Methodology for Amtrak cost accounting

Dharm GuruswamyPDFTech ReportDOT-VNTSC-FRA-09-05DOT/FRA/ORD-09/16RR06/FG035Performance measurementCost accountingCost allocationRailroad transportationUnited States. Federal Railroad AdministrationChurch, Robert F.Mauri, RonaldMergel, JosephPace, DavidHyde, DavidPickrell, DonPickrell, Don{12293}Shaulov, MarkTempleton, JoshuaWetula, Leopold E.John A. Volpe National Transportation Systems Center (U.S.)NTL-RAIL TRANSPORTATION-RAIL TRANSPORTATIONNTL-RAIL TRANSPORTATION-Rail Economics and FinanceNTL-RAIL TRANSPORTATION-Rail Planning and PolicyVolpe National Transportation Systems Center, Technical Reference CenterBTS Data DirectoryThe Federal Railroad Administration tasked the Volpe Center with developing a methodology for determining the avoidable and fully allocated costs of Amtrak routes. Avoidable costs are costs that would not be incurred if an Amtrak route were discontinued. Fully allocated costs are the total costs of operating a route, including operating, marketing, general and administrative, and capital costs. The methodology was developed in cooperation with Amtrak staff and is being implemented within Amtrak\ue2\u20ac\u2122s new Amtrak Performance Tracking (APT) system. This report describes the methodology for determining Amtrak\ue2\u20ac\u2122s avoidable and fully allocated costs. Challenges faced in developing the methodology included how to allocate shared costs that cannot be directly linked to single trains, how to spread high-level costs, such as general and administrative costs, how to distribute costs to Amtrak\ue2\u20ac\u2122s ancillary businesses, how to estimate and allocate capital costs given Amtrak\ue2\u20ac\u2122s history and structure, and how to estimate avoidable costs given record keeping limitations and the fact that many Amtrak costs are shared. The methodology will provide improved estimates of avoidable and fully allocated costs as compared to Amtrak\ue2\u20ac\u2122s current cost allocation system. It simplifies the cost allocation rules, incorporates Amtrak\ue2\u20ac\u2122s ancillary businesses in the allocation process, and increases transparency