- ANS-
"Boilerplate"pispaptermpappliedptopconditionspthatptendptopbeppredeterminedpandpautomaticallypinclu
dedpinpallpofpapbusiness'spcontracts.pThepmajoritypofptheseptendptopbepdisclaimerspandplegalpprotect
ionspregardingpthingspsuchpaspmediation,parbitration,pattorneyspfees,petc.pBepcertainptopreadpthesep
justpaspcarefullypbecauseptheypcanphavepapdirectpimpactponpanyplegalpactionspthatptakepplacepinpth
epeventpofpapproblem.
- ANS-
"Overlapping"pofpFMLApandpOFLApwithpWorkers'pCompensationpandpADApandpOregonpDisabilit
ypLaws
Whenpcoveredpbypmorepthanponepemploymentplaw,pthepemployerpmustpfollowptheponepmostpbene
ficialptopthepemployee.pLargerpcompaniespwillpbepcoveredpbypbothpOFLApandpFMLA.pThepOFLApa
ppliesptopemployerspwithp25porpmorepemployeespwhereaspFMLApappliesptopemployerspwithp50porp
morepemployees.
- ANS-10.pCalculatepYourpMarkuppandpProfitpMargin
ClickpTopEnlarge
Nowpyouparepreadyptopaddpthepfinishingptouchp-
pyourpprofit.pEverypestimatepmustpincludepapprofit,potherwisepwhat'sptheppoint?
Thingsptopconsiderpforpapprofitpthatpwillpgetpyoupbusinesspandpbepenoughptopkeeppyoupinpbusiness,pi
nclude:
Yourpcostpestimate
Thepcustomer'spneedspandpexpectationspL
ocalpmarketpandpcompetition
Desiredpprofitpmargin
Onepofpthepmostpcommonpmethodspforpdeterminingpthepfinalpmarkuppand,pthereby,pyourpbid,pisp
cost-basedppricing.pThepbasicpformulapforpcalculatingpthroughpthispmethodpis:
CostpEstimatep+pOverheadp+pProfitpMarkupp=pBid
Inpourpcurrentpexample,pwephavepaddedpthepfirstptwopitemspandparrivedpatp$11,364.00.pNowpwepne
edptopfigurepwhatpwepwantpourpprofitpmarginptopbe,pandpwephavepourpbid.
Thispispwherepknowledgepofpyourpmarketpcanpgivepyoupaptruepcompetitivepedge.pBidptooplowpandpan
ypunforeseenpdelaysporpaddedpexpensespcanprapid
- ANS-2.pAddpLaborpBurden
Expensesprelatedptopwagesporprequiredppayrollpdeductionspandpotherpemployerpobligationspcanpad
dpaspmuchpasp30%ptopyourplaborpcosts.pThispispcalledpthep"laborpburden".
Examplespofpthesephiddenpexpensespinclude:pFede
ralpandpstatepwithholdingp(SeepCh.p14)pUnemploy
mentpinsurancep(SeepChs.p3p&p14)
FederalpInsurancepContributionpActp(FICA)p(SeepCh.p14)pMedi
carepandpSocialpSecurityp(SeepCh.p14)
Workers'pcompensationpinsurancep(SeepChs.p3p&p14)
,Employeepbenefitsp(healthpcare,pvacation,petc.)
Anpemployeeptrustpbenefitpalsopcanpbepanpindirectplaborpcost.
- ANS-2010pOregonpManufacturedpDwellingpInstallationpSpecialtypCode
EffectivepAprilp1,p2010,pOregonpadoptedpthepnewpManufacturedpDwellingpInstallationpSpecialtypCo
dep(MDISC)ptopreplacepthep2002pManufacturedpDwellingpandpParkpSpecialtypCodep(MD&P).pThepn
ewpMDISCpcodepispbasedponpthep2002pMD&P,pU.S.pDepartmentpofpHousingpandpUrbanpDevelopm
entp(HUD)pinstallationpstandards,pandpnationalprecognizedpmanufacturedpDwellingpinstallationpsta
ndards.
