5.1. Information Sources for Operating Costs

Try these first

1. 1.

   List the three main components of operating costs.

   Hint

   Think about what costs incur when equipment is actively used.

2. 2.

   What method is commonly used for estimating equipment costs?

   Hint

   Remember, there are two methods discussed.

3. 3.

   What do operating costs primarily depend on?

   • a) Equipment age
   • b) Job operating conditions
   • c) Initial purchase cost

   Hint

   Think about what changes when you use the equipment in different environments.

4. 4.

   True or False: Major repairs are categorized under operating costs.

   • True
   • False

   Hint

   Consider which costs arise irrespective of how often the equipment is used.

5. 5.

   Calculate the estimated operating cost for a piece of equipment that operates for 1500 hours annually, with a fuel cost of $2.50 per gallon and an average consumption of 5 gallons per hour.

   Hint

   Multiply the operating hours by the cost per unit consumption and the price of fuel.

6. 6.

   Discuss why a manufacturer’s handbook is crucial for estimating repair costs and provide one specific example of how it informs the estimation process.

   Hint

   Consider citing specific data usage from the handbook related to typical operational hours.