A reputed engineering college in Pune has 20 sections with 60 students per section. The college plans a one day pleasure trip around the city for…

CA Intermediate · Cost and Management Accounting · PYQS · May 2025
A reputed engineering college in Pune has 20 sections with 60 students per section. The college plans a one day pleasure trip around the city for the students during the weekend to places such as zoo, the amusement park and the technological museum. A private transport operator has agreed to provide the required number of buses at a hire charge of 6,500 per bus per trip. The bus hire charge is inclusive of special permit fees of 500 per bus per trip paid to the city municipal corporation. Each bus has a maximum seating capacity of 54 persons excluding the driver. Four seats are reserved for the teachers who accompany each bus. The college will employ four teachers for each bus and pay 500as daily allowance to each teacher for the trip. No other costs in respect of teachers are relevant to the trip. The following are the other cost estimates: Particulars Cost per student (₹) Breakfast 55 Lunch 120 Evening tea with snacks 40 Entrance Fee at amusement park Fee entry Entrance Fee at the zoo 25 As regards the technological museum, the authorities charge block entrance fees for group of students depending upon the number of students in the group as enumerated below: Number of students in the group Block Entrance Fees (₹) Upto 300 2,000 301-900 3,000 901 and above 3,500 Cost of prizes that would be distributed to the winners in different games being arranged in the amusement park depends upon the number of students in a trip. The cost of prizes to be distributed is: Number of students in a trip Cost of prizes (₹) Upto - 300 2,200 301-600 2,400 601 - 900 2,400 901 and above 2,500 Assuming that the college hires the requisite number of buses depending upon the number of students in a trip, you are required to: (i) Prepare a flexible budget, estimating the total cost for a trip for the levels of 300, 600, 900 and 1,200 students showing each item of cost separately. (ii) Compute the average cost per student at each of the above levels.

Suggested Answer and Working Notes:

(i) Flexible Budget showing the total cost for a trip: Particulars No. of Students 300 (₹) 600 (₹) 900 (₹) 1200 (₹) Variable Cost Breakfast @55 per student 16,500 33,000 49,500 66,000 Lunch @120 per student 36,000 72,000 1,08,000 1,44,000 Evening Tea with snacks @40 per student 12,000 24,000 36,000 48,000 Entrance Fee at amusement park (Free entry) - - - - Entrance Fee at the Zoo @25 per student 7,500 15,000 22,500 30,000 Total Variable Costs (A) 72,000 1,44,000 2,16,000 2,88,000 Semi-Variable Cost Hire Charges @6,000 per bus 36,000 72,000 1,08,000 1,44,000 Special Permit Fees @500 per bus 3,000 6,000 9,000 12,000 DA to Teachers @500 x 4 teachers per bus = 2,000 per bus 12,000 24,000 36,000 48,000 Block Entrance Fees at the Technological Museum 2,000 3,000 3,000 3,500 Prizes to students 2,200 2,400 2,400 2,500 Total Semi-Variable Costs (B) 55,200 1,07,400 1,58,400 2,10,000 Total Cost for a Trip (A+B) 1,27,200 2,51,400 3,74,400 4,98,000 Working Note: Particulars 300 600 900 1200 No. of Students No. of Buses required (50 students per bus) 300/50 = 6 buses 600/50 = 12 buses 900/50 = 18 buses 1200/50 = 24 buses (ii) Average cost per student at each level: Particulars No. of Students 300 600 900 1200 Total Cost (₹) 1,27,200 2,51,400 3,74,400 4,98,000 Average cost per student (₹) 424 419 416 415

Topics: Budgets and Budgetary Control

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