3.1 Introduction
3.2 Classification of Costs
3.3 Definitions
3.4 Fixed Costs
3.5 Operating Costs
3.6 Labor Costs
3.7 Variable Effort Cycles
3.8 Animal Rates
3.9 Examples
3.2 Classification of Costs
3.3 Definitions
3.4 Fixed Costs
3.5 Operating Costs
3.6 Labor Costs
3.7 Variable Effort Cycles
3.8 Animal Rates
3.9 Examples
3.1 Introduction
The unit cost of logging or road construction is
essentially derived by dividing cost by production. In its simplest case, if
you rented a tractor with operator for $60 per hour - including all fuel and
other costs - and you excavated 100 cubic meters per hour, your unit cost for
excavation would be $0.60 per cubic meter. The hourly cost of the tractor with
operator is called the machine rate. In cases where the machine and the
elements of production are not rented, a calculation of the owning and
operating costs is necessary to derive the machine rate. The objective in
developing a machine rate should be to arrive at a figure that, as nearly as
possible, represents the cost of the work done under the operating conditions
encountered and the accounting system in use. Most manufacturers of machinery
supply data for the cost of owning and operating their equipment that will
serve as the basis of machine rates. However, such data usually need
modification to meet specific conditions of operation, and many owners of
equipment will prefer to prepare their own rates.
3.2 Classification of Costs
The machine rate is usually, but not always,
divided into fixed costs, operating costs, and labor costs. For certain cash
flow analyses only items which represent a cash flow are included. Certain
fixed costs, including depreciation and sometimes interest charges, are omitted
if they do not represent a cash payment. In this manual, all fixed costs
discussed below are included. For some analyses, labor costs are not included
in the machine rate. Instead, fixed and operating costs are calculated. Labor
costs are then added separately. This is sometimes done in situations where the
labor associated with the equipment works a different number of hours from the
equipment. In this paper, labor is included in the calculation of the machine
rate.
3.2.1 Fixed Costs
Fixed costs are those which can be predetermined
as accumulating with the passage of time, rather than with the rate of work
(Figure 3.1). They do not stop when the work stops and must be spread over the
hours of work during the year. Commonly included in fixed costs are equipment
depreciation, interest on investment, taxes, and storage, and insurance.
3.2.2 Operating Costs
Operating costs vary directly with the rate of
work (Figure 3.1). These costs include the costs of fuel, lubricants, tires,
equipment maintenance and repairs.
Figure 3.1 Equipment
Cost Model.
3.2.3 Labor Costs
Labor costs are those costs associated with
employing labor including direct wages, food contributions, transport, and
social costs, including payments for health and retirement. The cost of
supervision may also be spread over the labor costs.
The machine rate is the sum of the fixed plus
operating plus labor costs. The division of costs in these classifications is
arbitrary although accounting rules suggest a rigid classification. The key
point is to separate the costs in such a way as to make the most sense in
explaining the cost of operating the men and equipment. For example, if a major
determinant of equipment salvage value is the rate of obsolescence such as in
the computer industry, the depreciation cost is largely dependent on the
passage of time, not the hours worked. For a truck, tractor, or power saw, a
major determinant may be the actual hours of equipment use. The tractor's life
could be viewed as the sand in an hour glass which is only permitted to flow
during the hours the equipment is working.
3.3 Definitions
3.3.1 Purchase Price (P)
This is the actual equipment purchase cost
including the standard attachments, optional attachments, sales taxes, and
delivery costs. Prices are usually quoted at the factory or delivered at the
site. The factory price applies if the buyer takes title to the equipment at
the factory and is responsible for shipment. On the other hand, delivered price
applies if the buyer takes title to the equipment after it is delivered. The
delivered price usually includes freight, packing, and insurance. Other costs
such as for installation should be included in the initial investment cost.
Special attachments may sometimes have a separate machine rate if their lives
differ from the main equipment and form an important part of the equipment
cost.
3.3.2 Economic Life (N)
This is the period over which the equipment can
operate at an acceptable operating cost and productivity. The economic life is
generally measured in terms of years, hours, or in the case of trucks and
trailers in terms of kilometers. It depends upon a variety of factors,
including physical deterioration, technological obsolescence or changing economic
conditions. Physical deterioration can arise from factors such as corrosion,
chemical decomposition, or by wear and tear due to abrasion, shock and impact.
