Intermediate Equipment Handbook
Intech Associates
COST CALCULATION
Continued
CONVERSION TO DAILY CHARGE RATE
OWNERSHIP COSTS
2 tonne Towed GRADER
SHEET 3 OF 3
WORKING SHEET
EXA M PLE
INTEREST RATE ASSUMED (Sheet 2)
10 %
C ADJUSTMENT FOR ACTUAL COST OF PURCHASE
Selected Depreciation/replacement charge (US$/hr) from Table A1
Selected Finance charge (US$/hr) from Table B1, B2 or B3 (or interpolation)
Actual purchase/replacement cost in US$
Assumed number of operating hours per day
DAILY OWNERSHIP COST = (C1 + C2) x C4 x C3 / 18,000 =
1.5 (C1)
1.2 (C2)
16,800 (C3)
7 (C4)
US$/day
Local currency
17.6
(C)
D ADJUSTMENT FOR EXPECTED RESIDUAL/SCRAP VALUE (IF ANY)
Assumed Residual/Scrap Value in US$
Assumed Economic Life in years
Assumed Utilisation in Hours / Year
900 (D1)
15 (D2)
800 (D3)
ADJUSTMENT FOR RESIDUAL/SCRAP VALUE = (D1 x C4) / (D2 x D3)
US$/day
SUB-TOTAL FOR OWNERSHIP COSTS = (C) - (D)
OPERATING COSTS
Local currency
0.5 (D)
17.1
(W)
E SPARES & CONSUMABLES
Either predict daily costs from past records or select from the following:-
Select percentage of spares and consumables per year compared to machine current cost new,
Suggested value between 2 and 10% of cost new (usually increases with age)
6 % (E1)
Local currency
DAILY COST OF SPARES = 0.01 x C3 x C4 x E1 / D3
US$/day
8.8
(E)
F SERVICING AND REPAIR (WORKSHOP LABOUR COSTS)
Either predict daily costs from past records or select from the following:-
Suggested value between 20% and 100% of (E)
DAILY WORKSHOP LABOUR COSTS = 0.01 x E x F1
70 % (F1)
Local currency
US$/day
6.2
(F)
G FUEL & LUBRICANTS
Cost of fuel per litre (add between 2 and 5% to cover lubricant costs)
Assumed fuel consumption in litres per hour
DAILY LUBRICANTS COST
N/A (G1)
N/A (G2)
US$/day
Local currency
0.5 (G)
H OPERATORS (DAILY COSTS)
Wages Allowances Other
Operator
$7.00
$2.00
$1.00
Assistant
Other
Sub-totals $7.00
$2.00
$1.00
US$/day
SUB-TOTAL FOR OPERATING COSTS = (E) + (F) + (G) + (H)
OVERHEADS
Predict from past records to include:-
I Offices, Workshops, Tools & other Facilities
J Supervisory, management and clerical personnel
K Supervision and support vehicles
L Stores and other stock
M Insurances
N Banking and other finance charges not relating to the equipment item
O Administration, training, safety or other overhead costs
P Risk, late payment and other contingency items
Q Taxes, levies etc.
SUB-TOTAL FOR OVERHEADS = Daily allowance for items (I) to (Q)
(assuming 15% in this example)
PROFIT
SUB-TOTAL PROFIT
(assuming 15% in this example)
TOTAL COST TO BE CHARGED = (W) + (X) + (Y) + (Z) =
US$/day
Local currency
10.0
(H)
25.5
(X)
US$/day Local currency
6.4 (Y)
US$/day Local currency
6.4 (Z)
US$/day Local currency
55.4
NOTES
1 Finance charge (Sheet 2) calculated by the formula:-
C2 = ((N + 1) / 2N) x Purchase Price x interest rate expressed as a decimal
Hours per year
Where N = number of years (economic life)
2 To convert the US$ values to Local Currency multiply by the current exchange rate
March 2012
Intech Associates
Ref: 2tgrader-d.xls
October 2012
75