Abstract
The author in using the operating costs of the Metropolitan Dade County Transit Authority, develops a cost allocation formula that could be applied to any bus operation. Cost items were allocated among four major elements affecting expense; vehicle costs, vehicle miles, peak vehicle needs, and passenger revenue. He concludes that for long-range planning projections a simplified operating cost formula using only vehicle-miles and vehicle-hours is more than adequate and desirable. For short-range service improvements and fiscal planning, however, a more accurate allocation formula such as the four-variable method is more appropriate.