These may result from normal and proper usage, abusive and improper usage, age,
inadequate or lack of maintenance, or severe environmental conditions. Changing
economic conditions such as fuel prices, tax investment incentives, and the
rate of interest can also affect the economic life of equipment. Examples of
ownership periods for some types of skidding and road construction equipment,
based upon application and operating conditions, are shown in Table 3.1. Since
the lives are given in terms of operating hours, the life in years is obtained
by working backwards by defining the number of working days per year and the
estimated number of working hours per day. For equipment that works very few
hours per day, the derived equipment lives may be very long and local
conditions should be checked for the reasonableness of the estimate.
3.3.3 Salvage Value (S)
This is defined as the price that equipment can
be sold for at the time of its disposal. Used equipment rates vary widely
throughout the world. However, in any given used equipment market, factors
which have the greatest effect on resale or trade-in value are the number of
hours on the machine at the time of resale or trade-in, the type of jobs and
operating conditions under which it worked, and the physical condition of the
machine. Whatever the variables, however, the decline in value is greater in the
first year than the second, greater the second year than the third, etc. The
shorter the work life of the machine, the higher the percentage of value lost
in a year. In agricultural tractors for example, as a general rule 40 to 50
percent of the value of the machine will be lost in the first quarter of the
machine's life and by the halfway point of lifetime, from 70 to 75 percent of
the value will be lost. The salvage value is often estimated as 10 to 20
percent of the initial purchase price.
3.4 Fixed Costs
3.4.1 Depreciation
The objective of the depreciation charge is to
recognize the decline of value of the machine as it is working at a specific
task. This may differ from the accountant's depreciation schedule-which is
chosen to maximize profit through the advantages of various types of tax laws
and follows accounting convention. A common example of this difference is seen
where equipment is still working many years after it was "written
off" or has zero "book value".
Depreciation schedules vary from the simplest
approach, which is a straight line decline in value, to more sophisticated
techniques which recognize the changing rate of value loss over time. The
formula for the annual depreciation charge using the assumption of straight
line decline in value is
D = (P' - S)/N
where P' is the initial purchase price less the
cost of tires, wire rope, or other parts which are subjected to the greatest
rate of wear and can be easily replaced without effect upon the general
mechanical condition of the machine.
Table 3.1.a - Guide for
selecting ownership period based on application and operating conditions.1/
ZONE
A
|
ZONE
B
|
ZONE
C
|
|
TRACK-TYPE
TRACTORS
|
Pulling scrapers, most
agricultural drawbar, stockpile, coalpile and landfill work. No impact.
Intermittent full throttle operation.
|
Production dozing in clays, sands,
gravels. Pushloading scrapers, borrow pit ripping, most landclearing and
skidding applications. Medium impact conditions.
|
Heavy rock ripping. Tandem ripping.
Pushloading and dozing in hard rock. Work on rock surfaces. Continuous high
impact conditions.
|
Small
|
12,000
Hr
|
10,000
Hr
|
8,000
Hr
|
Large
|
22,000
Hr
|
18,000
Hr
|
15,000
Hr
|
MOTORGRADERS
|
Light road maintenance. Finishing.
Plant and road mix work. Light snowplowing. Large amounts of traveling.
|
Haul road maintenance. Road
construction, ditching. Loose fill spreading. Landforming, land-leveling.
Summer road maintenance with medium to heavy winter snow removal. Elevating
grader use.
|
Maintenance of hard pack roads
with embedded rock. Heavy fill spreading. Ripping-scarifying of asphalt or
concrete. Continuous high load factor. High impact.
|
20,000
Hr
|
15,000
Hr
|
12,000
Hr
|
|
EXCAVATORS
|
Shallow depth utility construction
where excavator sets pipe and digs only 3 or 4 hours/shift. Free flowing, low
density material and little or no impact. Most scrap handling arrangements.
|
Mass excavation or trenching where
machine digs all the time in natural bed clay soils. Some traveling and
steady, full throttle operation. Most log loading applications.
|
Continuous trenching or truck
loading in rock or shot rock soils. Large amount of travel over rough ground.
