Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-10-13
ARE YOUR TRUCKS
EARNING MONEY?
EXPERT ADVICE ON HOW TO
GET ACCURATE FIGURES ON
OPERATION COST.
DETAILS OF HOW TO
FIGURE TRUCK EXPENSES
Failure to Charge Against Trucks All
items of Cost Common Cause tor
Failure in Business or un'uee'''-
full Operation Of Trucks-cost
Methods Outlined for Owners.

When a man operates motor
truck he is engaged in the transpor-
tation business, whether he sells the
services Of his truck to others or
converts it to the pses Of his own
business. Just as he would be COM
peting with others in similar trade II
he hired them out, SO he is competing
with those to whom he might rent
services when he operates them. Tor
himself.
Without data on what the opera
ton Of his trucks cost him a man IS
at a competitive disadvantage. he
does not know whether he is saving
money by operating his own trucks
or not.
Accurate Cost Necessary.
Worse, infinitely than the first
figures at all are incorrect ones, for
without any knowledge OF costs or
binary caution would impel conser-
vative and cautious attitude. Bogus
costs encourage price cutting and all
the attending evils.
The fallacies Of many self-decetv-
ing operators are based chiefly upon
failures to take all Of, the items or
cost into consideration. Too many
truck users depend upon their cheek
books for their operating accounts,
and Intentionally or unintentionaHy
water their stock or bleed their In
vestment dry by failing to charge n
suitable sinking fund against the cost
of operation; by considering only
current operating expenses and fail
ing to allow for disbursements GER
tain to become necessary In the flu
ture.
Fixed Charges Important.
Chief among the omissions of this
nature are those fixed charges which
tho intangible and largely unaffected
by the extent to which the vehicle is
operated. go on just the same and
are the chief reason why a minute OF
lost time here, an hour or two a day.
q day or so a month, make the diff
ference between economy and extrav-
agance.
When sum Of money is paid out
for the purchase Of equipment Of any
sort the transaction is one Of slow
turnover and ID termed an invest
ment. Money, however, put in use
should return q minimum of the legal
rate Of interest, since it may always
be invested in gilt edge securities to
earn this amount.
This, then, is the first fixed charge,
usually 8 per cent on the total in
vestment.
As to Depreciation.
Since all machinery wears out in
time. becomes obsolete and can never
be liquidated at it's real value. de-
probation should be allowed for. To
allow for this a depreciation charge
is made, so as to build up sinking
fund from the earnings Of the truck
by which it may be replaced when
worn out.
Depreciation Is figured either on
an annual percentage basis or on a
fixed sum per mile of travel, The
first is based on an estimate Of the
life of the truck in years and is, Of
course. the simplest. The second as
sumes a given number of miles of
travel. irrespective Of time, as the
life. >The latter Is the more exact,
since a truck which is run $4,000
miles year may be expected to last
twice as long as one which runs
$4,000 miles per annum.
Including Insurance.
Just as depreciation Is necessary
to provide for the natural deprecia-
ton in value due to ordinary use OF