Slide 1

Report
Cost Allocation
Sponsored by:
California Association for Coordinated Transportation
Presented by
Rich Garrity, Senior Associate
RLS & Associates, Inc.
September 23-24, 2008
Sacramento, CA
Session Objectives
1. Develop a Standard Approach to “Cost Allocation”
2. Identify Special Issues in Cost Allocation
3. Build a Cost Allocation Model
4. Understand the Difference Between Cost and Price
5. Automating the Cost Allocation Process
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 2 of 175
Target Audience

This Session is Designed for:
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Organizations That Need an Approach to Cost
Individuals Service Components
Transit Organizations that Provide Service
Under a Purchase of Service Arrangement to
Other Users/Groups
Multi-Purpose Human Service Agencies
Supported by Multiple Federal Grants
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 3 of 175
Defining a Standardized
Approach to Cost
Allocation Issues
Module 1
Issues in Cost Allocation

The Term “Cost Allocation” Has Been
Used to Describe a Wide Range of
Allocation Needs Among Public Transit
Operators
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 5 of 175
Issues in Cost Allocation


In Transit, “Cost Allocation” Can Refer
to a Series of Distinct
Management/Accounting Practices
Each Cost Allocation Problem
Requires a Separate Methodology,
Typically Referred to As “Cost
Allocation”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 6 of 175
Types of Cost Allocation
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Financial Based Cost Allocation
Service Based Cost Allocation Plans
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 7 of 175
Financial Based Cost Allocation
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Central Service Cost Allocation Plans
Indirect Cost Allocation Plans
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 8 of 175
Financial Based Cost Allocation #1

Central Services Cost Allocation Plan
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A Publicly Sponsored Transit Program Benefits
from the Services of Other Governmental Units
and Desires to Claim Costs Incurred by these
Units Under its Various Federal Awards
The Public Entity or Governmental Unit Must
Prepare a “Central Services Cost Allocation
Plan”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 9 of 175
Financial Based Cost Allocation #2

Indirect Cost Allocation Plan
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An Entity (Public or Private Nonprofit) Provides
Multiple Program Services
Certain Overhead and Administrative Costs
Incurred by the Entity Benefit All Programs and
Services, Including Transit
The Agency Seeks to Recoup These Costs in
Their Billings to Various Federal Agencies
The Entity Requires an Approved “Indirect Cost
Allocation Rate” in Order for Such Costs to be
Reimbursable by the Federal Government
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 10 of 175
Service Based Cost Allocation
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Allocate Costs to Various
Types/Modes/Services
Urban/Rural Cost Allocation
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Required by FTA
Charter Cost Allocation
Local Match Allocation Plan
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 11 of 175
Service Based Cost Allocation #1

Service Based Cost Allocation

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A Public Transit Agency Coordinates Service
With Various Human Service Agencies In The
Area
The Transit Provider Has A Policy That Public
Transit Funds Cannot Be Used To Subsidize
Human Service Agency Client Transportation
The Transit Agency Needs A “Fully Allocated
Cost Analysis” To Determine How To Price
Contract Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 12 of 175
Service Based Cost Allocation #2

Service Based Cost Allocation
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A Transit Agency Receives Funding Under Both
FTA Section 5307 And Section 5111
FTA Expects the Grantee to Develop a
Reasonable Basis for Allocating Operating
Costs Between the Two Funding Sources that
is Related to the Service Provided
FTA Requires a “Grant Allocation Plan” to
Distribute Costs to the Two Different, But
Related Programs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 13 of 175
Service Based Cost Allocation #3

Service Based Cost Allocation
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A Transit Agency Provides Charter Service in
Accordance with 49 CFR part 604
The Transit Agency Must Demonstrate That it
Fully Recovers the Cost of Charter Service
The Agency Requires a “Charter Service
Allocation Plan”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 14 of 175
Service Based Cost Allocation #4

Service Based Cost Allocation
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A Regional Transit Authority Provides Service
Over a Multi-Jurisdictional Service Area
Each Participating Local Entity Must Share
Responsibility for Funding a Portion of the Local
Share
The Authority Must Allocate Local Funding
Needs In An Equitable Manner To All
Participating Jurisdictions
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 15 of 175
Multiple Cost Allocation Needs

Some Public Transportation Projects
May Require Multiple Types of Cost
Allocation
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 16 of 175
Multiple Cost Allocation Needs
Municipal or County Government
Central Service Departments
Operating Departments
Central Service Departments
Individual Operating Departments
Central Service Cost
Allocation Plan
Allocable Portion of Central Service Costs
Public Works &
Transit
Departmental
Administration
Approved Indriect Cost Rate
Allocable Portion of
Departmental Indirect Costs
Transit
Allocable Portion of
Departmental Indirect Costs
Public Works
Transit Direct Costs:
Direct Functions
Operations
Approved Indriect Cost Rate
Transit Direct Costs:
Shared Functions
Maintenance
Management
Dispatch
Modes
Allocable Portion of
Fixed Route
JARC
Demand Response
Allocated on Basis of Service
Units
Transit Management Costs
(Fixed Costs)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 17 of 175
Multiple Cost Allocation Needs
Nonprofit Organization
Indirect Expenses
Direct Expenses
Approved Indirect
Cost Rate
Allocable Portion of Indirect Costs
Transportation
Home Care
Congregate Meals
Transit Direct Costs:
Shared Functions
Transit Direct Costs:
Direct Functions
Management
Maintenance
Operations
Dispatch
Services
Medicaid
Contract Transit
Rural Public
Transit
Title III Client
Transit
Allocable Portion of
Allocated on Basis of
Service Units
Transit Management Costs
(Fixed Costs)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 18 of 175
Embracing the Concept
of Full Cost Identification
Module 2
Why Full Cost Identification?

