Cost of Heavy Equipment per Hour

Trying to calculate your cost based on Historic Accounting information is like trying to find the time by looking at a broken clock. It absolutely correct 2 x in a day! Only after the sale of a machine can you take the total amount paid out over a machine's ownership life and compute what that particular machine really cost you per hour.

Even then you might not want to use that number to base your price per hour on due to the fact that:

1. The cost for diesel fuel, service, parts, operator is very likely different now, than in the previous 5 (or whatever) years
2. Type of work application may be different (see CAT Performance Handbook)
3. Geology of work may be different (sand vs, clayey soils job)
4. You use the machine more or less annual hours than the machine you sold
5. The new machine is more or less dependable than the old machine
6. You might have sold the machine right before a major repair
7. The market value for used machines has changed
8. Your accounting system did not compute the "Cost of Money into your costs unless you financed 100%.

Nobody said this business was going to be easy. It just looks easy. If you send me an e-mail with your mail and e-mail information, I will send you a free copy of the CAT Performance Handbook costing section and some information on how to make all of this easier. No charge or obligation.
Dan