KEVOS® MAKEOS · Money
Machine Hour Rate
What does this machine cost per productive hour to own and run?
Hourly cost of a machine from capital recovery, floor space, power, maintenance, tooling and consumables over its productive hours, with operator cost to give a full machine-and-operator rate for quoting.
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How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Installed machine cost | AUD | Purchase price including installation and commissioning. |
| Resale value at end of life | AUD | Expected resale value at the end of its economic life. |
| Economic life | years | Years the machine will be used economically. |
| Interest (discount) rate | % | Your cost of capital. |
| Productive hours per year | h | Hours per year the machine actually produces (not attendance hours). |
| Floor space cost per year | AUD/yr | Share of building cost for the machine’s floor area. |
| Average power drawn when running | kW | Average electrical demand while producing. |
| Electricity price | AUD/kWh | Electricity price. |
| Maintenance per year | AUD/yr | Planned and breakdown maintenance per year. |
| Tooling and consumables per hour | AUD/h | Cutting tools, coolant and consumables per productive hour. |
| Operator cost per hour (fully loaded) | AUD/h | Operator wage plus on-costs per hour (0 for machine-only rate). |
Method and formulas
- Capital recovery per year = (cost − salvage) × A/P(i, n) + salvage × i.
- Hourly cost = (capital + space + maintenance) ÷ productive hours + power × price + tooling.
- Machine-and-operator rate = machine rate + operator cost.
- Example: the default machine costs $40.90 per hour, or $106 with an operator.
Limitations
- Excludes general factory overheads (supervision, administration, quality) unless included in the inputs.
- Productive hours are the most sensitive input.
- Example values are illustrations. Replace them with values for your actual task.
Typical uses
- Set shop rates for quoting
- Compare the cost of running old and new machines
- Decide whether to outsource an operation
Who it is for
- Engineering managers
- Cost estimators
- Finance and business analysts
What you get
- Capital cost per hour
- Running cost per hour
- Machine rate and machine-plus-operator rate
Interpreting the result
- Under-utilised machines have high hourly rates; quote on realistic productive hours.
References
- Machinery’s Handbook, 29th edition (Industrial Press, 2012), printed pp. 134–146, 1153–1160. Topic reference; no source tables or recommended settings are reproduced.
WORKOS tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.
