Fixed Costs 



Fixed costs include allowances for depreciation, interest on facility investment, 

 taxes, insurance, and fixed repairs and maintenance each estimated as a percentage 

 of investment cost. Fixed costs also include salaries of management and super= 

 visory personnel, interest on short-term loans that may be required to pay current 

 operating expenses, and other expenses of ownership that cannot be avoided by 

 closing down operations,, 



Investment costs for the different types and sizes of radiation facilities con- 

 sidered are based on estimates of current replacement value of equipment and 

 other durable instruments of production,, These include the cost of source and equip- 

 ment and of transporting them to plant site, and installation costs including the cost 

 of installing ancillary equipment. 



Investment costs for selected sizes of cobalt 60 and X°ray machine facilities 

 are shown in tables 6 and 7, respectively,, 



Total fixed costs, and the basis for their calculation, are shown in table 8. The 

 table also gives average fixed costs per kilowatt hour of annual facility operation, 



Average Total Costs 



The average total cost is the sum ofthe average variable and average fixed costs. 

 To find the average total cost per pound for treating fresh strawberries with cobalt 

 60 in a facility of 1 kilowatt capacity, the following steps are required: 



lo Find in table 4 the quant ity=- 1,120 pounds--that can be treated in an hour under 

 the assumptions used in the foregoing analysis (an application dosage level of 220 

 kilorads and net source utilization efficiency of 30 percent.) 



2„ Multiply this quantity by 95 percent, the facility use factor for cobalt 60 

 (page 6), to obtain 1,064 pounds as the average output per hour. 



3. In tables 5 and 6, find the average variable and fixed costs per hour of oper- 

 ation. For an annual operation of 2,000 hours, these costs are $12.10 and $18.95, 

 respectively. Add these two figures and divide the total of $31.05 by 1,064 pounds 

 (average output, from item 2 above) to obtain an average total cost of 2.9 cents per 

 pound. (See table 9 for comparable figures for different facility sizes and annual 

 hours of operation.) 



A similar procedure is required to compute average total cost estimates for 

 X=ray machine facilities. In this analysis, a net source utilization efficiency of 35 

 percent and a use factor of 80 percent are applied to X-ray machine facilities. 



For a 3-kilowatt or 204,000-curie cobalt 60 facility operated 2,000 hours 

 annually at the 220 kilorad dosage level, the estimated average total cost is 1.7 cents 

 per pound (table 9). The comparable estimate for a 3-kilowatt 3-Mev. X-ray machine 

 facility is 2.4 cents per pound. For 4,000 hours of annual operation, the estimate 

 is 1.1 cents per pound for a 204,000-curie cobalt 60 facility and 1.6 cents per pound 

 for the comparable 3~kilowatt 3-Mev. X-ray machine facility. The corresponding 

 engineering and design average cost estimates shown in table 12 should be added 

 to these estimates if it is contemplated that only one facility will be installed by a 

 manufacturer. 



- 9 - 



