function calculateMachineRate() {
var price = parseFloat(document.getElementById('machinePrice').value) || 0;
var residual = parseFloat(document.getElementById('residualValue').value) || 0;
var life = parseFloat(document.getElementById('usefulLife').value) || 1;
var hours = parseFloat(document.getElementById('annualHours').value) || 1;
var maint = parseFloat(document.getElementById('annualMaint').value) || 0;
var fixed = parseFloat(document.getElementById('annualFixed').value) || 0;
var power = parseFloat(document.getElementById('powerUsage').value) || 0;
var rate = parseFloat(document.getElementById('elecRate').value) || 0;
var wage = parseFloat(document.getElementById('operatorWage').value) || 0;
if (life <= 0) life = 1;
if (hours <= 0) hours = 1;
// 1. Depreciation
var annualDepre = (price – residual) / life;
var hourlyDepre = annualDepre / hours;
// 2. Maintenance & Fixed
var hourlyMaintFixed = (maint + fixed) / hours;
// 3. Energy
var hourlyEnergy = power * rate;
// 4. Total
var totalRate = hourlyDepre + hourlyMaintFixed + hourlyEnergy + wage;
document.getElementById('resDepre').innerText = '$' + hourlyDepre.toFixed(2);
document.getElementById('resMaint').innerText = '$' + hourlyMaintFixed.toFixed(2);
document.getElementById('resEnergy').innerText = '$' + hourlyEnergy.toFixed(2);
document.getElementById('resLabor').innerText = '$' + wage.toFixed(2);
document.getElementById('resTotal').innerText = '$' + totalRate.toFixed(2);
document.getElementById('resultsArea').style.display = 'block';
}
Understanding the Machine Hourly Rate
A machine hourly rate is a critical accounting metric used in manufacturing and production environments to determine the actual cost of running equipment for one hour. Accurately calculating this rate is essential for product pricing, job costing, and profitability analysis.
Key Components of the Calculation
Depreciation: This accounts for the loss of value over time. We calculate it by taking the purchase price minus the expected salvage value, divided by the number of years the machine will be in service.
Annual Working Hours: This represents the total time the machine is actually operational or available for production each year.
Variable Costs: These include electricity/fuel consumption and routine maintenance. The more the machine runs, the higher these costs become.
Fixed Costs: Expenses like insurance, property taxes, and factory overhead that apply regardless of how much the machine is used.
Labor: The direct hourly wage of the technician or operator required to run the specific machine.
Why This Calculation Matters for SEO & Business
For small business owners and manufacturing managers, failing to account for the "invisible" costs of machinery (like depreciation and power usage) often leads to underquoting projects. By using this Machine Hourly Rate Calculator, you can ensure that every quote includes a margin for equipment replacement and utility costs, securing the long-term financial health of your production facility.
Example Calculation
Imagine a CNC machine purchased for $100,000 with a $10,000 salvage value after 10 years. If it runs 2,000 hours per year, the hourly depreciation is $4.50. If maintenance and insurance add $5.00/hour, power costs $2.00/hour, and the operator earns $30.00/hour, your total machine hourly rate is $41.50.