COST ACCOUNTING UNIT-3 Topic 1 Service costing compiled by CA.

Ramesh Bhandari 9878812453, (0172) 5193314, 2270053

Topic - Service costing

Answers
Q1 20,000 kms and 9,00,000 passenger kms {MONTHLY for all 5 buses} Q2. { 3,60,0000 passenger kms} Re. 0.05 per passenger km. Q3. 0.7793 Q4. Charges per passenger mile Re. 0.07635 Fare for Chandigarh Rs. 11.45 Fare for Agra Rs. 9.16 {Hint : Net takings = Gross takings Passenger tax} Q5. Cost per passenger Km (Excluding passenger tax) Rs. 0.262; One way fare Rs. 10.92 Q6. 5730 tonne-kms & Cost Rs. 1.50 per tonne km Q7. (i) (ii) 0.50 Rs. 50 { Imp. Hint : Revenue per trip Rs. 300 / tones carried in a trip 6}

Q8. 0.3642 Q9. Variable 0.402 per km; Fixed 0.11744 per km Q10. 2.85 Q11. 3.8166 Q12. A 15.29 paise; B 8.56 paise; Bus 3.24 paise Q13. A 2.45 B 2.7666 Q14. 2.034 Q15. 33.72 & 35.46 Q16. (i) Rs. 26250 and Rs. 7 per tonne km (ii) Rs. 350 Q17. Option 2 gives lowest cost Rs. 33200 Q18 1.0787 {With tonne kms 182250}
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COST ACCOUNTING UNIT-3 Topic 1 Service costing compiled by CA. Ramesh Bhandari 9878812453, (0172) 5193314, 2270053

Q19. (i) (ii) (iii)

Rs. 100000 per flight Reducing fare gives contribution higher per flight Rs. 13,792 Accept the charter if lowering fare is not an option

Q20. 246.875 Q21. 76,800 Q22. 835, 1320 Q23. (a) Single room Rs. 6.65; Double room Rs. 10.64 (b) Sports centre 31148: sports shop 12974; cafeteria 19086; TOTAL 73208 Q24. (264750 /680000) Rs. 0.389 Q25. Rs. 15 { Hint : Annual Lighting 33000; Power Rs 3600} Q26. 0.5317; 0.5838 Q27. Operating Cost Statement
Particulars

Driver's salary Cleaner's salary Licence fee, taxes etc. Insurance Repairs & Maintenance Depreciation Diesel (See Note 1) Total Cost per month No. of students on half fee basis (see Note 2) Cost per student (half fee) Cost per student (full fee)

Rate Per Bus Per Annum No. 1 450 p.m. 1/5 350 p.m. 860 p.a. 1,000 p.a. 3,500 p.a. 10,000 p.a.

Rs. 5,400 840 860 1,000 3,500 10,000 7,200 28,800 2,400 150 Rs. 16.00 Rs. 32.00

Fleet of 5 buses p.a. No. Rs. 5 27,000 1 4,200 4,300 5,000 17,500 50,000 36,000 1,44,000 12,000 750 Rs. 16.00 Rs. 32.00

Working Notes 1. Calculation of Diesel Cost per bus. Number of trips of 8 kms. each day 8. Distance travelled per day by a bus: 8 8km / trip = 64 km. Distance travelled during a month : 64 25 = 1,600 km.
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COST ACCOUNTING UNIT-3 Topic 1 Service costing compiled by CA. Ramesh Bhandari 9878812453, (0172) 5193314, 2270053

2.

Distance travelled p.a. 1,600 9 = 14,400 km. (May, June and December being vacation) Mileage 4 km./litre Diesel required 14,400/4 = 3,600 litres. Cost of diesel @ Rs. 2 per litre = Rs. 7,200 p.a. per bus. Calculation of number of students per bus Bus capacity 50 students. Half fare 50% i.e. 25 students. Full fare 50% i.e. 25 students. Full fare students as equivalent to half fare students i.e. 50 students. Total number of half fare students. 75 students. per trip Total number of half fare students in two trips150 students. On full fare basis, number of students in two trips 75 students.

