DETERMING THE PRICE OF TRACTOR OPERATION DEPENDING ON THE ANNUAL ENGAGEMENT

Abstract

The paper presents a calculation of fixed and variable costs for a John Deere 6110 B tractor, depending on the annual engagement of 400 and 600 working hours. Depreciation, interest, insurance, garage, repair and registration costs are calculated as fixed (ownership) costs. The costs of tractor maintenance, fuel and lubricants are presented as variable (operating) costs. The gross salary of workers and profit margin are also calculated. The value of fixed costs was calculated, regardless of the hiring of tractors during the year, 4,910 EUR. Depending on the number of working hours of tractors during the year, variable costs ranged from 14,942 EUR to 21,906 EUR. The price of tractor operation per hour was 62.67 EUR for 400 and 56.73 EUR for 600 hours of operation. With the increase in the annual engagement of tractors from 400 to 600 hours, the costs of labor per hour decreases by 5.94 EUR. In the calculation of the price of tractor work, variable costs participated with 59.61% and 64.36%, fixed costs with 19.59% and 14.42%, workers salaries with 4.95% and 5.46% and profit margin with a share of 15.85% and 15.76% for 400 and 600 hours of work, respectively. Taking into account the calculated costs, the prices of services provided by the tractor and machinery can be realistically determined, so based on that, farmers will choose whether it is more profitable for them to buy a new tractor or to rent a tractor as needed.