This post contains all the information you need for the Alchemy Workshop. It is a work in progress and updated as information is obtained.

You can create all sorts of goodies with "magic powder" which you get from "salvaging" epic heroes (any rings/glory/evo count for more powder too). The downside is you need to upgrade the workshop to access more items to create with the powder. The additional downside is that it costs powder to upgrade the shop!
Here are the costs and what you unlock: 
We have the item/count, powder cost, and time to create

Lvl1 - 1m gold to build - Requires TH6
50 BB shards - 50 powder/ 8 hours
1x bag 'o souls (8k) - 75 powder/ 8 hours
100 GP shards - 50 powder/ 8 hours
1x chest of gold (2m) - 60 powder/ 4 hours

Lvl 2 - 200 powder(2 hours) - Requires TH7
100 SM shards - 60 powder/ 12 hours
50 SC shards - 60 powder/ 8 hours 
1x chest of gold (5m) - 130 powder/ 8 hours
1x chest of rings (100) - 75 powder/ 8 hours

Lvl 3 - 300 powder(24 hours) - Requires TH7
100 DR shards - 75 powder/ 12 hours
100 AE shards - 60 powder/ 8 hours
1 gold exp egg - 30 powder/ 5 hours
3x one hour speed scroll - 15 powder/ 1 hour

Lvl 4 - 300 powder(24 hours) - Requires TH8
100 cdb shards - 50 powder/ 8 hours
100 BH shards - 50 powder/ 8 hours
1x bag o souls (30k) - 250 powder/  1 day
1x chest of rings (500) - 330 powder/ 1 day

Lvl 5 - 500 dust (3 days) - Requires TH8
100 PG shards - 60 dust / 12 hours
100 Hyd shards - 45 dust / 8 hours
100 mutagen - 150 dust / 1d 8h
Speed scroll (8 hours) x1 - 30 dust / 2.5 hours

Lvl 6 - 1000 powder(5 days) - Requires TH9
100 Sfx shards - 50 powder/ 12 hours
100 Pdr shards - 50 powder/ 9 hours
1x coral egg - 100 powder/ 1 day
1x Talent Refreshment bead - 50 powder/ 1 day

Lvl 7 - 1500 powder(7 days) - Requires TH9
100 AD shards - 75 powder/ 1 day
100 AL shards - 75 powder/ 1 day
2x Potions (12 energy) - 30 powder/ 12 hours

Lvl 8 - 2000 powder(10 days)  - Requires TH10
100x RV shards - 75 powder/ 1 day
100x Chr shards - 75 powder/ 1 day
300 mutagen - 400 powder/ 4 days

Lvl 9 - 2500 powder(12 days) - Requires TH10
100 GS shards - 150 powder/ 2 days
100 LS shards - 150 powder/ 2 days
10x EXP stone II - 80 powder

Lvl 10 - 3000 powder(15 days) - Requires TH11
100 Amb shards - 150 powder/ 2 days
5x EXP Stones III - 120 powder

Lvl 11 - 3600 powder (20 days) - Requires TH12 (?)
100 ET shards - 150 powder / 2 days
100 Bk shards - 150 powder / 2 days
100 WT shards - 150 powder / 2 days
100 Ancient Spirit shards - 200 powder / 2 days

Lvl 12 - 4200 powder (25 days)
100 Arcane Caster shards - 150 powder / 2 days
100 Toxic Shaman shards - 150 powder / 2 days
100 BullHead shards - 150 powder / 2 days

Some basic return values if you upgrade your salvage hero
197k souls = 277 powder (upgrading from lvl 1 to lvl 21 merc)
550 rings = 100 powder (upgrading to lvl 5 skill)
25 gold eggs = 45 powder
15 coral eggs = 140 powder

Powder value at lvl 1 hero/skill/mercs (no glory/evolve/talent)
AE: 65
SC: 65
BB: 65
GP: 65
SM: 76
Hdr: 87
CdB: 93
DR: 100
BH: 113
Pdr: 136
PG: 170
DS: 151
SFx: 242
RV: 252
Dj: 252
Chr: 252
AD: 253
AL: 253
GS: 756
LS: 756
Amb: 756
Ent: 756 ?
TBk: 756 ?
WT: 756 ?

Tips:
1. If you glory your heroes you will get less powder than if you salvaged one by one. Do them individually (no glory) and you'll get more powder on avg. You may use more stamina but it rebuilds fairly quickly. There is a chance you will gain slightly more powder with just 1 glory but after that the returns diminish. The only way to make up for it is to get "lucky" and get a double salvage bonus.
2. It may be useful to spend some time to level up the heroes you want to salvage. You cannot salvage EXP eggs directly but if you use them to lvl up your hero then you will get extra powder in return. 
3. If you have the extra rings or souls, upgrading your hero's skill and mercs will increase the amount of powder you get. See above for details. It may be worth it to you if you really need the extra powder.
4. You can still salvage/create while the workshop building is  being upgraded.

IMPORTANT: If you have the supplies the optimal spot to get a salvage epic to is lvl 120, lvl 5 skill, and lvl 15 mercs. This will cost 400k exp (~54 coral eggs), 56k souls, and 550 rings. This gives the best powder return for cost. You will gain 641 Powder over the standard non-upgraded lvl 1 hero.

Thanks to Rubra, Balgra, Cagey75, Tr0sk, Alanlianov, Cordi, Lazybum, Macross for their contribution to this info. (sorry if I missed anyone)

This is as far as I've got for now - I had the speed ups to get by level 2 instant, just leveling to level 3 now. It's going to take a LOT of side heroes [make sure the ones you want to use are unlocked, not being used as aid] or fusing a lot of your shards to level this baby up max. 

It's 1m gold to build

200 dust to go to level 2 - 2hrs

300 dust to level 3 - takes 24hrs

I couldnt build alchemy workshop cuz my workers are busy. So, how many dusts we get for shitty hero like air elite or BB ? (Thanks for the info btw)

I cannot salvage BB with 3 X glory LVL38, LVL1 achem, anyone have same issue, do we need to lvl up to salvage higher glory epic.

Salvage chief: 65 dust.
Glory priestess: 53 dust (I think I did this an hr ago will double check)
Artic lord (250ish dust sorry I should have wrote this down but did it before I saw the thread)

What is the max level of Alchemy Workshop ?

"lvl 5 - 500 dust (3 days)
100 PG shards - 60 dust
100 ? shards (can anyone tell who this is?) 45 dust"
 nope i blew it up on my laptop... no idea but who is left besides hydra and DS.. cheap dust so must be Hydra.


Lvl 6 - ? dust
1x ?????? - 50 dust

Looks like Mystic crystals

No one tried eat a lvl 120 hero?  Need to wait 1 day before have worker free and gonna eat carol lvl +109 and see hou much can get. As I see,  best is to lvl heroes up before slaughter them for dust.

can you add my (balgra) hints and tips into this post and make a mega thread, no point in running two consecutively and you've done way more info than me!

going from 5 to 6 costs 1000 dusts and 5 days