Tyre costs

Tyre costs present a more difficult case to deal with primarily because modern tyres may be expected to last for long periods without repair or replacement. Consequently weeks may pass with no expenditure to record against this particular item.
Once an occasion does arise to record an item of tyre cost, especially in the case of the replacement of one or more tyres, the cost in that period (possibly within one week) when the expenditure occurs will appear very high.
For example, in a week when the vehicle covers 1,370 kilometres two new tyres are fitted at a cost of say K21,450.00. This does not mean that tyre costs for that week are:

K21,450.00/1,370 km = K15.66 per kilometre

Faithful recording of tyre costs over a period of a year will present a much more accurate picture of tyre life in mileage terms but the important point is that the actual costs must be recorded as they arise.

Recording tyre changes A tyre change tag is completed and details of the new tyre and the vehicle to which it was fitted are entered on the tyre record card. For cross checking a master card, must be available for every vehicle in the fleet.

Calculating tyre costs If a costing exercise is started with a brand new vehicle, one of the first steps is to calculate depreciation. This involved reducing the price of the new vehicle by the value of the tyres with which it was fitted. Now if this vehicle was a two-axle type fitted with single front wheels and twin rears we have the cost of 6 tyres to deal with in the running costs. With tyres costing say K10,000.00 each this means that the tyre cost analysis has to show expenditure, right from the start, of K60,000.
At the end of, say, 6 months when these tyres have covered 56,000 kilometres and are ready for replacement the tyre cost analysis would show the following:

Tyre cost, 6 x K10,000.00 = K60,000.00
Tyre life 56,000 kilometres
Cost per kilometre
     K60,000.00/56,000 km = K1.07 per kilometre