3.2. Filter, Oil, Grease (FOG) Cost Estimation

Try these first

1. 1.

   What is the purpose of estimating equipment costs?

   Hint

   Think about both ownership and operational factors.

2. 2.

   What does FOG stand for?

   Hint

   It's related to maintenance materials.

3. 3.

   What method estimates costs focusing on cash flow timing?

   • Caterpillar Method
   • Peurifoy Method
   • Flat Rate Method

   Hint

   Think about the method that accounts for long-term value.

4. 4.

   True or False: Operating costs include legal fees.

   • True
   • False

   Hint

   Consider what expenses directly relate to machine operation.

5. 5.

   Given an initial cost of 4 crores for a construction vehicle, and a salvage value of 15%, calculate the annual depreciation for its useful life of 10 years.

   Hint

   First, find out the salvage value, then apply the depreciation formula.

6. 6.

   A company needs to assess the FOG costs for its fleet of vehicles, encountering a labor adjustment factor of 0.75. If the total fuel cost is ₹2000 per vehicle, how would you calculate the FOG cost?

   Hint

   Plug in the values into the formula using the provided factors.