Q28. 88.22 Q29. 7.2 paise { Annual cost 77760; Takings 103680; 1440000 passenger kms} Q30. (a) 28,800 (b) Cost per Kilometre Cost per tonne Kilometre Delhi to Chd 24 Delhi to Agra 19.20 Delhi to Jalandhar 43.20 Q32. 0.72; 0.66 Q33. 1400; 1440 Q34. Annual cost per bus Rs. 252082 Fare up to 4kms- Rs.59.34 Fare up to 8 kms Rs. 118.68 Fare up to 16kms Rs. 237.36 Q35. (i) 600436 (ii) 4.4548 (iii) 1.27

9 = 1.80

Q31. Fare per passenger km 0.1607741 (APPROXIMATELY 0.16)

COST ACCOUNTING UNIT-3 Topic 1 Service costing compiled by CA. Ramesh Bhandari 9878812453, (0172) 5193314, 2270053

Q36. 0.20; Rs. 3224 { 44720 tonne-kms} Q37. 0.2471 Q38. 5600; 5760 Q39. (i) Rs. 126640

(ii) Contribution increases by Rs. 31332 per flight. Hence decrease the fare. Q 40. Computation of total revenue No. of library members No 1,000 Library fees per month Rs. 1,00,000 Late fees per month (500
5
1) Rs. 2,500 Total Revenue per month Rs. 1,02,500 Total Revenue per annum (1,02,500
12) Rs. 12,30,000 Computation of total cost Staff details No. Salary per month Total cost Rs. Rs. Librarian 1 10,000 10,000 Assistant Librarian 3 7,000 21,000 Clerk 1 4,000 4,000 Total Staff cost per month 35,000 4,20,000 Total Staff cost per year (35,000
12) No. Cost per book Books maintenance cost 50,000 Rs. 10 5,00,000 Total maintenance cost per annum excluding cost of new books (4,20,000 +5,00,000)9,20,000 Cost incurred per library member per annum (Rs. 9,20,000/1,000) Rs. 920 Cost incurred per member per month on the library excluding cost of new books (920/12) Rs. 76.67 Cost incurred per club member per annum (9,20,000/5,000) Rs. 184 Cost incurred per club member per month (184/12) Rs. 15.33 Net income from the library per annum (12,30,000 9,20,000) Rs. 3,10,000 Cost per new book Rs. 300 Maximum number of new books per annum (3,10,000/300) No. 1033.333 Present number of books purchased No. 1200
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COST ACCOUNTING UNIT-3 Topic 1 Service costing compiled by CA. Ramesh Bhandari 9878812453, (0172) 5193314, 2270053

Excess books purchased (1200 1033.333) No. 166.6667 Subsidy being given per annum Rs. 50,000 Subsidy per library member per annum (50,000/1,000) Rs. 50 Subsidy per club member per annum (50,000/5,000) Rs. 10 Comment: The club is exceeding its subsidy target to members by Rs. 45 (Rs. 50 5) per library member and Rs. 5 (Rs. 10 5) per club member. Q 41. (i) Total equivalent single room suites Nature of suite Occupancy Equivalent single room suites Single room suites 100
360
100% = 36,000 36,000
1 = 36,000 Double rooms suites 50
360
80% = 14,400 14,400
2.5 = 36,000 Triple rooms suites 30
360
60% = 6,480 6,480
5 = 32,400 Total 1,04,400 (ii) Statement of total cost: Rs. Staff salaries 14,25,000 Room attendants wages 4,50,000 Lighting, heating and power 2,15,000 Repairs and renovation 1,23,500 Laundry charges 80,500 Interior decoration 74,000 Sundries 1,53,000 25,21,000 Building rent 10,000 X12 + 5% on total taking = 1,20,000 + 5% on takings Total cost 26,41,000 + 5% on total takings Profit is 20% of total takings Total takings = Rs. 26,41,000 + 25% of total takings Let x be rent for single room suite Then 1,04,400 x = 26,41,000 + 25% of (1,04,400 x) or 1,04,400 x = 26,41,000 + 26,100 x or 78,300 x = 26,41,000 or x = 33.73 (ii) Rent to be charged for single room suite = Rs. 33.73 Rent for double rooms suites Rs. 84.325 Rent for triple rooms suites Rs. 168.65 Q42 (i) {1929000/1886400} = 1.022 (ii) 1.363