There are different kinds of transport.
Such as air, water, roads, railways etc.
Transport is engaged either passenger or goods.
Passenger services are determined in kilometer per passenger.
Goods service is determined in ton kilometer.
Generally, under road transport, cars, buses, taxies, trucks, tempo etc are recorded.
The main purpose of transport costing can be introduced as follow:
To provide knowledge about vehicles used efficiently
To get idea for fixing tender rate
To control the fuel consumed, repair cost and other cost.
To make comparison of the operating cost with one group to another group
To decide fare
To prepare daily log sheet.
Generally there are three types of transport services costing; they are fixed cost, semivariable cost and variable cost.
it is also called period cost.
It includes those charges which are fixed in nature and are not affected by the running of vehicles; such as:
Road tax, vehicle tax
Garage rent
License fee
Insurance premium on vehicles for fire and accidental
Interest on cost of vehicles
Salaries to driver and conductor with provident fund (if monthly basis)
Depreciation on vehicles (if monthly basis)
Salaries to management and supervisor etc.
It includes those expenses which are neither related to distance nor the period.
Generally, costs of spare parts are the part of this category; such as:
Cost of tyres and tubes
Repairs and maintenance charge
Overhauling or service charges
Cost of spare parts, accessories, components
Denting and painting charge
Terminal charges etc.
It includes those expenses which are changeable according to kilometer; such as:
Cost of diesel, petrol, lubricantoil, grease
Salaries to driver, conductor and assistant (if kilometer basis)
Depreciation on vehicle (if kilometer basis)
Insurance on goods in transit
Commission of transport agent etc.
ABC Transport Company
(For the month/year of ………..)
Expenses 
Amount 
Standing charge/fixed charge: 

Salary and wages to staff (monthly) 
xxxx 
Garage rent (monthly) 
xxxx 
Insurance 
xxxx 
License and road tax 
xxxx 
Interest on capital 
xxxx 
General supervision 
xxxx 
Depreciation (annual) 
xxxx 
Total A 
xxxxx 
Running/operating charge/variable cost: 

Repairs and maintenance 
xxxx 
Cost of diesel and petrol 
xxxx 
Lubricating and greases 
xxxx 
Service and cleaning 
xxxx 
Denting and painting 
xxxx 
Tyres and tubes cost 
xxxx 
Spare parts and components 
xxxx 
Terminal office expenses 
xxxx 
Salary and wages of operating (distance basis) 
xxxx 
Depreciation (if life in km) 
xxxx 
Insurance of goodsintransit 
xxxx 
Commission 
xxxx 
Other charge (based on distance) 
xxxx 
Total B 
xxxxx 
Total operating cost (A+B) 
xxxxx 
Add: Profit 
xxxx 
Service revenue or taking revenue 
xxxxx 
Or
ABC Transport Company
Operating Cost Sheet
(For the month/year of ………..)
Expenses 
Amount 
A. Standing charge/fixed charge: 

Salary to staff (monthly) 
xxxx 
Garage rent 
xxxx 
Insurance 
xxxx 
License 
xxxx 
Interest on capital 
xxxx 
General supervision 
xxxx 
Depreciation 
xxxx 
Total A 
xxxxx 
B. Maintenance Charge/SemiVariable Cost: 

Tyres and tubes 
xxxx 
Spare parts and components 
xxxx 
Repairs and maintenance 
xxxx 
Service and cleaning 
xxxx 
Denting and painting 
xxxx 
Terminal office expenses 
xxxx 
Other expenses 
xxxx 
Total B 
xxxxx 
C. Running/ Operating Charge/Variable Cost: 

Cost of diesel and petrol 
xxxx 
Lubricating 
xxxx 
Greases 
xxxx 
Wages of operating (distance basis) 
xxxx 
Depreciation (if life in km) 
xxxx 
Insurance of goodsintransit 
xxxx 
Commission 
xxxx 
Other charge (based on distance) 
xxxx 
Total C 
xxxx 
Total operating cost (A+B+C) 
xxxx 
Add: Profit (on cost or service) 
xxxx 
Service revenue or taking revenue 
xxxxx 
Total kilometer or total passenger kilometer or total tone kilometer
= No. of vehicles x No. of days x No. of trips x 2 x Distance
= Vehicles x Days x Trips x 2 x Distance
= No. of vehicles x Distance x No. of trips x 1 or 2 way x No. of days x Passenge$traveling in a vehicle
= Running km x Seat capacity x Sitting %
= No. of vehicles x Distance x No. of trips x One way or two way x No. of days x Goods carried by vehicle
Profit on cost = Total cost x % ÷100
Profit on revenue/taking/sales = Total cost x % ÷ (100 – %)
######
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Accounting Equation 

