Operating costs are all the costs you will incur to make a cubic yard of finished compost/soils product. Normally those costs include some factor for amortizing the capital investment in the facility (see sidebar), plus the cost of money acquired to finance that capital, but for the purposes of this section, operating costs will be defined as non-capital related costs, e.g. fuel, labor, electricity, and maintenance.


For new facilities, those costs can be estimated with a time-and-motion projection. For existing facilities, operating expenses can be measured in a similar manner along with detailed cost accounting of equipment costs. As composting is essentially a materials handling exercise, it takes a certain amount of time at a certain cost, to perform each task in the compost manufacturing process. The time to perform each task is estimated (or measured in existing facilities), and the cost of each task is defined by the loaded labor rate and the machine rate.