Costs of man-hours

The total cost of man-hours at the rates paid, plus overtime rates where applicable, plus health insurance, pensions, paid holidays, etc.

have to be considered. Here again these may be added to the hourly rate, or as percentage additions to the wage total. Strictly speaking, either method is not really accurate, for most of the charges remain the same whether a man works 40 or 60 hours a week; but the percentage addition is the simplest method.

Machine costs

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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