Our Goal - To Answer the Questions:
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How Much Does the Transportation Service
Cost?
How are We Going to Pay For It?
In Order to Achieve These Goals, Agency
and Program Managers Must Use
Financial Planning
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 20 of 175
Why Full Cost Identification?
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Assess Performance
Measure Progress Toward the
Achievement of Goals and Objectives
Consider Actions Which May Change the
Course of Future Events
Modify Policies, Procedures, and
Processes
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 21 of 175
Why Full Cost Identification?

Make Operational Changes, Including
Those Leading To:
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Service Expansion, Reduction, Or Cessation
Increases Or Decreases In Services,
Revenues, And Staff
Changes Or Modifications In Procedures Or
Other Activities (Such As Marketing Or
Public Relations)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 22 of 175
Why Full Cost Identification?

Transportation Systems Need Complete
and Accurate Financial Data in Order to:

Manage the System So That its Goals and
Objectives are Met Efficiently
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 23 of 175
Why Full Cost Identification?

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Know the True Cost of Operating the System
so that Costs May be Billed or Allocated
Appropriately to the System's Users
Report to the Funding Sources or
Purchasing Agencies How Money was
Spent, What Revenues were Realized, and
the Financial Status of the Organization
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 24 of 175
Issues in Full Cost Accounting
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Lack of Sufficient Account Detail In
Organizational Accounting Systems
Failure to Capture and/or Allocate Agency
Indirect or Overhead Costs
There Is A Lack Of Common Definitions
For Accounts (Non-FTA Programs)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 25 of 175
Issues in Full Cost Accounting
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Lack of Common Definition of Service
Failure to Capture Service Unit Data
Blended Program Expenditures
Use of Capitated Payments
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 26 of 175
Financial Planning:
Why is This Important?

Planning for
Change
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Political Clim ate
Changes We
Institute
Changes Forced
Upon Us
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 27 of 175
Financial Planning:
Why is This Important?

Consider the Example:
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A Manufacturer Produces Two Consumer
Products
What are Some of the Costs That Will Be
Incurred by this Company?
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 28 of 175
Exercise No. 1

Exercise No. 1 - Take a Minute or Two to
Jot Your Ideas Down on Paper
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 29 of 175
Identifying Transportation Costs

Now Consider ….
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Since the Ingredients Used are Basically the
Same as Product 2, the Product 1 Manager
Opts to Include them all In Product 2 and
Does Not Include Them in Calculating His
Cost
Since Product 1 is Delivered on the Same
Trucks as Product 2, the Product 1 Manager
Does Not Include Them in Calculating His
Cost
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 30 of 175
Identifying Transportation Costs

Product 1
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Research, Development,
& Testing
Purchase of Ingredients
Production
Quality Control
Distribution
Marketing
Profit
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Product 2

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Research, Development,
& Testing
Purchase of Ingredients
Production
Quality Control
Distribution
Marketing
Profit
Page 31 of 175
Identifying Transportation Costs

Do You Disagree with this
Approach?
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Strongly Disagree
Disagree
Not Sure
Agree
Strongly Agree
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 32 of 175
Identifying Transportation Costs

What is this Product Line Manager Doing
Wrong?



?
?
?
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 33 of 175
Identifying Transportation Costs

Let’s Talk About a Transportation Related
Situation

What About this Example?

A Transportation Provider Reports Their
Transportation Expenses as Follows:
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Fuel
Maintenance
Insurance
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 34 of 175
Identifying Transportation Costs

Financial Planning Begins by Establishing
(or Reaffirming) Overall Strategies and
Goals

Mission Statement
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WHAT Will the Transit Service Do?
HOW Will the System Operate?
This Starts the Financial Planning
Process
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 35 of 175
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 36 of 175
Identifying Transportation Costs
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Cost Analysis is a Key Element of
Financial Planning
Knowing the Costs of Individual Routes or
Services is Useful for Your Management
Purposes and for Billing Your Client
Agencies
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 37 of 175
Identifying Transportation Costs

The Basic Approach Recommended and
Used by Successful Business Operations
and Transportation Systems is Called
“Full Cost Accounting”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 38 of 175
Identifying Transportation Costs