Machine continuously working on rock floor with constant high load factor and
high impact.
|
12,000
Hr
|
10,000
Hr
|
8,000
Hr
|
1/Adapted from Caterpillar
Performance Handbook, Caterpillar Inc.
Table 3.1.b - Guide for
selecting ownership period based on application and operating conditions.1/
ZONE
A
|
ZONE
B
|
ZONE
C
|
|
WHEEL
SKIDDERS
|
Intermittent skidding for short
distances, no decking. Good underfoot conditions: level terrain, dry floor,
few if any stumps.
|
Continuous turning, steady
skidding for medium distances with moderate decking. Good underfooting: dry
floor with few stumps and gradual rolling terrain.
|
Continuous turning, steady
skidding for long distances with frequent decking. Poor underfloor
conditions: wet floor, steep slopes and numerous stumps.
|
12,000
Hr
|
10,000
Hr
|
8,000
Hr
|
|
WHEEL
TRACTOR SCRAPERS
|
Level or favorable hauls on good
haul roads. No impact. Easy-loading materials.
|
Varying loading and haul road
conditions. Long and short hauls. Adverse and favorable grades. Some impact.
Typical road-building use on a variety of jobs.
|
High impact condition, such as
loading ripped rock. Overloading. Continuous high total resistance
conditions. Rough haul roads.
|
Small
|
12,000
Hr
|
10,000
Hr
|
8,000
Hr
|
Large
|
16,000
Hr
|
12,000
Hr
|
8,000
Hr
|
OFF
HIGHWAY TRUCKS & TRACTORS
|
Mine and quarry use with properly
matched loading equipment. Well maintained haul roads. Also construction use
under above conditions.
|
Varying loading and haul road
conditions. Typical road-building use on a variety of jobs.
|
Consistently poor haul road
conditions. Extreme overloading. Oversized loading equipment.
|
25,000
Hr
|
20,000
Hr
|
15,000
Hr
|
|
WHEEL
TRACTORS & COMPACTORS
|
Light utility work. Stockpile
work. Pulling compactors. Dozing loose fill. No impact.
|
Production dozing, pushloading in
clays, sands, silts, loose gravels. Shovel cleanup. Compactor use.
|
Production dozing in rock.
Pushloading in rocky, bouldering borrow pits. High impact conditions.
|
15,000
Hr
|
12,000
Hr
|
8,000
Hr
|
1/Adapted from Caterpillar
Performance Handbook, Caterpillar Inc.
Table 3.1.c - Guide for
selecting ownership period based on application and operating conditions.1/
ZONE
A
|
ZONE
B
|
ZONE
C
|
|
WHEEL
LOADERS
|
Intermittent truck loading from
stockpile, hopper charging on firm, smooth surfaces. Free flowing, low
density materials. Utility work in governmental and industrial applications.
Light snowplowing. Load and carry on good surface for short distances with no
grades.
|
Continuous truck loading from
stockpile. Low to medium density materials in properly sized bucket. Hopper
charging in low to medium rolling resistance. Loading from bank in good
digging. Load and carry on poor surfaces and slight adverse grades.
|
Loading shot rock (large loaders).
Handling high density materials with counterweighted machine. Steady loading
from very tight banks. Continuous work on rough or very soft surfaces. Load
and carry in hard digging; travel longer distances on poor surfaces with
adverse grades.
|
Small
|
12,000
Hr
|
10,000
Hr
|
8,000
Hr
|
Large
|
15,000
Hr
|
12,000
Hr
|
10,000
Hr
|
TRACK-TYPE
LOADERS
|
Intermittent truck loading from
stockpile. Minimum traveling, turning. Free flowing, low density materials
with standard bucket. No impact.
|
Bank excavation, intermittent
ripping, basement digging of natural bed clays, sands, silts, gravels. Some
traveling. Steady full throttle operation.
|
Loading shot rock, cobbles,
glacial till, caliche. Steel mill work. High density materials in standard
bucket. Continuous work on rock surfaces. Large amount of ripping of tight,
rocky materials. High impact condition.
|
12,000
Hr
|
10,000
Hr
|
8,000
Hr
|
1/Adapted from Caterpillar
Performance Handbook, Caterpillar Inc.
