Introduction to Cost Estimating

Lecture No 1

Dr Arwa Hussein
 Introduction
• 􀂉 What is an Estimate?
• 􀂉 What is the Purpose of Estimating?
• 􀂉 What is the Role of the Estimator?
• 􀂉 What the Estimator Must Know (Skills)?
• 􀂉 The Components of an Estimate.
• 􀂉 Possible Sources of Errors in Cost Estimates.
What is an Estimate?
• An estimate involves calculating the costs of construction
work on the basis of probabilities.

Two activities are undertaken when carrying out a cost

estimate:

􀂉 Measurements: all measurements are approximate.

􀂉 Pricing: the degree of approximation is even greater because

of the difficulty in predicting all the probabilities of items such as
labor productivity and site conditions.
What is the Purpose of Estimating?
What is the Role of the Estimator?
• 􀂉 The estimator’s job is to prepare estimates of project costs.

• 􀂉 The success of a construction business depends on the

accuracy of these estimates.

• 􀂉 The estimator’s success will be based on his previous

experience and knowledge of the construction industry.

• 􀂉 An estimator lacking this experience may over-, or under-

estimates his project costs.
What is the Role of the Estimator?
What is the Role of the Estimator?
What the Estimator Must Know (Skills)?
What the Estimator Must Know (Skills)?
What the Estimator Must Know (Skills)?
What the Estimator Must Know (Skills)?
What is an Estimate?
• 􀂉 Costs are classified as:
• 1. Materials costs.
• 2. Labor costs.
• 3. Equipment costs.
• 4. Overhead (general and job) costs.
• 5. Profit.

• 􀂉 Data on all of these costs are required to

develop or prepare an estimate.
The Components of an Estimate
The Components of an Estimate
Quantity take-off
• Quantity take-off is an activity performed by General
Contractors, Subcontractors, Cost Consultants, and
Quantity Surveyors as part of the construction process.

• It involves counting the number of items associated with

a particular construction project, determining the
associated materials and labor costs, and formulating a
bid (or estimate) as part of the bidding process.

• Quantity take-off is also applied to the pricing process.

Possible Sources of Errors in Estimates
Possible Sources of Errors in Estimates
End of Lecture
Introduction to Welding Cost
Estimating
Lecture No 2

Dr Arwa Hussein
 Types of Companies

• Large Scale.
Design first, Cost Next.
• Small Scale.
Cost First, Design Next.
 Estimating
• It is the process of determining the probable cost
of a Product / Process (Welding) before the
manufacturing.

• Estimation is the Process done by a Technical

Person and not by Accountant.

• Both Over Estimation and Under Estimation is

Dangerous.
 Costs
• Direct Cost.
Material Cost.
Labour Cost.
Expenses.

• Indirect Cost.
Over heads.
Admin. Expense.
Selling and Distribution.
Profit, Discount….
 Ladder of Cost.

Discount

Profit Market
Selling
Price
Sales and Price
Distribution Total
Or
Admin. Prodn. Ultimate
Cost cost

Factory Work
Cost
Direct
Expense,
Material, Prime
Labour Cost Cost
 Material Cost
• It is the cost of Materials required for a
Process (Welding)
• Example:
– Direct: Filler, Flux, Gas, etc.
– Indirect: Cotton wastes, Coolant, etc.
 Labour Cost
• It is the cost spent to the workers who are
directly or indirectly involved in
Manufacturing.
• Examples:
– Direct: Operators, Welders…
– Indirect: Watchman, Supervisor…
 Expenses
• All other expenditure other than Material and
Labour cost is called Expenses.
• Examples:
– Direct: Power consumption, Welding M/C. cost….
– Indirect or overhead cost: Depreciation.
 Gas Welding & Cutting Cost
• Direct Material cost = base material cost + Consumable’s Cost
(Filler, O2 & C2H2)

• Direct Labour cost = Preparation or pre welding cost +

welding cost + Post welding cost.

• Direct expense = Cost of fixture and auxiliaries.

