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#Minimum average cost per unit calculator how to
#Minimum average cost per unit calculator driver
#Minimum average cost per unit calculator full

With an overall rate of $1.64, I don’t want too many loads under that rate and I will usually want to be well above that, so I make a profit. It will help you know if you should take a load or not.īecause I know my overall number, when a broker gives me a rate for a run, rather than taking a load on a wing and a prayer, I’ll know if I can make money at the price they are willing to pay. There are three key areas where knowing your cost-per-mile will put you ahead of the pack. My total variable costs for Haulin Assets were $1.33, and my fixed costs were $0.31. Misc/overhead (Permits, scale fees, tolls, taxes, and washouts).Misc/overhead (Bank fees, compliance, ELD, and parking).Note, some of my misc/overhead costs were fixed and some were variable, so I have some in each category. Here are what I considered my fixed costs and variable costs. You want to add all your fixed costs together and all your variable costs together so you know the total of each.

#Minimum average cost per unit calculator driver

Driver pay and maintenance/repairs are more good examples of variable costs. Fuel is a great example the more miles you go the more fuel you will have to buy. Variable costs are expenses that vary based on the number of miles you drive. Your truck payment is a perfect example of a fixed cost it stays the same whether you drive one mile or 20,000 miles in a month. If you really want to get the most out of your cost-per-mile for decision making, you need to understand your variable costs versus your fixed costs.įixed costs are expenses that don’t really change much based on how many miles you drive.

Misc/overhead includes: bank fees, compliance costs, ELD, parking, permits, scale fees, taxes, tolls, and washouts.ĭon’t put startup costs into your cost-per-mile calculation, unless you are paying off a loan you used to pay for your startup costs.

Subscriptions include: my cell phone, pre-pass, and QuickBooks.

To simplify things I categorized several expenses together: I did not make an IRP payment during May, June, or July, so I took the total amount I paid for the year and divided it by four to get three months worth. I account for that by not including any of the interest listed on the profit and loss statement in my cost-per-mile calculation, but I use the actual truck and trailer payment amounts. Your entire truck and trailer payments don’t show up on the profit and loss statement, only the interest portion does. Most of the expenses listed above came directly from the profit and loss statement. These numbers are three-month totals for May, June, and July.Ģ. Let’s point out some of the things you need to keep in mind.ġ. Even though the overall cost-per-mile using this method is only $0.03 different than the good method, over 10,000 or more miles a month, that adds up to several hundred dollars. That makes a total cost-per-mile of $1.64. If you want a true representation of what your cost-per-mile is, you need to list each expense individually. If you don’t have a profit and loss statement, shame on you, but you can just add all your expenses together and divide that by the number of miles you ran during the same time period you used for expenses.

#Minimum average cost per unit calculator full

Some expenses like your full truck payment are not fully accounted for on the profit and loss statement.Some expenses like lumper fees are not true expenses, because they get reimbursed.

This number will get you close to your actual cost-per-mile, but it is not exact. You can see the Haulin Assets’ profit and loss statement in the show notes for episode 17 of the podcast. Goodįor the simplest cost-per-mile calculation, you merely divide the total expenses from your profit and loss statement by the total number of miles you drove.

Let’s take a look at all three by analyzing Haulin Assets’ first three months of operation to determine its three-month cost-per-mile.ĭuring that three-month period, I drove 31,307 total miles. When calculating cost-per-mile, I like to say there are three methods: The more complicated version will give you greater detail and help you make even better decisions. Your cost-per-mile calculation can be simple or a little bit complicated.

#Minimum average cost per unit calculator how to

After I explain what the cost-per-mile is, I will give you the “so what” and show you how to use it. Understanding your company’s cost-per-mile is an important tool that will help you make better business decisions in several different areas.