Documente Academic
Documente Profesional
Documente Cultură
OF
www.constructionmechanizer.com
Introduction
Ownership and operating costs of
work need to be calculated based
on
1. units of work production per hour (ton/hr or
cum3/hr etc),
2. cost per hour (Rs./hr etc), or
3. unit cost (Rs./ton or Rs./cum)
3.Employee cost
www.constructionmechanizer.com
Fixed Cost
Fixed costs are those which can be
predetermined as accumulating with
the passage of time, rather than with
the rate of work.
www.constructionmechanizer.com
Fixed Cost
Commonly included in fixed costs
are
1.equipment depreciation,
2.interest on investment,
3.taxes,
4.storage and protection, and
5.insurance.
Fixed costs of equipment are the
result of procurement and vanish
when it is sold.
www.constructionmechanizer.com
Variable Cost
Variable costs incurred only when the machine
is put to work. These costs include the
1.costs of fuel,
2.lubricants,
3.wear parts,
4.equipment maintenance and repairs.
Operating cost depends largely on the way
machine is operated (operator skill).
Proper maintenance also plays vital role in
operating cost.
www.constructionmechanizer.com
Employee Cost
Employee costs are those costs
associated with employing people for
operation,
maintenance, and
supervision.
employee cost includes:
direct wages,
food contributions,
transport,
social costs,
health and retirement, incentive.
www.constructionmechanizer.com
A to Z Element for
calculation of Ownership Cost
A. Purchase price (inc. options,
delivery & set up costs). Often these
are the cost known with certainty.
www.constructionmechanizer.com
A to Z Element for
calculation of Ownership Cost
C. Economic Life: This is the period over
which the equipment can be operated at an
acceptable operating cost and productivity.
The economic life is generally measured in
terms of years, hours, or kilometers.
D. Ownership period: The intended period
of the machine to be utilized by owner.
This can be based on economic life or
physical life, or a compromise of the two.
www.constructionmechanizer.com
A to Z Element for
calculation of Ownership Cost
E. Residual value: The future market
value of the machine - discounted back
to a present value. Estimate of realizable
value for disposal of equipment.
F. Depreciation Time: The intended
period of the machine over which
depreciation is divided. This can be
based on economic life or physical life,
or a compromise of the two.
www.constructionmechanizer.com
A to Z Element for
calculation of Ownership Cost
G. Annual depreciation cost: This is
calculated by deducting the residual value
from the purchase price and dividing the
remaining amount by the no. of years the
machine is to be kept or any other
depreciation method selected by owner.
www.constructionmechanizer.com
Calculation of
Ownership Cost & Operating Cost
.
www.constructionmechanizer.com
Calculation of
Ownership Cost & Operating Cost
.
www.constructionmechanizer.com
Thought of
Construction Mechanizer
www.constructionmechanizer.com
Thought of
Construction Mechanizer
www.constructionmechanizer.com
THANK YOU
www.constructionmechanizer.com