Q l.

teaning of Selvice Costing ,,',

According to CAS-I ',Servigg or Operating cost refer to cost of underrakings
:ranufacture any product but which provides services". Service costing applies
which do not
wh[re stanJardised
'en-ices are provided either by an undertaking or by a service cost centie within an undertaking.
}is method may be used where service is notlompietely standardised, but where it
is convenient
: ' regard it as such. and to-caiculate average cost plr p"riod
in relation to the standardised unit of
:reasurement. Thus it is the cost of producing andmaintaining a service.

It is a method of-costin-g applied to undertakings which provide

production of tangible prod-ucts. The service to be costed couid either be: service rather than
(i) Transport seruices : Tramways, Railways, Bus, Tyucll Air and Marine
T?ansport.
rii) Supply seruices : Gas supply, Electricity supply, Water supply.
tiii) Welfare supplies : Hospitals, Canteens, Libraries, Schools.
t iu') Municipal Seruice : Street lighting, Road maintenance etc.
tu) Entertainment Services : Cinema, Circus etc.
.These services may be internally used e.g., canteen, delivery van, boiler house
r':rdered to th-e public- as is done by StatJ Transport Corpo"atlon, Hospital, etc. or may be
' :lpanies etc. In both the cases operating costs are required to be ascertainea. flreElectricity,
oper.ting
Gas
costs
-:= generally period costs. The expenses are accumulaled for a period
and they are'."iui"i to trr"
I I antum of service rendered during the period. In certain ..r"., Lo*"rrer,
the operating ;o.i cal be
'--::j:ral.cost e.g. when a bus chartered out for a specific trip, the cost of .".f, tripi. *ortud oot
':=ating itas a specificjob. Though service undertaking. ur" ofdiff"rent types but in the following
: 1:es we shall be dealing with costing of some importait service undertakings.

(i) It deals with the determination of cost of repetitive serricesand not tangible products.
(") It resembles with unit costing in that the total cost incurred during a period in a service
divided by the total number ofcost units ofthe service gives cost per unit ofseryice.
(rii) Services are standardised.
 cosrrrvG SERWCE(OR OpERAflHGT 6
:' in"'esrment in fixed assets is
high and in working capitai is 10w"
' H'; 5iTTfl :::**::' ffi'#,1Tf;J* ;#;; .;s t per unit or ervice rendered is s Q Daify Log Sheet
rr' \-arious costs (chatges) in providingservices may
categorised as : (a) Standing charges,
be
3'-'t:i3:ffiT,?;i,fn::"--3J"ti"s charges "'' ; i;;f*;J;d;;;, charges
';;lfrili',"
C) Transport Costing
Transport industries include Air'
transporL undertakings is known water.-Road..and ft.ailways., Method
as'traisport costing. rt of ascertaining cost in
':nit for Air, water to determining cost per serviee
noua t""rr*-["ii ro. gooJ;"rri';;r;g"rr.
""i#.
: r:'. ate cars. carriers "ira
for owners, buses. taxis."".rir"^, Moior transpoit incjudes
f"ri*I
The objectives of "il]
motor transport costing may be summarised
as follows :
" f,11;3:ue information wherebv the effliciencv
*r***.n the vehicles are rented may be - .: : !- i r= :
-
r To provide an accurate basis for quotation and, :-
_-
--

=
i
r_ ^

fixingofrates.
" 3;3:fl'":11*l',#:l:?i'rfJ;,??x,ffi1,,*:";,- -.= i-
--,=
l -- r ^
*o0", time, ruer consumed is not -.-^. ^^

o To provide cost comparlsoru between own transport

and alternative e.g. hiring.
o To compare the cost of maintaining one group
t To cretermine what should be charged against of vehicres with another group. '-: Flace/ Pia:e
c To decide at whatprice the use ofvehicle can departments using the service. \€ Slarion Sia-u,s"-

o To ensure that cost ofmaintenance and repairsbe .huogua.

