AWS ARE-12:2001 pdf download

AWS ARE-12:2001 pdf download.ECONOMICS OF WELDING AND CUTTING
A cost estimate is a forecast of expenses that may be incurred in the manufacture of products or components or in the implementation of new processes or operations. In addition to manufacturing costs, a typical cost esti- mate includes administrative, handling, warehousing, and storage expenses as well as data related to profit. Data derived from an accurate cost estimate can contrib- ute to management decisions such as the following: 1. Establishing the selling price of a product for quotation purposes and for bidding and evaluat- ing contracts; 2. Ascertaining whether a proposed product can be made and marketed at a profit, considering existing prices and anticipated competition; 3. Determining whether parts and assemblies should be fabricated in-house or purchased from a vendor; 4. Determining the amount of investment required for the acquisition of the tools and equipment needed to produce a product or a component using one process as compared to another;5. Choosing the best and most economical method, process, and materials to manufacture the product; 6. Establishing a basis for a cost reduction program by demonstrating savings that are being realized or that could be realized by changing methods or pro- cesses or by applying value-analysis techniques; 7. Predetermining standards of production perfor- mance that can be used at the start of production to control operating costs; and 8. Predicting the effects of production volume changes on future profits as a result of the intro- duction of automation, mechanization, or other improvements suitable to mass production. If production involves a new product, the details of the cost estimate should include the first formal process planning. This process planning may subsequently become the basis for the following decisions: 1. Establishing personnel requirements to meet future work plans; 2. Predicting material needs over the length of a contract; 3. Setting the overall schedule or timetable for meeting company goals; and 4. Specifying the equipment, machines, and facili- ties required for the production of a proposed product in the quantities required and within the time limitations.
All expenses that may be incurred by the company must be considered when preparing a cost estimate or establishing a selling price for a product. The account- ing department often establishes general and adminis- trative expenses, while management usually establishes the expected amount of profit. If the product to be man- ufactured includes weldments or brazements, the pro- cedures for costing these must fit into the general accounting practices of the enterprise. Thus, only the manufacturing costs are of prime interest to the cost estimator. Manufacturing costs include (1) direct materials, (2) direct labor, (3) expendable equipment, and (4) factory overhead (sometimes referred to as burden). Direct materials are the product components that become part of the finished product. They can easily be traced to the product in terms of units and materials consumed per product manufactured. Direct materials include those whose cost per unit can accurately be estimated.Direct labor is work that is required for the produc- tion of a finished article. These costs, which may include the work involved in the performance of testing and inspection activities, can readily be charged to the finished product. Expendable equipment includes the small tools, fixtures, and accessories used in the produc- tion processes that are expendable and readily charged to the product. Factory overhead consists of all indirect labor, mate- rials, and other indirect manufacturing expenses 1 that cannot be allocated precisely to a product on a per-part basis. Allocations for facilities, equipment, power, air, utilities, and manufacturing services such as mainte- nance may be a part of these costs. Overhead costs can also be allocated to a product based on cost drivers such as direct labor hours or equipment hours. A por- tion of overhead costs may be fixed, while the remain- der might vary depending upon the production rate, which is defined as the number of parts produced per unit of time.