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Machine Information: Total Fixed Costs (INR/SMH)

The document contains information about calculating the costs of owning and operating a machine over its lifetime, including depreciation, interest and insurance costs, repair and maintenance costs, labor costs, and total costs per scheduled hour.

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Emba Madras
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163 views2 pages

Machine Information: Total Fixed Costs (INR/SMH)

The document contains information about calculating the costs of owning and operating a machine over its lifetime, including depreciation, interest and insurance costs, repair and maintenance costs, labor costs, and total costs per scheduled hour.

Uploaded by

Emba Madras
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Note: Change only the numbers in the white squares

Machine Information Depreciation/hour (INR/SMH)


Purchase Price (INR) 200,000 Interest, Taxes, & Insurance (INR/SMH)
Salvage Value (INR) 20000 Total Fixed Costs (INR/SMH)
Life in years (yrs) 8
Scheduled hours /yr (SMH) 2000 Fuel and Lube (INR/PMH)
Interest Insurance &Taxes (%) 12 Tires and Tracks (INR/PMH)
Repair and Maint. (%/Depr) 80 Repair and Maintenance (INR/PMH)
Labor Fringe (% LR) 45 Total Variable Cost (INR/PMH, INR/SMH)
Expected Utilization (%) 70

Average Fixed investment ₹ 121,250 Labor Rate (INR/SMH)


Labor Fringe (INR/SMH)

Equations
Depreciation = (Purchase Price - Salvage Value) / (Life in years x scheduled hours)

Average Fixed Investment = (Purchase Price - Salvage Value) x (Life in years + 1) / (2 x Life in years) + Salvage value

Interest, Taxes and Insurance cost = (Interest, Taxes and Insurance%) x Average Fixed Investment / Scheduled hours

Repair and Maintenance ($/PMH) = Depreciation * Repair and Maint. (%/Depr.)

Labor Fringe = Labor Rate x Labor Fringe (%)

Total Variable Cost ($/SMH) = Total Variable Cost ($/PMH) x Utilization (%)
₹ 11.25
₹ 7.28
₹ 18.53

₹ 12.00
₹ 5.00
₹ 9.00
₹ 26.00 ₹ 18.20
₹ 36.73 Machine Cost (INR/SMH)

₹ 12.00
₹ 5.40
₹ 17.40 Labor Cost (INR/SMH)

₹ 54.13 Total Cost (INR/SMH)

n years) + Salvage value

stment / Scheduled hours

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