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Journal Entries 

Journal Entry and Ledger 

Ledger 

Subsidiary Book 

Cashbook 

Trial Balance and Adjusted Trial Balance 

Bank Reconciliation Statement (BRS) 

Depreciation 



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Accounting for Long Lived Assets 

Analysis of Financial Statement 
######
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1A
HK Transport Company (P) Ltd keeps truck. The following information is for the month of January:
Purchase value of truck 
$18,00,000 
Repairs and maintenance per month 
$6,000 (average) 
Kilometer runs in January 
10,000 km 
Garage rent average 
$2,000 
Salary and wages 
$18,000 
Insurance and road tax (annual) 
$48,000 
Diesel and lubricant 
$15 per km 
Depreciation @ 15% per annum on SLM 

Required: (a) Standing charge and running charge; (b) Total cost; (c) Profit if company charges 30% profit on cost
[Answer: Standing charge = $44,500; Running charge = $158,000;
Total charge = $202,500; Profit = $60,750]
SOLUTION:
Depreciation
= 18,00,000 @ 15% x 1÷12
= $22,500
Operating Cost Sheet
HK Transport Company (P) Ltd
(For 1 month)
Expenses 
Amount 
Standing charge/fixed cost: 

Salary and wages 
18,000 
Depreciation 
22,500 
Insurance and road tax [$48,000 ÷ 12] 
4,000 
Total A 
44,500 
Running charge/variable cost: 

Diesel and lubricant [10,000 km x $15] 
150,000 
Repairs and maintenance 
6,000 
Garage rent 
2,000 
Total B 
158,000 
Total operating cost (A+B) 
202,500 
Add: Profit [$202,500 x 30%] 
60,750 
Service revenue or taking revenue 
$263,250 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1B
ABC Transport Company operates a mini bus between two cities. The distances between cities are 40 km the capacity of bus has 40 passengers seat. The bus made 2 trips, 2 ways in 25 days during one month. Average 75% of seats are packed.
The expenses for the month of January:
Salary of driver and conductor 
$18,000 
Interest on purchase capital of bus per month 
$3,000 
Lubricants and service per 10 km 
$12 
Other variable expenses per km 
$2 
Diesel per km 
$10 
Insurance and road tax per annum 
$36,000 
Depreciation per month 
$6,000 


Required: (a) Running km; (b) Passenger km; (c) Standing charge total and per km; (d) Running charge total and per km;
(e) Total cost; (f) Profit if company charges 80% profit on cost
[Answer: (a) 4,000 R/Km; (b) 120,000 P/Km; (c) $30,000 and Re 0.250;
(d) $52,800 and $1.033; (e) $82,800 and $1.283; (f) $66,240 and $1.026]
SOLUTION:
Running km
= Vehicles x Days x Trips x 2 x Distance
= 1 x 25 x 2 x 2 x 40
= 4,000 R/km
Passenger km
= Running km x Seating capacity
= 4,000 x 40 @ 75%
= 120,000 P/km
Per Km*
= Amount ÷ 120,000 P/km
Operating Cost Sheet
ABC Transport Company
(For 1 month)
Expenses 
Amount 
Per Km* 
Standing charge/fixed cost: 


Salary of driver and conductor 
18,000 
0.150 
Depreciation 
6,000 
0.050 
Interest 
3,000 
0.025 
Insurance and road tax [$36,000 ÷ 12] 
3,000 
0.025 
Total A 
30,000 
0.250 
Running charge/variable cost: 


