EcoTrans Logistics Pvt. Ltd. is a regional goods transport company based in the industrial hub of LogiPort, providing daily freight services to and…

EcoTrans Logistics Pvt. Ltd. is a regional goods transport company based in the industrial hub of LogiPort, providing daily freight services to and from GreenCity, a fast-growing metropolitan area located 120 kilometers away. The company has been operating for over a decade and has built a reputation for timely deliveries, especially for fast-moving consumer goods (FMCGs), packaged food items, and light industrial components. To meet increasing demand, EcoTrans has recently expanded its fleet and now operates 24 transport vehicles of varying capacities. The company promises reliable daily service, and each vehicle typically completes one round trip per day, carrying cargo in both directions. EcoTrans emphasizes sustainability and efficiency, with systems in place for fuel monitoring, vehicle maintenance, and cost control. However, to remain competitive and ensure profitability in a cost-sensitive industry, management has decided to undertake a detailed cost analysis for the month of April 2025. This analysis will guide pricing strategy and assess whether current operations are yielding the desired profit margin of 20% on freight revenue. The following data has been compiled by the Finance and Operations departments for cost analysis and pricing decision-making. No. of Vehicles Capacity per Vehicle (MT) 6 10 MT 8 14 MT 6 18 MT 4 22 MT Each vehicle operates one round trip per day on average. Vehicles are loaded to 85% capacity on the forward journey and 65% on the return. On average, 12% of the fleet is under maintenance at any time. The company operated for 26 days in April 2025. Monthly Expenditure (April 2025) Description Amount (₹) Salary of Transport Manager 75,000 Salary of 32 Drivers @22,000 each 7,04,000 Wages of 28 Helpers @13,000 each 3,64,000 Loading & Unloading Charges per Trip 950 Consumable Stores (Fuel Additives, Tools) 1,50,000 Toll Charges 250 per Trip Insurance (Annual Premium) 9,60,000 Road Licence Fee (Annual) 5,40,000 Diesel Cost per Litre 82 Mileage per Vehicle 4.5 km/litre Lubricants & Oils 1,30,000 Tyres, Tubes, Spare Parts (Running basis) 4,80,000 GPS & Fleet Tracking Subscription (Monthly Basis) 2,000 per vehicle Driver Safety & Training Programmes 80,000 Garage Rent (Annual) 10,80,000 Workshop Repairs (Routine & Emergency) 3,40,000 Electricity & Utility Expenses 62,000 Depreciation on Vehicles (Monthly) 6,80,000 The company operates an in-house workshop that handles routine and emergency repairs for both its own fleet and external vehicles. As part of the internal cost allocation, 45% of the Transport Manager's salary is charged to the workshop to reflect time and resources dedicated to overseeing maintenance operations. In return, the transport department has been apportioned - 95,000 by the workshop for repair and service support during the month. Being a finance manager of the company, you are required to answer the followings (5 MCQs):