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Saturday, May 12, 2012

Assignment Questions - OPERATING COSTING

Assignment Questions



Question 1. A bus carries 25 passengers daily for 25 days and its mileage per month is 2,000 kms. Find its passenger kms.


Question 2. Calculate cost per passenger kilometres from the following information:

Total operating expenses in a month of Rs.15,36, 000. Number of buses 6, number of days operating in a month 25, trips made by each bus per day 8, distance covered 20 kilometres (one side), capacity of bus 40 passengers, normally 80% of capacity utilization.


Question 3. XYZ Auto Ltd is in the business of selling cars. It also sells insurance and Finance as part of its overall business strategy .The following information is available for the company.

Line of Business

Physical units

Sales units

Earnings before expenses

Sales of cars

10,000 cars

Rs.30,000 lacs

3% of sales value

Sales of insurance

6,000 policies

Rs.1,500 lacs

20% of sales value

Sales of finance

8,000 loans

Rs.19,200 lacs

2% of sales value

The expenses of the company are as follows:


Salesman salaries                                                    Rs.200 lacs

Rent                                                                         Rs.100 lacs

Electricity                                                                Rs.100 lacs

Advertising                                                              Rs.200 lacs

Documentation cost per insurance policy               Rs.100

Documentation cost for each loan                           Rs.200

Direct sales expense per car                                    Rs.5,000

Indirect cost have to be allocated in the ratio of physical units sold.



Ø      Make a cost sheet for each product allocating the direct and indirect

Ø      Costs and also showing the product wise profit and total profit.

Ø      Calculate the percentage of profit to revenue earned from each line of business.




Question No.



50000 passenger kms


Re.1 per passenger km


Net Profit (Rs. in Lakhs); Cars Rs. 150; Insurance Rs. 144; Finance Rs. 168


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