← Lessons 14-Vehicle Costing
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1. INTRODUCTION 2. TERMINOLOGY 3. VEHICLE STANDING COSTS 4. VEHICLE RUNNING COSTS 5. THE PROFIT REQUIREMENT 6. CALCULATING RATES 7. CONCLUSION 8. QUICK EXAM NUMBERS / FACTS – MEMORISE THESE 9. FINAL MEMORY CHECKLIST

9. FINAL MEMORY CHECKLIST

  • Know the difference between direct/indirect and fixed/variable costs.
  • Know the five standing-cost components.
  • Know the four running-cost components.
  • Know how to calculate straight-line and reducing-balance depreciation.
  • Remember that original tyre equipment is treated as a running cost and deducted before depreciation.
  • Know the main methods for allocating administration costs: number of vehicles, payload, combined vehicle/payload and distance.
  • Know how to calculate running cost per kilometre.
  • Know the ROCE formula and how to derive a required profit surcharge.
  • Allow for vehicle utilisation rather than assuming 365 working days.
  • Know how to calculate rates on time-and-distance, per-tonne and per-kilometre bases.
  • Remember minimum charges/limits for distance-based quotations.
  • Understand cost-plus/open-book pricing.
  • For international work, include ferries, tolls, road-user charges, subsistence and exchange-rate effects.
  • Use current costing data and review rate schedules regularly.