From the Commissar of Production - Factory Evacuation

[Weasel]

So ran the test. With the KV factory out of production I was building an average of 23 per turn, by turn 22 I had 336 KVs. On turn 23 my Vologda factory started up although it still had 15% damage, each turn the number of KVs built there increased by one; so with the two factories the production was:

Turn 23: 359 (23 built)
T24: 397 (38 built, Vologda now producing but at 15% damage)
T25: 436 (39)
T26: 476 (40)
T27: 517 (41)
T28: 559 (42)
T30: 601 (43, Vologda now fully repaired)

From T30 each turn produced 43 KVs, so it would seem that for each 3% of factory damage you lose the production of 1 KV. This doesn't have anything to do with rail capacity at all, so RC only affects factory expansion chances, if you move a factory to a RC 1 then most likely your factory won't expand production as opposed to moved to Moscow with RC 30.