F.am Ta
3L
is not excessive.
Q Classification of Costs
Costs are ciassified into the foliowing
three head.s :
1' standing or Fixed charges'
These charges are incurred in
-in:ar.' of operating managerand;"p"il;;;. spite-of the kilometres run e€"
:::1r..9€nerai supervision, offrce "t..1irrr,rru.r."] ,,,"i".' *rri.re tax, licencl-d", g."ug"
exfens"., i"pr".iutt";?;i;h;;;
: ''nrhir- sararies of drivers, .onductor. on rime or fixed percenrage),
o. .i*rru", and interest orr'.rprtur. ,=-
2' Maintenance charge s' semi-uariable
expenses are included in this group
e.g. salary and
:.:;-.#1"_tarage staff, consumbles .tor"l tvres and t"b;;;-;";rs and paintings, renewar and
l:,-r
3' operating and Running charges. These charges
: :'n-ietres and includ'e, petrol,
oil, greasJ etc.,
uo,y tnore or ress in direct proportion
to O Cost Units Us€d in Ss
'' ::iated to time or distance of driver, lo.rjr.hr, attendant etc. iipayment
.wagel
-- "rt"ip-i
short, ar the variabre .rr"rsu.
**irt.io,rirt.k;c,;i;;;;;d depreciarion (on kms basis).
o?-;i;i"* ir;;;;;ir*it r.
' "'ehrcie is given in ""nar" "."
terms- ofhiteage totJ*., e".".dir;i;;;; sroup. Normaly rhe rife of
: =-':s of kiiometres run and
hence .ri*ia iJ i*".t"a ..
ic'ia,onis to be attocatJ on the
ii"* o? uu.i.," charge.
The classification of various
items of costs into the "r,
above three groups should not
=s : matler of rule' It depends basically on
the circumstance. ri""Jr, ca,sg.-For
be attempted
: a'"able to a driver by a private exampre,the
o*r"i
:=:ating or variable expenses' But ";- ;-;" work no poy oori*nourd be treated as an item of
wages
in C,crnposite l- -,s;
case ofu-ptoyiu. ;ftffi Transport corporation
l,11rl-."0
ol permanent basis, tr't.,*" liJ* or.ori.nl.ria r" i."#a as part of standing and :ir.
:.:--
,:: :: ,t:"-
or fixed
lndusby
-: ::re iransport company is rendering service
:= * ai:rta*red in addftion to the to the public, customer-wise details
of each trip is
abovJ;;;";. This is'n;;;;;;;;;;r." customers are b,red at
: j;.=.11,.,i:lffA,H:t#X,"Ti ;;-,i*Jl*i,,tu,,,.ry,-;;;;p'"it"i"pu"t,.,",,t should maintain
 A r'og Sheet is a record maintained for each vehicle for
the purpose of cost collection and cost
:ontrol' It is maintained by the driver of the vehicie on dalty
uaJi.. it .or.t.ins most of the details
:eqr.rireci for: transport costing e.g., details of journey
;";;il;;i;e, capacit;,-, dista'ce covered in
riometers, cost of petrol, dieietlurricants, accident"s,r;;iffi
.:g sheet provides information relating-to trips.maae a"rl"g urra-rrrio.airrg time, etc. The dail;7
;'er day,
ii"
ioad or passengers carried*during the day, p"t.-"i ;"d;il
iil, i.ilo*nt"rs run by the vehicle
:-"erage consumption per kilometer and houis for which consume6 during the day.
the vehicie remained idle during the da1.
=nd causes for the same. These detaiis not oniy help in ;;;"r"t-i;;g the operating cost but
aisc
'rabie. the management to avoid idleness of vehiciesip;"r;";;;;;of capacity and exercise orher
. -.irols. A speciiaen log sheet, is given
belor"r :
DAILY'LgG SHEET
, :tcle No.
Date
l:- ';er''s No. and Name
::,:ie No. Time Garage out
Time Garage in
*
=nce No.
=";'stration No.
THIP PARTICULARS
Tons or
Trip Placd Placd Packages Time
No, Station Station Kilometres Remarks
From To oa I cottxt* Aut I tn
I on Rotne

Supplies Time of workers Analysis of lost time

l:--t,
Driver............
Mechanic...... Traffic Delay...:......:.........:.:
Cleaner/........ Loading/Un1oa0ing.....,.........
Conductor Others........,.