• Over heads.
 Welding Cost Parameters
• Joint Design Type
• Weld Size
• Weld Type
• Welding Process
• Electrode Deposition Efficiency
• Others (Safety)
 Factors of Welding Cost

•Time for joint preparation.

•Time to prepare the material for welding (blasting, removal of oils,
etc.).
•Time for assembly.
•Time to preheat the joint (when required).
•Time for tack-up.
•Time for positioning.
•Time for welding.
•Time to remove slag (when applicable).
•Time to remove spatter.
•Time for inspection.
 Factors of Welding Cost

•Time for changing electrodes.

•Time to move the welder from one location to another.
•Time to change welding machine settings.
•Time spent by personnel for personal purposes.
•Time to repair or re-work defective welds.
•Costs associated with any required stress relief.
•Cost of electrodes.
•Cost of shielding materials.
•Cost of electric power.
•Cost of fuel gas for pre-heat (when required).
 Basic Cost Formula
Welding Costs = (L&O) + (Consumables Costs)

The Operating Factor

• The ratio of hours spent welding to total
hours worked is called the operating factor.
 Three Basic Approaches

• Cost per unit.

• Cost per length.
• Cost per weight.

The application will determine which

approach is most appropriate.
 Cost Per Unit
• This method suits for pieces that move through
a workstation.

 Cost/unit = (L&O/unit) + (filler metal and shielding material cost/unit)

 L&O/unit = (welding-related time/unit) x (L&O rate)

 Cost Per Unit - Contd.

• For Wire Fed processes:

 Filler metal cost/unit = (wire feed speed) x (welding time) x (weight of

electrode/mm) x (electrode cost/kg)
 Filler metal cost (SMAW) = [{(electrode melt off rate) x (welding time) x
(weight of electrode/mm)}/(% of electrode used)]
 Shielding gas cost/piece = (flow rate) x (welding time) x (gas cost/m 3 )

 SAW flux cost/piece = (wt. of flux used) x (cost of flux/kg.)

 Cost Per Length
• This method is appropriate for estimating the cost of long
welds
• Formula:
 Cost/length = (L&O cost/length) + (filler metal and shielding cost/length)

 L&O cost/length = (L&O rate)/(travel speed) x (operating factor)

 Filler metal cost/length (wire fed processes) = {(wire feed speed) x (wt. of
electrode/(m or mm).) x (cost of electrode/Kg.)}/(travel speed)
 Cost Per Length - Contd.
 Filler metal cost/length (SMAW) = (melt off rate) x (wt. of electrode/length) x
(cost of electrode/Kg.)/(travel speed)(% of electrode used)

 Shielding gas cost/length = (gas flow rate) x (gas cost/m 3 )/(travel speed)

 Shielding cost/length (flux) = (wt. of weld metal/length) x (ratio of flux to weld

metal) x (cost of flux/Kg.)
 Cost per weight

• It is best used in applications in which significant volumes of

weld metal must be deposited, such as multi pass applications.
Hard facing and overlay welding are ideal applications.
 Formula
 Cost/Kg. = (L&O cost/Kg.) + (filler metal and shielding cost/Kg.)

 L&O Cost/Kg. = (L&O rate)/{(deposition rate) x (operating factor)}

 Filler metal cost/Kg. (any process) = (cost of filler metal/Kg.)/(electrode efficiency)

 Shielding cost/Kg. (gas) = (shielding gas flow rate) x (cost of shielding gas/m 3 )
/(deposition rate)

 Shielding cost/Kg. (flux) = (cost of flux/Kg.) x (ratio of flux to filler metal)

 Thumb Rule

In case of on site welding process, if it

is difficult to estimate the weldment
weight. for such case, the Universal
Thumb Rule is
weldment weight is 2% of total
structure’s weight.
 Power Cost.
V x A xt 1x 1x
1000 60 η r x c
Where
• V – Voltage in volts
• A – Current in amps
• t – Welding time in min
• η – Efficiency of the welding machine, (0.6 – Transformer &
0.25 – Generator)
• r – Operating factor
• C – Rate of Electricity per kWhr in rupees
 Theoretical Vs Actual
• Tooling time.
• Fit ups
• Fixture non alignment because of spatter
deposition
• Filler may change, So quality. may change
• Skill varies from men to men.

