Enter the total purchase price ($), the eventual salvage value ($), and the useful life span (hrs) into the Machinery Cost Per Hour Calculator. The calculator will evaluate and display the Machinery Cost Per Hour. 

Machinery Cost Per Hour Formula

The following formula is used to calculate the Machinery Cost Per Hour. 

MC = (P - SV) / LS
  • Where MC is the Machinery Cost Per Hour ($/hr)
  • P is the total purchase price ($) 
  • SV is the eventual salvage value ($) 
  • LS is the useful life span (hrs) 

To calculate the machinery cost per hour, subtract the eventual salvage value from the purchase price, then multiply by the useful life span.

How to Calculate Machinery Cost Per Hour?

The following example problems outline how to calculate Machinery Cost Per Hour.

Example Problem #1

  1. First, determine the total purchase price ($). The total purchase price ($) is given as 4,000 .
  2. Next, determine the eventual salvage value ($). The eventual salvage value ($) is calculated as  1,000 .
  3. Next, determine the useful life span (hrs). The useful life span (hrs) is found to be 1500.
  4. Finally, calculate the Machinery Cost Per Hour using the formula above: 

MC = (P – SV) / LS

Inserting the values from above yields: 

MC = (4000 – 1000) / 1500 = 2.00 ($/hr)

Example Problem #2

The variables needed for this problem are provided below:

total purchase price ($) = 60,000

eventual salvage value ($) = 10,000

useful life span (hrs) = 2000

Entering these values and solving gives:

MC = (P – SV) / LS = 25.00 ($/hr)