Other Costs 



In addition to costs for labor, ownership, administration, supervi- 

 sion and utilities, there is a set of other costs. These are discussed Jjelow 

 and their levels on an annual and per ton basis are shown in Tal)le 11. 



1. Equipment Repair and Service Costs ■ — Equipment repairs and 

 services are the cost of replacement parts for equipment that has failed 

 because of wear, and services hired by the mill to make certain repairs. 

 Examples are the purchase of pellet mill dies and rolls, hammermill 

 hammers, and the ribbon for a mixer. Services hired by a mill may be 

 for rewinding a burned-out motor or making other repairs that mill 

 personnel are not qualified to make. 



Equipment repairs and services are a variable cost since they are 

 a result of wear or use. Data for deriving an estimate of this cost for the 

 model mills were obtained from the observed mills accounting records. 



Figure 2 shows the relationship used to estimate repair and service 

 costs. The relationship is between the percent of new equipment invest- 

 ment and the percent of capacity under which the mill is operated. At 

 100 percent of capacity, the annual repair cost is equivalent to 6.5 per- 

 cent of the equipment investment. 



Figure 2. Relationship between Percent of Mill Capacity Utilized 



and Percent of New Equipment Investment for Estimating 



the Annual Variable Equipment Repair Cost 







25 

 Percent 



50 75 



of mill capacity utilized 



26 



