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5 cards from this section. Quick, good the night before a test.
What does FOG stand for in the context of equipment costs?
Think of what consumables are used in machinery operation.
What is the formula for calculating depreciation?
Recall the components needed for depreciation calculation.
What is the significance of FOG costs in equipment operation?
Consider the maintenance needs of machinery.
The Peurifoy method uses which of the following for cost estimation?
Think about how cash flows work over time in budgeting.
Calculate the total operating cost for a piece of machinery with an initial price of $100,000, a salvage value of $10,000, a depreciation period of 5,000 hours, and operating 50 hours with fuel consumption of 5 gallons per hour at $3 per gallon. FOG represents 15% of fuel cost.
Break it down into depreciation, fuel cost, and then adding FOG.
Given an initial cost of $120,000, estimated annual maintenance (not including tires) as 12% of the delivered price, and an expected tire cost of $9,000. Calculate the operating cost considering an annual usage of 2,000 hours.
First calculate the maintenance cost adjusted for tire costs, then divide by yearly usage to find hourly costs.
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