In this example, we are going to calculate the cost per hour of a Ford F150 4×4 6-cylinder truck.

We should note that the reader should substitute the values used in this example to adapt them to those in effect in his or her region…

## Table of contents

## Fixed cost formula

*Net value of equipment* **=** **Vn**

**Vn** = *Net value ***= Vad-P4-Pe**

Where:**Vad **is the acquisition value.

**P4** is the cost of replacement of 4 tires per year.

**Pe** is the value of special parts or accessories.

The following table shows the parameters used for the calculation.

## How to calculate vehicle cost per hour

For the calculation of the fixed costs of F150, we followed the concepts developed in the previous publications:**Cost of selected equipment****Equipment cost per hour****Labour hours calculation**

## How to Calculate the Hourly Cost of a Pickup Truck – Formulas to use

### The resale value of machinery and vehicles

**Vrev** **=** The resale value of a vehicle at the end of their useful life.

For the F150 we took a resale value of 20% of the acquisition value.

### Depreciation

The value to be allocated for depreciation arises from the following formula:

**D= [Vn-Vrev/Vu]**

### Average interest on investment = **Im**

Average interest of the investment at an annual interest rate **= i**

The charge to be added to the cost of the equipment for the average interest of the investment is equal to:

The average value of the equipment by the annual interest, divided in 2000 hours per year.

**Im = { [Vn + Vrev]/2 * 2000}*i**

### Cost of insurance, taxes, and storage

The costs for insurance, taxes, and annual storage fees are:

Insurance cost: 5.5% of the average value of the equipment.

Cost for taxes: 1.5% of the average value of the equipment.

Cost of storage 1.5% to 2% of average equipment value.

We get hourly costs by dividing the amounts by the number of annual work hours, 2000 hours.

### Maintenance and repairs of machinery

Maintenance for repair and spares costs.

We assign the hourly maintenance cost for repairs and spare parts for the F150 pickup a value equal to 50% of its depreciation value.

The formulas mentioned for the calculation of the fixed cost per hour of the F150 are shown in the following table.

Summarizing the fixed hourly cost of the F150 truck in the example is USD 5.45/hour.

In the next post, we will examine what are the **costs for consumption and operation.**

*How to Calculate the Hourly Cost of a Pickup Truck – Calculate Man Hours*

*How to Calculate the Hourly Cost of a Pickup Truck – Calculate Man Hours*