To Use this Approach Requires an
Understanding of Basic Cost Concepts and the
Use of a Consistent Costing Method
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 39 of 175
Identifying Transportation Costs
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Using “Full Cost Accounting” Means that
the Total Costs of Providing
Transportation Services are Considered
Total Costs Include Any Commitment or
Use of Time, Money, Physical
Resources, and Other Assets of the
Agency in the Delivery of Transportation
Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 40 of 175
Identifying Transportation Costs

In Full Cost Accounting, a Value is Given to
These Commitments Whether or Not They
Result in Immediate Out-of-Pocket
Expenditures
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 41 of 175
Identifying Transportation Costs
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Full Cost Accounting Will:
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Assist the Manager in Understanding the TRUE
Cost of Providing Service
Determine Needed Revenues -- Immediate and
Long-Term
Allow Allocation of Costs to System Users
Compare Costs of Service with Other Systems
(Peer Analysis)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 42 of 175
Identifying Transportation Costs
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Full Cost Accounting Will
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Assist in Making Decisions to Participate
in a Coordinated Services Program
Recognize Value of Donations (Time,
Materials, and Supplies)
Permit Accurate Financial and
Performance Monitoring/Evaluation
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 43 of 175
Identifying Transportation Costs
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Analyze the Various Functions and
Activities that Your Transportation
Program Carries Out on a Day-to-Day
Basis
Management’s Responsibility is to
Identify All Activities That Your Agency
Performs in the Delivery of
Transportation Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 44 of 175
Identifying Transportation Costs
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Understand HOW the Activity Creates Costs
for the Transportation Program
 Your Transit Program DOES Something
 Your Transit Program BUYS Something
Use a Functional Approach to Cost
Recognition
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 45 of 175
Identifying Transportation Costs

Functional Areas of Transportation:
 Operations
 Maintenance
 Non-Vehicle Maintenance
 General Administration
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 46 of 175
Identifying Transportation Costs

The Agency’s Chart of Accounts is the
Basic Tool Used to Ensure that All
Transportation Costs are Reflected in the
Agency’s Accounting System
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 47 of 175
Issues in Cost Allocation
Module 3
Special Issues in Cost Allocation
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Direct and Indirect Costs
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Operating and Capital Costs
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Fixed and Variable Costs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 49 of 175
Direct and Indirect Costs
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Direct Costs
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Those Expenses Incurred by the Grantee That Are
Directly Related and Strictly Benefit Only the Public
Transportation Program
Generic Examples:

Compensation of Employees for the Time Devoted and
Identified Specifically to the Performance of the Grant
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 50 of 175
Direct and Indirect Costs
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Direct Costs
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Generic Examples:
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Cost of Materials Acquired, Consumed, or Expended
Specifically for the Purpose of Providing Public Transit
Service
Equipment and Other Approved Capital Expenditures
Travel Expenses Incurred Specifically to Carry Out the
Award
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 51 of 175
Direct and Indirect Costs
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Direct Costs
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Transit Examples:
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501.01 – Operator's Salaries & Wages
501.03 – Dispatcher's Salaries & Wages
503.05 – Contract Vehicle Maintenance
504.01 – Fuel & Lubricants Consumed
504.02 – Tires and Tubes Consumed
508.00 – Purchased Transportation
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 52 of 175
Direct and Indirect Costs
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Indirect Costs
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Generic Examples
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Certain Central Service Costs
General Administration of the Organization
Accounting and Personnel Services Performed Within the
Organization the Delivers Public Transit Services
Costs of Operating and Maintaining Facilities
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 53 of 175
Direct and Indirect Costs

Indirect Costs
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Transit Examples
 501.04 – Administrative Salaries & Wages
 512.12 – Other Administrative Facilities
 505.02 – Telephone
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 54 of 175
Direct and Indirect Costs
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Why Is the Identification of Indirect Costs
Important?
Full Costs =

Direct Costs + Allocable Portion of Indirect
Costs – Rebates/Credits
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 55 of 175
Direct and Indirect Costs
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Will All Transit Agencies Incur Indirect
Costs?
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No
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Independent Transit Authorities
Other Units That Do Not Rely on Central
Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 56 of 175
Direct and Indirect Costs

How Can We Tell if We Need An Indirect
Cost Allocation Plan? If a Transit System
Incurs Costs That Are:
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Accumulated in the Accounts of Another
Department or Division of the Organizations
Incurred by Nonprofit Agency Management
That Benefits Multiple Programs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 57 of 175
Direct and Indirect Costs

Indirect Costs Must Be Allocated in a Manner
Consistent with Procedures Set Forth in OMB
Circulars A-87 or A-122
Expense
Funct ion
Transport at ion
Facilit y Expenses
Meals
Vocat ional Services
Homemaker Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 58 of 175
Direct and Indirect Costs

How are Indirect Costs Claimed Under
Federal Awards?
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OMB Circular A-87, Attachment A, “General
Principles for Determining Allowable Costs,”
paragraph C3(d) states:
Where an accumulation of indirect costs will
ultimately result in charges to a Federal award,
a cost allocation plan will be required

