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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.