Cost center

Some of the economic hurdles and process cost centers of this conventional carbohydrate fermentation process, schematically shown in Eigure 1, are in the complex separation steps which are needed to recover and purify the product from the cmde fermentation broths. Eurthermore, approximately a ton of gypsum, CaSO, by-product is produced and needs to be disposed of for every ton of lactic acid produced by the conventional fermentation and recovery process (30). These factors have made large-scale production by this conventional route economically and ecologically unattractive. 

However, it is sometimes quite difficult to separate costs and particularly manufacturing overhead costs into fixed and variable components. In the long term virtually all costs are variable. The difference between the two methods assumes great importance in inventory evaluation. In cost accounting, costs are identified with cost centers. These are accounting devices which may or may not have a physical existence. In the simplest case of a plant manufacturing a single product, the entire plant may be the cost center. 

An industrial organization must decide whether to charge off air pollution control costs as a corporate charge, so that the plant manager does not include them in the accounts or the reverse, so that the plant manager must show a profit for the plant as a cost center, after including costs of air pollution control. 

Cost center For accounting purposes, a grouping of equipment and facihties comprising a product manufacturing system. 

This sale and back-lease model is applied by many other pharmaceutical companies. It enables the company to dispose of assets without being forced to lay off employees. The net effect for the industry as a whole is that statistically, the share of outsourcing is increasing. However, the problem of underutilized capacity persists. For a hne-chemical company, the acquisition of an API plant from a pharma company is problematic. Once the supply contract, offered by the pharma company as an incentive for the acquisition, expires, the problem arises as to what the capacity should be used for. This is all the more the case as the plants usually are designed to manufacture just one product and therefore are not truly multipurpose. Last but not least, the plants have been run as cost centers and the implementation of a lean production... 

Managing cost centers Internal cost allocation/ charging... 

Table 15-11 depicts the hospital s total patient revenues for fiscal year 2007. It also indicates the total expenses for the pharmacy department and the percentage of revenues consumed by the department. Although not shown in this exhibit, a revenue/expense report is generated every month so that the cost center s expenses as a percentage of total revenue can be monitored closely. 

Department of Pharmacy—Cost Center 8107 Revenue/Expense Actuals for Fiscal Year 2007... 

Pharmacy cost center expense as a percent of revenue... 

Cost center A unit of an organization for which costs are recorded and analyzed. In general, cost centers add to the overall cost of the organization but contribute to the profits of the organization indirectly. Some examples of cost centers are customer-service centers and research and development departments. 

In order that the true internal costs of a study can be calculated, it is necessary that a sponsor completes a similar exercise, using its own internal fully overheaded costs for each of the cost center personnel that are used. When sponsors estimates of internal costs are substantially less than those offered by CROs, it is frequently the case that understanding of the sponsors fully overheaded costs has been inadequate. This was borne out in a survey of 27 pharmaceutical companies (King, 1997), 41% of whom reported that they did calculate internal costs, 33% reported that they did not and, interestingly, 26% did not know ... 

Enterprise data, which consists of data referring to, for example, products, customers, suppliers, countries, and cost center usually in the responsibility of external departments and can be transferred via software interfaces from other systems... 

The effective times of the laboratory work can be entered in the system and used for cost calculations. The LIMS has the ability to calculate the costs of processing orders. It is possible to provide detailed reports associated with processing a particular product or set of products by entering into the order the cost center, the charged and expected times, and costs defined in the standard. 

Cost center consciousness will become increasingly important to the 70 s. Sensitivity to the fact that marketing profits are directly related to the point of manufacture, available methods of distribution, and related considerations is essential in the contribution of the marketing function to profitable results. 

Cost center studies should include programs which help the salesman to keep his selling costs at minimum levels and enable him to make the maximum contribution to profits of which he is capable. Equally important in implementing the cost center concepts are value analyses which accurately apprise the marketing team of the results being obtained from dollars spent for advertising, sales promotion, technical literature, and related aids. 

One of the major results of chemical R D is the benefit by way of improved productivity and quality to many industries that use its constantly improved and diversified products (food, clothing, housing, transportation, medicine) as well as the resulting ultimate social benefit to individual consumers. Therefore, the chemical industry s R D cost center is to an extent an unpaid, unsung hero (this might well be said of other industrial R D cost centers also). 

Percent craft hours by work/cost center... 

Data managed in this module would include the details of the maintenemce budget and provide current cost experience at cost center, project number, equipment location, system/subsystem level, etc. 

Contract maintenance will continue to grow. The core requirement for maintenance will be even more important in the next millennium due to technology advances. Organizations will focus on core competencies. Some forget the core requirement for maintenance and also lose their core competencies to do effective maintenance. Profit-centered contract maintenance providers wiU consume internal maintenance operations that continue a cost-centered approach. In-house maintenance operations will continue to lose when they are unable to replenish and/or maintain their core competencies in maintenance. 

The scope of the application of the rate, whether it is for the plant, cost center, machine, or design. 

Service Requester. The database should include elements allowing identification of the department, person, telephone number, cost center, and location of the service requester. 

Organize materials by department or cost center or other hospital organizational entity for ease of use by planners. 

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