3.4.2 Interest
Interest is the cost of using funds over a
period of time. Investment funds may be borrowed or taken from savings or
equity. If borrowed, the interest rate is established by the lender and varies
by locality and lending institution. If the money comes from savings, then
opportunity cost or the rate this money would earn if invested elsewhere is
used as the interest rate. The accounting practice of private firms may ignore
interest on equipment on the ground that interest is a part of profits and,
therefore, not a proper charge against operating equipment. Although this is
sound from the point of view of the business as a whole, the exclusion of such
charges may lead to the development of unrealistic comparative rates between
machines of low and high initial cost. This may lead to erroneous decisions in
the selection of equipment.
Interest can be calculated by using one of two
methods. The first method is to multiply the interest rate by the actual value
of the remaining life of the equipment. The second simpler method is to
multiply the interest rate times the average annual investment.
For straight-line depreciation, the average
annual investment, AAI, is calculated as
AAI = (P - S) (N +
1)/(2N) + S
Sometimes a factor of 0.6 times the delivered
cost is used as an approximation of the average annual investment.
3.4.3 Taxes
Many equipment owners must pay property taxes or
some type of usage tax on equipment. Taxes, like interest, can be calculated by
either using the estimated tax rate multiplied by the actual value of the equipment
or by multiplying the tax rate by the average annual investment.
3.4.4 Insurance
Most private equipment owners will have one or
more insurance policies against damage, fire, and other destructive events.
Public owners and some large owners may be self-insured. It could be argued
that the cost of insurance is a real cost that reflects the risk to all owners
and some allowance for destructive events should be allowed. Not anticipating
the risk of destructive events is similar to not recognizing the risk of fire
or insect damage in planning the returns from managing a forest. Insurance
calculations are handled in the same way as interest and taxes.
3.4.5 Storage and Protection
Costs for equipment storage and off-duty
protection are fixed costs, largely independent of the hours of use. Costs of
storage and protection must be spread over the total hours of equipment use.
3.5 Operating Costs
Operating costs, unlike fixed costs, change in
proportion to hours of operation or use. They depend upon a variety of factors,
many of which are, to some extent, under the control of the operator or
equipment owner.
3.5.1 Maintenance and Repair
This category includes everything from simple
maintenance to the periodic overhaul of engine, transmission, clutch, brakes
and other major equipment components, for which wear primarily occurs on a
basis proportional to use. Operator use or abuse of equipment, the severity of
the working conditions, maintenance and repair policies, and the basic
equipment design and quality all affect maintenance and repair costs.
The cost of periodically overhauling major
components may be estimated from the owner's manual and the local cost of parts
and labor, or by getting advice from the manufacturer. Another owner's
experience with similar equipment and cost records under typical working
conditions is a valuable source. If experienced owners or cost records are not
available, the hourly maintenance and repair cost can be estimated as a
percentage of hourly depreciation (Table 3.2).
TABLE 3.2. Maintenance
and repair rates as a percentage of the hourly depreciation for selected
equipment.
Machine
|
Percentage Rate
|
Crawler
tractor
|
100
|
Agricultural
tractor
|
100
|
Rubber-tired
skidder with cable chokers
|
50
|
Rubber-tired
skidder with grapple
|
60
|
Loader
with cable grapple
|
30
|
Loader
with hydraulic grapple
|
50
|
Power
saw
|
100
|
Feller-buncher
|
50
|
3.5.2 Fuel
The fuel consumption rate for a piece of
equipment depends on the engine size, load factor, the condition of the
equipment, operator's habit, environmental conditions, and the basic design of
equipment.
To determine the hourly fuel cost, the total
fuel cost is divided by the productive time of the equipment. If fuel
consumption records are not available, the following formula can be used to
estimate liters of fuel used per machine hour,
where LMPH is the liters used per machine hour,
K is the kg of fuel used per brake hp/hour, GHP is the gross engine horsepower
at governed engine rpm, LF is the load factor in percent, and KPL is the weight
of fuel in kg/liter. Typical values are given in Table 3.3. The load factor is
the ratio of the average horsepower used to gross horsepower available at the
flywheel.
TABLE 3.3. Weights, fuel
consumption rates, and load factors for diesel and gasoline engines.
