CMA Intermediate · Cost Accounting · Operating Costing - Transport, Hotel and Healthcare
In transport operating costing, which of the following is classified as a fixed (standing) charge rather than a running charge?
Road tax and insurance are standing charges because they are incurred whether or not the vehicle runs. Diesel, lubricating oil and tyre costs vary with the kilometres operated, so they are running charges and not fixed costs.
- ADiesel consumed by the bus
- BRoad tax and insurance of the vehicleCorrect
- CTyre replacement cost based on kilometres run
- DLubricating oil used in the engine
Explanation
Standing charges are incurred irrespective of whether the vehicle runs, such as road tax, insurance, garage rent and driver's fixed salary. Diesel, tyres and lubricants vary with distance run, so they are running costs. Hence road tax and insurance is the fixed item.
Did you get it right without looking?
One question tells you little. A timed set on Operating Costing - Transport, Hotel and Healthcare shows your real accuracy, how long you take and where you lose marks.
More Operating Costing - Transport, Hotel and Healthcare questions
- In the operating costing of a hospital, which of the following is the most appropriate cost unit for the in-patient ward service?
- In hospital operating costing, which cost unit is most commonly used for an in-patient ward service such as general ward accommodation?
- A hotel charges Rs 2,400 per room-day. Its cost per occupied room-day is Rs 1,800 at 75% occupancy, of which Rs 600 is variable. The hotel h…
- A 50-bed nursing home in Pune operates for 30 days in a month. Average occupancy is 80%. Total in-patient ward costs for the month are Rs 4,…
- A hospital has 40 beds, operating 25 days in a month. Occupied patient-days were 800. Fixed ward costs are Rs 2,00,000 and variable costs ar…
- A goods carrier of Shree Logistics Ltd. travels 4,000 km in a month with a load of 5 tonnes on every trip and returns empty each time. Out o…