3.1. Fuel Cost Calculation

Try these first

1. 1.

   What is included in ownership cost?

   Hint

   Think about what expenses are needed to own equipment.

2. 2.

   How do you calculate total cost of ownership?

   Hint

   What two major cost categories are involved?

3. 3.

   What constitutes ownership costs?

   • Depreciation and taxes.
   • Fuel and maintenance.
   • Initial price and insurance.

   Hint

   Think of the costs tied to asset ownership.

4. 4.

   True or False: Salvage value is the estimated resale value of an asset at the end of its useful life.

   • True
   • False

   Hint

   Consider what happens when an asset is disposed of.

5. 5.

   Calculate the total cost per hour if the ownership cost is ₹2713, operating cost is ₹3209.29, and the operator wage is ₹200.

   Hint

   Think about how to combine all the costs.

6. 6.

   If the dump truck's useful life is extended to 15 years, recalculate the hourly depreciation based on the new lifetime hours of use.

   Hint

   Make sure to adjust the useful life in your calculations.