OMB Circular A-122 contains similar language
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 59 of 175
Indirect Cost Allocation
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You MUST Have An Indirect Cost
Allocation Plan or Indirect Cost Rate in
Order to Claim Reimbursement Under
Federal Awards
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 60 of 175
Indirect Cost Allocation
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Indirect Cost Rate Proposals or Cost
Allocation Plans Must Either:
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Be Submitted to a Federal Cognizant
Agency; or
Be Maintained on File by the Governmental
Unit
Similar Rules Apply to Nonprofits
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 61 of 175
Indirect Cost Allocation
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"Cognizant Agency" Means the Federal
Agency Responsible for Reviewing,
Negotiating, and Approving Cost Allocation
Plans or Indirect Cost Proposals Developed
on Behalf of All Federal Agencies
OMB Publishes a Listing of Cognizant
Agencies
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 62 of 175
Indirect Cost Allocation
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Negotiation and Approval of Rates
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Generally, the Federal Agency with the Largest
Dollar Value of Awards to the Nonprofit
Organization Will be Designated as the Cognizant
Agency for the Negotiation and Approval of the
Indirect Cost Rates
The Designation Is Not Changed Unless There is a
Major Long-Term Shift in the Dollar Volume of
Federal Awards
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 63 of 175
Indirect Cost Allocation

In No Case Shall an Indirect Cost
Allocation Plan or Indirect Cost Rate
Proposal Be Acceptable Unless it Has
Been Certified by the Governmental Unit
Using the Certificate of Cost Allocation
Plan or Certificate of Indirect Costs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 64 of 175
Indirect Cost Allocation

The Certification Must be Signed on
Behalf of the Governmental Unit by an
Individual at a Level No Lower than Chief
Financial Officer of the Governmental
Unit that Submits the Proposal or
Component Covered by the Proposal
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 65 of 175
Indirect Cost Allocation
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Where a Local Government Only Receives
Funds as a Subrecipient, the Primary
Recipient Negotiates the Indirect Cost Rates
and/or Monitors the Subrecipient's Plan
Section 5311
 Primary Recipient: Caltrans
 Subrecipient: Grantee
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 66 of 175
Indirect Cost Allocation

Indirect Cost Rates and Cost Allocation
Plans Have Specific Documentation
Requirements:
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Organization Chart
Comprehensive Annual Financial Report
Certification
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 67 of 175
Indirect Cost Allocation

Indirect Cost Rates and Cost
Allocation Plans Where an
Organization’s “Central Services” are
Included Must:
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Identify the Unit Rendering the Service and
the Operating Agencies Receiving the
Service
Detail the Items of Expense Included in the
Cost of the Service
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 68 of 175
Indirect Cost Allocation

Indirect Cost Allocation Plans Must:
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Describe the Method Used to Distribute the
Cost of the Service to Benefitted Agencies
Contain a Summary Schedule Showing the
Allocation of Each Service to the Specific
Benefitted Agencies
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 69 of 175
Indirect Cost Allocation
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Guidelines for Nonprofits are Similar to Those for
Government Agencies
Procedures for Nonprofits Are Prescribed in OMB
Circular A-122, Attachment A, Paragraph C
Procedures for Educational Institutions Different –
Consult A-21
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 70 of 175
Indirect Cost Allocation
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Prescribed Methodologies
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Simplified Allocation Method
Multiple Allocation Base Method
Direct Allocation Method (Nonprofits Only)
Special
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 71 of 175
Indirect Cost Allocation

A-122 States that Indirect Costs be
Classified within Two Broad Categories:
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Facilities
Administration
A-21 Provides Similar Classification
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 72 of 175
Indirect Cost Allocation
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A Nonprofit Organization Which Has Not
Previously Established an Indirect Cost Rate
with a Federal Agency Shall Submit its Initial
Indirect Cost Proposal Immediately After the
Organization is Advised that an Award will be
Made and, in No Event, Later Than Three
Months After the Effective Date of the Award
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 73 of 175
Indirect Cost Allocation

Use of a Standardized Chart of Accounts
Is Essential to Indirect Cost Allocation

Modify or Expand the Chart of Accounts to
Meet Needs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 74 of 175
Indirect Cost Allocation Plan
Preparation Guide
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 75 of 175
Indirect Cost Allocation Plan
Preparation Guide

HHS Guide Can be Downloaded at:
http://rates.psc.gov/fms/dca/asmb%20c-10.pdf
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 76 of 175
Capital vs. Operating Costs
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Operating Costs are Consumed in Less
Than One Year (e.g., Wages, Fuel)
and Generally Have a Unit Acquisition
Cost of Less Than $300.00
Capital Costs are Expenses for LongTerm Assets (e.g., Vehicles, Garages)
Definitions May be Set by the Grantor
Agency
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 77 of 175
Capital vs. Operating Costs
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
Under the Section 5311 Program,
Capital Expenses are Defined in FTA
Circular 9040.1F, Chapter III,
Paragraph 2e(2)
This Document Can Be Obtained at
http://www.fta.dot.gov/documents/FTA_C
_9040.1F.pdf
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 78 of 175
Capital vs. Operating Costs

Defining Capital Costs is Important, as
OMB Circular A-87 States that
Depreciation Will Exclude:

Any Portion of the Cost of Buildings and
Equipment Borne by or Donated by the
Federal Government Irrespective of
Where Title was Originally Vested or
Where it Presently Resides
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 79 of 175
Capital vs. Operating Costs

What Does this Mean?

