Entering costs to determine recovery rates

You can use the calculated amount to determine the cost recovery and billing rates to charge for the use of the equipment on jobs.

To enter costs to determine a recovery rate:

1. Open 8-3 Equipment.
2. Using the data control, select the equipment.
3. Click the Cost Recovery Worksheet tab.
4. Under Resource Consumption:
   1. In the Start Date box, enter the beginning date of the resource consumption period.
   2. In the End Date box, enter the ending date of the resource consumption period.
   3. In the Start Value box, enter the worth of the equipment at the beginning of the resource consumption period.
   4. In the Ending Value box, enter the estimated worth of the equipment at the end of the resource consumption period.
5. Under Estimated Use:
   1. In the Unit list, click the unit of measurement by which you track usage.
   2. In the Estimated Use box, enter the projected number of units of use during the resource consumption period.

6. Under Costs of Ownership:

   1. In the Insurance box, enter the amount you pay for insurance during the resource consumption period.
   2. In the Tax and License box, enter the amount of total fees for taxes and licenses during the resource consumption period.
   3. In the Inspection box, enter the amount for inspections during the resource consumption period.
   4. In the Storage box, enter the amount for storing the equipment during the resource consumption period.
   5. In the Overhaul box, enter the estimated amount for major repair work during the resource consumption period.
   6. In the Financing box, enter the amount you pay in loan interest during the resource consumption period.

   7. In the Cost of Capital box, enter the amount of potential interest lost to investment in equipment during the resource consumption period.

      By investing in equipment, you have given up the ability to earn money through other investments. To calculate the potential interest lost for the Cost of Capital box, multiply the average equity in the equipment for the resource consumption period by the average yield you cold get on a certificate of deposit.

   8. In the Other Cost box, enter any additional costs per unit not otherwise covered.
7. Under Cost of Operation:
   1. In the Fuel and Oil box, enter the cost per unit for fuel and oil.
   2. In the Oil Change box, enter the cost per unit to change the oil.
   3. In the Fluid Change box, enter the cost per unit to change the fluids.
   4. In the Maintenance box, enter the cost per unit for maintenance.
   5. In the Tires box, enter the cost per unit for tires.
   6. In the Minor Repair box, enter the cost per unit for minor repairs.
   7. In the Other Cost box, enter any additional costs per unit not otherwise covered.
8. On the menu bar, click Calculate.
9. Use the Cost and Billing Rates tab to enter internal cost recovery rates and billing rates.