4. Components of Operating Cost

Try these first

1. 1.

   What are operating costs?

   Hint

   Think about what happens during the operation of machinery.

2. 2.

   Give an example of a consumable in construction equipment.

   Hint

   What do machines need to function effectively?

3. 3.

   What type of cost is incurred irrespective of machine operation?

   • Operating Cost
   • Ownership Cost
   • Maintenance Cost

   Hint

   Consider costs that remain unchanged.

4. 4.

   True or False: Operating costs always remain fixed.

   • True
   • False

   Hint

   Think about what happens during the operation.

5. 5.

   Estimate the operating cost for an excavator that operates 2000 hours in a year with consumables costing $50 per hour and operator wages of$20 per hour. What would be the total operating cost?

   Hint

   Calculate the costs separately and then add them together.

6. 6.

   A machine has an ownership cost of $10,000 per year and an operating cost that varies based on usage. If the machine is used 1500 hours in a year with variable costs averaging$30 per hour plus maintenance of $5,000, calculate the total cost for the year.

   Hint

   Don’t forget to account for all costs—ownership, operating, and maintenance.