The cost per running hour of each machine is arrived at in accordance with the following example: Sawbench
Initial cost 400
Estimated life 20 years, depreciation per year 40
Interest at 15 per cent per annum 60
Annual value 100
Annual cost of maintenance and repairs 30
Annual electric power consumed 40
Annual saw replacements, sharpening, etc. 40
Annual cost 210
(The figures quoted are purely hypothetical for illustration purposes only.)
Assuming that the average use of the sawbench is 20 hours a week for 50 weeks in the year, then the hourly rate will be 210 (the annual cost) ^ (20 X 50), exclusive of the machinist's wages. If the use is only 10 hours per week then the hourly rate will be doubled, or, if more, reduced accordingly. Where, however, the machine or machines are only used intermittently and by several craftsmen instead of one particular machinist, which is more often than not the usual practice in small workshops, then it may be difficult or impossible to keep accurate records, and the only method which can be adopted is to value the machines as above, and to include the total costs of all machines, not including craftsmen's wages, in workshop overheads. The latter method was used by the writer in his own workshops, and worked reasonably well over a number of years.
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