CA Intermediate · Cost and Management Accounting · Service Costing
Sharma Travels runs a bus on a route for a month. The bus has a seating capacity of 50 passengers, makes 4 one-way trips a day and runs for 25 days. The distance of each one-way trip is 60 km, and the average occupancy is 80% of capacity. Passenger-km for the month is:
Passenger-km is 240,000. Average passengers per trip are 40 (80% of 50), the bus makes 100 one-way trips in the month, and each trip covers 60 km, so 40 x 100 x 60 gives 240,000 passenger-km.
- A240,000Correct
- B288,000
- C300,000
- D360,000
Explanation
Passengers per trip = 50 x 80% = 40. Total trips = 4 x 25 = 100. Passenger-km = 40 x 100 x 60 = 240,000. Option 2 uses full capacity (50 x 100 x 60 = 300,000), ignoring occupancy.
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