Quantcast Section B -- Determining Costs

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AFM 91-19 / TM 5-629 / NAVFAC MO-314
24 May 1989
Section B -- Determining Costs
into his or her priority list and accomplish other
tasks. The calculations would show a savings in
labor costs, but the labor and equipment, and
6-4. Personnel Costs:
thus the costs, might be assigned to other tasks.
a. Document A (attachment 22) is used to
f. The use of military personnel for the task
record the hourly costs of the different types
poses the question of whether their labor cost
and grades of workers that will be used. Four
should be charged at military pay scales. If there
basic types of workers are:
are military requirements to staff the base at a
(I) Hourly Wage Workers. These are tem-
specific level to perform functions in wartime,
porary helpers that are hired during the peak
then there is the possibility that there will be
growing seasons. They do not accrue certain
military manpower surpluses during peacetime.
benefits, such as hospitalization and retirement.
Under these circumstances, military labor in
The composite wage scale for these workers is
peacetime could be considered a free good. In
normally prescribed by the local command.
the cost model presented here, however, costs
(2) Civil Service Employees. These are per-
represent the assignment of resources to specific
manent employees hired under civil service regu-
tasks rather than signaling areas of budget
lations. They are entitled to civil service benefits.
reduction; and, therefore, military personnel are
(3) Military Personnel. These are active
included in the costs.
duty personnel assigned to grounds maintenance.
(4) Contractor-Supplied Labor. These are
6-5. Equipment Costs:
personnel that are supplied by local contractors.
a. Document B (attachment 23) is used to
The labor costs are determined locally.
calculate the hourly costs of the different types
b. The costs of the different types of workers
of equipment to be used. If desired, document
are recorded in dollars per hour and include
Bs can be completed to create a catalog of
both wages and benefit costs. Benefits include
equipment costs for all the different types of
leave and holidays, incentive awards, and the
equipment the base uses in ground maintenance,
employer's share of payments for insurance,
such as weedeaters, small riding mowers, hand-
retirement, social security, taxes, and the like.
operated lawn mowers, and the different types
The costs of benefits are allocated to each
of tractor mowers.
worker on the same hourly basis as regular pay.
b. The entries on document B are made as
The pay and benefits are summed to produce the
hourly composite rate for each type of worker.
(1) Lines 1a to 1e. The purchase price of
When completed, document A is a catalog of
equipment (line 1a) should be available in local
operator and supervisor costs that can be used
records. The purchase price usually quoted will
to determine personnel costs for different pieces
include the freight on board (f.o.b.) charge but
of equipment and operations.
not the charge for shipping from the warehouse
c. To estimate military and civil service per-
to the base. Add any shipping charges to the
sonnel costs, use AFR 173-13, US Air Force
purchase cost. The service life in years (line 1b)
Cost and Planning Factors; AR 37-115, Finan-
is estimated for each type of equipment. Local
cial Administration -- Accounting for Special
experience may be used, particularly if local
Facilities Engineering Projects; and DA Pam-
operating conditions are adverse; or normal
phlet 420-6, Facilities Engineering -- Resource
service lives can be taken from Office of Man-
Management System. Base budget, personnel,
agement and Budget (OMB) Circular NO. A-76,
and contracting offices can also help in deter-
"Performance of Commercial Activities." An
mining personnel costs.
estimate of the number of hours the equipment
is operated each year (line 1c) is then used to
d. The completed document A for the exam-
calculate the equipment's service life in hours
ple of Air Base Somewhere is shown in figure
(line 1d). The hourly investment cost of each
6-1. It shows the pay rates of all the types of
piece of equipment (line 1e) is calculated by
personnel who would be used in the example.
dividing its purchase cost (line la) by its esti-
e. If growth regulators were to reduce the
mated service life in hours (line 1d).
amount of labor required for mowing, there
(2) Lines 2a to 2c. The fuel cost per hour
would not necessarily be a reduction in the
(line 2c) is calculated by multiplying the esti-
budget. If growth regulators permitted a
mated fuel consumption of the equipment per
grounds manager to reduce pesonnel in mowing
hour (line 2a) by the local cost of fuel (line 2b).
operations, he or she would be able to dip lower


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