An efficient cost analysis reveals, in addition to possible improvements in resource allocation, the real cost of products. For this, it is essential to understand the value that each piece of machinery or implement represents in a given farming operation.
The cost of a piece of machinery or implement per hour worked can be obtained through depreciation calculation. This can be calculated using:
Residual Value – The selling value of the machine after its “Lifetime”:Lifetime – On average assumed to be 7 yearsWorking Hours per Year – On average assumed to be 735 hours.
How to define depreciation for machinery
Step 1. Open settings
Step 2. Open settings
Go to the Equipment section and in the Machinery card click Add new;
Step 3. Fill out the form
How to define depreciation for an implement
Step 1. Open settings
Open the Settings menu and click the Labor option.
Step 2. Open settings
Go to the Equipment section and in the Implements card click Add new.
Step 3. Fill out the form
Fill out the form according to the instructions at the beginning of the article.
It is important to check the Apply Amortization option.
Click Save.