Plant overhead

Ethylene Stripping. The acetylene absorber bottom product is routed to the ethylene stripper, which operates at low pressure. In the bottom part of this tower the loaded solvent is stripped by heat input according to the purity specifications of the acetylene product. A lean DMF fraction is routed to the top of the upper part for selective absorption of acetylene. This feature reduces the acetylene content in the recycle gas to its minimum (typically 1%). The overhead gas fraction is recycled to the cracked gas compression of the olefin plant for the recovery of the ethylene. 

Essentially all of the methane [74-82-8] is removed ia the demethanizer overhead gas product. High recovery of ethane and heavier components as demethanizer bottoms products is commonplace. The work that is generated by expanding the gas ia the turboexpander is utilized to compress the residue gas from the demethanizer after it is warmed by heat exchange with the inlet gas. Recompression and deUvery to a natural gas pipeline is performed downstream of the plant. A propane recovery of 99% can be expected when ethane recoveries are ia excess of 65%. 

Eixed costs include corporate overhead and administration costs as well as those plant-related costs that do not vary with production and contribute 5 to 30% of the total manufacturing cost. 

The ammonolysis of phenol (61—65) is a commercial process in Japan. Aristech Chemical Corporation (formerly USS Chemical Division of USX Corporation) currently operates a plant at Ha verb ill, Ohio to convert phenol to aniline. The plant s design is based on Halcon s process (66). In this process, phenol is vapori2ed, mixed with fresh and recycled ammonia, and fed to a reactor that contains a proprietary Lewis acid catalyst. The gas leaving the reactor is fed to a distillation column to recover ammonia overhead for recycle. Aniline, water, phenol, and a small quantity of by-product dipbenylamines are recovered from the bottom of the column and sent to the drying column, where water is removed. 

Figure 5 illustrates a typical distillation train in a styrene plant. Benzene and toluene by-products are recovered in the overhead of the benzene—toluene column. The bottoms from the benzene—toluene column are distilled in the ethylbenzene recycle column, where the separation of ethylbenzene and styrene is effected. The ethylbenzene, containing up to 3% styrene, is taken overhead and recycled to the dehydrogenation section. The bottoms, which contain styrene, by-products heavier than styrene, polymers, inhibitor, and up to 1000 ppm ethylbenzene, are pumped to the styrene finishing column. The overhead product from this column is purified styrene. The bottoms are further processed in a residue-finishing system to recover additional styrene from the residue, which consists of heavy by-products, polymers, and inhibitor. The residue is used as fuel. The residue-finishing system can be a flash evaporator or a small distillation column. This distillation sequence is used in the Fina-Badger process and the Dow process. 

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. 

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. 

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. 

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. 

The modern trend is for overhead costs to become an increasing proportion of total product costs. This results from the ever-greater sophistication of process plants. Therefore, it is highly desirable that chemical engineers should have some say in the location of overheads and that this should not be left entirely to accountants. 

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. 

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. 

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... 

Problems can arise with each of the methods used for allocating overheads. Two process plants may occupy similar areas yet have vastly different material or labor costs. Problems can also arise with an individual plant that can be used to make different products, as Example 19 will show. 

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. 

Indirect Manufacturing Costs Estimates for the cost of payroh overhead, control laboratoiy, general plant overhead, packaging, and storage facilities are best based on company records for similar processes. 

Companies usually include in the charge for overhead the following items operating supphes, supervision, indirect payroll expenses, plant protection, plant office, general plant overhead, and control laboratory. This overhead charge is frequently taken as an equivalent percentage of the direc t labor cost. 

Factor Estimations Most factor methods for estimating the total installed cost of a process plant are based on a combination of materials, labor, and overhead cost components. These can be conveniently grouped as... 

Started to rise from the reaction, causing the vessel bottom head to fail at the weld seam. The force from the escaping gases propelled the tank into the ceiling and overhead structural steel. A small fire erupted which was quickly brought under control by the automatic sprinkler system. Even though the chemists had reviewed the chemistry and did not anticipate any problems, use testing could have identified this problem in the laboratory rather than the plant. 

The potentials from larger grounding installations on the soil surface are essentially flatter but more extended than those from overhead power line pylons (e.g., power stations, transformers and switchboard plants). The maximum expected grounding voltage in case of failure and its variation at the soil surface can be obtained from the facility s management. 

The allocation of home office expenses shows up in this category. It has been argued that home office expenses do not increase with the addition of a new plant or unit. Hov/ever, a full allocation of home office overhead should be made for each study, since old units are phasing out or losing profitability. The new units must carry their share. Further, as discussed next in the section on Economics, each new unit must stand on its own and contribute to the overall company s profitability. The cost of yield clerks, plant accountants, plant personnel representatives, plant transportation department personnel, etc., must be estimated and included here. 

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