So we should use Digital communication technology for

monitoring the welding and whether the std. are followed or
not….
 Theoretical Vs Actual

• If we increase the size of fillet weld, the area

of Fillet will be Doubled, And the cost will
increase. And not only that, it leads to Stress.
 Weld Area Vs. Cost

Note: Labour Cost is 80% of Total Cost

(Based on Typical Modern Welding rates and Efficiency)
 Some Data
Labor and Overhead
Operating Factor
percent of Total Cost
10 89
20 81
30 73
40 67
50 62
60 58
70 54
80 51
90 48
End of Lecture
 An Example
• If we consider a boiler drum, there are linear
and circumferential welds.

• That can be done by all kind of welding

processes.

• So here we are going to see some sample

calculations.
 Given Data
• Length – 3m
• Diameter – 1.2m
• Thickness – 15mm
• Both side welding.
• Rate of weld – 2m/hr(outside), 2.5m/hr
(inside)
• Length of electrode required – 1.5m/m of
weld.
 Given Data
• Cost of electrode – 2.75/m
• Power consumption – 4kwhr/m of weld
• Power charge -45 paise / kwhr
• Labour Charge – Rs. 9/hr
• Over heads – 90% of prime cost
• Discarded Electrode – 6%
• Fatigue and setting up time – 5% of weld time.
 Calculations
• Length of weld:
= 2 x Π x D + (2 x L) = 13.54m
• Total electrode length
= 1.5 x 13.54 = 20.31m
• Electrode Discarded = 6% = 1.22m.
• Total electrode wanted
= 1.22 + 20.31 = 21.53m
• Cost of electrode = Rs.59.21
 Calculations
• Labour Cost
• Length of inside weld = 3m. Time = 1.5hr
• Length of outside weld = 10.54m.
• Time = 4.216 hr.
• Net time = 5.716 hr.
• Total time = net + (Fatigue) = 6 hr.
• Cost = Rs. 54.
 Calculations

• Power Consumption = 4 x 13.54 = 54.16 kwhr.

• Cost = 0.45 x 54.16 = Rs. 24.37
• Prime cost = 59.21 + 54 + 24.37 = Rs. 137.58
• Over Heads = Rs. 123.82 (90%)
• Total Cost = 137.58+123.882 = Rs. 261.40

In other process the process may vary.

But the procedure is same
 Tips
• Select the cost calculation method that most directly
measures the important cost variables for the specific
application.
• When evaluating the effect on overhead costs, ask: Will
the changes in the welding operations affect the
company throughout?
• Carefully evaluate the impact of the proposed change
on the operating factor. Some changes will decrease this
variable, others will increase it.
• Make sure the data used for cost computations reflect
reality.
 Steps to Reduce Welding Cost
• Analyze the delivery of consumable and accessories to welding point.

• Analyze whether material handling is effective.

• Look for ways to correct over welding.

• Enhance current welding process and procedures.

• Optimize joint preparation.

• Eliminate any extra welds from design.

• Look for items that can be welded rather than cast.

• Look for ways to eliminate costly record keeping

• Examine safety concerns

Welding Cost Estimating

Lecture No 3

Dr Arwa Hussein
 Welding Cost Estimation
• This section will cover cost estimating for steel weldments produced by the
four most common arc welding processes in use today:

– Shielded Metal Arc Welding,

– Gas Tungsten Arc Welding.
– Gas Metal Arc Welding,
– Flux Cored Arc Welding, and

• The Gas tungsten arc welding GTAW process is a relatively costly method of
depositing weld metal, and is usually chosen for weld quality or material
thickness and composition limitations, rather than economy.
 Welding Cost Estimation
• Welding costs may be divided into two categories;

– Fixed costs involved regardless of the filler metal or welding process selected . Such as,
• material handling,
• joint preparation,
• fixturing,
• tacking,
• preheating,
• weld clean-up, and
• inspection.

