by In transport service costing, problems generally require calculation of total operating cost, total kilometres, passenger kilometres or tonne kilometres, and cost per unit. The following are important exam oriented problems.
Problem 1: Passenger Transport
A bus operates for 25 days in a month and covers 200 km per day. The average number of passengers carried is 40. The monthly expenses are:
| Particulars | Amount ₹ |
|---|---|
| Driver and Conductor Salaries | 40,000 |
| Fuel and Lubricants | 55,000 |
| Repairs and Maintenance | 15,000 |
| Insurance | 5,000 |
| Depreciation | 10,000 |
| Other Expenses | 5,000 |
Required: Prepare the Operating Cost Statement and calculate cost per passenger kilometre.
Solution:
Total operating cost:
₹40,000 + ₹55,000 + ₹15,000 + ₹5,000 + ₹10,000 + ₹5,000
= ₹1,30,000
Total kilometres:
25 × 200 = 5,000 km
Passenger kilometres:
5,000 × 40 = 2,00,000 passenger km
Cost per passenger kilometre:
₹1,30,000 ÷ 2,00,000
= ₹0.65
Answer: Cost per passenger kilometre = ₹0.65
Problem 2: Transport with Different Passenger Loads
A bus operates 30 days during a month and covers 150 km per day. It carries 50 passengers on average. The following expenses are incurred:
| Particulars | Amount ₹ |
|---|---|
| Salaries | 45,000 |
| Fuel | 50,000 |
| Repairs | 12,000 |
| Insurance | 6,000 |
| Depreciation | 8,000 |
| Administration | 9,000 |
Required: Calculate:
- Total operating cost
- Total kilometres
- Passenger kilometres
- Cost per passenger kilometre
Solution:
Total operating cost:
₹45,000 + ₹50,000 + ₹12,000 + ₹6,000 + ₹8,000 + ₹9,000
= ₹1,30,000
Total kilometres:
30 × 150 = 4,500 km
Passenger kilometres:
4,500 × 50 = 2,25,000 passenger km
Cost per passenger kilometre:
₹1,30,000 ÷ 2,25,000
= ₹0.58 approximately
Answer: Cost per passenger kilometre = ₹0.58
Problem 3: Goods Transport
A truck carries goods between two cities. During a month, it travels 6,000 km and carries an average load of 5 tonnes. The following expenses are incurred:
| Particulars | Amount ₹ |
|---|---|
| Driver and Cleaner Wages | 35,000 |
| Diesel | 60,000 |
| Repairs and Maintenance | 15,000 |
| Insurance | 5,000 |
| Depreciation | 10,000 |
| Other Expenses | 5,000 |
Required: Calculate the total operating cost and cost per tonne kilometre.
Solution:
Total operating cost:
₹35,000 + ₹60,000 + ₹15,000 + ₹5,000 + ₹10,000 + ₹5,000
= ₹1,30,000
Tonne kilometres:
6,000 × 5
= 30,000 tonne km
Cost per tonne kilometre:
₹1,30,000 ÷ 30,000
= ₹4.33
Answer: Cost per tonne kilometre = ₹4.33
Problem 4: Transport Service with Fixed and Variable Costs
A transport company operates 5 buses for 25 days in a month. Each bus travels 180 km per day and carries an average of 45 passengers. The monthly expenses are:
| Particulars | Amount ₹ |
|---|---|
| Salaries | 1,00,000 |
| Fuel | 1,20,000 |
| Repairs | 30,000 |
| Insurance | 20,000 |
| Depreciation | 25,000 |
| Administration | 15,000 |
Required: Prepare the Operating Cost Statement and calculate cost per passenger kilometre.
Solution:
Total operating cost:
₹1,00,000 + ₹1,20,000 + ₹30,000 + ₹20,000 + ₹25,000 + ₹15,000
= ₹3,10,000
Total kilometres:
5 × 25 × 180
= 22,500 km
Passenger kilometres:
22,500 × 45
= 10,12,500 passenger km
Cost per passenger kilometre:
₹3,10,000 ÷ 10,12,500
= ₹0.31 approximately
Answer: Cost per passenger kilometre = ₹0.31
Important Formulae for Transport Costing
| Particular | Formula |
|---|---|
| Total Operating Cost | Fixed Cost + Variable Cost + Semi Variable Cost |
| Total Kilometres | Number of Vehicles × Days × Km per Day |
| Passenger Kilometres | Total Km × Average Passengers |
| Tonne Kilometres | Total Km × Average Load in Tonnes |
| Cost per Passenger Km | Total Cost ÷ Passenger Km |
| Cost per Tonne Km | Total Cost ÷ Tonne Km |
| Cost per Vehicle Km | Total Cost ÷ Total Vehicle Km |
These are the common types of problems asked in examinations on preparation of an Operating Cost Statement for transport services.
