ABC Transport company operates a fleet of buses. The following details are available for a month: | Particulars | Amount (Rs.) | | :------------------------------ | :----------- | | Cost of Bus | 10,00,000 | | Life of Bus | 10 yrs. | | Insurance per year | 24,000 | | Garage Rent per month | 5,000 | | Drivers salary per month | 15,000 | | Conductor's salary per month | 10,000 | | Annual Tax | 12,000 | | Diesel cost per km. | 12 | | Lubricant cost per/km | 2 | | Repairs and maintenance per km | 3 | | Tyre cost per km. | 1.50 | | Total Distance Covered (km) | 5,000 | | Passengers carried (Total) | 100 | | Passengers capacity used | 60% | Calculate: a) Total Operating cost. b) Cost per passenger km.
Answer (1)
To calculate the total operating cost and cost per passenger km, we'll break down the calculations step-by-step.
a) Total Operating Cost
First, we need to determine all the costs associated with operating the bus for one month.
Depreciation of the Bus :
Cost of Bus = Rs. 10,00,000
Life of Bus = 10 years
Monthly Depreciation = 10 × 12 10 , 00 , 000 = 8 , 333.33 Rs.
Insurance :
Annual Insurance = Rs. 24,000
Monthly Insurance = 12 24 , 000 = 2 , 000 Rs.
Garage Rent :
Monthly Garage Rent = Rs. 5,000
Driver's Salary :
Monthly Driver's Salary = Rs. 15,000
Conductor's Salary :
Monthly Conductor's Salary = Rs. 10,000
Annual Tax :
Annual Tax = Rs. 12,000
Monthly Tax = 12 12 , 000 = 1 , 000 Rs.
Variable Costs (based on distance covered) :
Total Distance Covered = 5,000 km
Diesel Cost = 12 × 5 , 000 = 60 , 000 Rs.
Lubricant Cost = 2 × 5 , 000 = 10 , 000 Rs.
Repairs and Maintenance = 3 × 5 , 000 = 15 , 000 Rs.
Tyre Cost = 1.5 × 5 , 000 = 7 , 500 Rs.
Total Monthly Operating Cost = Fixed Costs + Variable Costs
Fixed Costs = Depreciation + Insurance + Garage Rent + Driver's Salary + Conductor's Salary + Tax
= Rs. 8,333.33 + 2,000 + 5,000 + 15,000 + 10,000 + 1,000
= Rs. 41,333.33
Variable Costs = Diesel Cost + Lubricant Cost + Repairs and Maintenance + Tyre Cost
= Rs. 60,000 + 10,000 + 15,000 + 7,500
= Rs. 92,500
Therefore, Total Operating Cost = Rs. 41,333.33 + Rs. 92,500 = Rs. 1,33,833.33
b) Cost Per Passenger Km
To find the cost per passenger km, we must first determine the total passenger kilometers.
Total Distance Covered = 5,000 km
Passengers Capacity Used = 60%
Total Passengers Carried = 100
Total Passenger Kilometers = Total Distance Covered × Passengers Carried × Passengers Capacity Used
= 5 , 000 × 100 × 0.60 = 3 , 00 , 000 Passenger Kilometers
Cost Per Passenger Km = Total Passenger Kilometers Total Operating Cost
= 3 , 00 , 000 1 , 33 , 833.33 ≈ 0.445 Rs.
Therefore, the total operating cost for the month is Rs. 1,33,833.33, and the cost per passenger km is approximately Rs. 0.445.