– Costs related to a specific welding process.

• Although some of these items will be affected by the specific process and filler metal
chosen, they are a necessary part of practically all welding operations. Calculating
these costs will depend upon your workers’ capabilities and the equipment you use.
Factors affecting welding costs
• The cost of actually depositing the weld metal will vary
considerably with;
– The filler metal.
– Welding process selected.

• This cost element will be influenced by

• The labor and overhead rates,
• The deposition rate and efficiency of the filler metal,
• The operating factor, and
• The cost of materials and power.
 Cost of Shielded Metal Arc Welding
• Shielded metal arc welding is a very low initial investment
cost, however, its moderate deposition rates and low
operating factors may be outweighed by other considerations.

• The cost of this welding process consists of three major items.

These are

(1) the labor and overhead cost,

(2) electrode cost,
(3) electric power cost.
 Cost of Shielded Metal Arc Welding
1. Labor Cost

The labor and overhead costs are usually combined in cost

calculations.
Overhead usually includes items such as :
Services,
Taxes,
Facilities maintenance, and
Depreciation of the equipment.

The hourly rate and the overhead rate vary from plant to plant and
the actual hourly rates for each plant should be used for this
calculation.
 Cost of Shielded Metal Arc Welding
1. Labor Cost

The operating factor is the percentage of time that the welder is actually

welding.

Since a large amount of time goes into set-up, preheating, slag removal, and

changing electrodes, the operating factor for this process is relatively

low. It can range from as low as 10% to as high as 50%, but it is usually in
the area of 20-40%.
 Cost of Shielded Metal Arc Welding
1. Labor Cost

The operating facting varies from plant to plant and for different types

of weldments.

The deposition rates of the electrodes affect the labor and overhead

costs because the rate at which the electrode is deposited affects

productivity.

The travel speeds for the shielded metal arc welding process are often

low.
 Cost of Shielded Metal Arc Welding
1. Labor Cost

The equation for determining the labor and overhead:

 Cost of Shielded Metal Arc Welding
2. Electrode Cost

The cost of the electrode per foot of weld is determined by

several factors:

• The weight of electrodes deposited per foot of weld. This is dependent on

the size of the weld to be made.

• The cost per pound of the electrode.

• The deposition efficiency of the electrode.

 Cost of Shielded Metal Arc Welding
2. Electrode Cost

• The deposition efficiency is the percentage of the total weight of the

electrode that is actually deposited in the weld. This varies from electrode
to electrode and for the calculations we will be using, a 2 in. (51 mm) stub
loss is assumed.

Stub Loss of electrode material

• Some of the weight is lost to spatter, slag, and some of the electrode
becoming gas.
 Cost of Shielded Metal Arc Welding
2. Electrode Cost

• This Table shows the electrode consumption for different sizes and types
of welds.
 Cost of Shielded Metal Arc Welding
2. Electrode Cost

• This Table shows the electrode consumption for different sizes and types
of welds.
 Cost of Shielded Metal Arc Welding
2. Electrode Cost

• This Table shows the electrode consumption for different sizes and types
of welds.
 Cost of Shielded Metal Arc Welding
2. Electrode Cost
 Cost of Shielded Metal Arc Welding
3. Electric Power Cost

The cost of the electric power is a relatively minor cost factor, but it can become
important when large amounts of welding are required on a certain job.

The cost of electric power used is dependent on :

- The amount of welding current,
- Welding voltage,
- The efficiency of the power source,
- Welding time, and
- The cost per kilowatt-hour.

The power source efficiency is assumed for this calculation.

 Cost of Shielded Metal Arc Welding

3. Electric Power Cost

Cost Comparison of Different Sizes of Diameter
Electrodes
 Cost of Gas Tungsten Arc Welding
• Gas tungsten arc welding is expensive and not very economical to
use on thick metal, but on many other applications, it will be the
best method.

