[CBQ] Management vs. Out of Pocket Costs

["Don Winn" <donswinn@gmail.com>]

I just read the Perishable Study Transcontinental Fruit & Vegetable Traffic published by the BRHS archives for the winter campaign.  (thanks archive guys!)

 

The study was commissioned to determine if the company should more aggressively pursue the low profit perishable traffic moving from west to east.  Data was collected to determine how many produce cars could be added to trains coming from Grand Island and Kansas City without adding more power and without impacting the arrival schedules.

 

They lists 2 kinds of costs:  Out-of-Pocket and Management.  I assumed that Out-of-pocket is what would be called variable costs in current accounting language and that Management would be fixed costs.  But the discussion seems to support moving forward with the proposal so long as the Management costs are covered, even if there is a loss on the Out-of-Pocket costs.  From my experience, you always want to cover variable costs, even if the revenue doesn’t cover the fully burdened costs.

 

Can someone explain the Q terminology in 1966?

 

Thanks.

 

Don Winn

 

Sent from Mail for Windows 10

 

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