Sample costs in these budgets were extracted from the 2001 B.E.A.R. Program Budgets. The sample operating and overhead costs for machinery are averages derived from crop cost studies. These averages represent a wide range of individual results. It is recommended that you refer to your records to derive your costs. The Crop Insurance premiums shown are a representative average of producer premiums for the 2000 crop.
Experience is the best guide in budgeting machinery costs.
Prior year's statements of income and expense can provide information on equipment repairs, maintenance, and fuel costs. The portion of those costs that relate to crop production can be divided by the acres of crop produced to arrive at a cost per acre. Overhead expenses are a major part of the total cost of doing business. In addition to depreciation of machinery, the depreciation charge should include all related tools and storage buildings. Return on investment is an opportunity cost to you - the rate of return that you expect or want on your invested capital.