• This is because this process can be used to

– weld very thin metal,
– dissimilar metals, and
– a wide variety of non-ferrous metals.

• it is often chosen for its capabilities with less consideration given

to cost factors. In some cases, it is the only usable welding
process.
 Cost of Gas Tungsten Arc Welding
• The initial investment cost for this process can vary widely depending on
the complexity of the equipment required.
– This can range from a high frequency current and inert gas attachment
added to a shielded metal arc-welding machine, up to a fully
automatic welding head and a programmable power source.

• There are also many possibilities that exist between these extremes. The
type of equipment used depends on the type of application.

• Manual gas tungsten arc welding generally produces moderate deposition

rates and low operating factors compared to other arc welding processes.
Automatic operations will generally give higher deposition rates and
higher operating factors.
 Cost of Gas Tungsten Arc Welding
• The cost of consumables can also vary widely because of the price differences for
the different shielding gases and filler metals. For some applications, no filler metal
is used and for the welding of some of the more exotic metals, filler wire can be very
expensive.

• Technically, the tungsten electrode is non-consumable, but tungsten electrodes have

to be replaced after a period of use. The frequency at which electrodes must be
replaced depends on conditions such as :
– the welder skill
– the amount of welding current.

• A good approximation of the cost of the tungsten electrode is 4% of the shielding

gas cost.
 Cost of Gas Tungsten Arc Welding
• The cost of this welding process is similar to SMAW but it has
additional factors to consider in the shielding gas and the wear
on the tungsten electrode.

• It consists of four major items including :

(1) the labor and overhead cost,

(2) the filler metal cost,
(3) the shielding gas cost,
(4) the electric power cost, and one minor item, wear on
the electrode.
 Cost of Gas Tungsten Arc Welding
1. Labor Cost

As discussed earlier, the labor and overhead costs are often combined in cost
calculations; this is usually the largest cost factor in welding.

The operating factor in percentage is the same for GTAW as for SMAW, but for
different reasons.
- With GTAW, while little or no slag is produced, more time is needed
for setup, preheating, and changing filler rods.
 Cost of Gas Tungsten Arc Welding
However, because this process can be used manually and automatically, the
operating factor can vary widely depending on which process you use.

For manual welding, the operating factor is relatively low and may range from
about 10% to as high as 50%, but is normally in the range of 20% to 40%.
Automatic welding generally gives high operating factors because it can usually
proceed to completion without interruption. Operating factors for this can
rise as high as 80% or more, depending on the specific application.

The deposition rates and travel speeds affect the labor and overhead costs
because the rate at which the weld can be completed affects the
productivity; travel speeds used with this process are often fairly low.
 Cost of Gas Tungsten Arc Welding
1. Labor Cost
 Cost of Gas Tungsten Arc Welding
2. Filler Metal Cost

• Filler metal costs are made up of the same three factors that
affect SMAW:

1) weight of electrodes deposited per foot of weld dependent on the

size of the weld to be made,
2) cost per pound of the electrode, and
3) deposition efficiency of the electrode.
 Cost of Gas Tungsten Arc Welding
2. Filler Metal Cost

the deposition efficiency is nearly 100% for most GTAW welding

operations because little or no filler metal is lost through
spatter, vaporization, or stub end loss.

For the calculations to be used for GTAW, a deposition efficiency

of 100% will be assumed.
 Cost of Gas Tungsten Arc Welding
2. Filler Metal Cost
The equations used for determining the cost of the filler metal
are as follows:
 Cost of Gas Tungsten Arc Welding
The following Tables shows filler metal weights and consumption.
Cost of Gas Tungsten Arc Welding
Cost of Gas Tungsten Arc Welding
Cost of Gas Tungsten Arc Welding
End of Lecture
Welding Cost Estimating

Lecture No 4

Dr Arwa Hussein
 Welding Cost Estimation
• This section will cover cost estimating for steel weldments produced by the
four most common arc welding processes in use today:

– Shielded Metal Arc Welding,

– Gas Tungsten Arc Welding.
– Gas Metal Arc Welding,
– Flux Cored Arc Welding, and

• The Gas tungsten arc welding GTAW process is a relatively costly method of
depositing weld metal, and is usually chosen for weld quality or material
thickness and composition limitations, rather than economy.
 Cost of Gas Metal Arc Welding
• Gas metal arc welding can be used to weld many thicknesses and
types of metals as economically as possible. It is usually selected
because it is the least expensive process that can be used for many
applications.

