Assignment Questions
OPERATING COSTING
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.
Required:
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.
| ANSWER HINTS | |
| Question No. | Answer |
| 1 | 50000 passenger kms |
| 2 | Re.1 per passenger km |
| 3 | Net Profit (Rs. in Lakhs); Cars Rs. 150; Insurance Rs. 144; Finance Rs. 168 |
