Intermediate Equipment Handbook
Intech Associates
Estimate or record of value cost of servicing and repair workshop costs per year
for the equipment item and reduced to a daily charge
Estimate or record of fuel and lubricants consumption and costs per hour/day of
utilisation
Costs of operator’s and assistant’s wages, allowances or other costs, reduced to
a daily charge
All cost components relating to overheads to be assigned to the equipment item
over the course of the operating year and reduced to a charge per operating day.
This information is input into the costing process as described in the following pages,
and using the example forms in Part 2 of the Handbook.
In Summary, the steps involved in the costing process are:
1. Determine a baseline Depreciation cost
2. Determine the baseline Finance/Opportunity cost
3. Adjust for Actual new or second hand cost
4. Adjust for expected Residual/disposal/scrap value
5. Adjust for expected Economic life
6. Adjust for expected Annual Utilisation
7. Estimate Spares and consumables costs
8. Estimate Servicing and Repair workshop and labour costs
9. Estimate Fuel and Lubricants costs
10. Estimate Operators costs
11. Estimate Overheads, including contingency, and any other costs not included
above
12. Assess a suitable Profit margin
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