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### 3. CALCULATION OF MACHINE RATES

3.2 Classifiion of Costs. The machine rate is usually, but not always, divided into fixed costs, operating costs, and labor costs. For certain cash flow analyses only items which represent a cash flow are included. Certain fixed costs, including depreciation and sometimes interest charges, are omitted if they do not represent a cash payment.

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### 3. CALCULATION OF MACHINE RATES

Costs for equipment storage and off-duty protection are fixed costs, largely independent of the hours of use. Costs of storage and protection must be spread over the total hours of equipment use. 3.5 Operating Costs. Operating costs, unlike fixed costs, change in proportion to hours of operation or use.

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