If the Cost of the Vehicle (Asset) Was Paid
for by a Federal Program, You May NOT
Include Depreciation of that Asset in Your
Charges to Other Federal Programs in the
Cost of Service Provision
 Source: OMB Circular A-87, Attachment
B, Paragraph 15c(2); and OMB Circular
A-122, Attachment B, Paragraph 11c(2).
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 80 of 175
Fixed vs. Variable Expenses

Variable Costs Change
Relative to the Amount
of Service Provided
(e.g., Drivers' Wages)
Fixed Costs Do Not
Vary with the Amount of
Service Provided (e.g.,
Administrative Salaries)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Total
Variable
Cost

Fixed
Output
Page 81 of 175
Developing a Cost
Allocation Model
Module 4
Why Cost Allocation?

Fad or Management Necessity?

An Understanding of Fully Allocated Costs
Provides Management with:



The Ability to Accurately Price Services
Provided Under Contract
An Assessment Tool to Evaluate Changes in
Service
For Example, the Cost of Adding or Losing
a Contract Service Could Be Estimated
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 83 of 175
Why Cost Allocation?
More Grant
Funds From Caltrans??
General Public
Ridership
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 84 of 175
Why Cost Allocation?

To Determine How Much It Costs to
Provide A Specific Transit Service
$6.80
Per
Trip
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 85 of 175
The Cost Allocation Process

Why Do We Need a Model to
Determine Cost?



Why Can’t We Simply Divide Total
System Cost by Total System Miles?
Or Total System Cost by Total System
Hours?
Consider the Following:
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 86 of 175
The Cost Allocation Process

Do These Trips Cost the Same?
5 Miles
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
20
Minutes
5 Miles
5 Miles
10
Minutes
5 Miles
Page 87 of 175
The Cost Allocation Process

Do These Trips Cost the Same?
8 Miles
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
20
Minutes
5 Miles
5 Miles
20
Minutes
5 Miles
Page 88 of 175
The Cost Allocation Process

Transportation Costs are Driven by
Two Critical Factors:


Time AND Distance
Our Model Must Take Both Factors Into
Account When Costing Transportation
Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 89 of 175
Developing a Cost Allocation
Model

How Do We Allocate Costs? Don’t
Worry, This Process is Not Complicated!
Another Program Mandate????
Aaaaaagh!!!
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 90 of 175
Cost Allocation Model

Cost Allocation Assumes:


Total System Costs Can be Allocated to
Service Based on the Level of Service
Provided
System Average Unit Costs Can Be Used
to Estimate Service Costs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 91 of 175
Overview of Cost Allocation Process
Assemble Data
Assign Expense Line Items
Calculate Unit Costs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 92 of 175
Issues in Assembling Data

Where Do We Get Cost Data?

What Time Period Should be Used?

Projected vs. Actual?
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 93 of 175
Required Data

Twelve (12) Months Actual or Projected
Transit Expense Data

Expense Data Will be Classified as Either:



Fixed Expense
Variable Expense
Service Data



Vehicle-Miles
Vehicle-Hours
Passenger Trips
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 94 of 175
Assigning Cost to Categories


Cost Allocation Involves Taking Each
Expense Line Item and Assigning It to
Either the Fixed or Variable Category
Variable Expenses are Further Broken
Down as Varying Either by:


Hour
Mile
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 95 of 175
Assigning Cost to Categories


Fixed Costs are Those Costs that Will
Not Change As a Result of an Increase
or Decrease in Service Levels
Variable Expenses are Those Costs that
Will Change if There is a Change in
Service Levels
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 96 of 175
Assigning Cost to Categories

There are No Hard and Fast
Rules…..But:




Project Administration Costs are Almost
Always Fixed
Understand the Basis of Each Cost Item
and Assign Accordingly
Be Logical
BE CONSISTENT
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 97 of 175
Exercise No. 2, Part A

Using the Provided Budget, Classify Each
Line Item Expense as Either:



Fixed
Variable (by Hours)
Variable (by Miles)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 98 of 175
Exercise No. 2, Part B

Now that We Have Classified Each
Expense Line Item, We Want to Total All
Fixed Expenses, All Variable - Hours
Expenses, and All Variable - Miles
Expenses
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 99 of 175
Calculation of Unit Costs


We Now Have a Total of Fixed and Variable
Costs
We Need to Calculate Our Unit Costs. There
are Three (3) Calculations:
 Allocated Hours Cost
 Allocated Miles Cost
 Allocated Fixed Expense


Demand Response: Ratio
Fixed Route: Fixed Cost Per Vehicle
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 100 of 175
Calculation of Unit Costs

Allocated Hours Cost:

Total Allocated Hours Cost ÷
Annual Projected Vehicle Hours
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 101 of 175
Calculation of Unit Costs

