Capital costs, indirect

An alternative to allocating overheads by using a single method is to classify the various overheads into groups and to use the most appropriate allocation for each group. For example, depreciation would be allocated on the basis of capital cost, while indirect labor might be allocated either on the basis of direct labor cost or on the number of employees. Clearly, this alternative method is more complex, increases the associated accountancy costs, and is prone to misinterpretation and possibly abuse. 

An estimate of the cost for each corrective measure alternative should be developed, including capital, operating and maintenance costs. Capital costs consist of direct (construction) and indirect (nonconstruction and overhead) costs. 

In addition to their calculation of direct costs in the USA, Scitovsky and Rice (1987) also determined indirect costs attributable to the loss of productivity, resulting from morbidity and premature mortality in the US. The authors used the human capital approach. Indirect costs were estimated to rise from US 3.9 billion in 1985 to US 7.0 billion in 1986 and US 55.6 bilhon in 1991 (Table 5). 

When a metallic material of construction (MOC) is selected to contain, transport, and/or to be exposed to a specific chemical, unless we make a correct, viable, and optimum MOC selection, the hfe expectancy of those facihties, in a given chemical exposure, can be very short. For the inexperienced in this field, the direct capital costs of the MOC facet of the production of chemicals, the funds spent to maintain these facilities (sometimes several times those initial capital costs), the indirect costs that are associated with outages and loss of production, off-quahty product (because of equipment and facility maintenance) as well as from contamination of the product, etc., are many times not even considered, let alone used as one of the major criteria in the selection of that MOC as well as its costs to keep the plant running, i.e., a much overlooked cost figure in the CPI. To emphasize the magnitude and overall economic nature of the direct and indirect (nonproductive) costs/losses that result from the action of corrosion of our metallic facihties, equipment, and the infrastructures, within the United States, Congress has mandated that a survey of the costs of corrosion in the United States be conducted periodically. 

In addition to the direct cost of the purchase and installation of equipment, the capital cost of a project will include the indirect costs listed below. These can be estimated as a function of the direct costs. 

Social costs reflect in this example all costs occurring from the provision and the use of transport infrastructure, such as wear and tear costs of infrastructure, capital costs, congestion costs, accident costs and environmental damage costs. Some of these costs are already indirectly included in the private costs through taxes and charges, while others are not. In the context of environmental economics, private and social aspects are of importance. Mainly since it is often the case that environmental degradation is a social cost caused by private activities. Hence, the distinction between private and social is as presented above another impact of costs not being properly internalized in prices. 

Unlike the methane steam reformer, the autothermal reformer requires no external heat source and no indirect heat exchangers. This makes autothermal reformers simpler and more compact than steam reformers, resulting in lower capital cost. In an autothermal reformer, the heat generated by the POX reaction is fully utilized to drive the SR reaction. Thus, autothermal reformers typically offer higher system efficiency than POX systems, where excess heat is not easily recovered. 

Total capital cost (TCC) includes TEC, building, site preparation, and indirect costs. 

It is also possible to understand the fixed capital cost as the sum of direct and indirect costs. Direct costs are the installed-equipment costs plus the price of plants built separately from the production line, where utilities, such as steam, are produced. Indirect costs contain engineering costs, fees, supervision costs, etc. [15] that the investor needs to sustain during plant construction. 

The second step is to estimate the direct installation costs by summing all the cost factors involved in the direct installation costs, which include piping, insulation, foundation and supports, and so on. The sum of these factors is designated as the DCF (direct installation cost factor). The direct installation costs are then the product of the DCF and X. The third step consists of estimating the indirect installation cost. Here all the cost factors for the indirect installation costs (engineering and supervision, startup, construction fees, and so on) are added the sum is designated by ICF (indirect installation cost factor). The indirect installation costs are then the product of ICF and X. Once the direct and indirect installation costs have been calculated, the total capital cost (TCC) may be evaluated as follows ... 

III. Fixed-capital investment = direct costs + indirect costs... 

Operating Supplies Indirect Cost 0.0075 X Fixed Capital Cost... 

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