Overheads direct

Gr-The-solution-flashes into the separator operating near atmospheric pressure, and the resulting steam passes overhead directly to the ammonia evaporator or alternatively to be scrubbed with dilute AN solution to reduce ammonia and AN in the downstream condensates. Concentrated 95% - 97% AN solution overflows from the tank to the pump tank. If the AN solution is less than 96%, it is first concentrated in a falling film evaporator. The process parameters are given in Table 8.22. 

Variable overhead Direct labor GSA Warranty Depreciation Purchased items Materials... 

Less overhead While projects were underway, many and various expenses were being incurred within the firm which were not directly billed to the clients. Overhead = S -l- P where F is the sum of salaries and hourly pay not billable to client such as vacation, illness, holidays, bonuses, office staff, and business development. Recall that S is non-salary costs not billed to client and that P is total payroll. Then P - P = payroll paid by project income. The overhead ratio is O = (overhead)/(direct labor cost) = (S + F)/(P - F). The overhead ratio, which is usually greater than 1.0, is burden on direct labor—direct labor has to be marked up to recoup overhead and to generate profit. For the hypothetical income statement shown in Table 10.7,0=1.5. Overhead is subtracted from gross income. 

If there is a three-component mixture and simple columns are employed, then the decision is between two sequences, as illustrated in Fig. 5.1. The sequence shown in Fig. 5.1a is called the direct sequence, in which the lightest component is taken overhead in each column. The indirect sequence, shown in Fig. 5.16, takes the heaviest component as the bottom product in each column. There may be... 

Heuristic 2 Sequences that remove the lightest components alone one by one in column overheads should be favored. In other words, favor the direct sequence. 

McKelvie, I. D. Cardwell, T. J. Cattrall, R. W. A Microconduit Flow Injection Analysis Demonstration Using a 35-mm Slide Projector, /. Chem. Educ. 1990, 67, 262-263. Directions are provided for constructing a small-scale FIA system that can be used to demonstrate the features of flow injection analysis. For another example see Grudpan, K. Thanasarn, T. Overhead Projector Injection Analysis, Anal. Proc. 1993, 30, 10-12. 

Fractionation. Direct fractionation also can be used to remove dissolved water from LPG. The water-rich overhead vapor from the dryer fractionator is returned to the fractionator as reflux and the water phase is discarded. A dry LPG product that meets either propane or butane water specifications is produced as a ketde product from the fractionator. 

Safety Showers. Safety showers and eyewash fountains or hoses should be installed where corrosive or toxic materials are handled. A large-volume, low velocity discharge from directly overhead should effect continuous drenching, ie, a minimum flow of 20 L/min (50 gal /min). Water to outside showers may be heated to a maximum temperature of 27°C by an electric heating cable. The valves for all safety showers should be at the same height and relative position to the shower head, and they should operate in the same way and direction. The shower station should be identified by paint of a bright, contrasting color. In areas where chemicals harmful to the eyes may be encountered, an eyewash fountain or spray should be available in case of splash accidents. 

The simplest unit employing vacuum fractionation is that designed by Canadian Badger for Dominion Tar and Chemical Company (now Rttgers VFT Inc.) at Hamilton, Ontario (13). In this plant, the tar is dehydrated in the usual manner by heat exchange and injection into a dehydrator. The dry tar is then heated under pressure in an oil-fired hehcal-tube heater and injected directly into the vacuum fractionating column from which a benzole fraction, overhead fraction, various oil fractions as side streams, and a pitch base product are taken. Some alterations were made to the plant in 1991, which allows some pitch properties to be controlled because pitch is the only product the distillate oils are used as fuel. 

EDC from the oxychlorination process is less pure than EDC from direct chlorination and requires purification by distillation. It is usually first washed with water and then with caustic solution to remove chloral and other water-extractable impurities (103). Subsequently, water and low boiling impurities are taken overhead in a first (light ends or heads) distillation column, and finally, pure, dry EDC is taken overhead in a second (heavy ends or product) column (see Fig. 2). 

The manufacturing cost consists of direct, indirect, distribution, and fixed costs. Direct costs are raw materials, operating labor, production supervision, utihties, suppHes, repair, and maintenance. Typical indirect costs include payroll overhead, quaHty control, storage, royalties, and plant overhead, eg, safety, protection, personnel, services, yard, waste, environmental control, and other plant categories. However, environmental control costs are frequendy set up as a separate account and calculated direcdy. The principal distribution costs are packaging and shipping. Fixed costs, which are insensitive to production level, include depreciation, property taxes, rents, insurance, and, in some cases, interest expense. 