- ANS-2010pOregonpManufacturedpDwellingpInstallationpSpecialtypCode
EffectivepAprilp1,p2010,pOregonpadoptedpthepnewpManufacturedpDwellingpInstallationpSpecialtypCo
dep(MDISC)ptopreplacepthep2002pManufacturedpDwellingpandpParkpSpecialtypCodep(MD&P).pThepn
ewpMDISCpcodepispbasedponpthep2002pMD&P,pU.S.pDepartmentpofpHousingpandpUrbanpDevelopm
entp(HUD)pinstallationpstandards,pandpnationalprecognizedpmanufacturedpDwellingpinstallationpsta
ndards.
- ANS-2010pOregonpSolarpInstallationpSpecialtypCode
EffectivepOctoberp1,p2010,pthepdivisionpadoptedpthep2010pOregonpSolarpInstallationpSpecialtypCod
ep(OSISC),pthepfirstpsolarpcodepforpOregonpandpthepfirstpstatewidepsolarpcodepinpthepNation.pThepCo
depisppartpofpthepdivision'spoverallpgoalptopfacilitatepgreenpbuildingptechnologies.
ThepOSISCpstandardsparepforpthepinstallationpofpthepstructuralpcomponentspforpinstallation,palterat
ion,preplacementporprepairpofpsolarpphotovoltaicpsystems.pThepelectricalprequirementsparepcontain
edpinpthepOregonpElectricalpSpecialtypCodepandpreproducedpinpthepOSISC'spappendixpA.
- ANS-2014pOregonpEnergypEfficiencypSpecialtypCode
Oregonphaspadoptedpapnewpstand-
alonepcodeptopaddresspenergypissuespinpconstructionpinpOregon.pThep2014pOregonpEnergypEfficie
ncypSpecialtypCodep(OEESC)pwaspadoptedpeffectivepJulyp1,p2014pwithpapgracepperiodpextendingpt
opOctoberp1,p2014.pThispisptheplastpcodepcyclepwherepthepenergypprovisionspwillpbeppublishedpaspap
separateppublication.pInpthepfollowingpcodepcyclespthispwillpbepapsubsetpofpthepOSSC.
- ANS-2014pOregonpFirepCode
Thep2014pOregonpFirepCodepispbasedponpthep2014pICCpInternationalpFirepCodepwithpOregonpamen
dments.
- ANS-2014pOregonpMechanicalpSpecialtypCodep(OMSC)
Oregonpadoptedpthep2014p(OMSC),pwhichpispbasedponpthep2012pInternationalpMechanicalpCode,p
Oregonpamendmentspandpthep2012pInternationalpFuelpGaspCodepaspanpappendix.pThepOMSCpapp
liesptopallpstructurespnotpcoveredpunderpthepOregonpResidentialpSpecialtypCode.
- ANS-2014pOregonpStructuralpSpecialtypCodep(OSSC)
,ThepOSSCpconsistspofpthep2011peditionpofpthepInternationalpBuildingpCodepwithpOregonpamen
dments,pwhichpwaspeffectivepJulyp1,p2014pwithpapgracepperiodpextendingptopOctoberp1,p2014.
ThispcodepappliesptopallpstructurespnotpregulatedpunderpthepOregonpResidentialpSpecialtypCode,pin
cludingpthepfollowing
Commercialpstructures
Transientplodging,psuchpasphotelspandpmotels
CertainpresidentialpstructurespsubjectptoplicensurepbypthepOregonpDepartmentpofpHumanpServicesp
Low-risepmultiplepfamilypdwellings
- ANS-2017pOregonpElectricalpSpecialtypCodep(OESC)
Oregonpadoptedpthep2017pOregonpElectricalpSpecialtypCodepeffectivepOctoberp1,p2017,pwhichpispb
asedponpthep2017peditionpofpthepNFPAp70,pNationalpElectricalpCodepamendmentsptopthep2017pNE
C??padoptedpOct.p1,p2017.pThispcodepcontainsprequirementspforpelectricalpinstallations.
