Operating costing (Service costing)
Q.1 Raju the owner of a taxi supplies the following information:
cost of taxi- Rs.1,50,000 with total life of 2,50,000 kms, Driver’s salary Rs.700 p.m.,
cleaner’s salary-Rs.300 p.m., Repairs -Rs.3,600 p.a., Garage rent- Rs.2,400 p.a. , Tax-
Rs.1,200 p.a., Diesel consumption 8 kms. Per litre, Diesel cost Rs. 8 per litre, Oil and
other sundries Rs.20 per 125 kms.
The taxi runs 100 kms per day for an average of 25 days in a month, 20% of the
distance has been run without any passenger.
Calculate the cost of running the taxi per km. (Ans: Rs.3)
Q.2 A truck carried 45 tons during a six–day week and travelled a total distance of 135
miles as given below:
Days Distance travelled Tons carried
(miles)
Monday 10 5
Tuesday 20 10
Wednesday 30 5
Thursday 40 10
Friday 25 10
Saturday 10 5
_____ _____
135 45
Find total ton-miles for the week. (Ans: 1100)
Q.3 West Road Co. runs 10 buses between two places covering a distance of 25 kms.
Seating capacity of each bus is 30 passengers.
The expenses for the month of April, 2003 were as under:
Salaries of drivers and conductors - 90,000
Salaries of mechanical staff - 9,000
Diesel, oil, and lubricants - 60,000
Taxes, Insurance etc. - 7,800
Repairs and maintenance - 12,000
Depreciation - 48,000
60% of seating capacity was utilised in each case. All buses ran 25 days a month each
making four round trips daily:
(a) Find out cost per passenger-kilometer.
(b) What would have been the cost per round trip per passenger, if Seating capacity
utilization were to go up to 80%?
(Ans: 0.25200 ; Rs.9.45)
Q.4 A transport company runs 5 buses between two places covering a distance of 25
Kms. Seating capacity of each bus is 50 passengers. Generally 80% sitting capacity is
utilized in each bus. All buses run 25 days a month, each making 4 round trips daily.
If total operating cost during a month for all the five buses is Rs.16 lakhs and profit
on takings is assumed to be 20% , Calculate the bus fare to be charged for each
passenger km. [Ans :Rs.2]
Q.5 A truck carries goods covering a distance of 60 km each way. On upward journey,
freight is available for its full capacity but on downward journey only 25% of its
capacity is filled up. The truck runs on an average 20 days a month. Compute Ton
km. per month for the truck if the capacity of the truck is 10 tons.
[Ans: 15000]
Q.6 X & Company runs a bus between two places covering a distance of 30 kms. Seating
capacity of the bus is 30 passengers.
The expenses for the month of May 2006 were as follows:
₨.
Salaries of driver, conductor and other staffs 10,000
Diesel, oil and lubricants 6,000
Repairs and Maintenance 1,600
Depreciation 4,000
The bus ran 25 days in May, 2006 making two round trips per day. 60% capacity was
utilised.
(a) Find cost per passenger km.
(b) What will be the fare per passenger if the company wants to maintain a profit @ 20%
on sales.
[Ans : Rs. 0.40 ; Rs. 15]
Q.7 Volvo Corp. owns a bus which runs according to the following Schedule:
Distance No. of days run Seating
Route one-way each month occupancy
Delhi to Chandigarh 150 Kms 8 90%
Delhi to Agra 120 Kms 10 85%
Delhi to Jaipur 270 Kms 6 100%
Other Details
Cost of the bus ₨. 6, 00,000
Diver’s Salary ₨. 6,800 p.m.
Conductor’s salary ₨. 6,200 p.m.
Administrative Exp. ₨. 2,000 p.m.
Insurance if the bus ₨. 12,000 p.m.
Diesel and oil consumption – 4 kms per litre at ₨. 36 per litre.
Road Tax: ₨. 15,000 p.a.; Permit fee - ₨. 1,000 p.m.
Lubricant Oil (other than Diesel and Oil) ₨. 40 per 100 kms.
Repairs and Maintenance ₨. 5,000 p.m.
Depreciation of the bus 20% p.m.
Seating capacity of the bus: 50 Passengers
Passengers Tax is 20% of the Total Takings. Calculate the bus fare to be charged from
each passenger to earn a profit of 30% on total takings. The fares are to be indicated
per passenger for the journeys – (1) Delhi to Chandigarh, (2) Delhi to Agra and (3) Delhi
to Jaipur.
[Ans: Rs. 85.14 ; Rs. 68.11 ; Rs. 153.25]
Q.8. From the following particulars, calculate the cost per passenger- kilometer:
Paribahan Transport Company is running 5 buses for 100 kms. In each trip each vehicle
makes two round trips daily. The seating capacity of each bus is 30 and 80% of the
capacity is actually utilized. The buses run for an average period of 25 days in a
month. The total operating cost for 5 buses is ₨. 90, 00,000 for a month.
[Ans : Rs. 7.50]
Q.9. A taxi owner supplies the following information:
Cost of taxi ₨. 5,00,000 with total life of 2,50,000 km. Driver’s salary ₨. 5,000 p.m.,
Cleaner’s salary ₨. 500 p.m., Repairs ₨. 12,000 p.a., Garage rent ₨. 700 p.m., Road tax
₨. 4,800 p.a., Diesel consumption 8 km per litre; Diesel cost ₨. 56 per litre; Oil and
sundries ₨. 50 per 125 km. The taxi runs 100 km per day for an average of 25 days a
month. 20% of the distance has been run without any passenger. Calculate the cost of
running the taxi per km.
[Ans: Rs.15.55]
