David Krause7.1 The example: 5-axis machining center in two-shift operation
The following complete calculation shows the machine hour rate for a 5-axis machining center. We work in five steps from the asset value to the finished €/h rate — with all intermediate results and control points.
Determine the replacement value
Imputed depreciation is based on the replacement value, not the acquisition cost. We use the producer price index of the German Federal Statistical Office (GP09-284 — metalworking machinery).
| Item | Formula / source | Value |
|---|---|---|
| Acquisition cost | invoice / purchase contract 2018 | €520,000 |
| PPI year built 2018 | Destatis GP09-284, annual average | 116.4 |
| PPI current 2026 | Destatis GP09-284, latest annual average | 149.8 |
| Replacement value = acq. × (PPI₂₀₂₆ / PPI₂₀₁₈) | 520,000 × (149.8 / 116.4) | €669,000 |
| Difference to acquisition cost | 669,000 − 520,000 | +€149,000 (+28.7 %) |
The replacement value is 28.7 % above the acquisition cost — matching the real price increase for high-performance machining centers between 2018 and 2026. Anyone still using €520,000 as the depreciation base underestimates depreciation by 28.7 % — on this machine, about €10,700/year is then missing from the hour rate.
Because imputed depreciation is calculated on the replacement value (€669,000) rather than the historical acquisition cost (€520,000), every productive machine hour earns a share of the future replacement. Over the 13-year technical useful life, €51,462/year flows into the quoted prices — cumulatively the full replacement value. Whoever enforces these rates has mathematically earned the replacement investment by the end; whoever depreciates on acquisition cost silently under-recovers every hour and faces a funding gap at reinvestment.
Set the technical useful life
Tax useful life per depreciation table: 14 years. Technical-economic useful life for a 5-axis machining center in two-shift operation with good maintenance: 12–14 years. We use 13 years — documented in the asset register.
| Item | Reason | Value |
|---|---|---|
| Tax useful life (depreciation table) | BMF depreciation table 2023, item 2.1.1 | 14 years |
| Technical useful life (two-shift) | experience value, manufacturer, maintenance log | 13 years |
| Imputed depr. = replacement value / useful life | €669,000 / 13 years | €51,462/year |
| Book depreciation (comparison) | 520,000 / 14 years | €37,143/year |
| Difference costing vs. books | 51,462 − 37,143 | +€14,319/year |
Calculate imputed interest
= €669,000 × 5.5 % × 0.5
= €18,398/year → €5.42/h at 3,393 h
Take the productive hours — the time thread
The machine's gross occupancy time becomes the actually chargeable time via the OEE cascade. Only these hours may carry the money mountain from steps 1–3 — anyone calculating with 100 % capacity does not recover their idle costs.
Sum the components — the knot
Now both threads meet: annual cost (money) divided by productive hours (time) gives the machine hour rate.
| Component | €/year | €/h |
|---|---|---|
| Imputed depreciation step 2 · replacement value / 13 y | 51,462 | 15.17 |
| Imputed interest step 3 | 18,398 | 5.42 |
| Energy rated power × load × electricity price | 30,435 | 8.97 |
| Maintenance service contract + history | 22,000 | 6.48 |
| Consumable tools purchasing data cost center 210 | 18,500 | 5.45 |
| Space cost m² × rent × 12 | 16,530 | 4.87 |
| MHR = Σ components / productive hours | 157,325 | €46.37/MH |
7.2 Capacity and utilization: OEE, TEEP and the utilization rate
Because the denominator moves the hour rate more than any other figure, it is worth cleanly separating three metrics that are regularly confused in practice.
