- 10 Marks
Question
Igodah Transport company has 15 passenger buses. The buses ply between towns ‘A’ and ‘B’, which are 60 kilometres apart in distance. The buses’ seating capacity is 50 passengers.
Extracts from the company’s books for last month are as follows:
| Expenses | Amount (N) |
|---|---|
| Salaries of drivers and bus attendants | 120,000 |
| Diesel and other oil used | 160,000 |
| Vehicle repairs and maintenance | 50,000 |
| Insurance | 60,000 |
| Depreciation | 113,000 |
| Interest | 90,000 |
| Security | 60,000 |
| Car wash expense | 50,000 |
| Supervisor’s salary | 50,000 |
Other details include:
- The actual seating capacity carried for the month was 80%.
- The buses worked for all 30 days of the month, making two trips per day.
Required:
Calculate the cost per passenger kilometre.
Answer
- Tags: Passenger Kilometre, Service Costing, Transportation Costs
- Level: Level 1
- Topic: Costing Methods
- Series: NOV 2022
- Uploader: Theophilus