A Full Overhead Cost Model for the U.S. Coast Guard Yard, Curtis Bay, Maryland.
Abstract
This report examines the effect of including real property depreciation in the U.S. Coast Guard Yard's overhead costs. The following accounting concepts are discussed as to their nature and appropriateness to the Yard's accounting; asset valuation, useful life determination, depreciation and asset capitalization criteria. Two methods of overhead allocation are presented and contrasted. The first method is currently used by the Yard and the second is a proposed replacement. A $1,000 capitalization threshold is proposed to replace the current $200 threshold. The real property assets are depreciated on the basis of their historical cost and by the straight line method. Their depreciation costs are distributed to the appropriate cost centers. From there the costs are allocated to overhead by both allocation methods. The effect of a $1,000 capitalization threshold is then added in to the calculations. A new rate structure is computed twice for both allocation methods: at the current capitalization threshold and at the $1,000 capitalization threshold. The four resulting rates are applied to sample Yard projects to contrast their effects on overhead costs. A recommendation is made to use current cost to determine the current operating costs of the Coast Guard Yard.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 1982
- Accession Number
- ADA119337
Entities
People
- Michael F. Breen
Organizations
- Naval Postgraduate School