indian railways workshop accounts

Workshop Accounts

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Presented by

M.Nageswara Rao

Sr.SO(A)/S.C.Rly

Venue: C-TARA/Secunderabad

Date: 26th February, 2013

INDEX – Workshop Accounts

INDEX – Workshop Accounts

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Introduction – Need of Workshops

“for keeping the Rolling stock (i.e., Locos, Coaches & Wagons) in good repair and efficient maintenance of the

Railway Equipment”

Doing the above activity, the use of spare parts and fittings in replacement of worn out ones are required. Manufacture of

such duplicates was also undertaken in Workshops as a regular arrangement to the extent Workshop capacity was available.

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Repair Workshops

Mechanical Repair Workshops

Locos

Carriages & Wagons

Electrical sections attached to Mech. Workshops

Signal and Telecommunication Workshops

Civil Engineering Workshops

Organization - Different types of Workshops

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CME - Chief Mechanical Engineer

CWE - Chief Workshop Engineer

CWM – Chief Workshop Manager or Dy.CME – Dy.Chief Mechanical Engineer

CME - Chief Mechanical Engineer

CWE - Chief Workshop Engineer

CWM – Chief Workshop Manager or

Dy.CME – Dy.Chief Mechanical Engineer

Direct control of affairs of all the Workshops in zone & responsibility of

budget in workshops

Head of Mechanical Dept.

controlling all Mechanical Repair

Workshops

(in charge of the respective

workshop)

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Workshops (in Zonal Rlys)

Process shops(Manufacturing

shops)

Foundries Saw Mill RollingSmithy

Job shops (Repair shops)

Mill-wright Tool room Electrical repair

Introduction – Departmentalization of Workshops

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Introduction – individual shops

The ultimate unit of workshop organisation - “ THE SHOP” (where

it is not further divided into 'sections')

Shop in charge - Foreman/Shop Supdt./Sr.Section Engineer

Each shop - allotted the distinguishing number

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Main Object: To see the production is “ ON “ at all times and at all stages. In charge: Production

Engineer (PE)

Introduction – P C O (Production Control Organization)

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P C O Ensures

All activities are arranged & co

ordinate

Supplies are obtained in time

Work is synchronized

Economy at all stages

So that hold-ups are prevented and the production is kept at optimum

capacity


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P C O

1.Production control

A. Pre-planning

B. Rate fixing

C. Process

2.Progress

Watch the progress of products from process

shops to Machine shops and to Stores

Depot

3. Inspection

Inspection of quality as well

as Quantity


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A. Pre planning

i) study of drawings and specifications,

ii) Preparation of cost and details books for each

component

3. Material requirements etc

B.Rate fixing

maintenance of synthetic data for fixing rates (time)

for each operation & indicating allowed time in the process

sheet for each of the operation involved

C. Process

preparation of scroll process sheets

indicating sequence of operation,

quantity of material to be used


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Attendance in Workshops – provisions of the Factories Act, 1948

Hours of work: The hours of work in Railway Workshop which come within the definition of "Factories" given in the Factories Act, 1948

Weekly Hours: No adult worker shall be required or allowed to work in a factory for more than forty eight hours in any week

Weekly Holidays. No adult worker shall be required or �allowed to work in factory on a Sunday unless he has or will have a holiday for a whole day on one of the three days immediately before or after that Sunday.

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Daily hours. No adult worker shall be required or �allowed to work in a factory for more than nine hours in

any day.

Intervals for Rest. The periods of work of adult workers �in a factory shall be so fixed that no period shall exceed five hours and that no worker shall work for more than

five hours before he has had an interval for rest of at least half an hour.

The normal working hours of labour in Railway Workshops are eight and a half hours of week days and

five and a half hours on Saturday making a total working week of 48 hours equivalent to an 8-hour day.

Attendance in Workshops – provisions of the Factories Act, 1948

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The 'Time Office‘ - responsible for maintaining the initial record of

Attendance. The same are treat as the records of payment.

In charge - HTK -'The Head Time-Keeper' (under the administrative

control of the local Workshop Accounts Officer)

Attendance in Workshops – Opening and closing of Workshop Gates

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Entry into Workshop & loss of wages-

Late by First period Second period

Up to 3 minutes (Grace time)

Allowed and no loss of wages

Allowed and no loss of wages

3 minutes to 30 minutes

Allowed and loss of half an hour wages

Not allowed and loss of half a day wages

Beyond 30 minutes Not allowed and loss of half a day wages

Not allowed and loss of half a day wages

Attendance in Workshops Late attendance

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ON COST CHARGES

Example: Salaries of Accounts Office, Electricity charges etc.

These are known as “ON COST CHARGES”

Meaning - Certain items of expenditure (in addition to the Direct expenditure i.e., Labour and Stores) in the Workshop as a whole cannot be

booked directly to the work done.

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ON COST CHARGES

ON COST CHARGES

General on Cost - GOC• Expenses within Workshop

and common with all shops in Workshop

Shop on Cost - SOC• Expenses within individual

shop and common with all the activities in that shop

Pro forma on Cost - POC• Known as Indirect Charges.• Expenses mostly incurred

outside the Workshop• These would be so

included in the cost of items as per commercial costing principles 17

General On Cost - GOC ( common to all shops and incurred within the Workshop)

1. Wages of apprentice, expenses on apprentices school & hostel

2. Electrical power, water charges which are not possible to shops

Wages of staff in yards

Freight charges, sanitary arrangements, consumable stores, Canteen expenses

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Shop on Cost - SOC - common to all works within the Shop

1. Stationery & forms used in shops

2. Consumable stores. Examples are sponge, cloth, oil for lubrication etc.

3. Wages of shop messengers & operators employed in transport, small tools,

4. Wages of supervisors, chargemen, maistries

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Pro forma On Cost –POC - expenses incurred Outside the workshop

1. Share of expenses of Accounts, Personnel, Stores, Security depts etc

2. P.F/Pension contribution payable by Government

3. Interest of total costs of buildings, plant & machinery etc

4. Depreciation of Plants and buildings

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Annual On Cost Budget

For POC, also prepared annually and % fixed separately under i) supervision ii) pension/PF contribution iii) Repairs & maintenance v) New minor works vi) interest & depreciation.

