Preparation of Operation Cost Sheet, Transport Sector (Computation of Per Passenger Kilometer and Per Ton Kilometer)
by An Operating Cost Sheet for the transport sector is prepared to determine the total cost of operating vehicles and the cost per unit of transportation. The two important cost units are Passenger Kilometre for passenger transport and Tonne Kilometre for goods transport.
Important Cost Units
| Cost Unit | Meaning | Formula |
|---|---|---|
| Passenger Kilometre | Cost of carrying one passenger for one kilometre | Number of Passengers × Kilometres Travelled |
| Tonne Kilometre | Cost of carrying one tonne of goods for one kilometre | Tonnes Carried × Kilometres Travelled |
Classification of Transport Costs
| Type of Cost | Examples |
|---|---|
| Standing Charges | Driver salary, conductor salary, insurance, licence fees, garage rent, depreciation |
| Maintenance Charges | Repairs, servicing, spare parts, maintenance expenses |
| Operating Charges | Fuel, lubricants, tyres, toll charges and other running expenses |
Operating Cost Sheet Format:
| Particulars | Amount (₹) |
|---|---|
| Standing Charges | |
| Driver and Conductor Wages | xxx |
| Insurance | xxx |
| Licence and Registration | xxx |
| Garage Rent | xxx |
| Depreciation | xxx |
| Other Standing Expenses | xxx |
| Total Standing Charges | xxx |
| Maintenance Charges | |
| Repairs | xxx |
| Servicing | xxx |
| Spare Parts | xxx |
| Total Maintenance Charges | xxx |
| Operating Charges | |
| Fuel | xxx |
| Lubricants | xxx |
| Tyres | xxx |
| Toll and Route Expenses | xxx |
| Other Running Expenses | xxx |
| Total Operating Charges | xxx |
| Total Operating Cost | xxx |
| Add: Profit | xxx |
| Total Revenue | xxx |
Computation of Passenger Kilometre
Passenger Kilometre = Number of Passengers × Distance Travelled
Example
A bus carries 40 passengers for 200 kilometres.
Passenger Kilometres = 40 × 200 = 8,000 passenger kilometres
If total operating cost is ₹40,000:
Cost per Passenger Kilometre = ₹40,000 ÷ 8,000
= ₹5 per passenger kilometre
Computation of Tonne Kilometre
Tonne Kilometre = Tonnes of Goods Carried × Distance Travelled
Example
A truck carries 10 tonnes of goods for 300 kilometres.
Tonne Kilometres = 10 × 300 = 3,000 tonne kilometres
If total operating cost is ₹24,000:
Cost per Tonne Kilometre = ₹24,000 ÷ 3,000
= ₹8 per tonne kilometre
Important Journal Entries:
Operating cost sheets are mainly a cost accounting statement, so a journal entry is not required for every calculation. However, the underlying expenses may be recorded as follows:
| Particulars | Journal Entry |
|---|---|
| Fuel purchased | Fuel/Stores A/c Dr. To Cash/Bank/Creditors A/c |
| Fuel consumed | Transport Operating Cost A/c Dr. To Fuel/Stores A/c |
| Wages paid | Transport Operating Cost A/c Dr. To Wages A/c |
| Repairs incurred | Transport Operating Cost A/c Dr. To Cash/Bank/Creditors A/c |
| Insurance expense | Transport Operating Cost A/c Dr. To Bank/Creditors A/c |
| Depreciation on vehicle | Transport Operating Cost A/c Dr. To Accumulated Depreciation A/c |
| Toll charges | Transport Operating Cost A/c Dr. To Cash/Bank A/c |
| Transport revenue received | Cash/Bank A/c Dr. To Transport Revenue A/c |
| Transport service provided on credit | Transport Receivables A/c Dr. To Transport Revenue A/c |
Key Formulas
Total Operating Cost = Standing Charges + Maintenance Charges + Operating Charges
Cost per Passenger Kilometre = Total Operating Cost ÷ Total Passenger Kilometres
Cost per Tonne Kilometre = Total Operating Cost ÷ Total Tonne Kilometres
Passenger Kilometres = Passengers × Kilometres
Tonne Kilometres = Tonnes Carried × Kilometres