Allocated Miles Cost:

Total Allocated Miles Cost ÷
Annual Projected Vehicle Miles
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 102 of 175
Calculation of Unit Costs


What Do We Do With Fixed Expenses?
There Are Different Approaches - For
Most Demand Response Systems in
Rural Areas, Fixed Expenses are
Expressed as a Percentage or Ratio of
Allocated Variable Expenses (Hours
Cost + Miles Cost)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 103 of 175
Calculation of Unit Costs

In Rural Systems, Fixed Expenses are
Expressed as a Percent of Variable
Expenses:

Fixed Cost Factor =
Total Fixed Expenses ÷ (Total Allocated Hours
Expenses + Total Allocated Miles Expenses)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 104 of 175
Calculation of Unit Costs

In Urban Systems, Fixed Expenses are
Expressed as Follows:
(Total Fixed Expenses ÷ Total Vehicles In
Maximum Revenue Service)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 105 of 175
Exercise No. 3

Calculate the Unit Rates



Allocated Hours Cost
Allocated Miles Cost
Fixed Cost Ratio
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 106 of 175
Completing the Computations

The Fully Allocated Cost of Service is Equal
to:
{(Total Annual Projected Hours x Allocated Hours Cost)
+
(Total Annual Projected Miles x Allocated Miles Cost)}
+
{Fixed Cost Factor x
[(Total Annual Projected Hours x Total Allocated Hours Cost)
+ (Total Annual Projected Miles x Allocated Miles Cost)]}
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 107 of 175
Completing the Computations

To Test our Unit Average Costs, Plug
in Total Annual Projected Hours and
Total Annual Projected Miles into the
Above Equation to Ensure the Result =
Total Annual Expenses
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 108 of 175
Completing the Computations

Congratulations … You Have Just
Developed a Cost Allocation Model
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 109 of 175
Applying the Model

Now that We Have Our Model, We Will
Put it to Work
We'll Sort Through The X's and O's
By Looking At Allocating the Costs
of Various System Users
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 110 of 175
Exercise No. 4

Using the Parameters Given, and Our
Cost Model Unit Costs, We Will
Calculate How Much it Costs to Provide
Service to the Five Different Users of
Our Transit System
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 111 of 175
Exercise No. 4

This Exercise is Comparable to the
Process a Transit Manager Would Use
to Determine What Each Agency Should
Pay to Purchase Service from the
Provider of Services
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 112 of 175
Exercise No. 4




In this Exercise, Management Has Made an
Estimate of the Resources (Hours & Miles)
of Service that Each User Will Consume
The Allocated Hours Cost and the Allocated
Miles Cost is Applied to Each User
Fixed Costs are Then Added, Then the
Three (3) Costs are Summed to Arrive at the
Provider’s Fully Allocated Cost of Service
Let’s Walk Through the Computation for the
First Agency User
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 113 of 175
Review


We Built a Cost Allocation Model that
Uses Generally Accepted Accounting
Principles to Allocate Transportation
Costs Among Various Agency Users
We Learned How to Use the Model to
Determine or Project the Costs for
Individual Agency Users
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 114 of 175
Pricing Fully Allocated
Services
Module 5
Using the Model to Price Contract
Services

We Will Examine the Ways in Which A
Transit System Can Use Fully Allocated
Costs to Develop Unit Pricing for
Contracted Services



Various Types of “Unit” Costs
Pro’s and Con’s of Each Unit Cost Type
We Will Calculate Various Units Costs
for Our Transit System
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 116 of 175
Objectives in Our Rate Structure

Our Objectives in the Process:




Simple
Equitable
Reflect Actual Cost of Service Provision
Appropriate Use of Public Subsidies
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 117 of 175
Alternative Rate Structures





Per Trip
Per Mile
Per Hour
Per Passenger Mile
Per Zone
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 118 of 175
Price Per Trip


Price Per Trip
Computed as Follows:
Fully Allocated Costs of the Service ÷
No. Projected Passenger Trips
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 119 of 175
Characteristics of Per Trip Pricing






Simple
Shared Ride Equity
Assumes That Are Trips Have Similar
Characteristics
Works Best in Small Service Areas
Greater Risk for Service Provider
Short Trips Subsidize Long Trips
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 120 of 175
Price Per Mile


Price Per Mile
Computed as Follows:
Fully Allocated Costs of the Service ÷
No. Projected Miles of Service
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 121 of 175
Characteristics of Per Mile Pricing






Customers Understand Miles
Requires Recordkeeping by Drivers
Cost Per Mile Varies Based on Route
Path Driven on a Given Trip
Does Not Address Travel and Wait Time
Dead Head Mileage
Shared Ride Equity Issues
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 122 of 175
Price Per Hour


Price Per Hour
Computed as Follows:
Fully Allocated Costs of the Service ÷
No. Projected Vehicle Hours
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 123 of 175
Characteristics of Per Hour Pricing




Requires Recordkeeping by Drivers
Cost Per Hour Varies Based on Route
Path Driven on a Given Trip
Addresses Travel and Wait Time
Shared Ride Equity Issues
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 124 of 175
Price Per Passenger Mile


