2. COST ACCOUNTING CONCEPTS FOR IS ORGANIZATIONS › 2.5 Differential Charging › 2.5.3 Product Surcharge Accounting

2.5.3 Product Surcharge Accounting

Product surcharge accounting applies a charge to the users of
a specific program product.  The product is, of course, an
expense to the data center that provides it to its users.

The rationale for product surcharge accounting is to recover
the cost of a product from those who use it rather than
including it in the overhead that is supported by all data
center users.  Where an expensive, special-purpose product is
used by a small group of users, this philosophy has some
merit.  The alternative is to require the user group to pay
the license fee for the product, but if it is possible that
the product's use may become more widespread, the surcharge
approach may be more acceptable.

A special case of product surcharge accounting occurs in the
service bureau environment, where the service bureau pays a
royalty to the product vendor for the use of a product.  This
royalty fee is passed on to the user in the form of a product
surcharge.

There are several alternatives that may be used to recover
the cost of program products from the applicable users.

    Percentage Surcharge

    The percentage surcharge is a multiplier of the
    standard rate for the use of the specified program
    product.  For example, Job A ran program Product X.
    The resource charge for Job A was computed at $1.00.
    However, the Product Surcharge Table indicates that
    jobs executing Product X are subject to a 20%
    surcharge.  Therefore, the submitter of Job A is billed
    $1.20.

    Fixed Surcharge

    A fixed surcharge is a flat dollar charge for the use
    of the program product.  For example, Job A ran program
    Product X.  The resource charge for Job A was computed
    at $1.00.  However, the fixed surcharge table indicates
    that jobs executing Product X are subject to a $2.00
    surcharge.  Therefore, submitter of Job A is billed
    $3.00.
    Subscription Surcharge

    A subscription surcharge is a fixed monthly fee for the
    users of a specific program product.  For example, User
    A has subscribed to use Product X and is therefore
    charged a monthly subscription fee of $75.00.