Engine
|
Weight
(KPL) kg/liter |
Fuel Consumption
(K) kg/brake hp-hour |
Load Factor
(LF) |
||
Low
|
Med
|
High
|
|||
Gasoline
|
0.72
|
0.21
|
0.38
|
0.54
|
0.70
|
Diesel
|
0.84
|
0.17
|
0.38
|
0.54
|
0.70
|
3.5.3 Lubricants
These include engine oil, transmission oil,
final drive oil, grease and filters. The consumption rate varies with the type
of equipment, environmental working condition (temperature), the design of the
equipment and the level of maintenance. In the absence of local data, the
lubricant consumption in liters per hour for skidders, tractors, and front-end
loaders could be estimated as
Q = .0006 × GHP (crankcase oil)
Q = .0003 × GHP (transmission oil)
Q = .0002 × GHP (final drives)
Q = .0001 × GHP (hydraulic controls)
These formulas include normal oil changes and no
leaks. They should be increased 25 percent when operating in heavy dust, deep
mud, or water. In machines with complex and high pressure hydraulic systems
such as forwarders, processors, and harvesters, the consumption of hydraulic
fluids can be much greater. Another rule of thumb is that lubricants and grease
cost 5 to 10 percent of the cost of fuel.
3.5.4 Tires
Due to their shorter life, tires are considered
an operating cost. Tire cost is affected by the operator's habits, vehicle
speed, surface conditions, wheel position, loadings, relative amount of time
spent on curves, and grades. For off-highway equipment, if local experience is
not available, the following categories for tire life based upon tire failure
mode could be used as guidelines with tire life given in Table 3.4.
In Zone A, almost all tires wear through to
tread from abrasion before failure. In Zone B, most tires wear out - but some
fail prematurely from rock cuts, rips, and non-repairable punctures. In Zone C,
few if any tires wear through the tread before failure due to cuts.
TABLE 3.4. Guidelines
for tire life for off-highway equipment
Equipment
|
Tire Life, hours
|
||
Zone A
|
Zone B
|
Zone C
|
|
Motor
graders
|
8000
|
4500
|
2500
|
Wheel
scrapers
|
4000
|
2250
|
1000
|
Wheel
loaders
|
4500
|
2000
|
750
|
Skidders
|
5000
|
3000
|
1500
|
Trucks
|
5000
|
3000
|
1500
|
3.6 Labor Costs
Labor costs include direct and indirect payments
such as taxes, insurance payments, food, housing subsidy, etc. Labor costs need
to be carefully considered when calculating machine rates since the hours the
labor works often differs from the hours the associated equipment works. What
is important is that the user define his convention and then to use it
consistently. For example, in felling, the power saw rarely works more than 4
hours per day, even though the cutter may work 6 or more hours and may be paid
for 8 hours, including travel. If felling production rates are based upon a
six-hour working day, with two hours of travel, the machine rate for an
operator with power saw should consider 4 hours power saw use and eight hours
labor for six hours production.
3.7 Variable Effort Cycles
The concept that men or equipment work at
constant rates is an abstraction that facilitates measurements, record keeping,
payments and analysis. However, there are some work cycles which require such
variable effort that it is more useful to construct machine rates for parts of
the cycle. One important case is the calculation of the machine rate for a
truck. When a log truck is waiting to be loaded, is being loaded, and is being
unloaded, its fuel consumption, tire wear, and other running costs are not
being incurred. Or, if these costs are incurred, they are at a much reduced
rate. For the standing truck, a different machine rate is often constructed
using only the fixed cost and the labor cost for this part of the cycle. Part
or all of the truck depreciation may be included.
If a single machine rate were used to estimate
the unit cost for truck transport and this value was converted to a ton-km cost
or $/m3-km cost without removing the "fixed" cost of loading
and unloading then the "variable" cost of transport would be
overestimated. This could lead to erroneous results when choosing between road
standards or haul routes.
3.8 Animal Rates
The calculation of the animal rate is similar to
the machine rate, but the types of costs differ and merit additional
discussion.
3.8.1 Fixed Cost
The fixed cost includes the investment cost of
the animal or team, harness, yoke, cart, logging chains and any other
investments with a life more than one year. Other fixed costs include the
upkeep of the animals.
The purchase price of the animal may include
spare animals if the working conditions require that the animal receive rest
more than overnight, such as every other day. To allow for the possibility of
permanent injury, the animal purchase price may be increased to include extra
animals. In other cases, accidents can be allowed for in the insurance premium.
