Annual Use Hours are the average number of hours per year that a machine performs work as determined by surveying equipment owners.

An API, or application programming interface, is a data delivery mechanism that allows for data from one source (MagikMe Equipment in this case) to be embedded into the application of a third party. The major benefit to APIs are the following: Workflow efficiency gains Derivative products The MagikMe Equipment API, specifically, is an API composed of the […]

Brand Premiums are an MagikMe Equipment proprietary metric for evaluating the relative price strength of a brand in used equipment markets either at a given time, or as an average over a period time.  The analysis involves comparing thousands (or millions) of observations from the equipment Resale and Auction channels, holding constant significant factors like equipment […]

It is the general practice in the industry to base rates upon one shift of 8 hours per day, 40 hours per week, or 176 hours per month of a 30-day consecutive period.

Cost of Facilities Capital (CFC), which is not the same as interest charges, addresses the cost of money invested, whether the machinery is purchased with cash or financed.

The Cost Reference Guide is a former MagikMe Equipment publication that served as a guide to ownership and operating costs for construction equipment manufactured within the past five years.

The Custom Cost Evaluator is now known as the MagikMe Equipment Internal Charge Rate Calculator.

In general terms, depreciation is the loss of fair market value of an asset over time, usually as a result of wear and tear.

Discount refers to the percent off from list price experienced by the equipment buyer. Including discount as an ownership factor will result in more accurate internal charge rate calculation.

Economic Life Hours reflect the average economically productive life of a machine used under average conditions with normal repairs and maintenance.

Equipment overhead costs include the direct costs of normal risk insurance and property taxes along with the indirect costs of storage, security, mechanics supervision, inspection, licenses, and record keeping.

Fair Market Value (FMV) is the monetary value of an asset that can be expected in a transaction with a single seller and single buyer, neither of whom are under any compulsion or time restriction to complete the transaction. Fair Market Values for heavy equipment are most closely associated with the private, resale market, as […]

The ownership costs of depreciation, indirect costs, cost of facilities capital, and major overhaul are annualized and then adjusted to reflect the average annual working season to obtain a monthly rate, from which weekly, daily and hourly rates are derived. The FHWA Hourly Ownership Rate in-particular is determined by taking the monthly ownership rate/176.

The FHWA (Federal Highway Administration) has approved the use of Rental Rate Blue Book on federally funded projects. The most common application is in force account work and for federally funded projects. FHWA (Federal Highway Administration) has limited their participation in matching funds with state highway agencies (using Rental Rate Blue Book) to the monthly […]

Equipment field repair is a segment of operating cost defined as routine, daily servicing of the equipment and would include repairing, replacing or adjusting small components such as pumps, carburetors, injectors, batteries, filters, belts, gaskets, and hoses.

Field repair labor costs are accrued on a machine working-hour basis to offset charges incurred to perform normal field repair and maintenance.

Field repair parts costs are accrued on a machine working-hour basis to offset the costs for supplying parts necessary to keep the equipment operating in good condition.

F.O.B. (Free on Board) refers to the practice by which the supplier pays shipping costs from the place of manufacture to a specified destination where the legal title then transfers to the purchaser.

Forced Liquidation Value (FLV) is the monetary value of an asset that can be expected in a transaction with a single seller and multiple potential buyers, where the seller is under a short time constraint and has location constraints within which to sell the asset. The Forced Liquidation Value for heavy equipment is most closely […]

The freight rates in the schedule are typically Free on Board from the lessor’s warehouse or shipping point.

Freight refers to the transportation cost from factory to Owner’s yard in total dollars.

Average cost of fuel in $/gallon or electricity in $/kWh.

Ground Engaging Components Cost include repair and/or replacement, either in whole or part, of ground engaging components such as pads, drums, teeth and cutting edges. 

Hourly Estimated Cost include the cost of labor and parts needed for routine, daily servicing of the equipment.

Idling rates refer to any instance in which a piece of equipment is located on a jobsite and the engine is burning fuel, but no ground engaging or other components are actively engaged in meaningful work. Idling Rates in the MagikMe Equipment Cost Recovery Guide are by default the hourly cost associated with an asset idling. […]

Indirect equipment costs consist mostly of overhead costs such as normal risk insurance and property taxes along with storage, security, mechanics supervision, inspection, licenses, and record keeping.

