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Re: Amtrak: Throw Dubious Accounting of Cost Under the Train
Author: BOB2
Date: 11-30-2012 - 15:29
Amtrak is unable to do marginal cost accounting, so everything is calculated in "fully allocated costss" or at a "burdened" rate. Thus, all "fully burdened" overhead is added to all activities. rgardless of marginal cost/marginal revenue accunting by sector or businsess segment. This would include things having nothing to do with the marginal cost of food service, like the cost of the army of drones in Philly, and retirement allocations are "amortized" across the system and added to every activity.
The actual marginal cost of food services, less these "addons", are probably far closer to the amount they made. The high cost of on-board crews is, however, a problem area, because these "marginal" overhead costs are real.
Though I suspect food services could be done far cheaper, this piece is being somewhat disengenous to create the narrative for this publications target market, so seems to omit some of the details, like how this interesting Cmatak accounting is done.
The actual marginal cost of food services, less these "addons", are probably far closer to the amount they made. The high cost of on-board crews is, however, a problem area, because these "marginal" overhead costs are real.
Though I suspect food services could be done far cheaper, this piece is being somewhat disengenous to create the narrative for this publications target market, so seems to omit some of the details, like how this interesting Cmatak accounting is done.
