Six questions about your own ledger. Ten minutes, no documents to gather. It tells you whether your overheads are understated — and by which mechanism.
Answer for how the books are actually kept, not how they are supposed to be kept. "I don't know" is a real answer and is counted as one.
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1. Are SGK contributions, unemployment insurance and staff payments — meals, transport, bonuses — booked as direct labour?
Where to look: the payroll posting. Whether these lines land in direct labour or in indirect labour.
2. Are the classification fee and insurance charged to months as flat shares of the annual budget, regardless of when the survey or the policy actually falls?
Where to look: the monthly overhead sheet. Whether these two lines are identical every month.
3. Can you say how many hours of project management, procurement and quality control went into one specific ship?
Not the department's total for the year — one hull's share of it.
4. Are overheads spread over ships by man-hours — or by another single coefficient — rather than by what each ship actually consumed?
Where to look: the costing sheet. Which base the overhead line is divided by.
5. Do repair and refit share one overhead pool with newbuilding, spread by that same base?
Where to look: whether the yard has one overhead account, or a separate pool for repair and for newbuild.
6. Is subcontracted labour merged with your own workforce inside the direct-labour line?
Where to look: the direct-labour line of one hull. Whether own payroll and subcontractor invoices are two figures or one.
This is not an audit. It is six questions whose answers you already know, matched against distortions documented in published work on a real yard. It tells you which mechanism is likely at work, not by how much your figure is off.
Why it matters more than it sounds. On one Turkish yard, costed workshop by workshop through its own ERP, overheads came to 72.2% of what the yard spent with its own hands — against 16.3% materials and 11.5% direct labour. If the largest block of your cost is the one assembled by coefficient, then your price is set on top of the part you measure least.
What follows from it. In the documented case the conclusion was blunt: because project cost cannot be established correctly by the traditional method, management sets the wrong target profit — and therefore the wrong prices.
This is one reading, taken by hand today. The same count can run by itself on a project you have on the floor now: the documents your yard already produces go to one place, and every week the count comes back — leak by package, forecast to completion — without anyone stopping to take a measurement.