The salvage cost for the animal has the same definition as for a machine rate
but in the case of the animal, the salvage value is often determined by its
selling value for meat. Average annual investment, interest on investment, and
any taxes or licenses are treated the same as for equipment. To find the total
fixed costs for the animals, the fixed costs for the animal, cart, harness, and
miscellaneous investments can be calculated separately since they usually have
unequal length lives and the hourly costs added together.
Animal support costs which do not vary directly
with hours worked include pasture rental, food supplements, medicine,
vaccinations, veterinarian services, shoes, ferrier services and any
after-hours care such as feeding, washing or guarding. It could be argued that
food and care requirements are related to hours worked and some part of these
costs could be included in operating costs. Pasture area (ha/animal) can be
estimated by dividing the animal consumption rate (kg/animal/month) by the
forage production rate (kg/ha/month). Food supplements, medicine, vaccinations,
and veterinarian schedules can be obtained from local sources such as
agricultural extension agents.
3.8.2 Operating Costs
Operating costs include repair and maintenance
costs for harnesses, carts, and miscellaneous equipment.
3.8.3 Labor Costs
The labor cost in the animal rate is for the
animal driver (and any helpers). For full year operations it is calculated as
the labor cost per year including social costs divided by the average number of
working days or hours for the driver (and any helpers).
3.9 Examples
Examples of machine rates for a power saw, a
tractor, a team of oxen, and a truck are in the following tables. Although the
machine rates in Tables 3.5 to 3.8 share the same general format, there is
flexibility to represent costs that are specific to the machine type,
particularly in the calculation of the operating costs. For the power saw
(Table 3.5), major operating expenses are identified with the chain, bar, and
sprocket so they have been broken out separately. For the oxen (Table 3.7), the
fixed costs have been divided into major cost components specific to
maintaining animals, in addition to depreciation. For the truck (Table 3.8),
costs have been divided in standing costs and traveling costs to differentiate
between costs when the truck is standing by, being loaded, or unloaded as
compared to traveling costs.
TABLE 3.5 Machine Rate
Calculation for a Power Saw1
Machine:
|
Description - McCulloch Pro Mac 650
Power Saw
|
|||
Motor
cc
|
60
|
Delivered
Cost
|
400
|
|
Life in hours
|
1000
|
Hours per year
|
1000
|
|
Fuel:
|
Type
|
Gas
|
Price
per liter
|
0.56
|
Oper:
|
Rate per day
|
5.50
|
Social Costs
|
43.2%
|
Cost Component
|
Cost/hour
|
||
(a)
|
Depreciation
 |
0.36
|
|
(b)
|
Interest
(@ 10% )  |
0.03
|
|
(c)
|
Insurance
(@ 3%)  |
0.01
|
|
(d)
|
Taxes
 |
-
|
|
(e)
|
Labor
 |
1.892
|
|
where
f = social costs of labor as decimal
|
|||
SUB-TOTAL
|
2.29
|
||
(f)
|
Fuel
|
= 0.86 l/hr × .95 × CL +0.86 l/hr
× .05 × CO)
|
0.51
|
where
CL = cost of gas, CO = cost of oil
|
|||
(g)
|
Lube oil for bar and chain = Fuel
cons/2.5 × CO
|
0.45
|
|
(h)
|
Servicing and repairs = 1.0 ×
depreciation
|
0.36
|
|
(i)
|
Chain, bar, and sprocket
|
0.67
|
|
(j)
|
Other
|
0.22
|
|
TOTAL
|
4.503
|
||
1 All costs are in
US$.