- ANS-2017pOregonpResidentialpSpecialtypCode
Oregonpadoptedpthep2017pOregonpResidentialpSpecialtypCodepeffectivepOctoberp1,p2017.pItpispba
sedponpthep2015peditionpofpthepICCpInternationalpResidentialpCodepwithpenhancementspaddedpinp2
017.
ThepplumbingpandpelectricalpchapterspofpthepInternationalpCodeparepnotpusedpinpOregon.pThepOreg
onpStatepPlumbingpCodepandpthepOregonpStatepElectricalpCodepapplypinpOregon.
ThepscopepofpthepOregonpResidentialpSpecialtypCodephaspbeenpexpandedptopincludepmultifamilypu
nitspandpincludesp-pwithplimitationsp-
ptownhouses,papartments,pandprowphousespincludingptheirpaccessorypstructures.pRowphousesparep
coveredpinpAppendixpOpofpthepOregonpResidentialpSpecialtypCode.
- ANS-2017pOregonpResidentialpSpecialtypCode
Oregonpadoptedpthep2017pOregonpResidentialpSpecialtypCodepeffectivepOctoberp1,p2017.pItpispba
sedponpthep2015peditionpofpthepICCpInternationalpResidentialpCodepwithpenhancementspaddedpinp2
017.
ThepplumbingpandpelectricalpchapterspofpthepInternationalpCodeparepnotpusedpinpOregon.pThepOreg
onpStatepPlumbingpCodepandpthepOregonpStatepElectricalpCodepapplypinpOregon.
ThepscopepofpthepOregonpResidentialpSpecialtypCodephaspbeenpexpandedptopincludepmultifamilypu
nitspandpincludesp-pwithplimitationsp-
ptownhouses,papartments,pandprowphousespincludingptheirpaccessorypstructures.pRowphousesparep
coveredpinpAppendixpOpofpthepOregonpResidentialpSpecialtypCode.
- ANS-3.pDeterminepMaterialspCosts
Forpmaterials,pyoupwantptopfollowpapsimilarpprocessptoptheplaborpestimating.pWorkingpfrompyourpesti
matepframework,pcalculatepthepcostpforpeachpmaterialpitemplisted.pThispispanotherpareapwherephavi
ngpyourphistoricalpdatapavailablepwillpbepaphugephelp,phowever,pyoupalsopneedptopstaypabreastpofpth
epmarketpbecausepmaterialpcostspcanpfluctuatepdramaticallypbasedponpsupplypandpdemand/pavaila
bility.
, Yourpsuppliersparepthepbestpsourcepforpcurrentpinformation.pTheypcanpprovidepeitherpperpunitporpl
ump-
sumpcostsptopassistpyourpestimate.pAlternatively,pthepU.S.pBureaupofpLaborp&pStatisticsptrackspt
hepcostspofpmajorpgroupspofpconstructionpmaterialspinpthepProducerpPricepIndexp(PPI)pprogram.
Ifpyoupreceivepthepcostspperpunit,pyoupcanpapplypthepfollowingpformulaptophelppdeterminepthepexpect
edpcostpforpeachpcategorypofpmaterial:
PricepperpUnitpxpNumberpofpUnitspNeededp=pTotalpMaterialpUnitpCostpT
opensure
- ANS-4.pCalculatepProjectpEquipment
Equipmentpcostspgenerallyparepdirectpcosts.pEquipmentpspecificptopapproject,pe.g.,prentalpofpapforklif
t,pcrane,pbackhoe,petc.,pspecificallypforpthepprojectpispapdirectpcostpandpshouldpbepaddedptopyourpest
imate.pSmallptoolspandpcompany-
ownedpvehiclespthatparepusedpregularlypforpjobspandpnotpspecificptopapparticularpprojectparepoverhea
dpandpshouldpnotpbepincludedphere.
