Interested in hearing how others handle this..
We are a heavy highway contractor that uses a dual internal equipment rate to charge our jobs, very similar to Mike Vorster's approach. We assume 8 hours of utilization per day. If a piece works 6 hours we will charge 6 hours of the full owning and operating rate to the cost code reported on the time card, then we would post an additional 2 hours of just the owning cost to the job. We have gone back and forth on where the best place is to charge the last 2 hours of idle time:
1. To the same cost code that the other 6 hours were posted to (gets tricky when those 6 hours are posted to several cost codes)
2. To a generic "Standby Equipment" cost code for the job (if posted here, do you leave it here or allocate to actual working cost codes?)
3. Don't post it to the job, keep it below the line or post to some sort of Equipment Job. Not sure how this would work but I've seen it mentioned.
Thanks for the input!
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Asa de Armas
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