What an hour of your machine costs you
A machine costs you twice: once to own, whether it works or not, and once for every hour it runs. Spread a year of owning it over the hours it really works, add fuel and repairs, and you have its hour. In the example below that is $26.60, and $83.65 with a person running it.
Work out what an hour of your machine costs you
Owning it
Or what it would cost. For one you have had a while, type what it is worth today.
When you are done with it. Leave it empty if you will run it until it is worn out.
What you pay in a year whether it works or not: insurance, registration, storage.
Only the interest, not the whole payment. Leave it empty if there is no loan.
Running it
Hours on its meter, not days you own it.
Gallons you put in over a stretch of work, divided by the hours it ran.
Service, parts, tires or tracks, blades and teeth. Your own figure: last year's bills are the place to look.
With a person running it
What the hour really costs you, not just the wage. Leave it empty to see the machine alone.
Type what the machine cost, the years you will keep it and the hours it works in a year. The answer shows here.
One machine, step by step
An example with made-up numbers, not a going rate
Say a machine cost you $48,000, you expect to sell it for $18,000 after 8 years, and it works 500 hours a year. It loses $30,000 of its value in that time, which is $3,750 a year. Say insurance and registration are $900 a year and loan interest is $1,500: owning it costs you $6,150 a year, whether it works or not, and that is $12.30 for each hour it works. Say it burns 2.5 gallons an hour at $3.80 a gallon, and repairs and upkeep are $2,400 a year: running it costs $14.30 an hour. An hour of the machine costs you $26.60.
With a person running it
An example with made-up numbers, not a going rate
| Price | You keep | Of every $100 |
|---|---|---|
| $93 | $9.35 | $10 |
| $105 | $21.35 | $20 |
| $120 | $36.35 | $30 |
| $140 | $56.35 | $40 |
| $168 | $84.35 | $50 |
The hours it really works
Owning the machine costs the same in a year whether it works every day or sits in the yard. So the fewer hours it works, the more each hour has to carry.
Take the machine above at half the hours, 250 a year, with half the repairs. Owning it is now $24.60 on every hour, not $12.30, and the hour costs $38.90, not $26.60. So type the hours it really works for pay, off its meter or out of your own records.
Count the machine once
On the hour calculator, a machine's payment, its insurance and its repairs can go in overhead. Then every hour you bill carries a share of it, whether the machine was on that job or not. Or leave it out of overhead, work its hour out here, and add it only to the hours it works. Doing both counts the machine twice.
Where the sum comes from
It is the sum university extension guides to machinery costs use. Iowa State's splits what a machine costs into owning it and running it. The value it loses is counted the plain way Penn State Extension gives: what it cost, less what you sell it for, divided by the years you keep it. Your accountant may count it another way, and it is not a figure for your taxes.
In TailGateBid
The Rates page takes what you charge for an hour of one person and, if you know it, what that hour costs you. Machine work can sit beside it in your price book as its own line, charged by the hour, with your price and what that hour costs you: the number you worked out here. Your customer never sees the cost.
Where each number comes from
- No price worked out here leaves you more than $90 of every $100. TailGateBid's own price suggestions stop at the same place. A price you type yourself can leave more.
- The ladder shows the prices that leave about $10, $20, $30, $40, $50 of every $100. The steps are our choice.
Put machine work in your price book as its own line, charged by the hour.
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Sources
Related
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- Brush hoggingA 5 acre field worked through, from the width of the cutter to a price for each acre.
- Stump grindingAdd up the inches across each stump, then see what the job costs you and what a price for each inch leaves.
- Trip and minimum chargeIn the example, a job 25 minutes away costs $93.92 before any work is done. See what your smallest job costs with the trip in it.
- Job price16 hours of work and $600 of materials cost you $1,320. See what five prices would leave you.
By TailGateBid. .
A calculator works from the numbers you type. Check the answer against your own books.