• The initial investment for the equipment can vary depending on the
complexity and size of the equipment used. The equipment for a
semiautomatic welding station is much less expensive than the
equipment required for a fully automatic set-up.

• The type of equipment depends on the type of application.

 Cost of Gas Metal Arc Welding
• Semiautomatic gas metal arc welding produces higher deposition
rates and operator factors when compared to manual shielded metal
arc welding.

• The level of welder skill for gas metal arc welding is generally less than
that required for shielded metal arc welding and gas tungsten arc
welding. This helps to develop welds with a more consistent quality.

• Semiautomatic welding often competes against manual processes

such as oxyacetylene welding, shielded metal arc welding, and gas
tungsten arc welding for many applications. This process will generally
produce higher deposition rates and operator factors than these other
manual processes.
 Cost of Gas Metal Arc Welding
• Automatic gas metal arc welding operations will give higher
deposition rates and operator factors.

• The cost of electrode wires and shielding gases can vary widely
because of price differences between different types and sizes of
electrodes and different types of shielding gas.

• The cost of electric power consumed will depend on the type of

machine, amount of welding, and the welding currents being used.

• The cost of this welding process consists of four major items: labor
and overhead, electrode, shielding gas, and electric power.
 Cost of Gas Metal Arc Welding
1.Labor Cost
•GMAW can be used semiautomatically and automatically, which
means the operator factor can vary widely.

–Operator factors for semiautomatic welding usually range from about

25% to as high as 60%. These operator factors are low compared to
machine and automatic welding, where operator factors can range up to
80% or more depending on the application.

–The machine and automatic welding operations give higher operator

factors because the welding can proceed to completion without
interruption.
 Cost of Gas Metal Arc Welding
1. Labor Cost

• The deposition rates and travel speeds affect the labor and
overhead costs because the rate at which the electrode wire is
deposited affects the productivity.

• The deposition rates and travel speeds used will be affected by the
size of the electrode wire, the welding current, the thickness of the
base metal, and the type of base metal.
 Cost of Gas Metal Arc Welding
1. Labor Cost

• The equation for determining the labor and overhead costs is:
 Cost of Gas Metal Arc Welding
2.Electrode Cost
•The cost of the electrode wire per weld is determined by
several factors:
–the weight of the weld deposited,
–the cost per pound of the filler metal, and
–the deposition efficiency of the filler metal.

•The small diameter solid electrode wires used for this process
cost more per pound than larger diameter solid electrode
wires and covered electrodes. Electrode wire is less expensive
per pound when supplied in a reel or large coil, as compared
to a small coil.
 Cost of Gas Metal Arc Welding
2. Electrode Cost
• The deposition efficiency is about 95% for most welding operations.
Some of the electrode wire is lost to spatter and vaporization.

• This will vary slightly depending on the type of shielding gas. Argon
will generally give higher deposition efficiencies than carbon dioxide
due to the fact that less spatter is produced by spray transfer.
Cost of Gas Metal Arc Welding
Cost Comparison of Manual (SMAW) vs. Semiautomatic (GMAW) and
Automatic (GMAW)
 Cost of Flux Cored Arc Welding
• Flux cored arc welding has advantages over other processes which make it
the most economical welding method for many different applications. To
select a welding process for your project or task, you should compare
factors such as deposition rates, welding speeds, joint preparation time,
operator factors, and welding material costs.

• Like GMAW, the initial investment for the equipment can vary
considerably depending on the size and complexity of the equipment
used, and the equipment used is often the same as for gas metal arc
welding.
 Cost of Flux Cored Arc Welding

• Because of the higher current levels used in flux cored arc welding, larger
power sources may be needed.

