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Once you have determined how much a machine or a harvesting system is producing per hour, it is time to assign a cost per hour to that given machine or system. Good record keeping will make this process easier.

Ownership costs. These are the costs associated with and derived from owning the machine. Ownership costs are also known as fixed costs. Factors used in determining fixed costs include:

  • purchase price
  • residual value
  • finance period
  • interest rate
  • ownership period
  • licensing fees
  • insurance

The longer the productive life of a machine the better – this allows the owner to spread the fixed costs over more hours, reducing fixed cost per hour.

Operating costs. These are the costs directly incurred by running the machine and are also known as variable costs. Variable costs include:

  • filters
  • fluids
  • replacement parts
  • maintenance labour
  • fuel consumption
  • operator labour costs

Machine availability and utilization. This is not a cost but must be known in order to break down all of the above costs per hour.

  • scheduled shift length
  • shifts per day
  • work days per year
  • machine availability
  • allocated time per shift for meals, breaks, and routine maintenance (ie. greasing and fluid checks)

A Tigercat harvester working in front of a pile of logs, another harvester is seen in the distance.