The list price represents the manufacturer suggested price for a complete working machine F.O.B. factory.

Lubrication includes the costs of oils, grease, coolants and filters. Labor and ancillary equipment involved in servicing is also included.

The Mechanic’s Wage is the hourly rate paid for labor including fringe benefits.

Miscellaneous Supply parts are those items normally stocked in bulk for an entire fleet, rather than for individual machines.

Market Popularity is a proprietary metric calculated by MagikMe Equipment to determine a model’s popularity relative to other models within the same equipment category. Popularity is calculated using transactional data collected within a rolling 12-month period.  After finding the unit volume for each model, a percentile-based distribution is created for the entire category.  Based on the number of […]

Model year indicates the annual production period in which a unit was manufactured or shipped from the factory.  When assigning model years, manufacturers may utilize utilize calendar years, fiscal years, or other production cycles.  As a result, model year can differ from the calendar year of manufacture.  For example, a unit manufactured in late 2015 will typically have a model year […]

No industry standard exists regarding the handling of fixed Ownership costs in computation of overtime rates.

The Operating Rate is the cost to operate an asset per hour.

Orderly Liquidation Value (OLV) is the monetary value of an asset that can be expected in a transaction with a single seller given a reasonable amount of time to find one or more purchasers of a liquidation sale, where the seller is under a short time constraint and has location constraints within which to sell […]

Overhaul reflects costs necessary to keep a machine functional throughout its economic life: the periodic rebuilding of engines, transmissions, undercarriages, hydraulic pumps, cylinders and other major components.

Overhaul labor is accrued for each machine working-hour to offset charges incurred to replace, rebuild and recondition major components and are to be included whether repair is performed in the contractor’s maintenance facility or at an outside shop.

Overhaul parts costs are accrued for each machine working-hour to offset costs incurred for periodic replacing, rebuilding and reconditioning of major components, such as engines, transmission, undercarriages, etc.

Primary Engine Power Consumption is calculated using average load factors, equipment horsepower, and the price of fuel per gallon. Actual fuel consumption will depend on variations in load factors, elevation, engine performance, operator efficiency, and terrain.

A proprietary MagikMe Equipment metric that answers the key equipment manager question: for any given project, should I used an owned asset or a rented asset?

On local rentals the equipment rental period most often starts when equipment leaves the lessor’s warehouse and stops when it is returned to the warehouse.

Resale value is the current fair market value of a piece of equipment expressed in total dollars.

Residual Value represents the worth of a piece of equipment at the end of a given term (e.g. multi-year lease or useful life). A high residual value generally shows that a machine has been successful at the work demanded of it, has presented minimal maintenance issues over its service life, and still presents a high value […]

In contrast to serial number ranges, rule-based serial numbers are similar to Vehicle Identification Numbers (VINS) in the on-highway industry.  These serial numbers often contain elements that identify the manufacturer, series, model, model year, manufacturing location, configurations, or other details. Rules and logic that determine the location of the elements within the serial number are set by […]

Sales tax refers to a compulsory contribution to state revenue imposed by the government a the point of sale on goods and services.

Fuel costs are included for machines that have dual engines or are truck mounted.

A serial number range is a sequential set of serial numbers that are assigned within a production period.  Serial number ranges can be numeric or alphanumeric.  Some manufacturers incorporate prefixes to identify a specific model or series while others apply the same sequential range to every machine built. If a manufacturer uses serial number ranges, model year can be […]

The verification process compares a given serial number to known ranges or rules for the appropriate manufacturer and model.  The serial number is considered verified if it matches the manufacturer’s information.  For verified serial numbers, MagikMe Equipment provides the correct model year and displays any transactional data.

Standy refers to the period during which equipment is assigned to a job and available for work, but is not put into operation until needed.

Standby refers to the situation where equipment is on the job and available for work, but is not put into operation until needed.

Tire costs include the repair and/or replacement of tires.

Tire Life is the expected life in hours of a new set of tires, based on severity of application.

Year of manufacture refers to the calendar year in which a unit was manufactured.  This may differ from the unit’s model year.