Chiku Transport Service is a Delhi based national goods transport service provider, owning four trucks for this purpose. The cost of running and…

CA Intermediate · Cost and Management Accounting · MTP · May 2024
Chiku Transport Service is a Delhi based national goods transport service provider, owning four trucks for this purpose. The cost of running and maintaining these trucks are as follows: Particulars Amount Diesel cost 19.20 per km. Engine oil 4,200 for every 13,000 km. Repair and maintenance 36,000 for every 10,000 km. Driver's salary 24,000 per truck per month Cleaner's salary 15,000 per truck per month Supervision and other general expenses 14,000 per month Cost of loading of goods 180 per Metric Ton (MT) All four trucks were purchased for 30 lakhs with an estimated life of 7,20,000 km each. During the next month, it is expecting 6 bookings, the details are as follows: Sl. No. Journey Distance in km Weight-Up (in MT) Weight-Down (in MT) 1. Delhi to Kochi 2,700 14 6 2. Delhi to Guwahati 1,890 12 0 3. Delhi to Vijayawada 1,840 15 0 4. Delhi to Varanasi 815 10 0 5. Delhi to Asansol 1,280 12 4 6. Delhi to Chennai 2,185 10 8 Total 10,710 73 18 Required (i) Calculate the total absolute Ton-km for the vehicles. (ii) Calculate the cost per ton-km.

Suggested Answer and Working Notes:

(i) Calculation of Absolute Ton-km for the next month: Journey Distance in km (a) Weight-Up (in MT) (b) Ton-km (c)=(a)×(b) Weight-Down (in MT) (d) Ton-km (e)=(a)×(d) Total (c)+(e) Delhi to Kochi 2,700 14 37,800 6 16,200 54,000 Delhi to Guwahati 1,890 12 22,680 0 0 22,680 Delhi to Vijayawada 1,840 15 27,600 0 0 27,600 Delhi to Varanasi 815 10 8,150 0 0 8,150 Delhi to Asansol 1,280 12 15,360 4 5,120 20,480 Delhi to Chennai 2,185 10 21,850 8 17,480 39,330 Total 10,710 73 1,33,440 18 38,800 1,72,240 Total Ton-Km = 1,72,240 ton-km (ii) Calculation of cost per ton-km: Particulars Amount (₹) Amount (₹) A. Running cost: - Diesel Cost {19.20 × (10,710 × 2)} 4,11,264.00 - Engine oil cost {4,200 / 13,000 km × 21,420 km} 6,920.31 - Cost of loading of goods {180 × (73+18)} 16,380.00 - Depreciation {(₹ 30,00,000 / 7,20,000 km × 21,420 km) × 4} 3,57,000.00 7,91,564.31 B. Repairs & Maintenance Cost {(₹ 36,000 / 10,000 km) × 21,420 km} 77,112.00 C. Standing Charges - Drivers' salary (₹ 24,000 × 4 trucks) 96,000.00 - Cleaners' salary (₹ 15,000 × 4 trucks) 60,000.00 - Supervision and other general exp. 14,000.00 1,70,000.00 Total Cost (A + B + C) 10,38,676.31 Total ton-km 1,72,240 Cost per ton-km 6.03

Topics: Service Costing

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