2.2.4. Repair Cost

Try these first

1. 1.

   What does ownership cost include?

   Hint

   Think of the ongoing costs you'll incur just from owning the equipment.

2. 2.

   How do you calculate hourly fuel cost?

   Hint

   Remember the formula: Fuel Cost = Consumption × Unit Cost.

3. 3.

   What is the primary focus of the Caterpillar method?

   • Estimation of total cost
   • Only operating costs
   • Decoration

   Hint

   Consider what the warm-up talks about when discussing equipment costs.

4. 4.

   True or false: Tire costs are included in the ownership cost.

   • True
   • False

   Hint

   Remember where we categorize different costs.

5. 5.

   A construction company has a bulldozer valued at $120,000, with an expected lifespan of 10,000 hours and a salvage value of$15,000. Calculate the hourly depreciation using the Caterpillar method.

   Hint

   Consider how many hours the machine is expected to run.

6. 6.

   Determine the total operating cost per hour if the fuel consumption factor is 4 gallons per hour and the unit cost of fuel is $3. Also, factor in additional costs for FOG at 15% of the fuel cost.

   Hint

   Make sure to break down the problem step by step to avoid confusion.