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A contractor has purchased a wheeled loader for $130,000 and expects to use the loader an average of 1,500 hours per year. Tires cost $6,000 to replace (estimated to occur after each 4,500 hours of use), and major repairs will be needed every 6,000 hours at a cost of $5,000. The contractor expects to be able to sell the loader for $10,000 after she has used it for 15,000 operating hours. Fuel, oil, and minor maintenance cost about $19.75 for each hour the loader is used. Interest, insurance, and taxes total about 16%. How much should the contractor charge per hour for use of the loader to recover her costs?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9962895

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