O Cost Units Used in Seruice Costing

l:rere are large varieties of services and therefore. there are riifferent
cost units for diffcrent
::r--rc€S' The unit fbr which the-operating cost is to be.o*p,rt"a should be decided after
:-':iering ali the technical and other factor! affecting irr" cost. The cost unit may be of
; . :]-pes as foiiows : "p"r"^tfi
i) simple cost unit. A cost unit is said to be simpre cost unit; when it involves one
characteristics for example : Tbansport (per kilomei;;i C;;; (per item or per meal),
Water (per 1,000 litres).
ii I Co*no"'te Cost Unit. A cost unit is said to be the compcsite cost unit when it reflects
two or more characteristics or when two units u."" *"rg"d into one as given
below in the
table :

, 1,"..,,,i.J'rllgliBof Per passenger k.m. or per tonne k.m.

2.;..-Pu,Q*!i,,.,.;,1 Per Kilo-waft (kw) hour
g..'..Hoigliil,,.:. Per room day/or per rneal
 Ni3.4 -1

_ SI"VC
! urrrposlEe untts may be computed SERWCE {OR Oof-;RAT:l||G; CC{
in two ways.
' filii#;:Y:l1iJ"Ti,"ff'fit1,[i]ffif#i;*T:lij:","".,r3:.u..,
u--'o
are the sum tota, or Rate to be Ckaryx
carried. ursLances by respective
,zzl commerciar (sirnnlo
load quantities _:s: ::- ::--:.- : -: - -: ._
6t,^D^_^\ ,' _*""*"
,,,1tip1yi-"-#fit:ffi:??3:,rll*:A$:r.r"*r,:#1, tonnes-kms, are arrived
ar by
E)(AfinpLE ,
i .lrr€: were unjoaded atlr**:tarred ils journey from Dethi to
Jaipui";;il'?#il:llljlT Air wfth a load or 12 tcnnes. S
_ ad of 5 r";;;;rT"1r"l:,0r" and a furrher road ;?r;;il.;trusnangarh.
r':lll"^1.tt:.r
Ar Dudu, a fresh
It was fully unloaded at
Ajmer.
.- :.*?il i:H?li?i:Xl1ev it started from
with 8 to11es,f1o.m Ajmer which was ruiry unroaded
'-----*q!u qu
Distances *"* r"r;:X;,:"'aken Jaipur
at Derhi. *hi'h;il^;;l;;;;; ar Jaipur.

kms'' Dudu 70 kms; Kishangarh

*.nt'#'"nr200 115 kms, Ajmer x40 kms (via
Dudu and
Calcuiate absolute tonne _ kms.

ron ne _ ms.
ffifr ffi li::r.J"tbsorute K

Delhito Jaipur l
= -, _ _
12 x 2oo
.triprr to o,lJ, e x 7o
,
-
orru to x]Jl]roarn 630 \OTE:4rouldrnnt=i,:
rGh;;;ililil; 14 x45
12x25 630 - .-. rl-:.<tnPrrA:. --.--.
R.t;;-d;;;',''' 300
= S of-trra... .,
Ajmer to Jaipur - ,

8 x 140 rrar-e1ling,
"raipur to Deini 11 x2OO
l,tzU

Tonne kms.
2,?OCI
=-(t,2i,J._. _ i_ +
7.280
Let us take c -. :..: -
-:-:-.rng goods betn.+=:_ :- _ ..=,
:.,,:ff ffi ffi G*?;.^"Ht'5TfxJ"xr,":lx1,:l'fl Tiffi "flm'"j,T-tlll,::i*unroads4 Io. of Vehicles
Xfif,::,"AS'-X*:**;tti"" R rr;;;;ffi;'Jrl,fil"{*:',"'-l';Hi%:
- .5 !lTi?:
:-nercial tonne-km., a,u ou r<ms. respectively. Compute .AbsoiuiJ ?i:T Capacitl, (in tonne; *a.: .
[r""][i"., ,"a Each r.ehicle hii=: I :::. .
SOLUTIQN,: .t=-.ehicles are la_rd _: ::-- --. _,1,
_

Acsolute Tonne Kms. = Distance x Load - --pan.\'operates rol _.. ::.- : I

rcmmerciar ronne xmJ-
- ,*-rh qill be calculat.: :- _. -_:l
+ 360 + 640 14ss
='3ti.[l,|ltiXh?,..^,::,.;fj;iT = Tonnes kms. carr.=i =
-- .
=
Ir _:.