Lubricant and service [4,000 km x $12/10] 
4,800 
0.030 
Diesel [4,000 km x $10] 
40,000 
0.333 
Other expenses [4,000 km x $2] 
8,000 
0.067 
Total B 
52,800 
1.033 
Total operating cost (A+B) 
82,800 
1.283 
Add: Profit [82,800 x 80%] 
66,240 
1.026 
Service revenue or taking revenue 
$149,040 
$2.31 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1C
Narayani Yatayat Company (P) Ltd runs truck transportation. One truck has capacity 10 tons. The following information is given:
Cost of truck 
$22,00,000 
Salary to driver 
$12,000 per month 
Estimated life 
10 years 
Wage to cleaner 
$6,000 per month 
Scrap value end of life 
$300,000 
Insurance 
$48,000 per annum 
Diesel and lubricant 
$22 per km 
Road tax 
$36,000 per annum 
Repairs and maintenance 
$10,000 average 
General administrative expenses 
$96,000 
The truck carries goods from Narayanghat to Kathmandu distance 160 km each way. Truck carries 100% goods to Narayanghat to Kathmandu but 50% on return. The truck runs average 15 round trips during a month.
Required: (1) Total operating cost; (2) Cost per tonkm; (3) Charge to customer per tonkm if profit 80% on freight
[Answer: (1) 48,833 + 115,600 = $164,433; (2) $2.28; (3) $11.40]
SOLUTION
Depreciation
= (Purchase – Scrap) ÷ Life x 1/12
= ($22,00,000 – $300,000) ÷ 10 years x 1/12
= $15,833
Run km
= 160 km x 15 round trip x 2 ways
= 160 x 15 x 2
= 4,800 km
Tonkm
= 10 tons @ 100% x 4,800 km + 10 tons @ 50% x 4,800 km
= 48,000 + 24,000
= 72,000 T/km
Operating Cost Sheet
Narayani Yatayat Company (P) Ltd
(For 1 month)
Expenses 
Amount $ 
Standing charge/fixed cost: 

Salary to deriver 
12,000 
Wages to cleaner 
6,000 
Depreciation 
15,833 
Insurance and road tax [ 48,000 ÷ 12] 
4,000 
Road tax [ 36,000 ÷ 12] 
3,000 
Administrative charge 
8,000 
Total A 
48,833 
Running charge/variable cost: 

Diesel and lubricant [4,800 km x $22] 
105,600 
Repairs and maintenance 
10,000 
Total B 
115,600 
Total operating cost (A+B) 
164,433 
Cost per tonkm
= Total operating cost ÷ Total tonkm
= $164,433 ÷ 72,000 tonkm
= $2.28
Charge per tonkm
Cost per tonkm 
2.28 
Add: Profit ($2.28 x 80/20) 
9.12 
Freight per tonkm 
$11.40 
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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2060/S Modified
Highway Cargo supplies the following information relating to a mini truck of 6 ton capacity that makes one trip daily covering distance of 30 km each way and carrying goods in full capacity on outward trip and on return only 20% of the capacity:
Capital cost of truck 
$12,00,000 
Yearly taxes and renewal 
$10,800 
Estimated life 
20 years 
Monthly wages of the driver 
$12,000 
Residual value at end of life 
$200,000 
Yearly insurance charges 
$19,200 
Repairs and maintenance cost per month 
$4,000 
Fixed general expenses yearly 
$36,000 
Monthly wages of the helper 
$5,000 
Fuel each or one way per trip 
$440 
In an average the truck run 26 days in a month
Required: (Operating cost sheet)
(1) Total tons km; (b) Fixed and variable cost and total cost; (c) Cost per month per ton km.
[Answers: Fixed = $26,667; Variable = $26,880; Total = $53,547;
Cost per ton per km = $9.53; *Depreciation = $4,167]
SOLUTION
Given and working note:
Depreciation
= (Purchase value – Book salvage value) ÷ Life
= (12,00,000 – 2,00,000) ÷ 1/12
= $4,167
Total tons km
Ton/km 
= (6 ton @ 100% x 30 km x 26 days) + (6 tone@ 20% x 30 km x 26 days) 

= 4,680 + 936 

= 5,616 
Operating Cost Sheet
A Highway Carriers
(for 1month)
Particulars 
Amount 
Standing/fixed charges: 
^{ } 
Wages to helper 
5,000 
Taxes and renewal ($10,800 ÷ 12 months) 
900 
Wages to driver 
12,000 
Insurance ($ 19,200 ÷ 12 months) 
1,600 
Fixed general expenses ($36,000 ÷ 12 months) 
3,000 
Depreciation 
4,167 
Total A 
26,667 
Running/variable charges: 

