General Inquiries

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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We currently post it to the same cost code that the operated hours are going to, although your questions is causing me to think this through more thoroughly.  A generic "standby" code could be helpful in determining potential lost revenues due to idle equipment.  I do feel that the cost should be allocated to the job, since that piece of equipment is essentially unavailable for use on other jobs.  I'm interested to hear the responses to this topic.

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Loretta Kuust
Controller
HP Civil Inc
Stayton OR
(541) 720-0527
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Original Message:
Sent: 11-26-2019 15:56
From: Asa de Armas
Subject: Where to Post Idle Equipment Time

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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