Price Per Passenger Mile
Computed as Follows:
Fully Allocated Costs of the Service ÷
No. Projected Passenger Miles
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 125 of 175
Characteristics of Per Passenger Mile
Pricing




Equitable
Addresses Shared Ride
Some Shared Ride Equity Issues
Generally Requires Automation to Assist
in Billing Computations
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 126 of 175
Price Per Zone


Price Per Zone
Zones are Artificial Grids Overlaid on a
Map of the Service Area
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 127 of 175
Price Per Zone
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 128 of 175
Price Per Zone

Computed as Follows:
Fully Allocated Costs of the Service ÷
No. Projected Zones of Travel
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 129 of 175
Price Per Zone


Counting Zones
Zones are Counted on a Straight-Line Basis, Up and
Down, Left or Right (No Diagonal Movement)
A
B
C
D
E
F
G
H
I
J
K
2
3
4
L
M
1
1
2
Dublin
3
5
6
33
Worthington
4
7
5
8
6
9
7
10
Hilliard
Upper Arlington
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 130 of 175
Characteristics of Zone Pricing






Sometimes Difficult to Explain
Relatively Simple to Administer
Easy to Predict Trip Cost if User is Familiar
with Zone Map
Requires Initial Estimate of Zones Traveled
in Order to Set Rate
Short Trips Will Generate Problems in Cost
Recovery
Sensitive to Zone Size
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 131 of 175
Rate Setting Complexities







Ridesharing
Wait Time
Out-of-County Trips
Mixed Fleet (e.g., Different Sized Vehicles)
Brokerage: Trips Assigned to Other Providers
Contracted Services
Subsidies
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 132 of 175
Ridesharing


Occurs When the Clients of Two or More
Agencies that Contract for Service Ride
the Same Vehicle
Some Rate Structures Will Require SubAllocation of Costs

Per Hour and Per Mile Pricing Methods
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 133 of 175
Ridesharing

Suggested Approaches

Pro-Rate Trip Costs Based on:



Percent of Agency “A” Passengers as Percent of All
Passengers (Percent x Overall Route Cost)
Calculate Trip Cost Based on Total Number of Passengers
((Overall Trip Cost ÷ No. of Passengers) x Passengers
Agency “A”)
Problems


Assumes Uniform Trip Characteristics
Gives Appearance of Uniform Rate
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 134 of 175
Wait Time


Labor Costs Associated with Wait Time
is a Problem
Suggested Approach

Adopt Time-Based Pricing


Cost Per Hour
Added Wait Time Charges on Top of Existing
Pricing Strategy (e.g., $10.00 per Hour)
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 135 of 175
Out-of-Service Area Trips

Use The Cost Allocation Model as the
Pricing Structure
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 136 of 175
Mixed Fleets


Different Operating Cost Structure of
Large Buses over Minivans/Standard
Vans
Options:


Adopt Tiered Pricing Structure
Use Uniform Structure
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 137 of 175
Brokered Trips

Adopt Uniform Rate Structure Despite
Differential Costs/Charges Among
Multiple Providers
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 138 of 175
Contracted Services

Fully Allocated Cost Pricing Means
System Administration Costs Plus
Contractor’s Rate are Incorporated Into
the Pricing Structure
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 139 of 175
Subsidies


Deduct Subsidy Amount Prior To
Calculating Average Unit Rates in Your
Cost Allocation Model
Run Cost Model With and Without
Subsidy so Users Understand True Cost
of Service
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 140 of 175
Automating the Cost
Allocation Process
Module 5
Overview

As You Can See from the Cost
Allocation Model Built Earlier in this
Workshop


Cost Allocation Can be Repeated on an
Annual Basis
The Process Lends Itself to Spreadsheet
Application
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 142 of 175
Cost Allocation Model


The Course CD-ROM Contains a
Generic Cost Allocation Model
Let’s Take A Look at the Model
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 143 of 175
Cost Allocation Model



Copy the File “Cost Allocation Model.xls”
to a Folder on Your Computers Local or
Network Drive
Start MS Excel
Navigate to Folder and Open the Model
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 144 of 175
Cost Allocation Model

Cautions

Excel Will Generate One of Two Messages,
Depending on Your Security Level

Excel Will Not Permit You to Open the File

Action:

Reset Security Level to Medium

From the Menu, Click on Tools, Options,
Security Tab, Click on the Macro Security
Button and Select Medium
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 145 of 175
Cost Allocation Model

Cautions



Once Set to Medium, Excel Will Permit You
to Open the File, But Will Generate a
Warning Message
You Must Click on “Enable Macros” in
Order for the Cost Allocation Model to Work
You are Not Jeopardizing Your Computer
or Network Security
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 146 of 175
Cost Allocation Model:
Macro Warning
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 147 of 175
Cost Allocation Model:
Opening Screen
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 148 of 175
Cost Allocation Model:
Opening Screen

Opening Screen



The Cost Allocation Model Will Always
Open to This Screen (Rather Than Last
Place)
To Continue, Click the “Begin” Button
This Will Advance You to the “Table of
Contents” Worksheet
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 149 of 175
Cost Allocation Model:
Table of Contents
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 150 of 175
Cost Allocation Model:
Opening Screen

First Step – Enter System Service Data




Vehicle Hours
Vehicle Miles
Vehicles Used in Peak Revenue Service
Click On “Step 1 – Enter ……”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 151 of 175
Cost Allocation Model:
Opening Screen
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 152 of 175
Cost Allocation Model:
Enter Service Data

What Time Period For Data?