E(AMPLE g A transport .o*o..rv

loo+60+80 l"['#+]=,ro xB=1440 I = - .:--:-

=-.--
i:'*ifi r*l*t-*::s,6;FEi#rui,*":i#=,:ffi"i;ii"::T"y"H1flHf;yf ..*:il
Q Steps fnvolvd in Ssvirr
: ,.'=it[:lili?rH,".,:]i?i#:":rii+TxiT.Tffi m:i6:*Tfl
:'-': ' .'.n i er'".. prrnfJ r;ba'r;ii#["[fff rate per tonne shoutd th;;;;;;;;l'nl'j*"
",j?#iffi
,, ,, The procedure of asc_-._--:-=- :-
E.I.rr}c}Iir - : rhe preparation .... ,
of u.l- :.-
- -
Commercial Tonne_Kms.
1. Selection of Cost Lnirr.
= Load x Distance x No. of x Capacity utilized :rut. Cost unit in transpo:: :,:. -=__ l
__-

= 4 x 100 x 25 + Z, 100 ,_2i,jj;,65i

-days
s,000 _ 1s,ooo ronne_kms. 2" Computation of Cosrs,
l:=' -cornmerciattonne
:e -_ :
km. = :€# = T 1.80
:,tst sheet under three hea*.
r.ianing or variable charges
. S--

3. Ascertainment of Cosrs

: -
-
--
=
:l
=
fG

(
.. ost per commercial tonne km.
1.80
Add : protit (1 /4 of cost or 1/5 oI freightage)
0.45

z'23
... For 100 kms. ={ 2.25 x 100 kms. :
In operating *!t1"s two types of services are generally
compounded together ,o
per unit' This is called composite
lr
unit. In transport costing u
passenger kilometre or tonne kilometer is
"ffi.o.,mile
Eolspqcitelrnit such as passenger
oiten selectJd. sircir units take into account both the
number of passengers or weight of goods carried
and distance run.
rour and in hospitar per patient p", duy or per patient operation In electricity supply per kilowatt
are other exampres.
Suppose : No' of Buses 10 ; Days operated in
a rnonth 2b : Round trips made by each bus 4
20 kms long ro"".ia.i; cupu.ity oiri;;A :

'J;:i:::r;l"oute , ffi;i^;"".J:ff;?J;;ilri*b6r;
Thentotal kms. couered will be
= No. of buses x No. of days x No. of trips x Distance of one trip
= 10 x 25 x 4 x 2x 20 kms. = 40,000 kms.
NOTE : 4 round trips = 4 x 2
=g trips
- -:tl Passenger Kilometres Couered,
= No' of buses x No' of days x No. of trips x Distance per trip x capacity x Normal passenger
travelling.

= 10 x25 x4x2x20kms. x40passenge.. 14,40,000passengerkms.

Let us take
"ffi=
ano^th-er example-f.rnno." a trarrsport-company maintains fleet
-::r\-1ng goods between two plaies. The capacity of of vehicles for
tirl ,
1o. of Vehicles 10 ""fri.f"[i" B ZO
Capacity (in tonnes each) 2 A b
Each vehicle makes-5 trips a day covering distance
of L0 kms. in each trip. on average l07o of
:--'= are laid up.l9r repairs aaitv aad9i7"i;;;;;rry;ieicrr
"'ehicles vehicle is acrually used. If the
total to""" r.ilo_"tres carried uy tr,eio*pany per
:.=:f,H,?ffi.lj;fit]r"Slfi;;lo"rn,the
Tonnes kms' carried = Total capacity (1.e. Number
of vehicles used x tonnes carried) x average
x No. of trips x days of month x zo of vehicles
\ms' runs on an average x
Capacity used.

=(10x 2+S x6+20x5)x 90 80

10"5r25* t00*100=1,35,000.

