Cost sheet fixed costs

The items may also be classified differently in cost sheets and cost standards prepared to monitor the performance of the operating plant. For this purpose the fixed-cost items should be those over which the plant supervision has no control, and the variable items those for which they can be held accountable. 

The simplest economic model for the guidance of the catalyst chemist is the standard cost sheet. This lists the variable costs (raw materials), fixed costs (capital charges) and semi-variable costs (conversion expense). Typically, these three elements may represent similar proportions of the overall cost per ton of product, but the circumstances following successful catalyst research can vary widely. 

It is useful to create a single-page summary of all of the production costs and revenues associated with a project, as this makes it easier to review the project economics and understand the relative contribution of different components to the overall cost of production. The summary sheet usually lists the quantity per year and per unit production of product, the price, the cost per year, and the cost per unit production of product for each of the raw materials, byproducts, consumables, and utilities, as well as fixed costs and capital charges. 

The first step in setting up the Solver model is to enter the cost, demand, and capacity information as shown in Figure 5-9 (see sheet Figure 5-12 in spreadsheet Figures 5-9 to 12). The fixed costs X for the five plants are entered in cells H4 to H8. The capacities Kj of the five plants are entered in cells 14 to 18. The variable costs from each plant to each demand city, Cy, are entered in cells B4 to G8. The demands Dj of the six markets are entered in cells B9 to G9. Next, corresponding to decision variables Xy andy cells B14 to G18 and H14 to H18, respectively, are assigned as shown in Figure 5-9. Initially, all variables are set to be 0. 

As with other ratios, careful interpretation is required. Property, plant, and equipment (PP E) is typically recorded on the balance sheet at cost. This could be misleading when compared to fixed asset turnover between similar companies. For instance, compare two identical companies however, one is older than the other. The only difference between the two companies is when each company purchased its PP E. Since inflation affects the purchase price of PP E, the older company records its fixed assets at a value lower than the younger company, which recently purchased fixed assets. Comparing the fixed asset turnover of these two companies, it would appear that the older company more efficiently uses fixed assets, when in fact this may not be the case at aU. 

Plume Containment. WeUs can be placed at a contaminated site to prevent the contamination from spreading further or migrating offsite. In the past, containment efforts often reHed on physical methods such as bentonite slurry trenches, grout curtains, sheet pilings, weU points, and fixative injections. Containment by judiciously placed weUs generally costs less, takes less time to install, and is more flexible because pumping rates and locations can be varied. 

Clad Tube Sheets Usually tube sheets and other exchanger parts are of a solid metal. Clad or bimetallic tube sheets are usecito reduce costs or because no single metal is satisfactory for the corrosive conditions. The alloy material (e.g., stainless steel, Monel) is generally bonded or clad to a carbon steel backing material. In fixed-tube-sheet construction a copper-alloy-clad tube sheet can be welded to a steel shell, while most copper-alloy tube sheets cannot be welded to steel in a manner acceptable to ASME Code authorities. 

The amount of fresh catalyst added is usually a balance between catalyst cost and desired activity. Most refiners monitor the MAT data from the catalyst vendor s equilibrium data sheet to adjust the fresh catalyst addition rate. It should be noted that MAT numbers are based on a fixed-bed reactor system and, therefore, do not truly reflect the dynamics of an FCC unit. A catalyst with a high MAT number may or may not produce the desired yields. An alternate method of measuring catalyst performance is dynamic activity. Dynamic activity is calculated as shown below ... 

Two general methods have been used to estimate piping costs when detailed flow sheets are not available. One method is to use a percentage of the FOB equipment costs or a percentage of the fixed capital investment. Typical figures are 80 to 100 percent of the FOB equipment costs or 20 to 30 percent of the fixed capital investment. This method is used... 

Fixed assets (excluding land) used by a company usually decrease in value over time, even when properly maintained. This can be due to product obsolescence or simply wearing out (with an ultimate need to be replaced). If an asset life is less than a year, the expenditure on it is included in the profit/loss account as a cost. If, however, its life is greater than 1 year, then a way has to be found to adjust both profit/loss account and balance sheet to give recognition to the actual life of the asset. 

The initial cost of the asset is shown as a fixed asset in the balance sheet. In the profit/loss account, the decrease in value is shown each year by allowing a proportion of the original value as a notional operating cost, the depreciation allowance . A correspondingly reduced asset value is then shown in the end-of-year balance sheet, with an equivalent increase in the cash assets (so that the total assets are not changed). 

Chemical Engineers, 4th ed., by M. S. Peters and K. D, Tlmnieriiaus (New York McGraw-Hill, 1991). From Figure 15-12 of this book, one can get an estimate of the purchase cost per foot of 1 for a 1-in. pipe and 2 per foot for a 2-in. pipe for single tubes and approximately 20 to 50 per square foot of surface area for fixed-tube sheet exchangers. 

---