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The management accountant of Vin Co has collected the following information for the year ending 31 December 20X8.
Vin Co operating data for the year ended 31 December 20X8
Capital employed $4,000,000
Operating profit $600,000
Sales revenue $3,600,000
Number of buses in operation 40 buses
Total number of passenger seats available 1,920 seats
Total number of passenger kilometres travelled 39,000,000 passenger kilometres
Total bus kilometres travelled 3,250,000 kilometres
Total fuel consumed 764,705 litresSir, I have completely no idea what “Average bus occupancy as a percentage of maximum capacity” means and how to calculate it. Please help me.
BPP answer:
Total number of passenger km travelled ÷ (Total km travelled x Average maximum bus capacity)
39,000,000 km ÷ (3,250,000 x 48 seats) x 100% = 25% of maximum capacityThe average occupancy is the % of available seats that are occupied by passengers.
If, for example, you were told that each bus had 100 seats and that on average 80 seats were occupied, the the average occupancy would be 80%.In this question we know that each bus has 1920/40 = 48 seats. However we are not told how many of the seats had people sitting in them.
But what we do know is that in total the buses travelled for 3,250,000 kms, so if they were fully occupied they could have carried 3,250,000 x 48 = 156,000,000 passengers for these kms.
They in fact only carried 39,000,000 for those kms, which means that on average the % of seats that were filled was 39/156 = 25%
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