INTERNAL ACCOUNTING ENGINEERING

Transfer of Maintenance Activities Cost

9. Preventive Maintenance:

Transfer functional activity cost to Buildings where it was realized; Machinery Maintenance: to Direct Production Departments: General repair of machinery: To Direct Production Department. 

Control by Job Order.

MAINTENANCE, REPAIRS AND CONSTRUCTION:

Internal Accounting offers the option to treat Maintenance, Repair and Construction like Production.  For more detailed information on specific machine maintenance costs, Internal Accounting may re-allocate from Maintenance Projects (Class 6) back to the  Direct Production Department (Class 5).

Internal Accounting provides the option to allocate Maintenance costs to general Management accounts (Class 3), as well as other options.

Internal Accounting helps managers avoid charging an unpredicted repair cost to a single month's production by supporting preventative repair budgets and estimating operating costs. An annual absorption rate for each Repair department is also recommended.

Internal Accounting can treat finished repairs as Assets, and provides the option to re-allocate it to a Department or depreciate it over time. Internal Accounting can treat a large repair as an equipment purchase.