#Immediacy on speech making

These fixed costs are: • Lease or depreciation costs • Tax • Insurance Garaging In ...

These fixed costs are: • Lease or depreciation costs • Tax • Insurance Garaging In addition, variable costs will be incurred depending on the mileage covered.

These variable costs will include: Fuel; Maintenance and servicing Replacement parts eg tyres; Washing. If a driver is employed his wages must, in the short to medium term at least, be considered a fixed cost. A driver may of course be able to carry out some of the maintenance and also keep the vehicle clean, but one way or another these items must be paid for. Let us now consider how a comparison might be made between running a vehicle and hiring one when required.

For this purpose I will assume total fixed costs of £11,800 per year.

I am also assuming that the proprietor one of his staff will do the driving when required so that labour costs are the same in both cases. For the purposes of this illustration I am assuming variable costs to be 20p per kilometre.

If journeys work out at one per week, averaging 50 kilometres per journey, throughout the year, then variable costs for the year will amount to 52 journeys x 50 kilometres x 20p = £1520. The total cost per year will be £11,800 + £1520 = £12,320, which works out at 2320/50 £146.4 per journey.

If, say, an equivalent vehicle can be hired at £120 per day, convenience apart, it is clearly more economical to hire a vehicle than to buy one. It should be borne in mind that the above illustration simplifies the problem, and in real life allowance must be made for such things as maintenance or repair sessions when your own vehicle will not be available for use. Another important point to watch is the ratio of delivery costs to the gross profit earned from the goods delivered. Unless the customer will pay the delivery costs then the seller's profit is reduced accordingly.

Having worked out the total cost of an owned or leased vehicle, ...

Having worked out the total cost of an owned or leased vehicle, the businessperson can compare this cost with that of any ... read more

'To my astonishment,' said Roger, 'the lorry shot out into the main ...

'To my astonishment,' said Roger, 'the lorry shot out into the main road and, if I have not braked very hard indeed, would have taken the front off my car.' Roger t... read more

Although the businessperson is well aware of the money he pays out ...

Although the businessperson is well aware of the money he pays out to buy raw materials and other supplies, he can easily overlook the cost of holding them. It is even easier to underestima