Fuel cost ($440 per trip x 2 ways x 26 days) 
22,880 
Repairs and maintenance 
4,000 
Total B 
26,880 
Total operating cost (A+B) 
$53,547 
Total tonkm 
5,616 
Cost per ton per km = Total operating cost ÷ Total tonkm 
$9.53 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2061/S Modified
A microbus operates 8 round trips each day for 30 days a month between 20 km apart newly urbanized two cities. The bus has 15 passenger sitting capacity. The average seat occupancy is 80%. The monthly operating expenses are given below:
Driver and helper’s salary 
$19,200 
Repairs and maintenance expenses 
$11,520 
Route license, insurance and garage rent per month 
$9,600 
Cost of the micro bus expecting to run for 10 years 
$20,73,600 
Average all fuel cost per km 
$16.50 
Required: (Operating cost statement showing)
(a) Total km and passenger km; (2) Total cost reporting standing charges and running expenses
(c) Bus fare per passenger per km expecting 20% profit on cost
[Answer: Total km = 9,600; Total passenger km = 115,200;
Standing = $46,080; Running = $169,920; Total cost = $216,000;
Profit = $43,200; Bus fare per passenger per km = $2.25;
*Depreciation = $17,280;
SOLUTION
Total km
= 20 km x 8 trips x 2 ways x 30 days
= 9,600 km
Total passenger km
= 9,600 km x 15@80% passengers
= 115,200 km
Depreciation
= $20,73,600 ÷ 10 years x 1/12 month
= $17,280
Operating Cost Sheet
(for 1 month)
Particulars 
Amount 
Standing/fixed charges: 
^{ } 
Driver and helper’s salary 
19,200 
Route license, insurance and garage rent 
9,600 
Depreciation 
17,280 
Total A 
46,080 
Running/variable charges: 

Repairs and maintenance 
11,520 
Average fuel cost (9,600 km x $16.50) 
158,400 
Total B 
169,920 
Total monthly charges (A+B) 
216,000 
Add: profit [20% on cost viz 216000 @ 20%] 
43,200 
Total revenue 
$259,200 
Total passenger km 
115,200 
Bus fare per passenger per km = Total revenue ÷ Total passenger km 
$2.25 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2063 Modified
ABC Transport Company which owned 10 buses supplied the following details:
Cost of each van 
$24,00,000 
Life of vans 
5 years 
Value of each van after 5 years 
$6,00,000 
Seating capacity of each van 
25 persons 
Normal passengers traveled of seating capacity 
80% 
Distance covered by each bus per day 
100 km 
Total running days per month 
26 days 
Operating costs for running 10 vans:

Amount in $ 
Salaries of office and supervision staffs per month 
65,000 
Oils for one month 
1,60,000 
Repairs and maintenance per month 
11,000 
Taxation and insurance for one year 
1,20,000 
Annual interest and other charges 
60,000 
Rent of garage per month 
15,000 
Wages of drivers, conductors and cleaners per month (Allocated on the basis of mileage run) 
1,20,000 
Profit expected by the company is 25% on cost
Required: (Operating cost statement)
(1) Total km and passenger km; (2) Monthly running charge, standing charge and total cost; (3) Monthly profit
(4) Fare to be charged per passenger per kilometer
[Answer: (1) Total km = 26,000; Passenger km = 520,000;
(2) Standing = $395,000; running = $291,000; Total = $686,000;
(3) Profit = $171,500 and (4) Charge per km = $1.65;
* Depreciation = $300,000]
SOLUTION
Total km
= 10 buses x 100 km per day x 26 days
= 26,000 km
Passenger km
= Total km x Normal Capacity
= 26,000 km x 25 persons@80%
= 520,000 km
Given and working note:
Depreciation
= (PV – BSV) ÷ Life
= (24,00,000 x 10 – 6,00,000 x 10) ÷ 5 years x 1/12
= 1,80,00,000 ÷ 5/12
= 300,000
Operating Cost Sheet
ABC Transport Company
(For 10 vans, 1 month)
Particulars 
Amount $ 
Standing/fixed charges: 
^{ } 
Salary of office and supervision staff per month 
65,000 
Taxation and insurance ($120,000 ÷ 12 months) 
10,000 
Annual interest ($60,000 ÷ 12) 
5,000 
Rent for garage 
15,000 
Depreciation 
300,000 
Total A 
395,000 
Running/variable charges: 