Thereparepdifferentpwaysptopcalculatepthepdirectpcostpdependingponpwhetherpyoupown,prent,psubcont
ract,porplease.
- ANS-
4.pCalculatepProjectpEquipmentpOwned
pEquipment
Beginpbypdeterminingpthepperpunitpcost,pconsideringpthepfollowingpfactors:p
Actualpvaluepofpequipmentp(includingpage,pdepreciation,petc.)pMaintenanc
epandpoperatingpcostsp(e.g.,pfuel)
Taxespandpfees
Laborptopoperatep(includingptrainingporplicensingpifpapplicable)pI
nsurance
Topcalculatepthepcostpforpthepproject:
Estimatepthepnumberpofphourspperpyearpthepequipmentpispusedp
Determinepthepannualpcostptopownpandpoperatepthepequipmentp
Dividepthepcostpbypthepnumberpofphours
ThenpmultiplypthephourlypratepbypthepnumberpofphourspexpectedptopbepneededpforpthispprojectpT
hepformulaplooksplikepthis:
Costpofpequipmentpperpyearp/pNumberpofphourspusedpperpyearp=pCost
Forpexample,pappiecepofpequipmentpcostp$10,000pperpyearptopownpandpmaintain.pYoupusepthepequ
ipmentp1000phourspperpyear.pYourpcostpisp$10pperphour.pOnpthispprojectpyoupdeterminepyoupwillpne
edp50phourspofpusepofpthispequipment.pY
- ANS-
4.pPreparingpFinancialpStatementspBalanc
epSheet
Long-termpLiabilities
Oppositepofpcurrentpliabilities,p"long-
termpliabilities"parepitems,pe.g.,pbankploans,pdeferredptaxppayments,pthatparepduepinpaptimepperiodplo
ngerpthanponepyear.
- ANS-
4.pPreparingpFinancialpStatementspBalanc
"Boilerplate"pispaptermpappliedptopconditionspthatptendptopbeppredeterminedpandpautomaticallypinclu
dedpinpallpofpapbusiness'spcontracts.pThepmajoritypofptheseptendptopbepdisclaimerspandplegalpprotect
ionspregardingpthingspsuchpaspmediation,parbitration,pattorneyspfees,petc.pBepcertainptopreadpthesep
justpaspcarefullypbecauseptheypcanphavepapdirectpimpactponpanyplegalpactionspthatptakepplacepinpth
epeventpofpapproblem.
- ANS-
"Overlapping"pofpFMLApandpOFLApwithpWorkers'pCompensationpandpADApandpOregonpDisabilit
ypLaws
Whenpcoveredpbypmorepthanponepemploymentplaw,pthepemployerpmustpfollowptheponepmostpbene
ficialptopthepemployee.pLargerpcompaniespwillpbepcoveredpbypbothpOFLApandpFMLA.pThepOFLApa
ppliesptopemployerspwithp25porpmorepemployeespwhereaspFMLApappliesptopemployerspwithp50porp
morepemployees.
- ANS-10.pCalculatepYourpMarkuppandpProfitpMargin
ClickpTopEnlarge
Nowpyouparepreadyptopaddpthepfinishingptouchp-
pyourpprofit.pEverypestimatepmustpincludepapprofit,potherwisepwhat'sptheppoint?
Thingsptopconsiderpforpapprofitpthatpwillpgetpyoupbusinesspandpbepenoughptopkeeppyoupinpbusiness,pi
nclude:
Yourpcostpestimate
Thepcustomer'spneedspandpexpectationspL
ocalpmarketpandpcompetition
Desiredpprofitpmargin
Onepofpthepmostpcommonpmethodspforpdeterminingpthepfinalpmarkuppand,pthereby,pyourpbid,pisp
cost-basedppricing.pThepbasicpformulapforpcalculatingpthroughpthispmethodpis:
CostpEstimatep+pOverheadp+pProfitpMarkupp=pBid
Inpourpcurrentpexample,pwephavepaddedpthepfirstptwopitemspandparrivedpatp$11,364.00.pNowpwepne
edptopfigurepwhatpwepwantpourpprofitpmarginptopbe,pandpwephavepourpbid.
