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3. OPERATING COSTING
SOLUTIONS TO ASSIGNMENT PROBLEMS
Problem No.1
Calculation of passenger km:-
Onward: 25 days x 3 trips x 20 km x 12 months 18,000 x 40 passengers
7,20,000 pass. Km.
Return: 25 days x 3 trips x 20 km x 12 months 18,000 x 40 passengers
7,20,000 pass. Km
14,40,000
Kilometers 36,000kms
Particulars Amount
Depreciation (1,00,000 / 5) 20,000
Insurance (1,00,000 x 3%) 3,000
Annual Road tax 2,000
Garage rent (400 x 12m) 4,800
Annual repairs 2,360
Salary to driver & conductor (800 x 12m) 9,600
Manager Salary (1,400 x 12m) 16,800
Stationery (100 x 12m) 12,000
Petrol & oil cost (3600 x 50 / 100) 18,000
Total cost before commission 77,760
(+) commission (10% on takings) 10,368
Total Cost 88,128
(+) Profit (15% on takings) 15,552
Total takings 1,03,680
1,03,680
Fare/ pass. Km Rs. 0.072 / pass.Km
14,40,000
Problem No. 2
Bus Route Km. per trip Trips per day Days per month Km. per month
Delhi to Chandigarh 250 2 8 4,000
Delhi to Agra 210 2 10 4,200
Delhi to Jaipur 270 2 6 3,240
11,440
Rate per passenger km. = (Rs. 2,99,488 ÷ 5,20,500) = Rs. 0.575 say Rs. 0.58
Note:
1. Passenger tax = 20% of total takings
2. Profit = 30% of total takings
IPCC_34e_Costing _ Operating Costing_ Assignment Solutions ____________9
Ph: 98851 25025/26 www.mastermindsindia.com
3. Passenger tax + Profit = 50% of total takings
4. Cost (balance) = 50%
5. Total takings = 100%
6. Item 3 as a % of item 4 = 100%
Passenger tax (20% of Rs. 2,99,488) = Rs. 59,897.60
Profit (30% of Rs. 2,99,488) = Rs. 89,846.40
Rs. 1,49,744.00
Problem No.3
Step-I:
Guntur to Tirupathi 10 days X 250 kms X 2 = 5000 km X 50 pass X 90% = 2,25,000 pass. km
Guntur to Kalahasthi 10 days X 200 kms X 2 = 4000 km X 50 pass X 80% = 1,60,000 pass. km
Local Trip: 5 days X 60 km = 300 km X 50 pass = 4,00,000 pass. km
Step-II:
Step-III:
77,120
Fare / Passengers km pass.km=Rs. 0.1928 / pass. km
4,00,000
Fare / Passenger from Guntur to Tirupathi = 250 p. km x 0.1928 Rs. 48.20
Fare / Passenger from Guntur to Kalahasthi = 200 p. km x 0.1928 Rs. 38.56
Problem No.5
Step-I:
Step-II:
Step-III:
Copy Rights Reserved
Calculation of cost % T.km
1,96,600
To MASTER MINDS, Guntur
Cost / T.km Rs. 0.92/ T.km
2,14,650
Problem No.6
Step-I:
Step-II:
Step-III:
Calculation of cost / Tons km
19,60,000
Cost / Tons km = = Rs. 4.67/T.km
4,20,000T.km
Problem No. 7
Statement showing operating cost
Particulars Per bus/p.a 5 buses/p.a
Standard charges(fixed cost)
Driver’s salary @ 4500 P.M 54000 270000
(4500 x 12) (4500 x 12 x 5)
Cleaner’s salary @ 3500 P.M 8500 42000
License fee, Taxes etc @ 8600 p.a 8600 43000
Insurance @ 10,000 p.a 10000 50000
Depreciation @ 1,00,000 p.a 100000 100000
Maintenance charges
Repirs & maintenance @ 35000 p.a 35000 175000
Operating charges:
Diesel 162000 810000
Rs.45 (162000 x 5)
(8km x 4 times x 2 way x 25 day x 9 months) x
4
total cost 3780000 1890000
Cost per month (a) 31500 157500
Problem No. 8
(i) Total equivalent single room suites
Nature of suite Occupancy Equivalent single room suites
Single room suites 100 × 360 × 100% = 36,000 36,000 × 1 = 36,000
Double rooms suites 50 × 360 × 80% = 14,400 14,400 × 2.5 = 36,000
Triple rooms suites 30 × 360 × 60% = 6,480 6,480 × 5 = 32,400
Total 1,04,400
Problem No.9
Calculation of cost per kwh:
Operating labour 50,000
Repairs & maintenance 50,000
Lubricants, spares & stores 40,000
Plant super vision 30,000
AOH 20,000
Coal (10,00,000 x 2.5 x 0.02) 50,000
Depreciation 10,000
Total Cost 2,50,000
2,50,000
Cost per kwh = = 0.25
10,00,000
Problem No. 10
Calculation of cost per Km. under various proposals
0.02 ps.
Driver wages 720
2,000 Km 0.36 ps.
Total Cost Rs.1.61 ps.
Proposal – 1: Car taken on Hire basis
Particulars Calculations Cost /Km
Hire charges 800/ -
2,000 km 0.40 ps.
Petrol 0.65 ps.
-
Oil 0.08 ps.
-
Tyres 0.07 ps.
-
Total Cost Rs. 1.20 ps.
Decision: As cost per unit in proposal - 2 is less, it is better to accept that proposal.
Problem No. 11
Decision: The Fare Reduction Proposal (and consequent increase in the number of passengers) will
increase the Operating Income per Flight by Rs.1,57,972 - Rs.1,26,640 = Rs.31,332. Hence, the
proposal is worthwhile.
Problem No.12
THE END