The procedure ofascertaining cost in transport undertaking

is to prepare operating cost sheet
: ::le preparation ofwhich the following steps are undertaken
:

1' selection of cost units. A basic probiem in

transport costing is the selection of a suitable
' . - Cost unit in transport costing
may be simple cost unif or composite cost unit.
2' computation of costs. In transport costing cost
are classified and computed in a operating
-: sheet under three heads l.e', standing or fixed charges,
--
Maintenance charges, operating and
or variable charges.
-*--ng
3, Ascertainment of Costs.

=
 ryi3.6 -
O escerAinment of Costs =ffi
rrrrefl
-:ral flxed, maintt Lorry-I-l7 reveal 'he 6ILi
;;:::T"Ti#xlT.::.:;",:'TTl,-1.':Ti:::::Tli:"#1":)ffif il;*:;:::.Iffi :
Days maintained
5 ; Total tonnes carrieil
fl); It
il
:**y"11*:tn#;1"Jffi ::'i**ifi iJ:,?:",?f.mr;r1,,;_,mr*:,;; empty).
You ascertainthefrlh
ABC Transport Company 1. Operatilg co€*s fu
COST SHEET
Ltd. t 600, WagestD-
for the month of.._.........2O19 2. Maintenanedf
VehiclelVo. * 3. Fixed costs fuftr
Expenses etc. T 200, Intenetf
I Capacity (in tonnes)
4. Capital cost: Cdd
- Total
Prepare acost sheetd
{; Fixed Costs: (i) cost per day rn"air*i
Garage Rent hour; (u) cost percommil
insurance Provide coluonsful*r
Motor Vehicle Tax
lnterest on Capital
ffi tTorking Notes:
(t) ComnrercklEr:
Total
3r MaintenanceCosfs:
Tyres iind Tubes
Repairs
Paintings
Overhaulings
,:nicle.

Total
C. OperatingCosls;
Petrol
a Wages and rLj,"t,^ -_-- :_-;.
Engine Oit
Lubricating Oil, Grease Petol
etc_
Wages of Operators ot
Depreciation Grease
Wages to-
Total Driver
GrandTotat(A+B+C) Assistant
(tiometres run
Load carried (tonnes) iotal
Days on road
": utilisation
Tonne kms run
Cost per tonne km.
Fixed
Maintenance @| Pertormarwtffi
Oprating r) Bays maintained
,2)Days operated
Total r3)Days idle
1t Totai hours opered
5) Total kms. colr€red
6r Total trip
71 Total comnrerci:{ freh

:
--

--
=
 _ tYtS- I

, _.:1t+HF,I.EAIHQ[*,I.
l,orry-I-I'/
Deluxe Transport Ltd. operates a fleet of lorries. The
reveal the following informationlor June, 2tiJ.g : records fbr
Days maintained B0 ; Totar kms. covered 2,b00 Days
;_ operated 25 ; Tota] trips E0 ; Days irrie
:;frij" ;
tonnes carried 200 Totai hours operated 300 (4 to;;;
r"ra-p", *ii"rli,r.i.ior.rr"y
You ascertain the foilowing :

1' operating costs for the month : Petrol r 700. oil {' vev'
800, Grease
L T i00, Wages to driver
{ 600, Wages to assistant { 400.
2. ulai.ntenance costs for the month : Repairs t 800, overhaul
t b00, Ty.es { s00.
3' Fixed costs for the month based on estimatesfor the year
: Insurance I 250, Licence tax
etc. { 200, Interest { 400, other overhead r 3b0, Garage
ciiarges T 200.
1' Capital cost : Cost ofacquisition T 30,000. Residuai value at the end of4 years iife t
Prepare a cost sheet and performance statement showing 6,000.
:
(l) cost per day maintained ; (ll) cost per day
operatedl (;;;) co.t per kilometr e ; {.iu) cost per
r:jix' ' (u) cost per cornmercial tonne-km.
Provide columns for last month's figures in the perfbrmance
statement.
so
Working Notes :
(r) Comrnercial tonne kilornetres per month

= 50 kms. x 4 tonnes x 25 days = 5,000 tonne kms.

