Calculate the annual cost to clean the tanks manually and how much is the annual saving if
Question:
Calculate the annual cost to clean the tanks manually and how much is the annual saving if an automated tank washer (motorized tank washer) is applied, which cost $2,392 (US) annually?
How long do you need to cover the cost of an automated tank washer?
Assumptions:
i.Two tanks, each 6' to 7' (1.8 m to 2 m) in diameter
ii.The tanks are in use when not being cleaned
iii.Cleaning for one tank takes one maintenance person six hours
iv.One hour of production time is valued at $50 (US)
v.Labour cost is $15/hour (US)
vi.Tanks are cleaned weekly
✓ The cost to clean these tanks manually $40,560 (US) annually
✓ The cost to clean these tanks using an automated tank washer $2,392 (US) annually
✓ An annual savings of $38,168 (US)
This example is based on using a motorized tank washer. The savings acquired during the first six to seven weeks of operation will offset the cost of the unit.
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso