Determine the fixed and operating costs for a scraper

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Reference no: EM13747860

Using the following information, determine the fixed and operating costs for a scraper.

Actual cost (delivered)—$1 56,000

Horsepower rating—200 hp

Cost of tires—$6,000

Salvage value—20 percent

Useful life—6 years (8,400 hours)

Total interest—7 percent

Length of loan—6 years

Total insurance, taxes, and storage—5.5 percent per year

Fuel cost—$3.90 per gallon

Fuel consumption rate—0.06 gallons per hp per hour

Power utilization—85 percent

Use factor—40 minutes per hour (66.67 percent)

Lubrication—8 quarts of oil at $4.50 per quart

Oiler labor—2.2 hours at $27.65

Lubrication schedule—Every 1 00 hours

Life of tires—3,500 hours

Repair to tires—1 2 percent of deprecation

Repairs to equipment—1 20 percent over useful life

Reference no: EM13747860

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