Utility cost share in chemical manufacturing: For ordinary chemical process plants, utilities (compressed air, steam, water, power, fuel gases, etc.) typically account for approximately what percentage of total product cost?

Difficulty: Easy

Correct Answer: 1% to 5%

Explanation:


Introduction / Context:
Utility costs are an important component of manufacturing cost but, for many ordinary chemical plants, they are a modest share compared with raw materials and labor/overheads.


Given Data / Assumptions:

  • Typical continuous chemical processes (non-energy-intensive specialty products).
  • Normal energy prices and efficient operations.


Concept / Approach:
Rule-of-thumb cost breakdowns commonly place utilities in the low single-digit percent range of total product cost, unless the process is very energy intensive (e.g., electrolytic or high-temperature furnaces).


Step-by-Step Solution:
Compare ranges: 1–5% aligns with ordinary plants.Larger ranges (10–45%) are typical only for energy-intensive processes or unusual utility price regimes.


Verification / Alternative check:
Published cost tables in process design texts show utilities often at a few percent for typical chemical production lines.


Why Other Options Are Wrong:
10–45% substantially overstates typical utility shares for ordinary plants.


Common Pitfalls:
Confusing total manufacturing cost with energy-intensive industries; always consider process specifics.


Final Answer:
1% to 5%

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