CMA Intermediate · Cost Accounting · Operating Costing - Transport, Hotel and Healthcare
A bus runs 50 km each day for 25 days in a month, carrying an average of 40 passengers on every trip, all passengers travelling the full distance. Assuming one trip of 50 km per day, what is the passenger-km for the month?
Passenger-kilometres are 50,000, found by multiplying 40 passengers by 50 km by 25 days. Options like 2,000 cover only one day's figure and ignore the number of operating days.
- A50,000Correct
- B40,000
- C2,000
- D1,250
Explanation
Passenger-km = passengers x distance x days = 40 x 50 x 25 = 50,000. 2,000 is only the passengers times distance for one day, and 1,250 is distance times days without passengers.
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