These are worked on the basis of actual figures under these heads during the previous 12 months (January to December

Percentages are worked separately for Labour and Stores and are leviable on the direct labour of each job.

For GOC & SOC are prepared for fixing a % for levying the same on various jobs undertaken during a year. They are based on actual for the previous 12 months i.e., from January to

December

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Necessity of WMS

Railways are a commercial concern. Costs incurred in Workshops affect maintenance costs of running the

Railways. Any extravagance in workshops is likely to tell upon the operating costs resulting in erosion of profits.

It is therefore, necessary to have proper cost control over expenses incurred in a Workshop. For this purpose, a Suspense Head of account i.e., WMS is needed under which all expenses in a Workshop are accumulated and analyzed so as to pinpoint

sources of waste and efficiency.

Workshop Manufacturing Suspense – Plan Head

7200

- is a Capital Suspense Head of account.

Entire process of Collecting, valuating, analyzing and booking of charges for doing the job or work and watching the settlement of all accounts is collectively known as WMS A/C.

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Workshop Manufacturing Suspense – Plan Head

7200

IN PUTS (Debits)

1.Labour2.Material

3.Contractual payments4. Direct Purchases

5. Overhead costs

OUT PUTS (Credits)

1. POH of Rolling stock of Home Railway and Foreign Rlys.

2. Works executed for other Depts.

3.Other Manufacturing activities (captive consumption)

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Work order

As a rule any work undertaken in Shops can only be started after an issue of

formal Work Order on the concerned shop by P.C.O of the Workshop.

Each work order is the basis for collecting charges, allocating it to the proper head of

account concerned and watching clearance of debits.

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Workshop General Register

WGR

Is a Subsidiary register of WMS Account is maintained in Workshop Accounts Office. - To collect the expenditure on account

of Labour, Stores and on cost charges on various jobs undertaken during the

month.

It shows the charges incurred on each work order whether in hand or

completed, shop wise.

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Out turn Statement

Out turn statement

Part - IAdjustments to be carried in the same month of accounts

Part - IIWorks in progress and

completed works awaiting adjustments

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Workshop Account CurrentDebit Side Credit Side

To Opening Balance

Current year Debits Current year Credits

1. To Labour 1. By Debits to Works

2. To Stores from Stock 2. By Debits to Cap. Suspense-Stores

3. To Stores - Direct Purchases 3. By Debits to Revenue

4. To Contractual payments 4. By Debits to F.Rlys.

5. To Misc. payments

Total Debits Total Credits

By Closing Balance

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1. Works done pending acceptance of Bills

2. Stores stock credits awaiting adjustment

3. Under/Over charges – A) Due to Average hourly rates B ) Due to on cost rates C) Due to manufacturing costs

4. Miscellaneous Debits

5. Misc. Items needing clearance due to want of details

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Closing Balance represents

Reconciliation of WMS balances with General

Books and Workshop Account Current.

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Reconciliation

1. All items are current and authorised .

2. Details consist of nothing else except unfinished jobs and finished jobs awaiting acceptance.

3. No Credit Items.

4. For Deposit works – Advance payment is received and extra charges, if any accepted by the party.

5. No inefficient balances & under/over charges are timely cleared and no long out standing dues

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Review of WMS Balances

The balance under Development Suspense Account - to be wiped off in due course when the time of production is stabilized.

The difference between the transfer price and the actual cost - kept under "Development Sus pense Account" - in the books of Production Units.

In the initial stages of production partly due to lack of sufficient experience in the field of manufacture and partly -due to gestation period to reach the ‘rated capacity' high cost of

manufacture was considered inevitable and it was considered to fix the transfer price at par with landed cost of similar products.

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Development Suspense Account

1. Decision taken by Railway Board in 1949

2. Introduced in CLW in 1954

3. Extended to ICF/Chennai in 1960

4. Later to Repair Workshops.

History of incentive system

Basic wages are guaranteed

Time is the yardstick.

Workers classified into DW,EIW & IW.

Over Time Allowance is not applicable.

Incentive Scheme – Salient features

FIXATION OF ALLOWED TIME

TIME STUDY BY RATE FIXERS OF

PCO

NORMAL WORKER

RATING – 60 UNITS

IMPROVES TO 80 UNITS i.e.,

33.33%

ACTUAL TIME x OBSERVED RATING

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80 (INCENTIVE RATING)

Actual time – Limited No. of observations

Preparatory time added.

ALLOWED TIME

Time Allowed

MINUS Time Taken

Time saved

For Direct workers

Incentive paid Net time saved Rate

For Direct workers

For Direct workers

Limit is 33 1/3 % to 50 %

SUPERVISOR & EIW

80 % of Average Bonus earned by the Section.Chargeable to Shop On Cost Work oders.

PITFALLS

Inoperative Time Recorder Clocks

Job Cards kept with Worker/Supervisor and not in Time Booth.

GA card & Job card reconciliation.

PITFALLS

Revision of allowed time.

Revision of sanctioned strength.

Review of % of EIW to DW (Maximum 15 %)

ANNUAL ROLLING STOCK PROGRAMME

ANNUAL ROLLING STOCK PROGRAMME

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ANNUAL ROLLING STOCK PROGRAMME- ZONAL RLYS


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Points to be considered

indian railways workshop accounts

Economy & Finance