• With the self-shielding electrode wires, a gas shielding system is not

needed, which simplifies and reduces the overall cost of the equipment. In
some cases where gas metal arc welding equipment is available, a change
to flux cored arc welding would require almost no new equipment.

• The equipment for semiautomatic welding is much less expensive than

equipment for automatic welding.
 Cost of Flux Cored Arc Welding
• An advantage of flux cored arc welding over the manual welding
processes is that a lower degree of welder skill is needed.

• A welder skilled in gas metal arc welding would have very little
trouble learning to weld with flux cored arc welding.

• This process generally has good welder appeal. This is particularly

true when compared to gas metal arc welding at the higher current
levels.

• Another example is the comparison to semiautomatic submerged

arc welding where it is more difficult to weld because the weld
puddle is not visible.
 Cost of Flux Cored Arc Welding
• Semiautomatic flux cored arc welding usually competes with
shielded metal arc welding, gas metal arc welding and submerged
arc welding.

• Automatic flux cored arc welding usually competes against

automatic gas metal arc welding and submerged arc welding.

• In flux cored arc welding, the costs of materials will vary depending
on the electrode and whether or not shielding gas is required. The
electric power cost will depend on the machine and the welding
parameters.
 Cost of Flux Cored Arc Welding
1. Labor Cost

• Because this process is applied semi-automatically and automatically, the

operator factor can vary widely. Operator factors for semiautomatic
welding usually range from 25% to as high as 60%.

• When compared to gas metal arc welding, operator factors are usually
slightly lower with flux cored arc welding because more time is spent
removing slag.

• Since flux cored arc welding uses a continuously fed electrode wire,
operator factors are much higher than shielded metal arc welding, where
much time is spent changing electrodes. Operator factors for machine and
automatic welding can range up to 80% or more, depending on the
application
 Cost of Flux Cored Arc Welding
2. Electrode Cost

• The deposition efficiency of flux cored wire is lower than that of solid
wires because the flux core provides shielding gas and a slag covering.

• Self-shielding flux cored wires typically have a deposition efficiency of

about 75-80%, which is much higher than obtained from covered
electrodes.

• Gas shielded electrode wires have deposition efficiencies ranging from 80-
90%.
 Cost of Flux Cored Arc Welding
2. Electrode Cost

• These are higher than self-shielding wires because less of the core
becomes shielding gas and slag.

• With both types of flux cored wires, some wire is lost to spatter and
vaporization. Spatter is generally higher with self shielding electrodes that
also contributes to the lower deposition efficiencies.

• The type of shielding gas used will have an effect on the deposition
efficiency. Carbon dioxide will produce higher spatter levels than argon-
carbon dioxide and argon-oxygen mixtures.
Cost of Flux Cored Arc Welding
 Cost Comparisons Between SMAW, GMAW, FCAW, and Submerged
Arc Welding of 1/2 in. (12.7 mm) Fillet Weld in the Horizontal Position
End of Lecture
 Depreciation

• Lecture No …..

• Dr Arwa Hussein
 Definition
• HKSSAP defines depreciation as the ‘allocation
of the depreciable amount of an asset over its
estimated life’.
 The Objective of Depreciation
• According to the matching concept, revenues should be matched
with expenses in order to determine the accounting profit.
• The cost of the asset purchased should be spread over the periods
in which the asset will benefit a company.

• Depreciation expense is used in accounting to allocate the cost of a 

tangible asset over its useful life. In other words, it is the reduction
of value in an asset over time due to usage, wear and tear, or
obsolescence.  The four main depreciation methods mentioned are
explained in detail below.
 What Are the Main Types of
Depreciation Methods?
• There are several types of depreciation expense and different
formulas for determining the book value of an asset. The most
common depreciation methods include:

1. Straight-line
2. Double declining balance
3. Units of production
4. Sum of years digits
 Straight-Line Depreciation Method