Thispispwherepknowledgepofpyourpmarketpcanpgivepyoupaptruepcompetitivepedge.pBidptooplowpandpan
ypunforeseenpdelaysporpaddedpexpensespcanprapid
- ANS-2.pAddpLaborpBurden
Expensesprelatedptopwagesporprequiredppayrollpdeductionspandpotherpemployerpobligationspcanpad
dpaspmuchpasp30%ptopyourplaborpcosts.pThispispcalledpthep"laborpburden".
Examplespofpthesephiddenpexpensespinclude:pFede
ralpandpstatepwithholdingp(SeepCh.p14)pUnemploy
mentpinsurancep(SeepChs.p3p&p14)
FederalpInsurancepContributionpActp(FICA)p(SeepCh.p14)pMedi
carepandpSocialpSecurityp(SeepCh.p14)
Workers'pcompensationpinsurancep(SeepChs.p3p&p14)
,Employeepbenefitsp(healthpcare,pvacation,petc.)
Anpemployeeptrustpbenefitpalsopcanpbepanpindirectplaborpcost.
- ANS-2010pOregonpManufacturedpDwellingpInstallationpSpecialtypCode
EffectivepAprilp1,p2010,pOregonpadoptedpthepnewpManufacturedpDwellingpInstallationpSpecialtypCo
dep(MDISC)ptopreplacepthep2002pManufacturedpDwellingpandpParkpSpecialtypCodep(MD&P).pThepn
ewpMDISCpcodepispbasedponpthep2002pMD&P,pU.S.pDepartmentpofpHousingpandpUrbanpDevelopm
entp(HUD)pinstallationpstandards,pandpnationalprecognizedpmanufacturedpDwellingpinstallationpsta
ndards.
- ANS-2010pOregonpManufacturedpDwellingpInstallationpSpecialtypCode
EffectivepAprilp1,p2010,pOregonpadoptedpthepnewpManufacturedpDwellingpInstallationpSpecialtypCo
dep(MDISC)ptopreplacepthep2002pManufacturedpDwellingpandpParkpSpecialtypCodep(MD&P).pThepn
ewpMDISCpcodepispbasedponpthep2002pMD&P,pU.S.pDepartmentpofpHousingpandpUrbanpDevelopm
entp(HUD)pinstallationpstandards,pandpnationalprecognizedpmanufacturedpDwellingpinstallationpsta
ndards.
- ANS-2010pOregonpSolarpInstallationpSpecialtypCode
EffectivepOctoberp1,p2010,pthepdivisionpadoptedpthep2010pOregonpSolarpInstallationpSpecialtypCod
ep(OSISC),pthepfirstpsolarpcodepforpOregonpandpthepfirstpstatewidepsolarpcodepinpthepNation.pThepCo
depisppartpofpthepdivision'spoverallpgoalptopfacilitatepgreenpbuildingptechnologies.
ThepOSISCpstandardsparepforpthepinstallationpofpthepstructuralpcomponentspforpinstallation,palterat
ion,preplacementporprepairpofpsolarpphotovoltaicpsystems.pThepelectricalprequirementsparepcontain
edpinpthepOregonpElectricalpSpecialtypCodepandpreproducedpinpthepOSISC'spappendixpA.
- ANS-2014pOregonpEnergypEfficiencypSpecialtypCode
Oregonphaspadoptedpapnewpstand-
alonepcodeptopaddresspenergypissuespinpconstructionpinpOregon.pThep2014pOregonpEnergypEfficie
ncypSpecialtypCodep(OEESC)pwaspadoptedpeffectivepJulyp1,p2014pwithpapgracepperiodpextendingpt
opOctoberp1,p2014.pThispisptheplastpcodepcyclepwherepthepenergypprovisionspwillpbeppublishedpaspap
separateppublication.pInpthepfollowingpcodepcyclespthispwillpbepapsubsetpofpthepOSSC.
