= 130 mm dia x 3 mm thickness.

All the three parts will be treated as having a hole of size 30mm.

Part D is a hollow cylinder of size = 60 mm O.d. x 30 mm. i.d.x 56 mm length

Part E is a key way of size = 6 x 3 x 56

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Volume of A = /4 x 1502 x20

= 354000 mm3

Volume of B and C = 2 x /4 x (130)2 x 3

= 79500 mm3

Volume of D = /4(602 -302 ) x 56

= 76500 mm3

Volume of E = 6 x 3 x 56.

= 1005 mm3

Total Volume = {Volume (A+B+C) - Volume of hole of 60 mm} + volume D -Volume E)

= 433.5 75.6 + 119 1005

= 477.4 cc

:. Weight of casting = 7.15x477.4 kg

1000

= 3.42 kg

Cost of casting = 1.5 x 3.42

= RM 5.130

Example 4
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Determine the weight of the brass casting given in the sketch Figure 4. If the brass
castings are available at the rate of RM 9.50/kg. What is the cost of the casting? Brass
casting weights 8 gm/cc.

Figure 4: Brass casting

Solution:

The part can be divided into 4 elements

Volume of A = 15 x 15 x 15

= 6375 mm3

Volume of B = /4

= 3400 mm3

Volume of C = /4 x (25)2 x 3 + /4(20)2 x 30

= x (625 +4000)

= 11,560 mm3

Volume of D = /4 x (10)2 x 15

= 11775 mm2

:. Total Volume = 3375 + 3400 + 11560 + 1177.5

= 19512.5 mm2

= 19.5 cc

Weight of the casting = 19.5 x 8.0

= 156.0 gm.

= 0.156 kg

Example 5
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Calculate the amount or material required for the iron slide block shown in the Figure 5.

The density of cast iron is 7.15 gm/cc

Figure 5: Iron slide block

Solution:

The slide block may be divided into following parts

Base A = (250 x 150 x 20)

Base B = (250 x 150 x 20)

Main Block = (150 x 170x 140)

Two guides = 2(250 x 20 x 20)

Volume of A = 750000mm3

Volume of B = 750000mm3

Volume of Block = 3570000 /4(50)2 x 170

= 3570000 - 334000

= 3236000 mm3

Total Volume = 3236 cc.

Weight of slide block = 3236 X7.15

= 23100 gms

= 23.1 kg

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