NOTES : CNC Department 1 Inspection of the processes (estimation of wastage, total material used, process cycle) 2 Identification of Raw

Material (Direct and indirect) 3 Labour hours and per month wages 4 Machinery Inspection and utilisation hours 5 Average of monthly Consumption reports as a basis 6 unit measure: SQ.M 7 Average consumption of material based on per SQ.M consumption 8 Identification of other expenses directly related to the departments 9 Dollar Flexibility

1 Inspection of the processes We inspected the CNC department and we have observed the process cycle of the department from the raw materials involved to the finished product of this department. We identified that this is one of the most important department which adds 25 % of cost to the product. The number of labours involved in the process, the raw materials involved, the machinery installed in this department and other indirect process involved in the department which adds to the cost of the product. 2 Identification of Raw Material We identified the important materials that are used in this department which that adds a greater contribution to the cost of the product as major part of the raw materials is imported. We have divide the raw materials into Major, Minor, miscellaneous and based on the average monthly consumption we have derived the cost of the material per SQ.M. 3 Labour hours and per month wages Identified the number of workers in the department and their working hours and by considering their monthly wages we derived the cost of the labour per SQ.M. 4 Machinery Inspection and utilisation hours Based on the specification of the machinery and the daily usage of each machine of the department and by considering the per unit rate of electricity we derived the cost of power consumption per SQ.M. 5 Average of monthly Consumption reports as a basis

All this analysis is done based on the consumption reports and data collected from the departmental heads and accounts department. 6 unit measure: SQ.M The standard unit measure taken into consideration is SQ.M and all the costs are derived in the same. 7 Average consumption of material based on per SQ.M consumption We have considered that the average consumption and production is 3000 SQ.M 8 Identification of other expenses directly related to the departments We have also taken into consideration of the other expenses such as freight charges, taxes etc that adds to the cost of the product. 9 Dollar Flexibility All the calculations are done by taking dollar rate as 1USD=53RS.