M/s XY Travels has been given a 25 km. long route to run an air-conditioned Mini Bus. The cost of bus is ₹ 20,00,000. It has been insured @3%…

(i) Statement showing the Operating Cost per Passenger-km. Yearly (₹) Monthly (₹) (A) Standing Charges: Insurance Charge ₹. 20,00,000 × 3% 60,000 5,000 Road Tax 36,000 3,000 Depreciation (20,00,000/5) 4,00,000 33,333.33 Total 4,96,000 41,333.33 (B) Maintenance Charges: Annual Repairs 50,000 4166.67 Office and administration overheads 3,18,000 26,500 Total 3,68,000 30666.67 (C) Running Cost/Charges: Driver's Salary 2,40,000 20,000 Conductor's Salary 1,80,000 15,000 Diesel & Oil (60,000 × 1,500 / 100) 9,00,000 75,000 Total 13,20,000 41,333.33 Total (A+B+C) Cost before commission and profit 21,84,000 1,82,000 Commission (33,60,000 × 10%) (working note 2) 3,36,000 28,000 Profit (33,60,000 × 25%) (working note 2) 8,40,000 70,000 Takings (working note 1) 33,60,000 2,80,000 (ii) Fare per Passenger-km. = Total Collection/Takings / Total Passenger-km (Working note 3) = 33,60,000 / 24,00,000 = ₹ 1.40 OR Fare per Passenger-km. (monthly) = 2,80,000 / 2,00,000 = ₹ 1.40 Working note: 1. Cost before commission (10%) and profit (25%) is 21,84,000 which is 65% of total takings. So total takings is (21,84000÷65) ×100=₹ 33,60,000 2. Commission is 10% of ₹ 33,60,000=₹ 3,36,000 and Profit is 25% of ₹33,60,000 = ₹ 8,40,000 3. Total Km is (4 Round Trips × Days in a month × Month = (4×2×25 ×25×12) = 60,000 km Passenger km is 60,000 km×40 passenger= 24,00,000