2 Labor based on 240 days per year.
3 Add 0.04 if standby saw is purchased.
2 Labor based on 240 days per year.
3 Add 0.04 if standby saw is purchased.
TABLE 3.6 Machine Rate
Calculation for a Tractor1
Machine:
|
Description - CAT D-6D PS
|
|||
Gross hp
|
140
|
Delivered cost
|
142,0002
|
|
Life in hrs
|
10,000
|
Hrs per year
|
1,000
|
|
Fuel:
|
Type
|
Diesel
|
Price per liter
|
.44
|
Oper:
|
Rate per day
|
12.00
|
Social Costs
|
43.2%
|
Help:
|
Rate per day
|
5.00
|
Social Costs
|
43.2%
|
Cost Component
|
Cost/hour
|
||
(a)
|
Depreciation
 |
12.78
|
|
(b)
|
Interest
(@ 10% )  |
8.52
|
|
(c)
|
Insurance
(@ 3%)  |
2.56
|
|
(d)
|
Taxes
(@ 2%)  |
1.70
|
|
(e)
|
Labor
 |
5.843
|
|
where
f = social costs of labor as decimal
|
|||
SUB-TOTAL
|
31.40
|
||
(f)
|
Fuel
|
= .20 × GHP × LF × CL
|
6.65
|
where
|
GHP = gross engine horsepower
CL = cost per liter for fuel LF = load factor (.54) |
||
(g)
|
Oil and grease = 0.10 × fuel cost
|
0.67
|
|
(h)
|
Servicing and repairs = 1.0 ×
depreciation
|
12.78
|
|
(i)
|
Other (cable, misc)
|
5.00
|
|
TOTAL
|
56.50
|
||
1 All
costs are in US$.
2 With blade, ROPS, winch, integral arch.
3 Labor based upon 240 days per year.
2 With blade, ROPS, winch, integral arch.
3 Labor based upon 240 days per year.
TABLE 3.7 Machine Rate
Calculation for a Team of Oxen1
Description
|
- Pair of oxen for skidding
|
|||
Gross hp
|
-
|
Delivered cost
|
2,000
|
|
Life in years
|
5
|
Days per year
|
125
|
|
Labor
|
Rate per day
|
7.00
|
Social Costs
|
43.2%
|
Cost Component
|
Cost/day
|
||
(a)
|
Depreciation
 |
2.082
|
|
(b)
|
Interest
(@ 10%)  |
0.96
|
|
(c)
|
Taxes
 |
-
|
|
(d)
|
Pasture
 |
1.10
|
|
(e)
|
Food supplements
|
1.36
|
|
(f)
|
Medicine and veterinary services
|
0.27
|
|
(g)
|
Driver
 |
10.023
|
|
where
f = social costs of labor as decimal
|
|||
(h)
|
After-hours feeding and care
|
2.62
|
|
(i)
|
Other (harness and chain)
|
1.00
|
|
TOTAL
|
19.41
|
||
1 All costs are in
US$.
2 Oxen sold for meat after 5 years.
3 Driver works with two pair of oxen, 250 day year.
2 Oxen sold for meat after 5 years.
3 Driver works with two pair of oxen, 250 day year.
TABLE 3.8 Machine Rate
Calculation for a Truck1
Machine:
|
Description - Ford 8000 LTN
|
||||||
Gross hp
|
200
|
Delivered cost
|
55,000
|
||||
Life in hrs
|
15,000
|
Hrs per year
|
1,500
|
||||
Fuel:
|
Type
|
Diesel
|
Price per liter
|
.26
|
|||
Tires:
|
Size
|
10 × 22
|
Type Radial
|
Number 10
|
|||
Labor
|
Rate per day
|
12.00
|
Social Costs
|
43.2%
|
|||
Cost Component
|
Cost/hour
|
|||
(a)
|
Depreciation
 |
3.12
|
||
(b)
|
Interest
(@ 10%)  |
2.20
|
||
(c)
|
Insurance
(@ 3%)  |
0.66
|
||
(d)
|
Taxes
(@ 2%)  |
0.44
|
||
(e)
|
Labor
 |
3.302
|
||
where
f = social costs of labor as decimal
|
||||
Standing Cost
|
SUB-TOTAL
|
9.72
|
||
(f)
|
Fuel
|
= .12 × GHP × CL
|
6.24
|
|
where
CL = cost per liter for fuel
|
||||
(g)
|
Oil and grease = 0.10 × fuel cost
|
0.62
|
||
(h)
|
Servicing and repairs = 1.5 ×
depreciation
|
4.68
|
||
(i)
|
Tires =
 |
2.40
|
||
(j)
|
Other (chains, tighteners)
|
0.20
|
||
Traveling Cost
|
TOTAL
|
23.86
|
||
1 All costs are in
US$.
2 Labor is for 240 days plus 20% overtime
2 Labor is for 240 days plus 20% overtime
Page 1-2-3-4-5-6-7-8
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