Machine Hour Cost Calculator
Build an hourly machine cost from depreciation, upkeep and electricity.
Currency changes the display only. No exchange-rate conversion is applied.
Results
Total machine hour cost
- Depreciation per hour
- 5 USD $/h
- Maintenance cost per hour
- 0 USD $/h
- Other fixed cost per hour
- 0 USD $/h
- Electricity cost per hour
- 1.5 USD $/h
- Labor cost per hour
- 0 USD $/h
- Machine cost excluding labor
- 6.5 USD $/h
This model uses straight-line depreciation and a constant average electricity load. Use a consistent allocation period and avoid counting the same expense in maintenance, other fixed costs and labor. Actual energy use and operating costs can differ from these inputs.
Formula · How it works
Formula
Depreciation per hour = (Purchase price − Salvage value) / Useful life in years / Annual operating hours; Electricity per hour = Power in kW × Load% / 100 × Price per kWh; Total hour cost = Depreciation per hour + Maintenance per hour + Other fixed cost per hour + Electricity per hour + Labor per hourAnnual depreciation = (purchase price − salvage value) ÷ useful life in years. Divide depreciation, annual maintenance and annual other fixed costs by annual operating hours. Electricity cost per hour = power in kW × load fraction × price per kWh. Their sum is machine cost excluding labor; add hourly labor for the total machine hour cost.
Worked example
A purchase price of 100,000, zero salvage value, a 10-year useful life and 2,000 operating hours per year give depreciation of 5 per hour. A 10 kW machine at 100% load and electricity priced at 0.15 per kWh adds 1.50 per hour. With maintenance, other fixed costs and labor all zero, total machine hour cost is 6.50 in the selected currency.
How it works
Annual costs are allocated across the operating hours you enter. With the same annual costs, fewer operating hours increase the cost assigned to each hour. Depending on your internal cost system, annual other fixed costs can include allocated insurance, rent, financing or administration. Electricity is estimated separately from power, average load and electricity price.
Common questions
What makes up machine hour cost?
This calculator adds hourly depreciation, maintenance, other fixed costs and electricity. It shows that subtotal without labor, then adds any hourly labor cost you enter to calculate the total.
How do salvage value and useful life affect depreciation?
Salvage value is subtracted from purchase price before the remainder is divided by useful life in years. That annual depreciation is divided by annual operating hours. Salvage value must be no greater than purchase price, and useful life must be positive.
Why do annual operating hours change the result?
Depreciation, maintenance and other annual fixed costs are spread over the entered operating hours. Fewer hours assign more of those costs to each hour. Use operating hours that match the annual costs you enter.
What can go into annual other fixed cost?
Depending on your internal cost definitions, this can include the machine's allocated insurance, rent, financing and administration costs. Use the annual amount assigned to this machine and avoid costs already included elsewhere.
How are electricity and labor included?
Electricity cost per hour is kW × average load fraction × price per kWh. Hourly labor is added separately and can be left blank for zero. When using the resulting rate in another estimate, avoid adding that labor a second time.