Analysis of Past Performance


Projected Costs for a Future Period



Historical Data
Budgeted or Projected Data
Enter System Hours and Miles
For Fixed Route Systems, Enter Peak
Vehicles In Revenue Service
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 153 of 175
Cost Allocation Model:
Enter Service Data:
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 154 of 175
Cost Allocation Model:
Next Step

Once You Have Entered System Service
Data, Click on “Back to Table of
Contents”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 155 of 175
Cost Allocation Model:
Next Step
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 156 of 175
Cost Allocation Model:
Enter Budget Data


From the Table of Contents, Click on
Step 2 – Enter Budget Data for Your
Transportation System
This Will Take You To a Worksheet
Where You Will Enter Budget Data
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 157 of 175
Cost Allocation Model:
Enter Budget Data
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 158 of 175
Cost Allocation Model:
Enter Budget Data


The Chart of Accounts is Generic,
Based on the FTA Uniform System of
Accounts (USOA)
The Chart Requires You To Enter Data
in Accordance With Four Basic Function
Codes
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 159 of 175
Cost Allocation Model:
Enter Budget Data

Four Basic Function Codes




Operations
Vehicle Maintenance
Non-Vehicle Maintenance
General Administration
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 160 of 175
Cost Allocation Model:
Enter Budget Data

Enter Budget Data


Each Function Code Has Its Own Column
Columns Automatically Total for



Each Function
Each Line Item
Where the Cells are Shaded, It Means
That, By Definition, the System Cannot
Have Expenses in That Line Item
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 161 of 175
Cost Allocation Model:
Enter Budget Data


If You are Unfamiliar With the USOA
Chart of Accounts, Help is Available
By Moving Your Mouse Cursor Over the
Tiny Red Triangle on the Ride Side of
the Account Column
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 162 of 175
Cost Allocation Model:
Enter Budget Data
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 163 of 175
Cost Allocation Model:
Compute Fully Allocated Costs


Once You Have Enter Budget Data,
Click the Button on the Top of the
Worksheet and Go Back to the Table of
Contents
Click on “Step 3: Calculate the Fully
Allocated Cost of Any Service
Component”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 164 of 175
Cost Allocation Model:
Compute Fully Allocated Costs


A Final Data Entry Sheet Will Appear
You Will Need to Specify The Mode of
Service



Fixed Route
Demand Response
Fixed Expenses Are Allocated
Differently in Each Mode
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 165 of 175
Cost Allocation Model:
Compute Fully Allocated Costs


You Then Enter the Estimated or Actual
Vehicle Hours or Vehicle Miles
If Costing a Fixed Route Service, Also
Enter the Number of Peak Vehicles
Used for the Proposed Service
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 166 of 175
Cost Allocation Model:
Compute Fully Allocated Costs
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 167 of 175
Cost Allocation Model:
Compute Fully Allocated Costs

Once You Enter the Required Service
Data, The Fully Allocated Cost Will
Automatically be Computed and Shown
in the Bottom Box!
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 168 of 175
Cost Allocation Model:
Other Elements


The Model Works Because Once the
Budget Information, Standardized
Assignment of Each Line Item Has
Already Been Established
You DO NOT Have to Assign Each Line
Item to the Fixed, Variable-Hours, or
Variable Miles Category
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 169 of 175
Cost Allocation Model:
Other Elements


You Can View the Assignment of Costs
From the Table of Contents, Click on
“View the Assignment of Cost
Categories”


Your Total Budget Information Appears
An “X” Indicated How the Model Classifies
Each Line Item, By Function Code
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 170 of 175
Cost Allocation Model:
Other Elements


You Can Also View the Total
Computations of Fixed and Variable
Expenses
From the Table of Contents

Click on “View the View the Cost
Computations”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 171 of 175
Cost Allocation Model:
Other Elements


Finally, Some Additional Explanation,
Help, or Tips are Available from All
Screens
Click on the “Get Help on This Section to
Get Context Sensitive Help”
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 172 of 175
Cost Allocation Model:
Other Elements
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 173 of 175
Adjourn


Good Luck in Using this Information at
Your Own Transit Programs
Please Complete the Course
Evaluation!!
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 174 of 175
Presenter
Richard Garrity, Senior Associate
RLS & Associates, Inc.
3131 S. Dixie Highway, Suite 545
Dayton, OH 45439
(937) 299-5007
Direct Line: (910) 328-5770
[email protected]
Cost Allocation – Rich Garrity, RLS & Associates, Inc.
Page 175 of 175

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