•  Straight-line depreciation is a very common

and simple method of calculating the expense.
In straight-line depreciation, the expense
amount is the same every year over the useful
life of the asset.
• Depreciation Formula for the Straight Line
Method:
• Depreciation Expense = (Cost – Salvage
value) / Useful life
  Double Declining Balance Depreciation
Method
• Compared to other depreciation methods, 
double-declining-balance depreciation results in larger
expense in the earlier years as opposed to the later years of
an asset’s useful life. The method reflects the fact that assets
are more productive in its early years than in its later years.
With the double-declining-balance method, the depreciation
factor is 2x that of a straight line expense method.
• Depreciation formula for the double declining balance
method:
• Periodic Depreciation Expense = Beginning book value x
Rate of depreciation
• 1-The beginning book value of the asset is filled in at the beginning of year 1 and the
salvage value is filled in at the end of year 8.

• 2-The rate of depreciation (Rate) is calculated as follows:

• Expense = (100% / Useful life of asset) x 2

• Expense = (100% / 8) x 2 = 25%

• Note: Since this is a double declining method, we multiply the rate of depreciation by 2.

• 3. Multiply the rate of depreciation by the beginning book value to determine the
expense for that year. For example, $25,000 x 25% = $6,250 depreciation expense.

• 4. Subtract the expense from the beginning book value to arrive at the ending book
value. For example, $25,000 – $6,250 = $18,750 ending book value.

• 5. The ending book value for that year is the beginning book value for the following year.
For example, the year 1 ending book value of $18,750 would be the year 2 beginning
book value. Repeat this until the last year of useful life.
 Units of Production Depreciation Method

• Units-of-production depreciation method

depreciates assets based on the total number
of hours used or the total number of units to be
produced over its useful life.
• The formula for the units-of-production
method:
• Depreciation Expense = (Number of units
produced / Life in number of units) x (Cost –
Salvage value)
 Sum-of-the-Years-Digits Depreciation
Method
• Sum-of-the-years-digits method is one of the accelerated
depreciation methods. A higher expense is incurred in the
early years while lower expense is incurred in the latter years
of the asset.
• In sum-of-the-years digits depreciation method, the remaining
life of an asset is divided by the sum of the years and then
multiplied by the depreciating base to determine the expense.
• The depreciation formula for the sum-of-the-years-digits
method:
• Depreciation Expense = (Remaining life / Sum of the years
digits) x (Cost – Salvage value)
• 1-The depreciation base is constant throughout the years and is
calculated as follows:
• Depreciation Base = Cost – Salvage value
• Depreciation Base = $25,000 – $0 = $25,000
• 2. The remaining life is simply the remaining life of the asset. For
example, at the beginning of the year, the asset has a remaining life of
8 years. The following year, the asset has a remaining life of 7 years,
etc.
• 3. RL / SYD is “remaining life divided by sum of the years.” In this
example, the asset has a useful life of 8 years. Therefore, the sum of
the years would be 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 = 36 years. The
remaining life in the beginning of year 1 is 8. Therefore, the RM / SYD
= 8 / 36 = 0.2222.
• 4. The RL / SYD number is multiplied by the depreciating base to
determine the expense for that year.
• 5. The same is done for the following years. In the beginning of year
2, RL / SYD would be 7 / 36 = 0.1944. 0.1944 x $25,000 = $4,861
expense for year 2.
Summary of Depreciation
Methods
Book Value
End of Lecture
Ship Hull Weight and Cost

Lecture No ……….

Dr Arwa Hussein
Shell Expansion Drawing
• Weight of steel = area projected * thickness*
density of steel*2

• Area projected is also used in calculating

required paint
 Example
• Given shell expansion plan of a 120 m length ship. The
scale of the drawing is 1:500. It is required to calculate the
following:
•  
– Approximate estimation about the total hull steel weight (5 marks)
– For the fore part calculate the following:
• Welding time.
• Quantity of electrodes
• Number of welders
• How long the job takes is 10 welders are available
• If it is required to finish the task in 10 days, how much labor cost and
overtime cost will be paid
End of Lecture