CA Intermediate · Cost and Management Accounting · Service Costing
Swift Carriers, Pune, runs a truck for goods transport. The truck made one round trip between Pune and Nashik, a distance of 200 km each way. It carried 10 tonnes from Pune to Nashik and 5 tonnes on the return. Absolute tonne-kilometres for the round trip are:
Absolute tonne-kilometres are 3,000. Multiply each leg's load by its distance and add: 10 tonnes over 200 km gives 2,000 and 5 tonnes over 200 km gives 1,000. Together they total 3,000. The return load must be included, and it is not the same as the outward load.
- A3,000Correct
- B2,000
- C1,500
- D4,000
Explanation
Absolute tonne-km = (10 x 200) + (5 x 200) = 2,000 + 1,000 = 3,000. The figure 1,500 comes from using the average load (7.5 tonnes) on only one leg of 200 km. The figure 2,000 ignores the return load. The figure 4,000 assumes 10 tonnes in both directions.
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