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Tractor Talk Discussion Forum

calculating operating costs

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Rich Iowa

03-25-2007 08:40:30




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I tried posting this last nite but doesn't seem to have worked. I've heard people on here talking about how much it costs them to drive/ run their trucks, tractors , etc. Can anyone give me a simple formula on how to determine these costs? Thanks




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kyhayman

03-25-2007 08:56:13




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 Re: calculating operating costs in reply to Rich Iowa, 03-25-2007 08:40:30  
I cant give a simple formula. The way I do it is I look at my last years, and 5 year average repair cost to determine my estimated annual repairs per machine. It also depends on the driver. My repairs run 30% more on the tractors I dont normally drive (what the hired help uses).

For trucks I take fuel cost per mile (avg 15 mpg on $2.50 diesel); 2.50/15.

Insurance and taxes per year divided by last years miles driven.

Repairs average calculated above divided by miles driven last year.

Straight line depreciation, estimated miles life divided by purchase price.

Miles per hour divided by my hourly wage.

Add it all up and multiply times 110% (10% profit) Add in lodging if needed, and a 'convenience factor'. If someone wants it done now and I have a date tonight, its gonna cost extra for the flowers and the better date Ive got to come up with later. Bottom line with me is $2.00 a loaded mile, and a minimum of $15 for me to start a pickup, $40 for a truck and trailer. There are always people telling me that so and so does it cheaper, my response, then get them to do it. Only had one this year that took me up on it.

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omahagreg

03-25-2007 10:16:17




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 Re: calculating operating costs in reply to kyhayman, 03-25-2007 08:56:13  
Don't forget that muliplying by 110% does not give you a 10% markup. $100*110%=$110*10%=$11. When I was remodeling for a living, I wanted a 25% mark up, so multiplied everything by 135%. Sorry for splitting hairs. Greg



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Joe in the snow

03-25-2007 10:55:33




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 Re: calculating operating costs in reply to omahagreg, 03-25-2007 10:16:17  
Your calculation gives you a markup that is closer to 26% than it is to 25%. If you wish to calculate a sum of which 10% is markup and 90% is your cost,divide your cost by 9/10. $100 divided by .9 gives you $111.11 rounded off to the nearest whole cent.



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