- ANS-2014pOregonpFirepCode
Thep2014pOregonpFirepCodepispbasedponpthep2014pICCpInternationalpFirepCodepwithpOregonpamen
dments.
- ANS-2014pOregonpMechanicalpSpecialtypCodep(OMSC)
Oregonpadoptedpthep2014p(OMSC),pwhichpispbasedponpthep2012pInternationalpMechanicalpCode,p
Oregonpamendmentspandpthep2012pInternationalpFuelpGaspCodepaspanpappendix.pThepOMSCpapp
liesptopallpstructurespnotpcoveredpunderpthepOregonpResidentialpSpecialtypCode.
- ANS-2014pOregonpStructuralpSpecialtypCodep(OSSC)
,ThepOSSCpconsistspofpthep2011peditionpofpthepInternationalpBuildingpCodepwithpOregonpamen
dments,pwhichpwaspeffectivepJulyp1,p2014pwithpapgracepperiodpextendingptopOctoberp1,p2014.
ThispcodepappliesptopallpstructurespnotpregulatedpunderpthepOregonpResidentialpSpecialtypCode,pin
cludingpthepfollowing
Commercialpstructures
Transientplodging,psuchpasphotelspandpmotels
CertainpresidentialpstructurespsubjectptoplicensurepbypthepOregonpDepartmentpofpHumanpServicesp
Low-risepmultiplepfamilypdwellings
- ANS-2017pOregonpElectricalpSpecialtypCodep(OESC)
Oregonpadoptedpthep2017pOregonpElectricalpSpecialtypCodepeffectivepOctoberp1,p2017,pwhichpispb
asedponpthep2017peditionpofpthepNFPAp70,pNationalpElectricalpCodepamendmentsptopthep2017pNE
C??padoptedpOct.p1,p2017.pThispcodepcontainsprequirementspforpelectricalpinstallations.
- ANS-2017pOregonpResidentialpSpecialtypCode
Oregonpadoptedpthep2017pOregonpResidentialpSpecialtypCodepeffectivepOctoberp1,p2017.pItpispba
sedponpthep2015peditionpofpthepICCpInternationalpResidentialpCodepwithpenhancementspaddedpinp2
017.
ThepplumbingpandpelectricalpchapterspofpthepInternationalpCodeparepnotpusedpinpOregon.pThepOreg
onpStatepPlumbingpCodepandpthepOregonpStatepElectricalpCodepapplypinpOregon.
ThepscopepofpthepOregonpResidentialpSpecialtypCodephaspbeenpexpandedptopincludepmultifamilypu
nitspandpincludesp-pwithplimitationsp-
ptownhouses,papartments,pandprowphousespincludingptheirpaccessorypstructures.pRowphousesparep
coveredpinpAppendixpOpofpthepOregonpResidentialpSpecialtypCode.
- ANS-2017pOregonpResidentialpSpecialtypCode
Oregonpadoptedpthep2017pOregonpResidentialpSpecialtypCodepeffectivepOctoberp1,p2017.pItpispba
sedponpthep2015peditionpofpthepICCpInternationalpResidentialpCodepwithpenhancementspaddedpinp2
017.
ThepplumbingpandpelectricalpchapterspofpthepInternationalpCodeparepnotpusedpinpOregon.pThepOreg
onpStatepPlumbingpCodepandpthepOregonpStatepElectricalpCodepapplypinpOregon.
ThepscopepofpthepOregonpResidentialpSpecialtypCodephaspbeenpexpandedptopincludepmultifamilypu
nitspandpincludesp-pwithplimitationsp-
ptownhouses,papartments,pandprowphousespincludingptheirpaccessorypstructures.pRowphousesparep
coveredpinpAppendixpOpofpthepOregonpResidentialpSpecialtypCode.
