Costs, administration auxiliaries

Fixed costs are those elements of piece cost that are a function of the annual production volume. Fixed costs are called fixed because they typically represent one-time capital investments (buildings, silos, processing machines, etc.) or annual expenses unaffected by the number of products produced (building rent, engineering support, administrative personnel, etc.). Typically, these costs are distributed over the total number of products produced in a given period. For plastics processes the principal elements are main machine cost, auxiliary equipment cost, tooling cost, building cost, overhead labor cost, maintenance cost, and the cost of capital. 

Total Capital Cost The installed cost of the fixed-capital investment Cpc is obviously an essential item which must be forecast before an investment decision can be made. It forms part of the total capital investment Ctc, defined by Eq. (9-14). The fixed-capital investment is usually regarded as the capital needed to provide all the depreciable facihties. It is sometimes divided into two classes by defining battery limits and auxiliary facilities for the project. The boundary for battery limits includes all manufacturing equipment but excludes administrative offices, storage areas, utihties, and other essential and nonessential auxihary facilities. 

Moreover, currently the marketing Remicaid, because it has been assessed to require administration by physicians, and not nurses or auxiliaries, has a hidden cost of the physician s time (say, 400 in the United States). The drug itself has been competitively priced at about 120. 

The fixed capital cost, Cp, is the capital required to provide all the depreciable facilities. Cp, may be divided into two classes known as the battery limits and auxiliary facilities. The boundary of battery limits includes all manufacturing and processing equipment. The auxiliary facilities are the storage areas, administration offices, utilities and other essential and non-essential supporting facilities. 

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