CA Intermediate · Cost and Management Accounting · Service Costing
Shree Travels runs a bus on a route of 120 km one way. The bus makes 2 round trips a day, 25 days a month. On average it carries 40 passengers per trip against a seating capacity of 50 in each direction. What are the passenger-kilometres per month actually travelled?
Actual passenger-kilometres are 480,000 per month. The bus runs 120 km each way, two round trips daily, so 480 km a day and 12,000 km in 25 days. Multiplying by the 40 passengers carried on average gives 480,000; the 50-seat capacity would overstate it.
- A480,000Correct
- B600,000
- C384,000
- D192,000
Explanation
Km per day = 120 x 2 (one way each direction) x 2 round trips = 480 km. Per month = 480 x 25 = 12,000 km. Actual passenger-km = 12,000 x 40 = 480,000. Using 50 seats gives 600,000, which is the commercial (capacity) figure, not actual.
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