SACRAMENTO TRANSIT AUTHORITY COST ALLOCATION GUIDELINES

A MANAGEMENT TYPE ACCOUNTING SYSTEM IS PROPOSED FOR THE STA, WHICH WOULD AFFORD MORE EFFECTIVE AND EFFICIENT SOLUTIONS TO THE PROBLEMS OF DETERMINATION OF THE CURRENT LEVEL OF CAPACITY. ROUTE OPERATING COSTS ARE DETERMINED BY USING A VARIABLE COSTING OR DIRECT COSTING APPROACH. IN THIS METHOD, THOSE COSTS DIRECTLY RELATED TO THE OPERATION OF ROUTE MUST BE COVERED BY THE REVENUE GENERATED ON THE ROUTE. THE EXCESS REVENUES OVER DIRECT COSTS IS CALLED CONTRIBUTION, AND IT IS USED TO COVER THE INDIRECT OPERATING COSTS AND THE JOINT COSTS WHICH ARE NOT ALLOCATED. INTERIM MONTHLY FINANCIAL STATEMENTS OF THE CITY OF SACRAMENTO AND THE MONTHLY OPERATING SUMMARIES PROVIDED THE STATISTICAL DATA ON REVENUE, MILES, PLATFORM HOURS, AND REVENUE PASSENGERS, USED IN A COMPUTERIZED CORRELATION STUDY. THIS CORRELATION STUDY STRONGLY INDICATED THAT A MIXED ALLOCATION PROCEDURE IS SUPERIOR TO ALLOCATING SOLELY BY ROUTES MILES, OR SOLELY BY PLATFORM HOURS. ON THE BASIS OF THE NEW PROPOSED MANAGEMENT ALLOCATION SYSTEM, IT IS CONCLUDED THAT: (1) VARIABLE COSTS ARE MATCHED BY REVENUES ON ALL LINES EXCEPT THE CROSSTOWN LINE AND ARE GENERATING ENOUGH REVENUE TO, COVER OR NEARLY COVER, THEIR VARIABLE COSTS; (2) LOSSES IN 1968-69 WERE LARGELY DUE TO AN INCREASE IN FIXED COSTS, AND THESE FIXED COSTS SHOULD BE CAREFULLY INVESTIGATED RATHER THAN THE VARIABLE COSTS; AND (3) THE COSTS STRUCTURE IS SWINGING TOWARD A LOGICAL CHOICE BETWEEN ROUTE EXTENSIONS AND INCREASED HOURLY SERVICE. /UMTA/

  • Supplemental Notes:
    • PROJ NO CAL-MTD-10
  • Corporate Authors:

    Sacramento Transit Authority

    ,    
  • Authors:
    • Dierks, P A
    • Cleveland, S T
  • Publication Date: 1970-1-14

Subject/Index Terms

Filing Info

  • Accession Number: 00200555
  • Record Type: Publication
  • Source Agency: Urban Mass Transportation Administration
  • Files: TRIS, USDOT
  • Created Date: Feb 19 1973 12:00AM