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Service Costing

This topic has 2 replies, 2 voices, and was last updated 1 week ago by maximus07.

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February 23, 2021 at 3:19 pm #611448
maximus07
- Topics: 48
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Which of the following would be appropriate cost units for a passenger coach company?

(i) Vehicle cost per passenger kilometre (ii) Fuel cost for each vehicle per kilometre
(iii) Fixed cost per kilometre

A (i) only
B (i) and (ii) only
C (i) and (iii) only
D (ii) and (iii) only
…
Sir the answer is B. I am able to get statement (i). How is (ii) valid? Even it is not mentioning passengers. Please explain (ii) statement
February 23, 2021 at 6:09 pm #611465
Ken Garrett
Keymaster
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I think (ii) is OK. If you were running a coach company you might well be interested in fuel cost/km. Different vehicles might have different fuel consumption and this might not vary much with the number of passengers.

(i) Is more comprehensive but would be much more difficult to calculate because records would have to be kept for about how many passengers were on each coach for each km and if there were lots of stops with passengers leaving and joining this could be a nightmare.
February 23, 2021 at 7:52 pm #611472
maximus07
- Topics: 48
- Replies: 44
Thank you sir.
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