(iD Depreciation per month = r
=15#*= 500

VEFIICLE COST SHEET AND PERFORMANCE STATEMENT

,
=nlcle. Month : June, 2018

MONTHLY CHARGES
= lA/ages and running cost (b) Maintenance charges (c) Fixed charges (proportion)
(
M 700 Repairs 300
I
lnsurance
(
d 300 Overhaul 500 Depreciation
250
Bease 500
100 Tyres 300 Licence tax etc.
tr.bges to- 200
lnterest 400
&iver 600 Others
Assistant 350
400 Garage charges 200
--.^l
- idl 2,100 1,100 't,900

(B) PERFORMANCE STATEMENT

Average of
Last Year
(a) Performance record
't Days maintained 30
2t Days operated 25
3 Days idle
5
I Total hours operated 300
5 Total kms. covered 2,500
5r Total trips
50
r Total commercial tonne-km. 5,000
 SERWCE {OR OPERAnNG,| CA
lb) futefficiency
T
ToElrnonthly charges (a + b +
per day maintained (B) + (1)
c) 5,100 ILLUST*ATG{ B .-
12 9* per day operared (ai + (zi '
170 5 buses. The cost r: ;:-:. - _. .-
.(:? P",
(ii| 204 an average 80 per c:r . r :: -: - -i-
Cost per km. (8) + (s) passengers. The b:.=i = . :--
2.O4
(rD Cost per hour (8) + ( vear 2018-19 are i-r-.-i:- . ..-
) 17.00
(vi Cost per commercial tonne_km. (B) + (7 Garage rent = {. , :...-
1.O2 -
of 5 drivers 7 3.00{ .=:---
ftryred by........................ :alarv{7.500perr.-:: . ._
Checked by
ILLUSTFt{rlpN 2 work out per month ; Cost of i=.= _-- - -
.-*. ior the year Z01g-1g for a fleet of inpu.I"rrg""
appropriate cost sheet form the unit
cost per passenger lepreciation 15c. olu..: :: - ,
buses run by a Transport Company
. iirng
- --,- figures extracted from its books': from the Youarerequired : ._._ ._

=-1 - - :
'.1e company want-r t-
'5 passenger busses .?..t1.rg 4 80,000,
T 1,20,000, a 4b,000, t bb,000 and g0,000
:-=arlr- depreciation of vehiclel- 207, { respectively.
: ' j : of depreciation. wages of 10 drivers
of'the'cost. Annuai."pui", *-uirrtenance and spare parts_ SOLUTION
o? roo
:=r month. Yearlv rate of interest @ 4vo on:ilil.l -;;;il; ;;ges of 20 creaners @ { b0 each
"u"rr_p";
d"rrt oi.i*'g.".g". @ r b0 each per month.
l'=ecior's fees @ t 400 per month, office
establishment @ il;fid;;, month, licence and taxes @
= - -)r-lrl every six months, realisation
ry.ut" orota tyres and il;6 a 8,200 every six months, 900
: 1s:engers were carried over 1,600 kms.
during the year.
SOLUTION
cost of buses = t-50,000 + { 1,20,000
+r45,000 + r 55,000 + T g0,000 { 3,50,000. A) Standing (or Fxed) CttqEl
Yearly depreciation (ZO% of Cost) =
= f ZO,OOO. Garage Rent (T 4,0([ r t2l
Yearly repairs (gO"k of depreciation)
= t SO,OOO. Salary of Drivers fi 3,fiX) r 5
OPERATING COST SHEET Wages of Conductors f{ 12U
_ forthe year 2018-19 Manager's Salary (T 7.5fi) r 1
(A tunding Charges : Road Tax, Permit Fee, €t
F
Wages of drivers (10 x T 100 x 12) T Office Expe.nses f{ 2.96 - 12

tnsurance lr o,so,om g
12,OOO I
Wages of cleaners (20 x { 50 x 12)
12,000 \ '--'--- ' l(I,
fnterest (4o/o on Capital) 24,000 ts) Haintenance (or Sen*Vril
Directors'fees (T 4OO x 12) 14,000 Repairs and Maintenarne flf 2
Office establishment (T 1,000 x 12) 4,800
't2,000
Ucence and taxes (T 1,000 x 2) C) Running (or Vari*) Cfq
Garage rent (6 x T 50 x 12) 2,000 I
3,600 Depreciation (r o,So,m - fi
s) Maintenance Charges:
iepairs. spare pads etc.
Total 60,400 oi"."r (reT@-.=l
iess ; Sale proceeds from old tyres and 56,000
tubes
(-6,400) TotalCost(A+B+G)
Add :$!per cent prffiantrl
49,600
! Operating Charges :
Bus fare to be charged tmcr
I sc"eciation Wor*ing note:
70,000
ja Grandtotal(A+B+e (r) Total Kilometres to be rr
1,80,000 Kilometres.
Passenger kms. carried (900 x 1,600)
14,40,OO0
(tr) Total passenger Kihr*
Cost per passenger km. - 1,g0,000
+ 14,40,000
0.125
ffir
between Delhi to Jaipur ailI be*

=
::
=
-
-
 been given a
--.r"',1:,",:i#ityjjf,*':Xf"#:l'::il;:gfkrn*;
=:- :rierage 80 per
vqE \ o,ou,uuu. l'he. buses wltt
;::;,#E;?:',".:"#1":I:ii"iAqdr,il?f"rtl',"'has
rD
t":"a,T{3it"fi:'#*l3'Jfi}ft""1:^l.gf iromerrerongroutetorun
-v :uu[ierre
mit e 5 ; ,ngf,l:p"o" long
rong route
roure to
ro run
::sinsers
.:-r:r-r*€rS.
:
"uri--
rhe ur Lnerr .;1r:,lJ::;X.1'r'r:'if:
r__"vvrrE,ErD
buses *ff'*"^': 'J;il#
The buses seltr"ls,canagity. tfru *"i*s
s-ig u; il:; #ilJl" on an averas:e 25 days i" , *""ilr.'jrhe #o::f
::?fj:T;;;;;;;'.;";,*
""
, r. ,r
other I*-f.hf{#::i;":f:r.r;?.TIj
"_uur i'uur.rrrauon i";ih;
nformation tor ,
::rage rent { 4,000 Der mnnfh A_----r the
- :n_\ grs -. S,OOO
:n_\-ers v'r r,unrn ; Annual repaj
^.,f..lonth. repairs and maintenance
8,000 t
:. i= ;.J00
: :-. ,.500 per "r.t ilSi:":th
""#
*^.*l il w;**'#;irs
lo"tr, ;, wager-or b conductors - , ,.,.,tj 1?.500 each,bus
each bus : Sararies
Sataries
ner month p* *'iiri; "oi;#;:,'.
?,r._u9o
:#,s"r",;hliillhiTlFrtlll:#".:1-,s6r
-- ,'nth : cost ordiese, .L"flf-l'Il#;'ir:li# :t::+"r:3b"r'h11'333,?T1
,.,,=;::[xy.,r:****i,,,'i*,tidl*1fu
;'='*tt"# :i:L',l;; Annuai
-- *'"lftit[H:'; per li
r: tin?Insurance ;;3ffi:""mrc1317
'
:":'i::
.r_^,rr
o-^ -^^_-=-
r\cr'o
I'3:,#3?jji:"*"#i"'?:?"}::ff
:r , , Annual I;';;;*T;?:
c-osL;
J.i:run
of cist. BVo

: - ' =:::::::::i11"
- ""*,ate
ripanv wants to earn
the 0". *""1"ie charged from
l each passenser
passenger per kitom
profit , rr* *, .""ffi;,d;.i;#;:'. kilometre, if
v' !a^,rBs.
sq_t
S*_UTI.$,,.,
floN, " (Eoral receipts from passengers).

OPEEATING COST
SHEET
for the year 201 g-l
9
Km = 1,15,2g,
Cost per
I 'assenger
Standing (or Fixed)
Charges- ': Km ({)
:a
==::1S" Iglr rr 4,000 x 12\
ary of Drivers (f S,OOOI5
x.l2) 48,000
,,','ases of conducior. ii j,ido o v rz) ,.i,",r, 1,80,000
sarary 1i},ioo-,",2i
;'^T:+^lb permit 72,000
lSao lax, Fee, etc. (_ 5,996 , a1 90,000
_"r ce Expenses
1r e,oool i'2i'""" ^ ", 20,000
isurance 24,000
(r o,so,ooo , .,*- ,. u)
3 Ma intenance (or Semi_Variab,",
Bepairs and Maintenance
.n"lrtji, lo,
(- 22,500, Ui--
1,12,500 0.010
Total (B)
3, Running (or Variabre) .
charges 0.010
I
)epreciation o,so,ooo,(r #, u ) o,rr,uro
D esel /3,60,000 km.
r / 0.042
r SS
=_, / 19,80,000 0.172
z+,az,soo 0.214
31,'t 1,500 o.270
15,55,750 0.135
46,67,250 0.405
(t) Total Kilometres
to be during the year 2O1g_19
Kilometres. = 40 x2 x3 x 25 x12x5 _ 3,60,000

= 3,6e,ee0 x 40 x
,l, ::,:::l::: l"'"tres ffi =,,, u,r0,000 passenser km
::ween Derhi to
l{' Mohit Transport
"uipi" "iir#i# r'.'ffi3?1t".#f,Xlt
month. *,u ai.t"""" n ril h?nlbus,-which
i,iil3r.::*lyH{' runs
ti iX#I,X", Jlff

l
 'lvl3'1&' ' '.-_, sERyICE{OROpERATtNO}COSflrrrG
=

Variable Expenses:
Dieselff x +s

Cost of Bus
Particulars Amaunt (7) Lubricant oir
le:oo 'fi
< 15,00,000 Flepairs & Maintenarce
Depreciation 15Vo per annum
Salary of Driver T 9,000 per month
Gross Taking
Salary of Conductor - 8,000 per month Profit on Nettakings$
Salary of Part time Accountant t 4,500 per month Total Net Takings
fnsurance T 10,800 per quarter Add : Net Takings
Diesel T 49 per litre
Distance covered per litre TotalTakings
5 kms.
Token Ta.x T 8,1"00 per quarter
Lubricant oil T 300 per 100 kms. Rate per Passerpr
Repairs and Maintenance { 8,000 per month
Permit Fee T 13,050 per quarter Charges {or Jairr p
Normal capacity 50 persons Charges for Agra p
The bus is general11' occupied g0% o{ihe capacity when it goes to Jaipur and.807o rvhen it goes
Charges for l-ocd d
to Agra. It is aiways full when it runs rrithin the city. Passenger tax rs 2E% of the fare. EEl.fsil
Caiculate the rate the company should charge a passenger when it wants to earn a profrt of load city A'to cif B.
l
33y'r on its revenue. reduction in these rru
2019 the truck rnadp l
s-
VYorking Notes :
ia +Ip I
u_nloaded twice
times but once caugh
(1) Calculation of Passenger kms. carried full load out dr
Passenger kms. The distance firmr
Jaipur Trip 10x540x50x90% fixed costs and mairrb
2,43,000 spent during Jaauar-r, I
Agra Trip 10 x 360 x50 x 80%
LocalCity
1,44,00A You are reguired t
4x65x50 13,000 2019.
Total Passenger kms. 4,00,000 ffi
(21 Total distance covered in the Month :

Passenger kms.
Fixed Cost F 6O,U
Jaipur 1O x27O x2 5,400 Maintenance Ctrngt
Agra 10 x 180 x2 3,600 Running Charges
Local 4x65 260 TcH(
Total 9,260
: Cost per absc{ute tr
OPERATING COST SHEET
kms:4,00,000
Fixed Expenses: ( Net Revenue Reci
Salary of Driver 9,000
'12 trucks x 6t
Salary ol Conductor 8,000
5 trucks x 8Er
6 trucks x 6tsu
Salary of Accountant 4,500 1 truck x 6ffi
Depreciation (15,00,000 x 15o/o x1112) 18,750
lnsurance (10,800/3) 3,600 Less: Frnes PC
Token Tax (8,'100/3) 2,700 I{etk
Permit Fees (13,050/3) 4,350
Less : TdQ
Total Fixed Expenses 50,900 ffi