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How Do You Calculate Dredging Cost

How Do You Calculate Dredging Cost?

The production of dredging enterprises is different from general construction and installation enterprises. Dredging companies are technology-intensive, mainly using advanced dredging equipment and technology to engage in underwater dredging business. Dredging equipment accounts for the main cost.

The main body of the dredging project has no raw materials. Calculate dredging cost mainly includes the use of machinery, and all labor and materials are reflected in the use of machinery(dredger). From the characteristics of the production and cost composition of the dredging company, it can be seen that the dredging company is a special construction company and cannot fully apply the cost calculation method of the construction company. It must be based on its own characteristics and the requirements of the new accounting system, and it needs a set that can be suitable for the dredging industry. The characteristics and calculate dredging cost that can meet the requirements of cost management.

1. Determine the object of calculate dredging cost

Dredging companies generally carry out construction in accordance with the technical requirements of the “Dedging Project Construction Contract” signed with the construction unit. With the further development of the market economy, land reclamation has gradually become an important business content of dredging companies. Regardless of whether it is a dredging project or a hydraulic reclamation project, the output value (workload) of the dredging enterprise is generally calculated by multiplying the unit price of earthwork by the effective amount of work.

Therefore, in order to correctly assess the management level of dredging costs, and to reflect the profit and loss of each project and the implementation of the budget quota in a timely and accurate manner, the project determined in the construction contract should be used as the cost calculation object to collect and allocate costs. It is consistent with the statistical caliber of the production and business departments, which is convenient for management and assessment.

2. Determine the cost item

Three major production factors are necessary to complete a dredging project, namely

Therefore, the three major expenses of ship usage fee, mud discharge facility usage fee, and measurement fee constitute the main body of the dredging project cost.

The new construction enterprise financial system stipulates: The construction enterprise project cost is divided into direct cost and indirect cost.

  • Direct costs refer to:

    the various expenditures that constitute the engineering entity consumed in the construction of the project, including

    • 1. Dredging costs, mud transportation costs
    • 2. Commencement of construction and collection fees
    • 3. Pipeline, pipe rack installation and disassembly fee
    • 4. Mountain waterway increase fee
    • 5. Dredging measurement fee
    • 6. Construction and use and maintenance of buoys
    • 7. Fees for sweeping the river bed before dredging, transfer fees for the construction team.
    • 8. Twisting fees for mud ponds
  • Indirect costs refer to:

    All the expenditures incurred by each construction unit for the organization and management of the project.

    • 1. Construction management fee
    • 2. Other indirect expenses (such as temporary facility fees, other expenses, etc.).

Divide the dredging project cost items into the following five categories:

  • 1. Fees for the use of dredgers, (that is, dredging fees and dredging fees in direct costs).
  • 2. Pipeline usage fee, (that is, the amortization fee of the pipeline, pipe rack installation and disassembly fee and pipeline float manufacturing fee in the direct cost.
  • 3. Measurement fee, (ie, dredging measurement fee, bed sweeping fee before dredging).
  • 4. Other direct costs, (namely, the transfer fee, the twisting fee, the maintenance fee for the buoy, the collective fee for the start and deployment and other expenses in the direct cost).
  • 5. Indirect costs, (that is, construction management fees, system site management fees, temporary facility fees, etc. among indirect costs).

According to this division method, the dredging cost can be calculated by:

  • 1. dredging equipment usage fee,
  • 2. The use fee of the mud pipeline,
  • 3. Measurement fee
  • 4. Other direct fees
  • 5. Indirect costs
  • It consists of five cost items. This is more in line with the actual situation of the dredging enterprise.

3. Collection of costs

In order to meet the requirements of dredging cost accounting, cost management and assessment, based on the division of dredging cost items, it is necessary to follow:

  • 1. Ship usage fee.
  • 2. Fees for the use of sediment discharge pipelines.
  • 3. The measurement fee and its detailed items are collected.

At the end of the month, use appropriate methods to allocate and record it in the project cost. For other direct costs and indirect costs when the amount is small, they can be directly credited to the relevant project cost.

4. Allocation of costs

1. Distribution of direct costs

If the dredging equipment usage fee and the measurement fee of the mud pipeline usage fee incurred within the month can distinguish the cost calculation objects, they can be directly transferred to the relevant project costs at the end of the month. If the cost calculation objects cannot be distinguished, the following methods can be used to allocate

  • 1. A project should share the dredging equipment usage fee = (this month dredging equipment usage fee / this month dredging equipment construction days) * the dredging equipment construction days of a certain project
  • 2. A project should share the measurement cost = (measurement cost this month / total amount of dredging projects this month) * the amount of work completed this month for a project
  • 3. A project should share the use fee of the mud pipeline = (the use fee of the mud pipeline this month / the total amount of dredging projects this month) * the total amount of dredging of a certain project

2. Other direct expenses and indirect expenses

if the cost calculation object cannot be distinguished, or the amount of large income has a long period, can be recorded in the prepaid expenses and then recorded in the project cost according to the proportion of the direct expenses or the project period

5. Calculate Dredging Cost Conclusion

Set up a cost account according to the project name determined by the dredging project construction contract. After the dredging cost is collected and distributed, the total dredging cost of a certain project can be obtained, and the unit dredging cost can be obtained by dividing by the amount of work. The above is how to calculate the dredging Cost method.