Appendix A: Calculation of Heat Treating Costs^[1]

This article presents a simple cost/pricing system that is reasonably accurate and could easily be recalculated if the yearly cost of any of the basic cost components change. Using the example of a commercial heat treating facility, the operational details are categorized as atmosphere processes, induction processes, aluminum processes, high-heat processes, and secondary processes. For the purpose of calculating the heat treatment processing cost per hour and the selling price for a piece of equipment, the costs are separated into direct costs, allocated costs, capitalized cost, and general and administrative costs. The article discusses the techniques involved in allocating costs to the group of equipment, and presents a description on the cost analysis of endothermic gas.