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OPERATING COSTING

TRANSPORT COSTING

1. Tulsian passenger transport company provides you the following information:

No. of buses 5

Normal % of vehicles laid up

for repair 5%

Cost of each bus Rs.3,00,000 no. of round trips per day 4

Estimated life 5 years Distance of route

Repairs & maintenace

Rs.7,285

p.m.per bus working days in a month 25

Driver's Salary

Rs.800 p.m.per

bus Manager's salary Rs. 1,000

Conductor's salary

Rs.600 p.m.per

bus Accountant's salary Rs. 500 p

Garage rent Rs. 6,000 p.a. Peon's salary Rs. 250 p

Insurance 2% p.a. Cleaner's salary 100 p.m.

Taxes Rs. 6,000 p.a. Mechanic's salary Rs. 300 p

Road licence

Rs. 600 p.a.per

busCost of tickets

Rs. 10 per

1000 pass

kmInterest 8% p.a. Office Rent Rs. 250 p

Km per litre of fuel 20 km Office routine expenses Rs. 500 p

Cost of fuel

Rs. 300 per 10

litres Cost of each tyre Rs. 3,000

Total Capacity 50 passengers Tyres to be replaced per bus 1 p.m.

Average capacity which

is used 90%

Notes: (i) Commission @ 10 % of the taking is to be paid to conductor.

(ii) Profit @ 20% on taking is desired by the owner.

Required- Calculate:

a. Cost per month b. Cost per day c. Cost per trip d. Cost per km

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e. Cost per passenger km f. Bus fare to be charged from each passenger

HOSPITAL COSTING

2. A public health centre runs an intensive medical care unit. For this purpose, ithas hired a building at a rent of Rs. 5,250 p.m. with the understanding that it

would bear the repairs and maintenance charges also.

The unit consists of 25 beds but 5 more beds can be comfortably accommodated

when the occasion demands. The permanent staff attached to the unit is as

follows:

2 supervisors, each at a salary of Rs. 2,500 p.m.

4 nurses, each at a salary of Rs. 1,500 p.m.2 ward boys, each at a salary of Rs. 750 p.m.

Though the unit remains open for the patients all the 365 days in a year , it has

full capacity of 25 patients per day only for 120 days. For 245 days it has on

average 20 beds occupied per day. But there were occasions when the beds are

full and extra beds are hired from outside at a charge of Rs. 10 per bed per day.

However , this does not come to more than 5 extra beds above the normal

capacity on any one day. The total hire charges for the extra beds incurred for

the whole year amount to Rs. 5,000.

The unit has engaged expert doctors from outside to attend patients. The fees

are paid on the basis of the number of patients attended and time spent by them.

On an average it works out to Rs. 33,500 p.m.

The other expenses for the year are as under:

Repairs & maintenance 7,200 Medicines supplied 64,000

food supplied to patients 88,000 Cost of oxygen, X-rays 1,08,000

Janitor & other services 25,000 General administration charges 99,000Laundry charges 28,000

Required: 1. If the unit recovered an over-all average amount of Rs. 150 per

patient per day, what is the profit made by unit.

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2. The unit wants to work on a budget for the next year, but the number of

patients requiring intensive medical care is a very uncertain factor.

Assuming that the same revenue and expenses will prevail next year also, work

out no of patient-days required by the break even.

HOTEL COSTING

3. From the following information relating to a hotel, calculate the room rent to

be charged to give a profit of 25% on cost excluding interest

(a) Salaries of staff: Rs. 1,02,200 p.a.

(b)Wages of the room attendant : Rs. 4 per day

There is a room attendant for each room. He is paid wages only when the

room is occupied.

(c) Lighting, Heating and power

The normal lighting expenses for each room for the whole month is

Rs. 100 when occupied.

Power is used only in winter and the charges are Rs. 40 p.m. for a

room, when occupied.

(d)Repairs to buildings: Rs. 10,000 p.a.

(e) License etc : Rs. 4,800 p.a.

(f) Sundries: Rs. 6,600 p.a.

(g) Interior decoration and furnishing: Rs. 10,000 p.a.

(h)Depreciation @ 5% is to be charged @ 20% on investment in buildings

costing Rs. 4,00,000 and 10% on equipments.

(i) Interest to be charged @ 20% on investment in buildings and equipments

amounting to Rs. 5,00,000.

(j) There are 100 rooms in hotel 80% of the rooms are generally occupied in

summer and 30% in winter. The period of summer winter may be

considered to be of 6 month in each case: a month can be assumed of 30

days.

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CANTEEN COSTING

From the following data for the month of April 2011, calculate cost per meal for

the canteen Run by joint councils of workers and management of Ratex Ltd:

1. Purchases for the month of April

Meat 50 kgs @ Rs. 15 per kg

Eggs 36 dozens @ Rs. 5 per dozen

Vegetables Rs. 300

Bread etc Rs. 400

Rice Rs. 600

2. Wages and Salaries

2 Cooks @ Rs. 400 p.m. each

1 Manager who is paid Rs. 50 p.m. as allowance ( because he is already an

employee)

3. Consumable stores Rs. 5,000 p.a.

4. Gas & Electricity Rs. 200 p.m.

5. Overheads allocated to the canteen Rs. 1,200 p.a.

6. Company subsidy Rs. 2,000 p.a.

7. No. of meals served in the month of April: 2000

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ELECTRICITY GENERATION COSTING

You are requested to prepare a Cost Sheet showing the cost of generation of power

per kilo Watt-Hours (kWH).

Total Units Generated 15,00,000 kWH p.a.

Rs.

Operating Labour 16,500 p.a.Plant Supervision 5,250 p.a

Lubricant and Supplies 10,500 p.a.

Repairs & Maintenance 21,000p.a.

Administrative

overheads 9,000 p.a.

Capital Cost 1,50,000

Coal consumed per kWH is 1.5 lbs and cost of coal delivered to the power stationis Rs. 33.06 per metric ton. Depreciation rate chargeable is 4% p.a. and interest on

capital is to be taken @7%.

Take 1 metric ton = 2205 lbs.