Oil for month 
160,000 
Wages for driver, conductor and cleaner (mileage based) 
120,000 
Repairs and maintenance 
11,000 
Total B 
291,000 
Total monthly charges (A+B) 
686,000 
Add: Profit (25% on cost viz 686,000@ 25%) 
171,500 
Total revenue 
$857,500 
Total passenger km 
520,000 
Fare per passenger per km = Total revenue ÷ Total passenger km 
$1.65 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2065 Modified
ABC Transport Company supplies the following information relating to a microbus with the capacity of carrying 20 passengers. It makes 5 round trips daily covering distance of 5 km. It carries the passenger with 80% capacity for 25 days in a month. Other relevant information is:
Particulars 
Amount in $ 
Particulars 
Amount in $ 
Cost of microbus 
15,00,000 
Taxes and renewal charge 
12,000 per year 
Estimated life 
10 years 
Insurance charge 
18,000 per year 
Residual value at the end of life 
5,00,000 
General fixed expenses 
20,000 per year 
Repairs and maintenance cost 
5,000 per month 
Fuel each way for 5 km 
$100 
Salary and wages of helper 
15,000 per month 


Required: (Operating cost statement):
(1) Total km and passenger km; (2) Standing charge, running charge and total cost; (3) Cost per passenger km
[Answer: Total km = 1,250; passenger km = 20,000;
(2) Standing = $27,500; Running = $30,000; Total = $57,500;
(3) Cost per passenger km = $2.88; *Depreciation = $8,333; *Fuel = $25,000;
SOLUTION
Total km
= 1 bus x 5 trips x 2 ways x 5 km x 25 days
= 1,250 km
Passenger km
= Total km X Normal Capacity
= 1,250 km x 20 persons@80%
= 20,000 km
Working notes:
Depreciation
= (PV – BSV) ÷ Life x 1/12
= (15,00,000 – 5,00,000) ÷ 10 years x 1/12
= 8,333
Operating Cost Sheet
ABC Transport Company
(For 1 month)
Particulars 
Amount $ 
Standing/fixed charges: 

Depreciation 
8,333 
Salary and wages of helpers 
15,000 
Taxation and renewal charge [$12,000 ÷ 12] 
1,000 
Insurance charge [$18,000 ÷ 12] 
1,500 
General fixed expenses [$20,000 ÷ 12] 
1,667 
Total A 
27,500 
Running/variable charges: 

Repairs and maintenance 
5,000 
Fuel [$100 x 5 tips x 2 ways x 25 days] 
25,000 
Total B 
30,000 
Total monthly charges (A+B) 
$57,500 
Total passenger km 
20,000 km 
Fare per passenger per km = Total revenue ÷ Total passenger km 
$2.88 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2067 Modified
Mr Shrestha has provided the following Particulars of his tourist car:
Cost of car $5,50,000 (life 10 years and scrap value $50,000)
Distance of route 40 km one way.
Insurance and taxes $10,500 p.a.
Garage rent $2,000 p.m.
Repair and maintenance $12,000 p.a.
Driver’s salary $6,000 p.m.
Other overhead charges $500 p.m.
Petrol cost $100 per 10 km
Car will make 4 round trips each day.
Car will operate 25 days in a month.
Profit is to be charged @ 15% on freight.
Required: (Operating cost sheet): (a) Calculation for depreciation, running km and fuel; (b) Showing proper division of cost;
(c) Profit; (d) Charge per passenger km
[Answer: (a) Dep^{n} = $4,167; Running km = 8,000; Fuel cost = $80,000;
(b) Standing = $13,042; Running = $81,500; Total = $94,542;
(c) Profit = $16,684; (d) Charge per km = $13.90]
SOLUTION
Depreciation per month
= (PV – BSV) x Life x 1/12
= ($550,000 – $50,000) ÷ 10 years x 1/12
= $4,167
Running km
= 1 car x 40 km x 4 trips x 2 ways x 25 days
= 8,000 km
Petrol per month
10 km needs 
= $100 
8,000 km needs 
= 100 x 8,000 ÷ 10 

= $80,000 
^{ }
Operating Cost Sheet
Of Mr Shrestha
(For one month)
Particulars . 
Amount $ 
Standing/fixed cost: 
– 
Insurance and tax [$10,500 ÷12] 
875 
Garage rent 
2,000 
Driver’s salary 
6,000 
Depreciation 
4,167 
Total [A] 
13,042 
Running/variable cost: 