| Metric | Single shift | Two-shift ★ | Three-shift |
|---|---|---|---|
| Gross hours planned occupancy | 1,904 h | 4,350 h | 6,525 h |
| Productive hours | 1,485 h | 3,393 h | 5,088 h |
| Utilization (OEE) | 78.0 % | 78.0 % | 78.0 % |
| Capacity utilization of 8,760 h | 21.7 % | 49.7 % | 74.5 % |
| TEEP utilization × OEE | 17.0 % | 38.7 % | 58.1 % |
| resulting MHR | €94.42/MH | €46.37/MH | €33.90/MH |
OEE is identical in all three columns — operations run equally well. TEEP differs by more than a factor of three, and that is exactly what hits the hour rate: from €94.42/MH to €33.90/MH. The shift model is therefore the strongest lever on the MHR — stronger than any OEE improvement. The consequence for costing: a competitor running three shifts can, at identical manufacturing quality, quote a good third cheaper. Whoever loses against such prices does not have a manufacturing cost problem but a utilization problem.
The downtime can be valued directly: 957 hours (4,350 − 3,393) times €46.37/MH is around €44,400 per year — for a single machine. One percentage point of OEE equals 43.5 hours or about €2,000. More depth in the specialist article on production KPIs (DE).
7.3 Sensitivity analysis: what if parameters change?
The table varies one single variable against the base case each time and shows which parameters must be set particularly carefully.
| Scenario | prod. hours | depr./h | MHR | Δ |
|---|---|---|---|---|
| ★ Base (two-shift) | 3,393 | 15.17 | €46.37 | — |
| Single shift | 1,485 | 34.65 | €94.42 | +48.05 |
| Three-shift | 5,090 | 10.11 | €33.90 | −12.47 |
| Replacement value +20 % | 3,393 | 18.20 | €50.49 | +4.12 |
| Capacity 100 % wrong! | 4,350 | 11.83 | €36.17 | −10.20 |
| Useful life 10 y (shorter) | 3,393 | 19.72 | €50.92 | +4.55 |
| Energy +30 % | 3,393 | 15.17 | €49.06 | +2.69 |
The greatest leverage lies in the shift model: single instead of two-shift almost doubles the MHR (+€48/MH = +103 %). The second critical parameter is the wrong capacity assumption: with 100 % instead of real OEE (78 %) an under-recovery of €8.22/MH arises — multiplied by 3,393 hours = €27,890 of hidden loss per year.
7.4 Checklist: calculating the MHR
The complete sequence from data gathering to documentation in the BAB — each step with a reference to a chapter or source.
- ☐ 1Asset register complete: acquisition cost, year built, book value per assetaccounting
- ☐ 2Determine replacement value per asset (index, manufacturer quote or flat)Ch. 6.4
- ☐ 3Set the technical useful life — document the shift model!Ch. 6.5
- ☐ 4Imputed depr. = replacement value / useful lifetechstep 2
- ☐ 5Imputed interest = replacement value × rate × 0.5step 2
- ☐ 6Calculate productive hours (OEE) per cost centerCh. 7.1
- ☐ 7Energy cost: rated power × load × h × €/kWhstep 4
- ☐ 8Set maintenance budget from contract + historystep 4
- ☐ 9Tooling cost from purchasing data per cost centerCh. 15
- ☐ 10Space cost: m² × rent/m² × 12 / productive hoursstep 4
- ☐ 11MHR = Σ components / productive hoursstep 4
- ☐ 12Plausibility check against benchmarksCh. 6.6
- ☐ 13Derive residual overhead from BAB and set the %Ch. 5
- ☐ 14Document the result in the BAB (MHR row, cost center)Ch. 5.5
7.5 From the MHR to the full hour rate
The MHR covers only the machine. For a complete manufacturing hour rate, direct labor and the center's residual overhead surcharge are added (direct-labor volume cost center 210: €260,000/year, residual overhead rate 35.1 % from the BAB, Ch. 5.5):
+ €32.00/h direct labor
+ €11.23/h residual overhead 35.1 % on labor
= €89.60/h
Chapter 8 closes Part III with self-diagnosis: the 10 most common costing errors from Chapter 3 are systematically corrected with the methods from Chapters 5–7 — with before/after calculations. Then Part IV begins with the complete quotation costing.
