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The following table shows per hour costs for different sized tractors. Total
per hour costs are divided into overhead (depreciation, interest, insurance, housing,
and repair costs), fuel, and labor costs. An
allowance for profit is not included in profit. Adding 5 to 15 percent
to estimated costs may be appropriate when setting custom or rental rates.
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Tractor Cost
Calculation Tool
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. Tractors 1 |
Costs |
| Total2 = |
Overhead3
+ |
Fuel4
+ |
Labor5 |
Detail
&Calc |
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$ per hour |
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1
"FWA" indicates a front wheel assist tractor. "4WD"
indicates a four wheel drive tractor. |
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| 2 Sum of overhead, fuel, and labor costs. |
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3 Includes depreciation, interest, insurance, housing, and repair
costs. These per hour |
| charges are appropriate for calculating rental costs
when the person renting the tractor provides fuel and labor. |
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4 Fuel costs are based on a price of $1.10 per gallon for diesel
fuel. Fuel costs |
| vary depending on fuel use. Use varies
with load on the tractor. |
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5 Labor costs are based on a $13.50 per hour labor charge. Labor
time is assumed to be |
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ten percent higher than tractor hours. |
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Formulas developed by the American Society of Agricultural Engineers (ASAE) are
used in calculating costs. All costs are based on buying a new tractor, owning
the tractor for 10 years, and using the tractor 300 hours per year. More detail
on how costs are calculated are given in the pdf version of the publication (Machinery
Cost Estimates: Tractors, FBM 0204). |
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Use and costs
The majority of overhead costs are in depreciation and interest. On an annual
basis, depreciation and interest are relatively constant no matter the hours of
use. As hours increase, yearly depreciation and interest costs are spread over
more hours. Overhead costs are double those shown above when use is 150 hours
rather than 300 hours. Overhead costs are 0.66 times those shown above when use
if 450 hours rather than 300 hours. The range points out the need to fully use
tractors in order to lower per hour overhead costs.
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