Repairs and maintenance [$12,000 ÷ 12] 
1,000 
Other charges 
500 
Petrol 
80,000 
Total [B] 
81,500 
Total cost [A+B] 
94,542 
Add: Profit [94,542 x 15/85] 
16,684 
Net cost 
$111,226 
Running km 
8,000 km 
Cost per passenger km 
$13.90 
#####
Problems and Answers of Transport Costing 
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1A
CK Yatayat Company runs pickup truck for city carriage purpose. The following information is given:
Kilometers run for January 
5,000 
Deprecation per annum 
10 % on original cost 
Salary and wage 
$12,000 
Repairs for the month 
$2,000 
Diesel, oil etc 
$10,000 
Garage rent, etc for the month 
$1,000 (fixed) 
Original cost of Vehicle 
$12,00,000 
License, Insurance, etc for the year 
$12,000 
Required: (1) Operating cost sheet for the month, showing the fixed and variable;
(2) Cost per running km showing each expenses
[Answer: (1) ($24,000 + $12,000) = $36,000;
(2) ($4.80 + $2.40) = $7.20]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1B
Mr Gurung has a luxuries car. It runs in Pokhara for tourist purpose. The various expenses incurred by him are given below:
Cost of taxi 
$17,50,000 
Road tax and renewal 
$24,000 per year 
Driver’s salary per month 
$10,000 
Insurance premium per annum 
2% of cost 
Rent of garage 
$12,000 per year 
Lubricant, grease and brakefluid 
$1,500 
Repairs and maintenance 
$3,000 


Additional information:
(1) The life of a taxi is 3,00,000 Km estimated scrap value $1,50,000.
(2) Taxi runs on an average 4,000 km per month of which 20% it runs empty.
(3) Petrol consumption is 10 km per liter of petrol costing $104 per liter.
Required: (a) Operating cost sheet showing standing and running charge; (b) Total operating cost; (c) Netrun km
(d) Cost per netkm; (e) Charge to passenger km if profit is 25% on service
[Answer: (a) (15,917 + 67,433); (b) $83,350;
(c) 4000@80% = 3,200 km; (d) $26.05; (e) $34,.73;
* Depreciation= $21,333; Petrol = $41,600]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1C
NP Yatayat Company gives you the following information:
Cost of bus $600,000 with expected 
100,000 km run 
Driver’s salary 
$14,000 per month 
Annual registration renewal charges 
$12,000 
Conductor’s salary 
$8,000 per month 
Garage charges per month 
$5,000 
Diesel and oil 
$14 per kilometer 
Annual repair 
$24,000 


The bus will run 25 days in a month with 40 passengers in 10 round trips of 20 km long route
Required: (Operating cost statement): (a) Monthly km and passenger km
(b) Standing charge and running charges separately; (c) Cost per passenger kilometer.
[Answers: (a) Monthly km = 5,000; Passenger km = 200,000;
(b) Standing = $28,000; Running = $102,000; Total = $130,000;
(c) Cost per km= $0.65; *Depreciation = $30,000;
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1D
ABC Transport Company has following data of a 10 tons load bearing capacity truck:
Cost of truck (purchased 5 years ago) 
$54,00,000 

Driver’s wage per month 
$7,800 

Miscellaneous expenses annual fixed 
$72,000 

Diesel cost per trip each way 
$728 

The truck carried goods each day to and from the city having the distance of 40 km each way. Full freight is obtained on outward trip and 40% of the capacity on return trip. The truck operated 25 days in a month. The remaining life of the truck expected is 5 years.
Required: (1) Total tons km; (2) Total cost with standing charges and running charges; (3) Compute cost per ton km.
[Answers: Total ton km (10,000 + 4,0000) = 14,000
Standing = $58,800; running = $36,400; Total = $95,200;
Cost per ton km = $6.80; *Depreciation pm = $45,000;]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1E
Scrutiny of the daily log book rendered by ABC Transport Company that owned 40 seater fleet of 5 buses runs on local city provided the following particulars:
Normal passengers traveled 90%
Annual depreciation registration and insurance per bus $270,000
Fuel lubricating oil, repair and maintenance etc per 25 km $1,125
Drivers and helpers’ salary for 5 fleet per month $87,500
Profit expected by the company is 20% on freight.
Each bus operated 4 round trips daily of 10 km distance each way for 25 days in a month.
Required: (1) Monthly running km and passengers’ km; (2) Monthly total charge showing standing and running charges
(3) Monthly profit; (4) Freight to be charged per passenger km
[Answers: (1) Running km = 10,000; passenger km = 360,000;
(2) Standing = $200,000; Running = $450,000; Total = $650,000;
(3) Profit = $162,500; (3) Freight per passenger/km = $2.26;
* Fuel cost = $450,000;
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