Overhead cost allocation at Military Sealift Command, Pacific

Abstract

The purpose of this thesis is to examine overhead costs and allocation methods at the Military Sealift Command (MSC). The command's overhead expenses from Fiscal Year 1988 through 1994 are reviewed and followed by a description of MSC's current method of allocating overhead to specific shipping arrangements. Possible sources of information distortion involved in indirect overhead allocation are discussed, and an alternative method of allocating overhead to ships is suggested. Finally, the recommended method of overhead allocation is incorporated into a Cost Simulation Model developed for MSC, Pacific (MSCPAC) using the Crystal Ball(r) simulation add-in to Microsoft Excel(r).