Indirect Costs - TB-43-0002-730017

TB 43-0002-73

electronics and communications equipment, missile systems, ships, munitions armament, weapons armament, rail

equipment, general equipment, and commodity groups of equipment); depot maintenance and direct/general support

maintenance; and each major geographical area where wage levels vary significantly.

(f) Depot maintenance labor rate. When considered necessary for determining the proper depot maintenance labor

rate, assistance may be requested as authorized by AR 700-4.

(2) Materials. The cost to repair will include all materials directly applied to, and identifiable with, the particular

equipment undergoing repair.

(a) Consumable items received from the supply system may be costed as billed by the supply agency. If no billing is

available, consumables will be costed at the standard inventory price as published in appropriate supply manuals. Items

procured from local sources will be priced at the latest invoice cost. Cost of items fabricated will be based on actual cost

for like items, where possible. When actual cost is not available, engineering estimates, including indirect expenses, will

be used.

(b) Replacement components and assemblies used in the repair process will be costed at the standard inventory

price. Credit will be taken for the return of the repairable component in an amount equal to the current standard inventory

price, less the estimated cost to repair the components.

(3) Freight and packaging. Freight will not be included as an element of cost when the equipment to be repaired is

located in CONUS. When the equipment to be repaired is located overseas and no local capability to repair exists, the

cost of freight to CONUS will be included as an element of cost. The cost of freight includes all cost involved in preparing

the item for shipment at point of use, and all transportation and handling cost from point of use to designated CONUS

point of repair. When equipment cannot be repaired on site, and cost must be incurred to prepare the equipment for

shipment regardless of destination, such cost (including materials) will be included in the estimate of cost to repair.

b. Indirect Costs. Indirect cost to be included will be determined by applying the indirect expense rates to the

estimated direct labor man-hours. The cost to repair will include the following indirect expenses.

(1) Indirect maintenance expense rate. This will include manufacturing or production expenses (i.e., indirect costs

incurred within or identifiable to the maintenance' shop or organization performing the repair work, although not identifiable

to particular jobs).