1

Introduction
1.1 Need, Scope & importance of ECC in industries.
1.2 Difference between costing and estimating.
1.3 Terminology associated with various cost elements and their classification.
1.4 Terminology associated with overheads, their classification and allocation.
1.5 Determination of selling price and catalogue price.
1.6 Depreciation and obsolescence: Definition, types, different methods of calculating depreciation, numeric examples.
1.7 Concept of Machine Hour Rate (MHR) and process hour rate (PHR).
1.8 Method to calculate MHR for any machine/machine tool.
1.9 Method and example to calculate MHR of Lathe, Milling, Drilling, Grinding and Press tool.
1.10 Method to calculate PHR for any process.
1.11 Method and example to calculate PHR of running diesel generating set, running air conditioner, running refrigerator, welding and gas cutting.



2

Break even analysis.
2.1 Classification of costs as fixed and variable costs.
2.2 Relationship between the costs and quantity of production.
2.3 Break Even Chart :
i. Definition of Break Even Point (BEP) and its needs in industry.
ii. Procedure of construction of Break Even Chart.
iii. Assumptions made in constructing Break even chart.
iv. Calculation of BEP analytically and graphically.
v. Margin of safety, its importance and its derivation.
vi. Effect of changing various parameters on BEP.
vii. Numeric examples.



3

Cost estimation of welding.
3.1 Elements of cost in arc welding.
3.2 Factors effecting arc welding cost.
3.3 Estimating cost elements for:
i. Consumables in arc welding and gas cutting.
ii. Gas cutting.
iii. Arc welding.
3.4 Estimation of production cost of given welding job for above methods.



4

Cost estimation of forging and casting.
4.1 Cost terminology associated with forging shop.
4.2 The procedure of calculating material cost of a product for forging shop (including input weight, cut weight, forged weight etc.).
4.3 Procedure of estimating cost of forging dies.
4.4 Procedure of estimating forging cost.
4.5 Given the forged component, estimate forging cost.
4.6 Cost terminology associated with foundry shop.
4.7 The procedure of calculating material cost of a product for foundry shop.
4.8 Procedure of estimating cost of pattern making.
4.9 Procedure of estimating foundry cost.
4.10 Given the casting component, estimate foundry cost.



5

Cost estimation of machined part.
5.1 The terminology associated with machine shop estimation.
5.2 Procedure to estimate material cost.
5.3 Procedure of estimating cost of machined part for following operations:
i. Lathe operations (Facing, outside/inside turning, boring, drilling on lathe, grooving and out side threading).
ii. Drilling operations (Drilling, reaming, tapping).
iii. Shaping operations.
iv. Milling operations (Face milling, side and face cutting, end milling, key way milling and gear forming).
v. Cylindrical grinding operations (Plain cylindrical grinding).
5.4 For given machined part, estimate material cost and machining cost.



6

Estimation of process cost.
6.1 Understand importance of estimating various process costs.
6.2 Procedure and steps to estimate cost for following processes:
i. Producing power using diesel generating set (cost per hour and cost per unit).
ii. Power produced at thermal power plants. (Cost per unit).
iii. Pouch packaging.(Cost per pouch).
iv. Heat exchanger, cooling or heating.(Cost per hour).
v. Ice plant.(Cost per unit weight).
6.3 Given the required set of input, estimate the cost of processes specified above.



7

Budgeting and contracting.
7.1. Define budget and budgetary control.
7.2. Purpose of budget.
7.3. Various types of budgets.
7.4. Benefits of budget.
7.5. With given example, interpret industrial budget.
7.6. Prepare simple budget given required input data.
7.7. Explain various accounting terminology like book value, Net Present Value, Work in progress, Gross Domestic Product (GDP),balance sheet terminology, etc.
7.8. Define contracts, its characteristics and advantages.
7.9. Types of contract.
7.10. Tendering, manual tendering and Etendering.
7.11. Provision of different conditions in a contract.
7.12. Documents required in an engineering contract (explain).
7.13. Prepare a contract for a given input situation.


