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- April 17, 2020 at 5:03 am #568490
A transport company operates a regular delivery service from its warehouse at point A to a destination at point B, the total annual kilometres covered (including 100 outward and return journeys) being 18,000 km’s per 10-ton vehicle
For the outward journey the vehicle is always fully loaded and in addition there is a regular demand for return loads of 400 tons per vehicle per annum. The standard charge to customers is 24 cents per ton/km. The costs of operating this service per vehicle are as follows:-
Vehicle fixed charges $5,400 per annum
Drivers’ wages, including normal overtime $10,260 per annum
Vehicle running costs 33 cents per kmThe company is willing to pay a bonus to drivers of up to 30% of any additional profit for obtaining additional return loads.
(a) What annual profit would be earned per vehicle without any additional return loads?
Answer:
Annual cost per vehicle
Fixed charges $5,400
Drivers’ wages $10,260
Running cost 18,000 x 33 cents $5,940
Total Cost ($21,600)Ton/km’s
Income
100 outward journeys = 9,000km’s x 10tons 90,000
Return journeys = 400 tons x 90 km’s 36,000
Total 126,000 x 24 cents $30,240Annual profit per vehicle 8,640
Below my questions:
I am completely confused by the unit.
1)why the income is calculated by 100 outward journeys = 9,000km’s x 10tons
why the answer uses 9000km to times 10tons?
2)why return journey calculates per journey i.e (9000/100)
it’s not per ton per kmThank you very much.
April 17, 2020 at 5:10 am #568491Answer:
Annual cost per vehicle
Fixed charges?????????????????????$5,400
Drivers’ wages?????????????????????$10,260
Running cost 18,000 x 33 cents?????????????$5,940
Total Cost??????????????????????($21,600)??????????????????????Ton/km’s
Income
100 outward journeys = 9,000km’s x 10tons???90,000
Return journeys = 400 tons x 90 km’s ??????36,000
Total 126,000 x 24 cents????????????????$30,240Annual profit per vehicle ????????????????8,640
April 17, 2020 at 9:51 am #5685099,000 kms is used because the return journey is 18,000 km so it must be 9,000 each way.
The outward and the return journey need looking at separately because it is always fully loaded on the outward journey, but not for the return journey.For the outward journey there is 10 tons on each journey. However for the return journey there are 400 tons per year (not for each trip).
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