Royal Transport Services runs fleet of buses within the limits of Jaipur city. The following are the details which were incurred by the company…

CA Intermediate · Cost and Management Accounting · RTP · September 2026
Royal Transport Services runs fleet of buses within the limits of Jaipur city. The following are the details which were incurred by the company during October, 2025: (₹) Cost of each Bus 24,00,000 Garage Rent 1,00,000 Insurance 25,000 Road tax 20,000 Manager's Salary 60,000 Assistant's Salary (Two) 32,000 each Supervisor's Salary (Three) 24,000 each Driver's Salary (Twenty-Five) 20,000 each Cleaner's Salary (Twenty) 5,000 each Office Staff's Salary 1,00,000 Consumables 1,20,000 Repairs & Maintenance 90,000 Other Fixed Expenses 72,000 Diesel (10 Kms per Litre) 80 per litre Oils & Lubricants 1,45,000 Tyres and tubes 35,000 Depreciation 10% p.a. on Cost Other details are as below: Capacity 12 Buses 60 Passengers 13 Buses 50 Passengers Each bus makes 4 round trips a day covering a distance of 10 Kilometers in each trip (One Way) on an average. During the trips 80% of the seats are occupied. The annual records show that 5 buses are generally required to be kept away from roods each day for repairs. You are required to CALCULATE cost per passenger-km. Cost sheet to be prepared on the basis of 25 buses.

Suggested Answer and Working Notes:

Operating Cost Sheet Particulars Amount (₹) Amount (₹) Standing Charges: Depreciation (₹24,00,000 x 10% x 1/12 x 25) 5,00,000 Garage Rent 1,00,000 Insurance 25,000 Road Tax 20,000 Manager’s Salary 60,000 Assistant’s Salary (₹32,000 x 2) 64,000 Supervisor’s Salary (₹24,000 x 3) 72,000 Driver’s Salary (₹20,000 x 25) 5,00,000 Cleaner’s Salary (₹5,000 x 20) 1,00,000 Office Staff’s Salary 1,00,000 Consumables 1,20,000 Repairs & Maintenance 90,000 Other Fixed Expenses 72,000 18,23,000 Running Charges Diesel (49,600 Kms / 10 Kms x ₹80 per unit) 3,96,800 Oils & Lubricants 1,45,000 Tyres and tubes 35,000 5,76,800 Total Operating Cost 23,99,800 Cost per passenger-km = Total Operating Cost / Passenger –kms = 23,99,800 / 27,18,080 = 0.883 Working Note: Calculation of Total Kilometers and Passenger Kilometers Specification Total Km. Passenger–Km. 12 Buses (60 Passengers) 29,760 Kms (10 Kms × 4 x 2 trips × 31 days x 12 Buses) 14,28,480 (29760 Kms x 60 Pass. x 80%) 13 Buses (50 Passengers) 32,240 Kms (10 Kms × 4 x 2 trips × 31 days x 13 Buses) 12,89,600 (32240 Kms x 50 Pass. x 80%) Total 62,000 27,18,080 Since 5 buses out of 25 buses are kept for repairs every day Actual total Km. = 62,000 × 20/25 = 49,600

Topics: Service Costing

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