- ANS-3.pDeterminepMaterialspCosts
Forpmaterials,pyoupwantptopfollowpapsimilarpprocessptoptheplaborpestimating.pWorkingpfrompyourpesti
matepframework,pcalculatepthepcostpforpeachpmaterialpitemplisted.pThispispanotherpareapwherephavi
ngpyourphistoricalpdatapavailablepwillpbepaphugephelp,phowever,pyoupalsopneedptopstaypabreastpofpth
epmarketpbecausepmaterialpcostspcanpfluctuatepdramaticallypbasedponpsupplypandpdemand/pavaila
bility.
, Yourpsuppliersparepthepbestpsourcepforpcurrentpinformation.pTheypcanpprovidepeitherpperpunitporpl
ump-
sumpcostsptopassistpyourpestimate.pAlternatively,pthepU.S.pBureaupofpLaborp&pStatisticsptrackspt
hepcostspofpmajorpgroupspofpconstructionpmaterialspinpthepProducerpPricepIndexp(PPI)pprogram.
Ifpyoupreceivepthepcostspperpunit,pyoupcanpapplypthepfollowingpformulaptophelppdeterminepthepexpect
edpcostpforpeachpcategorypofpmaterial:
PricepperpUnitpxpNumberpofpUnitspNeededp=pTotalpMaterialpUnitpCostpT
opensure
- ANS-4.pCalculatepProjectpEquipment
Equipmentpcostspgenerallyparepdirectpcosts.pEquipmentpspecificptopapproject,pe.g.,prentalpofpapforklif
t,pcrane,pbackhoe,petc.,pspecificallypforpthepprojectpispapdirectpcostpandpshouldpbepaddedptopyourpest
imate.pSmallptoolspandpcompany-
ownedpvehiclespthatparepusedpregularlypforpjobspandpnotpspecificptopapparticularpprojectparepoverhea
dpandpshouldpnotpbepincludedphere.
Thereparepdifferentpwaysptopcalculatepthepdirectpcostpdependingponpwhetherpyoupown,prent,psubcont
ract,porplease.
- ANS-
4.pCalculatepProjectpEquipmentpOwned
pEquipment
Beginpbypdeterminingpthepperpunitpcost,pconsideringpthepfollowingpfactors:p
Actualpvaluepofpequipmentp(includingpage,pdepreciation,petc.)pMaintenanc
epandpoperatingpcostsp(e.g.,pfuel)
Taxespandpfees
Laborptopoperatep(includingptrainingporplicensingpifpapplicable)pI
nsurance
Topcalculatepthepcostpforpthepproject:
Estimatepthepnumberpofphourspperpyearpthepequipmentpispusedp
Determinepthepannualpcostptopownpandpoperatepthepequipmentp
Dividepthepcostpbypthepnumberpofphours
ThenpmultiplypthephourlypratepbypthepnumberpofphourspexpectedptopbepneededpforpthispprojectpT
hepformulaplooksplikepthis:
Costpofpequipmentpperpyearp/pNumberpofphourspusedpperpyearp=pCost
Forpexample,pappiecepofpequipmentpcostp$10,000pperpyearptopownpandpmaintain.pYoupusepthepequ
ipmentp1000phourspperpyear.pYourpcostpisp$10pperphour.pOnpthispprojectpyoupdeterminepyoupwillpne
edp50phourspofpusepofpthispequipment.pY
- ANS-
4.pPreparingpFinancialpStatementspBalanc
epSheet
Long-termpLiabilities
Oppositepofpcurrentpliabilities,p"long-
termpliabilities"parepitems,pe.g.,pbankploans,pdeferredptaxppayments,pthatparepduepinpaptimepperiodplo
ngerpthanponepyear.
- ANS-
4.pPreparingpFinancialpStatementspBalanc