Annual iadirect costs are estimated as percentages of the direct labor and fixed capital costs. Typical direct labor percentage ranges are 25—30% for payroll overhead, 15—20% for stores and suppHes, 10—20% for control laboratory, 10—20% for security, 10% for yard, and 10—15% for process improvements. That is, total iadirect costs are usually 80—115% of the direct labor cost (1). 

A variable expense is considered to be one which is directly proportional to the rate of production Rp or of sales Rs as is most appropriate to the case under consideration. Unless the variation in finished-product inventoiy is large when compared with the total production over the period in question, it is usu ly sufficiently accurate to consider Rp and Rs to be represented by the same-numerical-value R units of sale or production per year. A fixed expense is then considered to be one whiai is not directly proportional to R, such as overhead charges. Fixed expenses are not necessarily constant but may be sub-... 

Revenue expenditure includes the direct material costs and direct labor costs incurred in the manufac ture of a produc t, together with the associated overheads that include maintenance of the plant. Since these expenses are debits, the debit balance for a given accounting period is obtained by adding up the debit balances from each individual expenditure account. Similarly, since revenues from sales and other income are credits, the credit balance for a given accounting period is obtained by adding up the credit balances from each individual income or revenue account. 

Cost accounting is the name traditionally given to accounting for manufacturing costs. The manufacturing cost of a product is traditionally taken as the sum of the costs for (1) direct materials, (2) direct labor, (3) manufacturing overheads, and (4) administration, selhng, and finance. 

However, many costs cannot be directly charged to an individual produc t. These so-called indirect, burden, or overhead costs range From the lighting and heating required for the plant and offices to the cafeteria and medical facihties provided. When several products are made in a plant, it becomes increasingly difficult to allocate overheads correctly among the various products. 

A number of different methods are commonly used to estimate the amount of overhead to be allocated to an individual product. These methods are necessaiy because accountancy costs become prohibitive for charging all costs directly to an individual product. Unfortunately, there is always an arbitrary element inherent in the process of allocation. 

Overheads in the chemical-process industries are commonly calculated as a percentage of (I) direct materials cost, (2) direct labor cost, or (3) prime or direct costs. Other methods of allocating overheads are on the basis of (I) plant area, (2) number of employees, (3) capital value, and (4) elec tric power. 

Let us consider the manufac ture of metal ornaments. The processing cost, exclusive of material, may vaiy veiy httle for a wide range of materials. However, the direct materials cost will be much greater for precious than for base metals. In this case, an overhead allocation on the basis of direct material costs could be veiy misleading, while one based on direct labor cost could be quite accurate. 

Problems can also arise when allocating overheads on the basis of direct labor cost. Let us consider a company that evaluates overheads at 125 percent of direct labor cost. A process plant employs seven operators, each with a direct cost of 10,000 per budget period. As a result of a works-study exercise, it is found that the plant can operate satisfactorily with six operators. The ac tual cost saving is hkely to oe far nearer to the direct labor savings of 10,000 per period than to the calculated saving of 10,000 -t- 10,000(125/100) = 22,500 per period. The 22,500 calculated saving is the direct labor cost plus overheads taken as 125 percent of the direct labor cost. 

A thorough analysis should be made before production is stopped on a product that is losing money. Although direct costs of the discontinued product will be saved, overheads are not ehminated, as might be inferred from taking overheads as a percentage of direct material, direct labor, or prime costs. The plant is stiU there, together with its... 

Example 19 Overhead in Two Dijferent Projects Let us consider a plant that can make either product A or product B. At normal capacity, the overhead cost is known to he 2.50 per unit. Product A has a direct materials cost of 8 per unit and a direct labor cost of 2 per unit. For simplicity, the prime cost is here taken as the sum of these two costs, i.e., 10 per unit. 

In Table 9-28, a correct overhead cost of 2.50 per unit at normal capacity is calculated by taking either 31.25 percent of the direct materials cost, 125 percent of the direct labor cost, or 25 percent of the prime cost. AU these methods give a total cost of 12.50 per unit and a profit of 1.50 per unit for a selling price of 14 per unit. 

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. 

The annual manufacturing cost or expense A e be written as the sum of the direct manufacturing or prime cost Adme. ud the indirect manufacturing or overhead cost A E ... 

The determination of direct or prime costs is more straightforward than the determination of indirect or overhead costs. When more than one product is involved, the question arises as to the correct distribution of overhead costs between the various products. 

Static and Flexible Budgets Overhead cost can significantly affect the profitability of a projec t and is the only cost outside the control of the project manager. The project is expected to contribute a definite amount toward the expenses of the company and will be charged this amount even if the production rate is zero. This is the fixecTcomponent of the overhead cost and will include directly allocable costs such as depreciation and a proportion of general costs such as office salaries and heating. 

Direct materials cost Direct labor cost Overhead cost Manufacturing cost Revenue from sales Gross profit... 

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