NAVFAC P-300 Management of Transportation Equipment

maintenance branch using the most recent labor and material cost report plus a projected
acceleration factor.
Example: Total direct labor cost for the Maintenance Branch = $96,000
18,000 man-hours of direct labor = $5.33 average labor rate + 33 percent fringe benefits
+ 8 percent cost of living increase = $7.52 shop labor rate.
e. Material Cost Factor Per Hour of Labor. A material cost factor for each hour of
direct labor shall be developed locally, using cost data from the latest annual
Transportation Cost Report (TCR) or the Transportation Equipment Management
Evaluation Summary (TEMES). To determine the material cost factor for each hour of
direct labor, divide the total annual material cost reported for the maintenance branch by
the reported direct labor hours. The material cost factor should be escalated to allow for
price increases anticipated in the budget year.
Example: Total direct material for the maintenance branch = $64,500
13,500 man-hours of direct labor = $4.78 X 1.07 (7 percent cost escalation) = $5.11
activity developed material factor per labor hour.
f. Maintenance Overhead. The total overhead hours under CAC 6900 should not
exceed 32 percent of the direct productive standard hours for the maintenance branch.
Considering normal staffing, overhead labor is based on a ratio of 2 overhead personnel
to 10 direct personnel with direct labor personnel effective for 91 percent of available
1,728 annual direct labor hours.
Formula:
(1) 2 X 1,728 = 3,456 indirect/overhead available labor hours
(2) 10 X 1,728 = 17,280 direct labor hours
(3) 17,280 X .91 = 15,724 effective direct labor hours
(4) 17,280 - 15,724 = 1,556 indirect/overhead for production labor
(5) 3,456 + 1,556 = 5,012 total indirect/overhead hours
(6) 5012 X 100 = 32 percent indirect to direct hours
15,724
g. Budget Computation. Sample worksheet for the direct labor and material
budget is shown in Figure G-1 Part A. The following are the appropriate column entries:
G-3